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1 - Marketing is Dynamic

1.Marketing Is
Dynamic!
Every day someone markets something to you. What do you think

marketing is? Do you like being "marketed to"?

Learning Goals

explain why companies market goods, services, and ideas

describe each of the Four Ps of marketing

define good, service, and idea

explain how marketers determine the marketing mix

summarize the key elements of a marketing plan

Marketing Terms

marketing retailer

customer distribution

target market price

Four Ps promotion

product marketing mix

good marketing plan

service SWOT analysis

idea forecast

place

Look around. Have you seen any marketing activities recently?

Maybe you saw a pop-up ad on Google. Perhaps a sales associate

helped you with a purchase at the mall. Advertising and selling are

the most visible marketing activities, 1-1. However, marketing is

much more than advertising and selling. Here are some other

marketing activities:

developing a new video gaming system

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asking customers their opinion of new computer software

arranging financing for a purchase

delivering beverages to a stadium

ordering a new shipment of jeans

displaying the new jeans in the store window

deciding the price to charge for the jeans

Marketing includes these activities and many others. Marketing is

essential to business success.

1-1
Selling and advertising are the most visible forms of marketing. This young

woman is demonstrating a product for customers.

Connect...
How many marketing activities have you seen this week? Give five specific

examples.

Page 5
Marketing Defined

How would you define marketing? Take a few minutes to jot down

your definition of marketing. Then read these current definitions:

The job of marketing is "to sell lots of stuff and make lots of

money." (Sergio Zyman, former chief marketing officer at the

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Coca-Cola Company)

Marketing is "to find out what your customers want and then

give it to them." (Tim Cohn, marketing consultant)

"Marketing is building an offer you believe and know in your

bones you can deliver on consistently and elegantly to the people

who will love it." (Liz Strauss, founder, Inside-Out Thinking)

"Marketing is a set of business practices designed to plan for and

present an organization's products or services in ways that build

effective customer relationships." (Canadian Marketing

Association)

If marketing could be easily defined in one sentence, there would be

no need for a whole textbook! However, here is a basic definition to

keep in mind as you proceed through the book and learn the details.

Marketing consists of dynamic activities that focus on the customer

to generate a profitable exchange. The goal of marketing is to meet

customers' needs (goods and services you must have, such as food

and shelter) and wants (goods and services you would like to have

but do not need) with products that customers can and will buy.

The rest of the book will explore and clarify these ideas.

Page 5
Marketing Is Dynamic

What makes marketing dynamic? The word dynamic describes

something that is constantly changing. The needs and wants of

customers are constantly changing. The goal of marketing is to meet

customers' needs and wants with products they will buy. Therefore,

marketing must constantly change to meet those needs and wants.

Why do customers' needs and wants change? One reason is that

customers change. As customers get older, their needs and wants

change, 1-2. Think of the things you wanted and needed in

kindergarten. Do you want and need the same things now?

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1-2
How have your wants and needs changed since you were a child?

Customers' needs and wants also change because the world that

customers live in is changing. Changes occur in the economy,

technology, and social trends. Changes in technology provide the

clearest example. Although the Internet was developed in the 1960s,

the first commercial use of the Internet occurred in the early 1990s

when Delphi began offering e-mail and Internet access. In recent

years, Internet use has exploded. In 2010, almost 80 percent of

Canadians were connected to the Internet and half shopped online.

Those figures are expected to increase yearly and surpass the rate of

e-commerce growth in the United States.

Page 6
Marketing Is Customer-Focused

A customer is an individual or group who buys products. A

customer can be an individual person, a business, a not-for-profit

organization, or a government. For example, when you buy jeans at

the local jeans store, you (an individual person) are the customer.

When a manufacturer buys denim to make jeans, the manufacturer

(a business) is the customer. When a school buys food for the

cafeteria, the school (an organization) is the customer. When the

government buys equipment for the military, the government is the

customer.

In order to be successful, a business has to sell its products. In order

to be able to sell its products, the customers have to want to buy the

products. In order for customers to want to buy products, the

products have to meet the customer's needs and wants. As a result,

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the main goal of marketing is to meet customers' needs and wants.

Marketers focus on learning what customers need and want. They

then develop and market products that meet those needs and wants.

A target market is the specific group of customers whose needs a

company will focus on satisfying, 1-3. There are many kinds of

target markets. Think of the potential customers for clothing. There

are many groups of customers with different clothing needs. For

example, teenagers need different kinds of clothing from business

people who work in offices. Babies need different clothing from

adults. You will learn more about target markets in Chapter 5.

1-3
A target market is the group of customers whose needs and wants

marketers try to satisfy. Teens are a popular target market.

Connect...
Think of something that you purchased recently. How did that product meet

your needs and wants?

Page 7
Marketing Is Relationships

Marketing is based on the relationship between the buyer and the

seller. For some businesses, the relationship is brief. For others, a

long-term relationship leads to customers who are more satisfied

and loyal to the business. Research has shown that it is less costly to

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keep a current customer than to get a new customer. As a result,

many businesses focus on developing and maintaining relationships

with their customers.

One way salespeople develop relationships is to contact the

customer after the sale to make sure the product is functioning

properly and meeting the customer's needs. If there are any

problems, the salesperson can correct them at that time. Salespeople

might send birthday greetings and notices of sales of items that are

of special interest to each customer. For example, Amazon

customers can sign up for personalized recommendations based on

their interests and preferences.

Many businesses reward repeat customers with discounts or free

products. Programs that offer such rewards include the Shoppers

Drug Mart Optimum card or the Scotiabank/Cineplex SCENE card.

Many bookstores, coffee shops, and sandwich shops also offer

frequent buyer programs. Through these programs, the businesses

establish long-term relationships and develop customer loyalty.

Connect...
Do you or does someone you know belong to any frequent buyer

programs? Name the business that offers it and describe the program.

Page 7
Marketing Is International

In the twenty-first century, people around the world are linked by

telephone, fax, Internet, and jet travel. Japanese products, such as

the Nintendo Wii, are available at your local mall. A Chinese

student who lives in Beijing can buy a hamburger at a McDonald's

Restaurant near his or her home, 1-4. Through the Internet, people

can buy products from anywhere in the world.

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1-4
Marketing is international. A McDonald's sandwich can be purchased in

China.

Connect...
Find the "Made in" tag on an article of clothing or a product that you have

with you. Name the country where the item was made.

Page 8
Marketing Is the Four Ps

How can a marketer meet customer needs and make a profit? There

must be hundreds of ways to meet this goal. Marketers meet this

goal by developing a plan of action. Each plan of action consists of

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four elements called the Four Ps. Product, place, price, and

promotion are the Four Ps, 1-5.

1-5

The Four Ps are the basic elements of marketing.

Page 8
Product

A product is anything that can be bought or sold. Products include

goods, services, and ideas. A good is a physical item, something that

you can touch. Examples of goods include jeans, snacks, and

cellphones. A service is an action that is done for you, 1-6. You

cannot touch a service or take it with you. Examples of services

include a haircut, a concert, and medical care. An idea is a concept,

cause, issue, image, or philosophy that can be marketed. Examples

of ideas include contribute to charity, buckle up for safety, and vote

for this candidate. Image has become a very important product.

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Marketers sell the image of goods and services, the business itself,

and people.

Marketers change products to meet customer needs and wants. For

example, some kitchen toolmakers have developed special grips to

help people who have trouble grasping regular kitchen tools.

Another example is the fabric denim—it has become so popular that

clothing manufacturers make a wide variety of clothing and

accessories from that material.

1-6
Services, such as a haircut, are considered products.

Connect...

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Think of a product that you use. How would you change it to better meet

your needs? How would you change it to meet others' needs?

Page 8
Place

Place involves making products available to customers. Place

decisions involve determining when, where, and how products get

to customers. Place includes decisions about where to locate stores

and the decisions related to retailing. A retailer is a business that

buys products to resell to final consumers. Place also includes

decisions such as whether to develop a store website. In marketing,

the Internet is considered a place.

Marketers try to make products available to customers at

convenient times and places. For example, originally, gas stations

sold only gas. Then the marketers of milk realized that it would be

very convenient if milk customers could buy milk when they buy

gas. The marketers of milk made arrangements with gas stations so

that the gas stations could sell milk. The result was more

convenience for customers and more sales of milk for the milk

marketers.

The place element includes distribution. Distribution is the process

of physically delivering goods to customers. Distribution includes

shipping, storing, inventory, and stocking of goods.

Good decisions about place help a business run smoothly, 1-7.

When poor place decisions are made, major problems can result.

Customers get upset because products are not available when they

want them. Customers might express their dissatisfaction by

shopping at a competitor's store. This type of loss of customers

might lead to financial losses for the business. For example, suppose

you went to an ice cream shop, but they were out of your favourite

flavour. This is an example of a poor place decision because the

store did not have the product on hand when you wanted to buy it.

As a result, you might go to a competing ice cream shop. If your

experience at the competitor's shop is satisfying, you may never

return to the first shop.

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1-7
The place element includes deciding where to locate your store and how to

get goods to your store.

Connect...
Have you experienced poor place decisions? Describe one example.

Page 10
Price

Price is the amount of money requested or exchanged for a product.

Marketers determine the price they charge for their products.

Marketers can set prices at any level. However, if marketers set

prices too high, customers might not buy the product. If marketers

set prices too low, they might not take in enough money to cover

expenses and make a profit. Setting the best price is important for

business success and customer satisfaction.

Connect...
Does the price of a product affect whether you will buy it? Give an example.

Page 10
Promotion

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Promotion is the process of telling people about the product and the

company that offers it. It includes telling people about the price and

the place where it is offered. If customers do not know that a

product exists, they cannot buy it. If customers do not know where

to find a product, they will not be able to buy it.

Promotion is the most visible part of marketing. Promotion includes

a variety of activities designed to include a customer in the process

of buying products, 1-8. These activities include selling, advertising,

sales promotion, and publicity. A salesperson delivers promotional

messages when he or she helps a customer. Advertising delivers

promotional messages on TV, radio, websites, cellphones,

billboards, magazines, and through many other formats. Sales

promotion includes free samples and contests.

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1-8
Promotion includes a wide variety of activities that communicate with

customers and the public. Advertising, sales, customer service, and public

relations are all part of promotion.

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Another aspect of promotion focuses on the company rather than

the product. This type of communication is often designed to

promote a positive image of a company and its products. For

example, a company may send out a publicity release about its

charitable activities to print in a local newspaper. This aspect of

promotion is called publicity, or public relations.

Connect...
Name three locations where you have seen an ad in the past week. What

were the ads? Did any of them influence you to make a purchase? Why?

Page 12
Marketing Is the Marketing Mix

Marketers have hundreds of choices for each of the Four Ps. For

each product that a company markets, the marketers develop a plan

called the marketing mix. The marketing mix is a plan of action for

marketing a product; it consists of the decisions made about each of

the Four Ps for that product. A marketing mix can also be

developed for a group of products or for an entire store.

You might compare the marketing mix to a recipe for a cake. A cake

must have certain basic ingredients, such as flour, liquid, leavening

agent, and flavouring. However, the exact type, amount, and

number of ingredients depend on the kind of cake you want.

How do marketers make marketing mix decisions? Before

developing a marketing mix, the marketer usually has a target

market in mind. Once the target market is determined, the decisions

about each of the Four Ps will be made with this target market in

mind. The marketers will make product, place, price, and

promotion decisions that meet this target market's needs and wants.

The marketers will develop a product that the target market needs,

set a price the target market will pay, make the product available at

stores convenient to the target market, and advertise the product

where the target market will see the ads. Figure 1-9 is a graphic

representation of the marketing mix. The target market is in the

centre, to show that all the marketing mix decisions are made with

the target market in mind.

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1-9
The marketing mix consists of the decisions made about the Four Ps:

product, place, price, and promotion.

For example, suppose an automobile manufacturer selects young,

first-car buyers as its target market. The marketers for that

automobile manufacturer will then develop a marketing mix. The

marketers will make product, place, price, and promotion decisions

based on the needs and wants of these young first-car buyers. The

product decision might be to make a sporty-looking car in bright

colours. The price decision might be to make the car as affordable as

possible. The place decision might be to offer the car on the website

as well as at traditional dealerships. The promotion decision might

include the use of young, hip-looking people in TV ads and

promotion through social media. Each decision is made to meet

needs of the customers in the target market and influence them to

buy the product.

Marketing mix decisions also affect each other. For example, the

decision to make the price of the car as low as possible affects the

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product decision. The car will have to be made as inexpensively as

possible so that the price can be as low as possible.

The same marketing mix usually does not meet the needs of all

customers. The key to a successful marketing mix is choosing the

right product, selling it at the right price, making it available at the

right place, and promoting it in a way that will reach the target

customers.

Connect...
Think of a favourite product or store. Describe the target market for this

product or store.

Page 13
The Marketing Mix in Action

Imagine that you want a personal media player. You search the

Internet for a sale on personal media players. You find a sale price

of $199.00. You have saved $225.00 for a player. The website shows

the personal media player at an electronics store in the mall near

your home. You go to the store, and a salesperson helps you find

the right player. You buy the media player. Can you identify the

Four Ps in this marketing mix?

Here are the marketing mix elements. The media player is the

product. The ad is part of the promotion. The salesperson is also

part of the promotion. The price is $199.00. The electronics store is

the place. Since (in this example) you bought the player, the

marketers for the media player developed the right marketing mix

for you. They provided the product you wanted, at a price you

could afford, at a place convenient to you. They also let you know

about the availability of the product by advertising on a website that

you found.

Notice that the customer is not part of the marketing mix. The

customer is the target of the marketing mix. The marketing mix

decisions are made to satisfy the customer.

Page 13
Marketing Is the Marketing Plan

Have you ever been lost? Do you remember how you felt when you

were lost—you were not sure what to do, who to call, or where to

go? You were probably lost because you did not make a good plan.

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That is the same feeling a company might experience if it does not

have a marketing plan. A marketing plan is like a road map—it

guides a company so that it avoids such pitfalls and detours as lost

sales, lost opportunities, and poor product planning. According to a

survey by the Kauffman Center for Entrepreneurial Leadership,

companies with business plans have 50 percent higher sales growth

and 12 percent higher gross profit margin compared to those that do

not have plans.

Most marketing plans are developed with the future in mind—at

least one year in advance. However, marketing plans for some

larger companies will be for a much longer time period.

Page 14
Key Elements of a Marketing Plan

The key elements of a marketing plan include: market opportunities

and analysis, market strategy, an action plan, and monitoring and

evaluating the plan. Read further to learn how each of these

elements combines to lead a company to success, 1-10.

1-10
A strong marketing plan helps a company stay focused on its goals and

objectives.

Market Opportunities and Analysis

The market opportunity and analysis includes the best description

about the current marketplace—this is no time for guessing. It is

important to conduct a SWOT analysis. A SWOT analysis helps a

company determine its Strengths, Weaknesses, Opportunities, and

Threats. For example, if you own an accounting firm, one of your

strengths might be that you have been in business for 25 years. One

of your weaknesses might be that you are located on a side of town

with the least amount of business growth. An opportunity might be

that two new companies are relocating to your town and have asked

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you to submit a proposal to do their accounting. A threat might be

that a larger accounting firm has just hired one of your most

experienced accountants.

Market Strategy

Before completing any marketing plan, you have to set goals and

objectives. Do you want to increase your market by five percent? Do

you want to introduce a new product line? Do you want to open a

new location in the next three years? Once you know your goals,

you need to identify the target market, determine your marketing

mix (Product, Place, Price, Promotion), and develop a position

statement so you can stay focused on your goals and objectives.

Action Plan

Once you have a plan, it is time to put it into action. Develop a

timeline or calendar and determine your budget. Make sure you

include the specific activities for accomplishing the goals of the

marketing plan. Identify who is responsible for carrying out these

activities.

Monitor and Evaluate the Plan

If you do not monitor and evaluate the plan, you might never know

if it was successful. It is important to monitor sales, market

reactions, and other factors to determine plan success. Reviewing

revenue from sales can help you forecast, or predict future sales and

revenue. The information you collect can also help to determine if

you need to modify the current plan.

Page 15
Is Marketing in Your Future?

If you choose a career in marketing, you will be part of an exciting

field that is growing, 1-11. You will also be in a career with great

potential for advancement and high earnings. There are careers for

all types of people in marketing.

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1-11
Is a marketing career in your future?

Are you outgoing and friendly? Consider a career in sales or

customer service. Do you love art and design? A career in

advertising, visual merchandising, or website design might be right

for you. Is math your strength? A career in marketing research

involves math as well as research skills. Are you a problem solver?

You might enjoy a career in distribution.

Are you a sports fan? Do you love to travel? Do you prefer theatre

and the arts? Consider a career in sports, recreation, or

entertainment marketing. Are you the best shopper ever? You might

enjoy a career as a buyer in a store that sells your favourite goods.

Does money fascinate you? A career in financial services marketing

involves working with money. Would you like to be your own

boss? Consider becoming an entrepreneur by starting your own

business. For almost any area of business, you can find a marketing-

related career.

Suppose business careers do not interest you that much. Perhaps

you are interested in a career in education, government, the

military, health occupations, social services, the clergy, or charitable

causes. Knowledge of marketing will also help you accomplish your

goals in these fields. Today not-for-profit organizations, such as

hospitals and charities, have marketing plans. Even government

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agencies use marketing. (You will learn more about marketing for

not-for-profit organizations in Chapter 8.)

Marketing skills will also come into play when you start your

career. How can you impress an interviewer? How will you

improve your chances of getting accepted at an institution of higher

education? How will you convince a loan officer to lend you money

for your new business? Your marketing skills can help you present

yourself effectively in many situations.

You will always be a consumer. As long as you are alive, you will be

buying goods, services, and ideas. Nearly half of every dollar you

spend goes for the marketing of the products you buy. Knowing

about marketing will not only help you in your career, but it will

also help you to be a wise consumer.

CHAPTER 1 REVIEW

Key Learnings

Marketing consists of dynamic activities that focus on the

customer to generate a profitable exchange.

The main goal of marketing is to meet customer needs and

wants with products that customers can and will buy.

The Four Ps are product, place, price, and promotion.

A product is a good, service, or idea that can be marketed.

The marketing mix is a plan of action for marketing a product;

it consists of the decisions made about each of the Four Ps for

that product.

Decisions about the marketing mix are made with the target

market in mind.

Marketing plans guide a company and help avoid the results of

poor planning.

A SWOT analysis helps define a company's strengths and

weaknesses for market planning.

Knowledge & Understanding

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1. Define marketing.

2. Why is marketing dynamic?

3. Why should marketing focus on the customer?

4. In what ways is marketing international?

5. Describe each of the Four Ps. Give an example of each.

6. Describe the difference among goods, services, and ideas.

7. Give an example of each of the three different kinds of

products.

8. How do marketers make marketing mix decisions?

9. Draw a diagram that shows the relationship between the

marketing mix and the target market.

10. How can knowing about marketing help you, even if you do

not go into a career in marketing?

Thinking

1. Can one store or business sell all three types of products? Name

a store or business and give an example of each type of product

that it sells.

2. Look at Figure 1-9. Why is the target market at the centre of the

diagram?

3. Organizations such as student council, student career

organizations, and sports teams use marketing. Choose an

organization with which you are familiar. Give an example of

the Four Ps for that organization.

4. Suppose you have an idea for a new business. What would the

business be? Draw conclusions about how a marketing plan

could benefit your business. When and how would you

conduct a SWOT analysis?

5. Think about your life after high school. How might marketing

affect your future? Give three examples.

Application

1. List three products or services that you or members of your

family often buy. Why are you or your family a target market

for these products or services? Explain with reference to the

definition of a target market.

2. A charitable organization, such as Free the Children, sells a

product. What type of product does it sell?

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3. Name a product that you own or would like to own. What

product, place, price, and promotion decisions did the marketer

make for that product? In other words, what is the marketing

mix for that product?

4. How does marketing affect your family? Give an example.

5. Talk with the manager of your workplace, your school store (if

you have one), or a store in your neighbourhood. Ask, "How

does marketing help your business achieve its goals?" Record

the answer and compare your findings with those of other

students. What observations can you make?

6. Look in the "Help Wanted" section of your local newspaper.

Find a marketing job that appeals to you. Explain why you are

interested in the job.

7. Despite high prices, products such as the following are selling

quite well: organic produce; meatless "hamburgers"; and low-

fat, low-carbohydrate, and low-calorie foods. Explain why

customers are willing to pay higher than average prices for

these products.

Communication

1. Collect two or more advertisements for a specific product.

Make a poster that illustrates the marketing mix. Label each of

the Four Ps.

2. Name a product that you would like to buy. Find a website

where that product is sold. In a one-page report, describe the

marketing mix for that product, based on the information on

the website, and assess whether or not this marketing mix

meets your needs.

3. In a small group create a SWOT analysis for one of the coffee

shops in Canada that you enjoy visiting. You can find

information on SWOT above, under the heading "Market

Opportunities and Analysis" (page 14).

4. Peter Drucker once stated: "The aim of marketing is to know

and understand the customer so well the product or service fits

him and sells itself."

What do you think Drucker means by this statement?

Research who Peter Drucker is and what his achievements in

business have been.

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5. Find the website for the Canadian Marketing Association

(CMA). Find out what the organization does. What kind of

information can you get from this website? Write an e-mail to

the CMA describing how its website could help make you a

better marketer.

1 - Marketing is Dynamic

PART 1: MARKETING BASICS - 1 - MARKETING IS DYNAMIC

ASSESSMENT OVERVIEW

INTRODUCTORY ACTIVITIES

CHAPTER TEACHING NOTES

CHAPTER REVIEW ANSWER KEY

ENRICH AND EXTEND

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