1.2 Understanding the Marketplace and Customer Needs Flashcards
What are the five core customer and marketplace concepts that we look at in this section?
(1) needs, wants, and demands;
(2) market offerings (products, services, and experiences);
(3) customer value and satisfaction;
(4) exchanges and relationships; and
(5) markets.
Definition of a Needs
Needs: States of felt deprivation.
They include basic physical needs for food, clothing, warmth, and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression.
Marketers did not create these needs; they are a basic part of the human makeup.
Definition of Wants
Wants: The form human needs take as they are shaped by culture and individual personality.
A person needs food but wants a Big Mac, fries, and a soft drink.
When backed by buying power, wants become demands
Definition of Demands
Demands: Human wants that are backed by buying power.
Given their wants and resources, people demand products and services with benefits that add up to the most value and satisfaction.
Companies go to great lengths to learn about and understand customer needs, wants, and demands. What are some of the things they must do?
They conduct consumer research, analyze mountains of customer data, and observe customers as they shop and interact, offline and online.
People at all levels of the company—including top management—stay close to customers.
Definition of Market offerings.
Market offerings: Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.
What is Marketing Myopia?
Marketing myopia: The mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products.
They are so taken with their products that they focus only on existing wants and lose sight of underlying customer needs. They forget that a product is only a tool to solve a consumer problem. A manufacturer of quarter-inch drill bits may think that the customer needs a drill bit. But what the customer really needs is a quarter-inch hole.
Consumers usually face a broad array of products and services that might satisfy a given need. How do they choose among these many market offerings?
Customers form expectations about the value and satisfaction that various market offerings will deliver and buy accordingly.
Satisfied customers buy again and tell others about their good experiences.
Dissatisfied customers often switch to competitors and disparage the product to others.
Marketers must be careful to set the right level of expectations. What can happen if they don’t?
If they set expectations too low, they may satisfy those who buy but fail to attract enough buyers. If they set expectations too high, buyers will be disappointed.
When does marketing occur?
Marketing occurs when people decide to satisfy their needs and wants through exchange relationships.
What is an Exchange?
Exchange: The act of obtaining a desired object from someone by offering something in return.
What does marketing consist of and what does this involve?
Marketing consists of actions taken to create, maintain, and grow desirable exchange relationships with target audiences involving a product, service, idea, or other object.
Definition of a Market
Market: The set of all actual and potential buyers of a product or service.
These buyers share a particular need or want that can be satisfied through exchange relationships.
What must Sellers do in order to sucessfully market their product or service?
Sellers must search for and engage buyers, identify their needs, design good market offerings, set prices for them, promote them, and store and deliver them.
What are some core Marketing activities?
Consumer research
Product development
Communication
Distribution
Pricing
Service
How do consumers participate in marketing?
Consumers market when they:
Search for products
Interact with companies to obtain information
Make their purchases
Today’s digital technologies, from websites and smartphone apps to the explosion of social media, have empowered consumers and made marketing a truly two-way affair.
How has this changed marketing aproaches and what questions does a marketer need to ask themselves?
Thus, in addition to customer relationship management, today’s marketers must also deal effectively with customer-managed relationships.
Marketers are no longer asking only “How can we influence our customers?” but also “How can our customers influence us?” “How can our customers influence each other?”
What does marketing involve in terms of competitors?
Marketing involves serving a market of final consumers in the face of competitors.
The company and competitors research the market and interact with consumers to understand their needs.
Then they create and exchange market offerings, messages, and other marketing content with consumers, either directly or through marketing intermediaries.
What are some major environmental forces that all Marketing forces must consider?
Each party in the system is affected by major environmental forces:
Demographic
Economic
Natural
Technological
Political
Social/Cultural
A Modern Marketing System (Figure)
Aside from a companys own actions, what does building a profitable relationship depend on?
Thus, a company’s success at engaging customers and building profitable relationships depends not only on its own actions but also on how well the entire system serves the needs of final consumers.
