Please enter something

Marketing Midterm Chapter 1

question

Marketing (Definition)
answer

the process by which companies create value for customers & build strong relationships in order to capture value from customers in return
question

Markets= people
answer

market are not a physical structure!
question

Marketing process (5 steps)
answer

1. understand the marketplace & customer needs/wants 2. design a customer driven market strategy 3. construct a marketing program that delivers superior value 4. Build profitable relationships & create customer delight 5. Capture value from customers to create profits & customer equity (this is where the company reaps rewards)
question

Marketer’s 4 tools
answer

Product Price Place Promotion
question

Customer Needs (definition)
answer

states of felt deprivation
question

Customer Needs (examples)
answer

physical: food, clothing, warmth, safety social: belonging, affection individual: knowledge, expression
question

Customer Wants (definition)
answer

the form human needs take as they are shaped by culture & individual personality
question

Wants (example)
answer

An American needs food but wants a big mac, fries, & soft drink. A new Guinean needs food but wants tacos & rice
question

needs become wants which are influenced by culture
answer

example: Muslim cultures can’t drink alcohol so maybe they need & want juice?
question

Demands (definition)
answer

human wants that are backed by buying power (demand= generates traffic)
question

What do marketing companies do with customers wants, needs, & demands?
answer

they go to great lengths to understand them. They analyze consumer research & data and try to see the stores through the customer’s eyes (i.e.-amazon)
question

Marketing uses all these terms interchangeably so when they say needs or wants they are referring to:
answer

“market demand”
question

Market Offering (definition)
answer

some combination of products, services, information, or experiences offering to a market to satisfy a need or want
question

Market Offerings (examples)
answer

banking airline hotel retailing persons places organization “Pure Michigan”- tourism “Let’s Move”- public service campaign to reduce obesity
question

Marketing Myopia
answer

the mistake of paying more attention to the specific product a company offers that to the benefits and experiences produced by these products
question

marketing myopia (example)
answer

if Disneyland were to sell just tickets (focusing on product instead of experience) instead of the “brand experience” of immersing yourself and family in a world of wonder.
question

Exchange (definition)
answer

the act of obtaining a desired object from someone by offering something in return (doesn’t include just $ in return); marketers want to maintain exchange relationships
question

exchange (example)
answer

political candidate wants a vote church wants new membership
question

Market (definition)
answer

the set of all actual or potential buyers of a product or service
question

Customer needs:
answer

value & satisfaction
question

Marketers need to:
answer

set the right level of expectation; not too high & not too low
question

Major environmental forces
answer

A company & it’s competitors research the market to understand customer needs, they then create & send their market offerings & messages through intermediaries, as long as they find a supplier that meets the requirements.
question

Marketing Management (definition)
answer

the art and science of choosing target markets and building profitable relationships with them.
question

marketing management (example)
answer

What customers will we serve? (target market) How can we best serve them? (value proposition)
question

Market segmentation
answer

categorizing markets into segments of customers
question

target marketing
answer

choosing which segments of customers to go after
question

market segmentation example
answer

Amex ID’d several groups as potential customers such as elderly & business professionals
question

target marketing example
answer

choosing to serve the elderly
question

value proposition (definition)
answer

benefits/values a company offers the customers in order to satisfy their needs
question

value proposition (example)
answer

Facebook helps you “connect & share with people in your life”
question

5 concepts which companies design & carry out their marketing strategies:
answer

production product selling marketing social marketing
question

Production Concept
answer

consumers will favor products that are available and highly affordable (therefore, management should focus on production/distribution efficiency which could eventually lead to marketing myopia)
question

Product Concept
answer

consumers favor product that offers the most quality, performance, and features focus: continuous product improvement; which could also lead to marketing myopia ex: mouse trap
question

Selling concept (most companies follow this)
answer

consumers will not buy enough of the firms products unless it undertakes a large scale selling and promotion effort start with: factory focus: existing products Means: selling & promoting ends: profits through sales volume
question

Marketing concept
answer

knowing the wants/needs of current target market & delivering desired satisfaction better than competitors do (ex: frank purdue and his chicken sales) start with: market focus: customer needs Means: integrated marketing ends: profits through satisfaction
question

customer-driven marketing
answer

understanding customer needs better than customers do themselves ex: henry ford ” if i asked them what they wanted they would’ve said faster horses”
question

social marketing concept
answer

making good marketing decisions by considering: consumer’s wants and long-term interests, company’s requirements, and society’s long-run interests; does it help social welfare? corporate social responsibility i.e.- sustainable marketing
question

societal marketing concept triangle
answer

society (human welfare) consumers company (want satisfaction) (profits)
question

what does a marketing strategy do?
answer

outlines which customers it will serve and how it will create value for them
question

Integrated marketing program
answer

comprehensive plan that communicates and delivers intended value to chosen customers
question

marketing mix
answer

set of tools the firm uses to implement it’s marketing strategy: product price promotion place
question

4th step of marketing process (also most important)
answer

building and managing profitable customer relationships
question

Customer relationship management
answer

the overall process of building and maintaining profitable customer relationships by delivering superior customer value & satisfaction (deals with: acquiring, keeping, & growing customers)
question

relationship building blocks:
answer

customer value & satisfaction
question

customer-perceived value
answer

the difference between total customer value and total customer cost (comparing competing offers based on benefits & costs)
question

examples of customer-perceived values
answer

“you get what you pay for” “sensible products at affordable prices”
question

Customer satisfaction
answer

the extent to which a product’s perceived performance matches a buyers expectations (if happy, these delighted customers not only come back but also recruit new customers) example: Jet blue- you above all
question

basic relationships
answer

Nike does not get to know the customers personally, but builds relationships through websites, apps, public relations, and brand-building advertising
question

full partnerships
answer

nike sales reps work closely with dicks, sports authority, etc
question

frequency marketing programs
answer

for repeat customers (airline miles, bonus cards)
question

Changing nature of customer relationships
answer

companies might want to fire those customers that cost more than they’re worth, so they can coddle the ones who provide the money. Instead, they are better to form deeper relationships with certain profitable customers by weeding out the others.
question

Customer managed relationships
answer

customers, empowered by today’s technologies, interact with companies and each other to shape their relationships with brands
question

consumer generated marketing
answer

consumers are playing a bigger role in shaping their own brand experience ex: what’s your starbucks idea?
question

Partner relationship management
answer

working closely with partners in other company departments and outside the company to jointly bring greater value to customers ex: IBM guy at professors bank
question

partner relationship management (cont’d)
answer

Partners inside the company is every functional area interacting with customers -electronically -cross-functional teams
question

partner relationship management (cont’d)
answer

Marketers connect with their suppliers, channel partners, and competitors by developing partnerships Supply chain is a channel that stretches from raw materials to components to final products to final buyers
question

Customer Lifetime value
answer

the value of an entire stream of purchases that the customer would make over a lifetime of patronage (ex: stew leonard- disneyland of dairy store; each customer spends about $100 per week, 50 weeks a year over 10 years= $50,000/ customer)
question

Share of customer
answer

the portion of a customers purchasing that a company gets in its product categories ex: companies want to increase “share of wallet” “share of stomach”
question

customer equity
answer

the total combined customer lifetime value of all the company’s customers
question

How to build customer equity:
answer

Right relationships with the right customers involves treating customers as assets that need to be managed and maximized; Different types of customers require different relationship management strategies
question

the changing economic environment
answer

new consumer frugality; marketers focus on the value for the customer
question

the changing marketing landscape
answer

the digital age: internet, digital technologies growth of: not for profit marketing sustainable marketing: CSR
question

pulling it all together
answer

review figure 1.6 on page 28