Book Notes: Chapter 2
Book Notes: Chapter 2 BA 101
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This 5 page One Day of Notes was uploaded by howellkaila on Monday January 26, 2015. The One Day of Notes belongs to BA 101 at University of Oregon taught by Tom Durant in Winter2015. Since its upload, it has received 311 views. For similar materials see Intro to Business in Business at University of Oregon.
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Date Created: 01/26/15
Chapter 2 Marketing Creating Customer Value Marketing a group of activities designed to expedite transactions by creating distributing pricing and promoting goods and services and ideas The Marketing Concept focuses on the importance of providing customers value Ideally all company policies should satisfy customer needs To apply marketina concept a business must understand how to do Market Research to determine the needs of its customers Market Mix to determine how to satisfy those needs through addressing product price place promotion and service Market Strategy to analyze its competitive advantages plans and actions Target Marketing to select specific markets to serve Managing the Market Mix the 4 P39s Service describes how owners and mangers combine these 5 areas into a marketing program 1 Products and Services for small business a product strategy may be focusing on a narrow product line or developing a specialized product or providing unusual amounts of service 2 m Major factor affecting total revenue this includes credit policy Most of the time higher prices mean lower volume number of items sold and lower prices mean higher volume Can be higher prices mean higher quality 3 Promotion set of marketing decisions includes leveraging various forms of advertising salesmanship and other promotional activities Effective promotional strategies are a must because extensive advertising is expensive 4 Place of Distribution Channel manufacturer must decide how to distribute Small retailers should consider cost and traffic flow Low cost but low traffic means you must spend more on advertising Investing efforts in increase accessibility are key to product distribution 5 Service customer service is a way an organization can provide value and differentiate itself from others with identical products Market Research the systematic gathering recording and analyzing of data about problems relating to marketing goods and services An orderly and objective way of learning about people specifically the people who will buy from you Attempts to learn about markets and gather facts and opinions in an orderly and objective way Seeks to find how things are not how people think or would like them to be Attempts to find out what specific products or services people want to buy rather than focusing on what you want to sell Organized way of finding objective answers to questions every business must answer to succeed Msons for Market Resem Managers have to view their company from a customer39s perspective but some of this may be poorly wordednot as detailed as they hoped This can lead the company in the wrong direction Market Research focuses on systematically organizing information Provides Reduction of Business Risks Identifies problems that already existcould happen Discovers sales opportunities profits Get the facts you need to develop a marketing strategy Conducting Market Research Follow these Eight Steps 1 Defining the Problem of Opportunitv aknowledge the reasons there is a problem but search for the cause 0 find causes that can be measured and tested Define the problem and list out what may have caused it 2 Assessing Available Information I If you already have all of the information to prove your hypothesis right and have an obvious solution to your problem STOP 0 You will waste time and money if you do more research now Odds are you won39t gain any new information either I If you need more information to get to the solution weigh this against the cost of finding more data to make a more informed decision 3 thering Additional Information I quotthink cheap and stay as close to home as possible 0 Most of the time you already have all of the information you need Look in your records I Records help you see what your customers buy how they buy it where they live work etc 0 Credit records gets you customer39s addresses I This can be helpful when wanting to get to know customers better and their lifestyle I A valuable source for customer information your employees 0 They hear customer39s appreciationcomplaints all day while they work They are free information 4 External Data and Secondary Research I getting information from a published source I if you can find a local source this is better for your company 0 Examples Newspaper Local Radio etc 5 Primary Research I collecting original data 0 asking customerssuppliers how they feel about your product I Reactive vs Nonreactive Research 0 Reactive surveys interviews questionnaires I important to ask the right questions to avoid bias 0 Nonreactive see how people react in a situation without influencing them 6 Organizing and Interpreting Data I go back to how you defined your problem 0 after you do this compare the definition of your problem with what you figured out and prioritize and rank your data based on what will solve the problem the best 7 Making Decisions and Taking Action I Prioritize each strategy by O the goal you want to achieve 0 the cost to do the strategy 0 the time to do the strategy 0 how much will this help you succeed If you have many possible strategies choose a couple with the greatest impact toward achieving your goal For each strategy develop tactics 0 What are the staff responsibilities 0 Necessary Steps 0 Distribution of the Budget 0 Will it be completed in a reasonable amount of time 0 How much progress will you make 8 Assessing the Results of the Action I Analyze the progress you made toward your goal Market Research is only limited by you It is your imagination that powers it The best part is you can conduct market research with little cost because it mostly just takes time and a little mental effort Market Research also should make a company want to identify trends that can create opportunities or problems population shifts legal issues economic situation etc Marketing Strategv Managing the Market Mixl to identify a customer group target market that your company can serve it better than competitors by tailoring to customer39s wants and needs Focus product offerings prices distribution and promotional efforts toward a segment of the market What makes a good marketing strategy Focus on the target market 0 increases effectiveness of market activities 0 better return from marketing budget Marketing Orientation gather information about customer39s needs through research and use the information collected to build a long term relationship between your company and your customers This makes marketing strategy most successful Target Marketing the term used to describe when a company puts all of their marketing efforts to one or a few segments of the market Also lets you focus on selling to those who are most likely going to buy your product Major Segments of the Market 0 Geographic focuses on the needs of customers in a particular area 0 Demographic focuses on attributes of the market 0 Psvchog phic focuses on the lifestyle and behaviors that will buy the product The Sales Forecast to attempt to predict your unit sales and revenue performance To make a sales forecast you must look at how the total market will perform as well as your competitors Forecasting sales can be challenging because things can change and questions can be left unanswered such as What will the economy be like What will competitors do How will customers make decisions These questions could make for a better forecasting decision Marketing Performance evaluating the result of the decisions made while marketing These results need to be evaluated against the standards of performance 0 Industry Norms and Past Performance can be the basis for comparing 0 Evaluate a company quarterly Diminishing Return This term means that investing more resources can increase productivity but after a while spending more money will lower the return per dollar invested and will not add proportional returns Also known as the rate of diminishing return A Marketing Perspective Some questions to ask yourself when determining the performance of marketing Does the product provide value to the customer Are customers aware of this product Is it easy for the customer to get the product Do the employees make the customer satisfied and want to come back
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