MGM 301 Chapter Notes - Chapter 1-3, 5: Social Forces, Price Fixing, Sports Equipment
20 Jun 2018
School
Department
Course
Professor
CHAPTER 1: Introduction to Marketing
Advertising ages top 5 “marketers of the Century”:
1. Proctor and Gamble (P&G)
Uses multiple branding strategy- allows to go after different segments of the market (different
brand names and different products) still under P&G name
Invented brand management contract (management team for a specific product)
60 billion dollar/year company
Number 1 advertiser worldwide, spends time on consumer innovation research
Credited with term soap operas
First use of the internet (saw it as ad space)
Brands go through product lifecycle- need to have ready replacement
2. McDonalds
Single operator in 1960’s, major franchise
A lot of emphasis on “tweens”
Transformational advertising- advertising transforms products into experiences and events
Problems: social trends hurt McDonalds in 2000, bad relation with “super size” (unhealthy diet),
slow on innovation
Solutions: price promotions (lazy way to compete), Hamburger University (employee training),
healthy meals now (salads), option to substitute in kids meals (milk instead of soda, fruit instead
of fries)
3. Coca-Cola
One of most powerful brand names
Brand equity- [value of firm subtract value of all tangible assets], looks at things other than
tangible assets
Strong because of imagery and name (60% of total value is the name), but people like taste of
Pepsi better
4. Anheuser-Busch (Budweiser)
1st national brewery
#1 market share nationwide
Creative advertising- key to developing products and keeping alive
5. Nike
Family branding - use same name on all products
*Lowering your price is a bad way to compete- making product better is more stable- sustainable competitive
advantage
Marketing – The activity of creating, communicating, delivering, and exchanging offerings that benefit the
organization, its stakeholders, and society at large
find more resources at oneclass.com
find more resources at oneclass.com
-Focus creation of product services deliverances to consumers, and customers through
communication (exchange)
-Customer value – exchanges take place, both consumer and company must be better off (or else
competition wins)
-The purpose of a business is to create and retain customers
-Discover needs and wants of prospective customers and satisfy them
-Marketing in the profitable creation of customer value***
-Marketing focuses on: Assessing and Satisfying consumer needs
-4 factors needs for marketing to occur:
o2 or more parties with unsatisfied needs
oDesire MGM and ability to satisfy those needs
oA way for parties to communicate
oSomething to exchange
-Marketing tries to satisfy both customer needs and wants
oNeed- when a person feels deprived of a basic necessity
oWant- need that is shaped by a persons knowledge, culture, and personality
Market – People with both the desire and ability to buy a specific offering (made up by potential consumers)
Target market – One or more specific groups of potential consumers toward which an organization directs its
marketing program
The Exchange Process – The trade of things of value between buyers and sellers so that each is better off after
trade
Key to achieving marketing objectives to serve buyers
Marketing management facilitates the exchange of value and satisfaction of consumer needs by the
use of the marketing mix
Diminishing Marginal Utility- amount of utility consumer gets is function of how much consumer
actually has, more quantity makes less valuable
The Controllable Marketing Mix Factors
Neil Gordon invented the Marketing Mix – can be used to solve marketing problems, combination of what
is going to work well together
The 4 P’s:
-Product – A good, service, or idea to satisfy consumer needs (variety, quality, design, features,
brand name, packaging, services, warranties)
-Price – What is exchanged for the product, needs to be controlled by developer (list price, discounts,
allowances, payment period, credit terms)
-Place – Means of getting the product to the consumer (channels, locations, inventory, transportation,
atmospheres)
-Promotion – A means of communication between the seller and the buyer (sales promotion,
advertising, sales force, public relations, direct marketing, E-commerce)
The Uncontrollable Marketing Mix Factors
find more resources at oneclass.com
find more resources at oneclass.com
-Environmental forces:
oSocial
oEconomic
oCompetitive
oRegulatory
oTechnological
The Marketing Program and Customer Value:
Customer Value – The unique combination of benefits received by targeted buyers that includes quality, price,
convenience, on-time delivery, and before-sale & after-sale services
Successful firms chose to deliver outstanding customer value with one of 3 strategies: best price, best
product, and best service
*** Value = Utility = Satisfaction = Benefit
Utility – The benefits or customer value received by users of the product, depends on the customer
1. Time Utility – The value to customers of having a good or service available when needed
(Ex: FedEx- the faster you want something to get somewhere the more it costs, people have
different levels of focus)
2. Place Utility – The value to customers of having a good or service available where needed, more
locations, more convenient, more advantages
Ex: McDonald’s have more outlets than Burger King
Ex: HSBC arena hockey game, you can buy beer there but it is more money because the value
of the product is worth more during that time and is convenient than buying it in Wal-Mart
Atmospherics – Atmosphere part of place utility, more fun at hockey game then home, Starbucks
3. Form Utility – The value of consumers that comes from production or alteration of a good or
service, the form that get the product into the market
oActual form you receive product in
(Ex: Mott’s juice ad, the top of the ad has a clear glass with fresh fruit in it, the bottom has the
real fruit bottle of fruit juice, showing that it is the same “real fruit” but in a different form)
4. Possession Utility – The value to customers of making an item easy to purchase so consumers can
use it
(Ex: Owning a home, you cant pay for the home on the spot so you take a mortgage, having a
credit card, lets you possess what you want without paying for it that second)
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Advertising ages top 5 marketers of the century : proctor and gamble (p&g) Uses multiple branding strategy- allows to go after different segments of the market (different brand names and different products) still under p&g name. Invented brand management contract (management team for a specific product) Number 1 advertiser worldwide, spends time on consumer innovation research. First use of the internet (saw it as ad space) Brands go through product lifecycle- need to have ready replacement: mcdonalds. Transformational advertising- advertising transforms products into experiences and events. Problems: social trends hurt mcdonalds in 2000, bad relation with super size (unhealthy diet), slow on innovation. Solutions: price promotions (lazy way to compete), hamburger university (employee training), healthy meals now (salads), option to substitute in kids meals (milk instead of soda, fruit instead of fries: coca-cola. Brand equity- [value of firm subtract value of all tangible assets], looks at things other than tangible assets.
