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are created when businesses and consumers interact through a sales transaction of a product or service and continue that relationship based on ongoing interaction between the business and continue that relationship based on ongoing interaction between the business and customer

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customer realtionships

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involves those elements of business strategy that enable meaningful, personalized communication between businesses and customers

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customer relationship management

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includes the projected sales revenue and profitability that a customer could provide to a firm

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customer lifetime value

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when customer relationships serve as the foundation for marketing activities

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marketing concept

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era of marketing focused on production "a good product will sell itself"

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prior to the 1920s

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era of marketing focused on sales "creative advertising and selling will overcome consumers' resistance and convince them to buy

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prior to the 1950s

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era of marketing focused on marketing "the consumer rules! find a need & fill it!"

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since the 1950s

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era of marketing focused on relationship "long term relationships with customers and other parties lead to success"

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since the 1990s

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is the idea that businesses consider society as a whole as one of their stakeholders and that businesses make decision that take into account the well being of society

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social responsibility

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marketing functions can be grouped into 3 general categories:

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exchange functions, physical functions, facilitating functions

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activities that promote and enable transfer of ownership (selling, pricing, advertising)

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exchange functions

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activities that enable the flow of goods from manufacturer to consumer (packaging, storing, transporting)

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physical functions

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activities that assist in the execution of exchange and physical functions. (financing, research, servicing)

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facilitating functions

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4 ps

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product, price, placement, promotion

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a collection of marketing variable that are managed to achieve the desired sales performance in a target market

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marketing mix

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include investors, consumers & customers, advertising/PR agency, information providers/marketing research companies, government, partners, competitors

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external marketing participants

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participants in the external market that influence marketing ideas through letters to mgmt and through attending shareholder meetings

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investors

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participants in the external met who make purchasing decisions and feedback on survey questions

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consumers and customers

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participants in the external market that assist businesses in understanding consumers and customers, as well as presenting products and services in the most favorable perspective through the creation of media content

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advertising

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participants in the external market that collect a wide range of consumer and market information for marketing departments

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market research companies

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participants in the external market that influences marketing through legislation or regulation

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governments

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participants in the external market that already work with or may work with a particular business, influence marketing choices by presenting opportunities to reach more consumers or to share in the cost of marketing activities

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partners

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participants in the external market that advertise investment and product launches

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competitors

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4 major components of marketing planning

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objective, audit, strategy, allocating resources and monitoring performance

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something a marketing function is attempting is attempting to achieve in support of a strategic business plan

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marketing objective

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the comprehensive review and assessment of a business's marketing environment. It is important that a business understands the external and internal forces that can influence its success

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marketing audit

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is a statement of how a business intends to achieve its marketing objectives. It includes selecting a target market and then creating an appropriate marketing mix for the target market

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marketing strategy

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identifies the product and service portfolio, including packaging, branding, and warranty for its target market

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product strategy

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identifies where, how, and when products and services are made available to target consumers

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place strategy

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identifies what a business will charge for its products or services

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pricing strategy

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identifies how a business communicates product or service benefits and value to its target market

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promotion strategy

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people and money both must be assigned to support implementation of marketing strategies

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allocating resources and monitoring performance

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document that includes an assessment of the marketing situation, marketing objectives, marketing strategy, and marketing initiatives

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marketing plan

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is a toll that helps identify business strengths, weaknesses, opportunities, and threats

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swot analysis

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strengths and weaknesses are based on _________ characteristics

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internal

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opportunities and threats are based on ______ characteristics

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external

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is the impact on business performance resulting from executing specific marketing activities

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return on marketing investment

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= expected benefits- expected costs

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customer perceived value

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additional benefits created primarily through a company's branding efforts. Include emotional benefits, self-expression benefits, and social benefits

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psychological benefits

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examines the trade offs customers make between costs and benefits when making a purchase decision

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price performance value map

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products that are perceived to deliver benefits equal to the products' total cost

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fair value zone

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satisfaction level that is the result when the product's performance does not live up to expectations. Degrees: dissatisfied or defect

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negative

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occurs when a product's performances matches expectations. A buyer has reached the baseline of satisfaction. Degrees: satisfied, switchable

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neutral

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when expectations are exceeded and the buyer is highly satisfied. Degrees: delighted, loyal

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positive

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customers who are satisfied are likely to continue to purchase the same brands, or business with the same service provider

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loyalty

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satisfied customers cannot wait to share their experiences with anyone who listens

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product champions

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the costs benefits of having satisfied customers is found in multiple areas from lower warranty expenses to few phone calls to customer service representatives

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reduced costs

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satisfied customers are more likely to purchase other products from a company to which they are loyal

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larger share of wallet

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is the degree to which a customer will select a particular brand when a purchase from that product category is being considered. It is a buyer's feeling of attachment to a particular product, brand or company

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customer loyalty

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80% of a company's profits are generated by 20% of its customers. Another 60% of customers will generate the remaining profits. The additional 20% of customers will generate a loss

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pareto principle

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is the present value of all profits expected to be earned in the future from a customer

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customer lifetime value

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to calculate _________ a company must know: customer average purchases per year, profit margin earned on those purchases, costs to service the customer, customer retention rate, the firm's discount rate

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customer lifetime value

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customer profitability may be limited or even at a loss at the beginning of a relationship, but profits will increase over time

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long term

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seeks to ensure that every effort an organization undertakes has as its purpose the development and maintenance of a profitable customer relationship

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customer relationship marketing

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those that connect the company with its customers

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external processes

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involve the management of information acquired from customers

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internal processes

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in a __________ market, firms know who their customers are because of previous purchases

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business to business

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in a _______ market, companies must make great effort to even identify their customer

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consumer

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companies benefit from loyalty programs by collecting information about customers, including contact information and a customer's spending habits

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loyalty programs

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statistical techniques used successfully in direct marketing to uncover individuals or groups of individuals who are most likely to respond to an offer and types of offers that will elicit a response

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data mining

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a set of forces, some controllable and some uncontrollable, that influence the ability of a business to create value and attract and serve customers.

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marketing environment

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involves all those activities, including marketing that occur within the organizational functions in a business

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internal environment

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is the implementation of marketing practices within an organization to communicate organizational policies and practices to employees and internal stakeholders

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internal marketing

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is the implementation of marketing practices directed outside the business to create value and to form productive customer relationships

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external marketing

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includes those forces close to a company, yet outside its internal environment that influence the ability of a business to serve its customers (customers, suppliers, competitors and other business)

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microenvironment

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can assist a business with understanding the potential for new product development, the attractiveness of a particular market segment, or he potential to reduce costs of supply or distribution

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five forces model

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can influence a business's level of power in an industry by the existing barriers to entry

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threat of new entrants

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suppliers can assert power if they are only one or one of a few businesses that can provide a particular product or service

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bargaining power of suppliers

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buyers can exert power on a business through the number and nature of buyers.

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bargaining power of customers

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can reduce the power of a business if many substitutes exist for a particular product or service

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threat of substitute products

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influences the balance of power in the industry. any change in status, whether it be the quantity and size of competing businesses, their portfolio, or their financial position, will influence the power any one business can exert on the industry

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competitive rivalry within an industry

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includes societal forces that are essentially uncontrollable and influence the microenvironment of a business

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macroenvironment

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different segments of macroenvironments that include economic, social & cultural, competitive, legal, political and technological

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subenvironments

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includes factors that influence consumer purchase ability and buying behavior.

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economic environment

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inflation rates, income levels, and unemployment levels all contribute to the economic environment

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economic environment

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is an increase int he price of a collection of goods that represents the overall economy

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inflation

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are average consumer earnings used to approximate national earnings. Changes in income inversely relate to changes in demand

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income levels

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are the number of unemployed persons divided by the aggregate labor force. increases in these levels reduce the ability of individuals to purchase products and services

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unemployment levels

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includes factors that relate marketing to the needs and wants of society and culture

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social and cultural environment

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characteristics of human population that are used to identify markets.

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demographics

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includes factors that relate to the nature, quantity, and potential actions of current and potential competitors

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competitive environment

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with a _____ number of competitors, there are fewer requirements to react to a competitive action and more time to make a strategic decision

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small

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with ____ of competitors, it can impede a business from taking the actions that it wants to take. maintaining margins would take second place to a need to respond to maintain market position

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lots

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includes factors that provide rules and penalties for violations, and is designed to protect society and consumers from unfair business practices and to protect businesses from unfair competitive practices

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legal environment

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includes factors that select national leadership, create laws, and provide a process for discourse on a wide range of issues

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political environment

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includes factors that influence marketing based on scientific actions and innovation

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technological environment

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the end users of the product or service who include individuals and households that are potential or actual buyers of products and services

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consumer markets

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are products that directly fulfill the desires of consumers and are not intended to assist in the manufacture of other products

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consumer products

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occurs when a consumer purchases a product or service at a price less than the utility of the product or service

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consumer surplus

CE chapters 5 & 7: the meaning of marketing and external environment – Flashcards

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