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MKT Intro ( Lec. 1) 1/12/2012 1:23:00 PM

Online textbook : ryersonmkt100.com

What is marketing?

Innovation and Exchange:

Schumpeterian growth Smithian growth

marketingis the activity, set of institutions, and processes for creating,

communicating, delivering, and exchanging offers that have value for

customers, clients, partners, and society at large.

Black + White = Marketing

Marketing is gray: there are several right answers to a problem4 Ps ?

Product Place Creating ValueCommunicating ValueDelivering Price Promotion

Marketing creates prosperity:

Innovation Exchange

Schumpeter Wealth Creation Principle:

Smith Wealth Creation Principle:

Create wealth through tradeWealth creation feedback effect:

Innovation Exchangeo Countries that shutdown trade and innovation suffer severely

economically. (China, previously was en-route to becoming a

super power and then they decided to shutdown and

therefore suffered)

Understanding supply and demand:

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Buyers preferences and wants are always being changed bychanges in supply

o Variation in supply is constantly Variation in demand isconstantly changing

A theory of marketing dynamics:

Introduction:o Spending a lot of money

Growtho Market worth pursuing or not , see whats coming next.

Maturityo Market stays the same

Transformational New ProductCompetitive Process:

Economies are made up of chains of manufacturers that each addvalue. It is called added value supply chain.

Variable Costs:

The total expense changes as volume changes. Are paid perquantity produced

On time fixed Cost:Fixed Cost

Are business expenses that are not dependent on the level of goodsor services produced by the business. ( Salaries, rents, etc.)

Time related

Important to Marketers:

Need an understanding of which costs are variable and which fixed This distinction is crucial in forecasting the earnings generated by

various changes in unit sales and thus the financial impact of

proposed marketing campaigns

Fundamental to understanding price and volume trade-offs Fundamental to understanding profitability

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Example:

60 for materials Variable Costs

6 hour of hand laborVariable Costs

40/hourVariable Costs

600/month buses producedFixed Costs1200/year insurance premiums Fixed costs

1000/components in place One Time fixed costs

2500 in tooling One time Fixed costs

300 total variable cots

1000 total fixed cost

3500 One time fixed cost