Chapter 12.1-12.6

Marketing

Marketing

An organizational function and a set of processes for creating, communicating, and delivering value to customers.

External Marketing Environment

Includes five forces: Competitors, Customers, Suppliers, Regulatory Agencies, and The Economy.

Value in Marketing

Defined as the ratio of benefits received to the costs incurred.

Benefits of a Product

Functional advantages and emotional satisfaction from ownership or usage.

Customer Value Strategies

Strategies to increase customer value include developing innovative products, extending store hours, implementing price reductions, and providing information on alternative uses.

Types of Utility Created by Marketing

Form Utility, Time Utility, Place Utility, Possession Utility.

Form Utility

Involves designing products with features desired by customers.

Time Utility

Ensures products are available when customers want them.

Place Utility

Makes products available in convenient locations.

Possession Utility

Transfers ownership through pricing strategies and payment terms.

Consumer Goods vs Industrial Goods

Consumer goods are bought for personal use (B2C), while industrial goods are used by companies to produce other goods (B2B).

Service Marketing

Focuses on promoting intangible offerings like consulting, healthcare, and hospitality.

Relationship Marketing

Emphasizes building lasting relationships to enhance customer satisfaction and loyalty.

Customer Relationship Management (CRM)

An organized method to improve connections with clients using customer data.

Data Warehousing

Compiles customer information for analysis.

Data Mining

Automates analysis of large data sets to uncover consumer behavior patterns.

Influences on Marketing Strategies

External forces such as political, sociocultural, technological, economic, and competitive factors.

Political-Legal Environment Impact

Government regulations and political activities affect industry operations.

Sociocultural Trends

Increased consumer demand for organic foods and healthier options.

Role of Technology in Marketing

Creates new products, alters consumer behaviors, and can render products obsolete.

Economic Conditions and Marketing

Economic variables like inflation and recessions affect consumer spending.

Types of Competition

Includes substitute products, brand competition, and international competition.

Purpose of a Marketing Plan

To outline marketing objectives and strategies for reaching target markets.

Components of the Marketing Mix

Product, Price, Place, Promotion.

Product Differentiation

Creating distinct features for a product to stand out from competitors.

Pricing Balancing Act

Prices must cover costs while remaining attractive to consumers.

Market Segmentation

Dividing a market into distinct categories of customer types.

Importance of Market Segmentation

Tailors marketing strategies to specific consumer groups, enhancing effectiveness.

Post-Segmentation Strategies

Companies may target multiple segments or focus on specific ones.

Product Positioning

Fixing and communicating a product's nature to establish its market place.

Segmentation Approaches

Demographic, Geographic, Geo-demographic, Psychographic, Behavioral.

Demographic Segmentation Factors

Age, income, gender, ethnic background, marital status, race, religion.

Geographic Segmentation Influence

Considers geographical units affecting buying decisions.

Geo-Demographic Segmentation

Combines geographic and demographic traits for market definitions.

Psychographic Segmentation Focus

Lifestyles, opinions, interests, and attitudes of consumers.

Behavioral Segmentation

Divides a market based on consumer knowledge, use, or response.

Organizational Markets in B2B

Includes Industrial markets, Reseller markets, Government and institutional markets.

B2B vs Consumer Markets Sales

B2B markets account for more than twice the sales amount of consumer markets.

Value of B2B Sales in the US

Approximately $8 trillion.

Industrial Market Description

Includes businesses buying goods to convert into products or using during production.

Example of the Industrial Market

Computer manufacturers buying microchips.

Reseller Market Definition

Consists of intermediaries that buy and resell finished goods.

Example of a Reseller Market Company

Coast Distribution System for pleasure boat parts.

Government and Institutional Market Role

Includes governments and NGOs purchasing supplies and services.

Canadian Federal Government Spending 2020

An estimated $303.6 billion.

B2B vs Consumer Buying Behavior

B2B involves long-term relationships and large quantities; consumer is short-lived.

Motivations of Organizational Buyers

Based on rational motives such as performance, cost, and efficiency.

Knowledge and Professionalism of B2B Buyers

B2B buyers are often specialized, well-informed, and professional.

Fields of Accounting

Financial accounting and managerial accounting.

Primary Users of Financial Accounting Information

External users such as consumers, shareholders, and government agencies.

Focus of Managerial Accounting

Internal users for decision-making and planning.

Historical Accounting Designations in Canada

Chartered Accountant (CA), Certified General Accountant (CGA), Certified Management Accountant (CMA).

Current Accounting Designation in Canada

Chartered Professional Accountant (CPA).

Common Services Provided by CPAs

Auditing, tax services, management consulting.

Purpose of Auditing Process

Ensure compliance with accounting rules and examine financial records.

Accounting Cycle Definition

A six-step process for analyzing and recording financial transactions.

Forensic Accounting Definition

Investigates financial discrepancies and fraud.

Purpose of Tax Services by Accountants

Aid in tax return preparation and planning.

Accounting Equation

Assets = Liabilities + Owners’ Equity.

Definition of Assets

Economic resources expected to benefit the owner.

Current vs Long-Term Liabilities

Current are due within one year, long-term beyond one year.

Calculation of Owners’ Equity

Owners’ Equity = Assets - Liabilities.

Purpose of a Balance Sheet

Snapshot of a company's financial position at a specific point in time.

Income Statement Shows

Revenues and expenses over a period, resulting in net income or loss.

Components of the Statement of Cash Flows

Cash flows from operations, investing, and financing.

Budget Definition

Internal financial statement estimating future receipts and expenditures.

Importance of Budgeting

Aids in planning and controlling financial performance.

Use of Budgets in Companies

Guides financial decision-making based on projections from departments.