Ch 1: Overview of Marketing

Question 1

Define: exchange

Answer 1

The trade of things of value between the buyer and the seller so that each is better off as a result.

Question 2

Define: market

Answer 2

Refers to the group of people who need or want a company’s products or services and have the ability and willingness to buy them.

Question 3

Define: marketing

Answer 3

A set of business practices designed to plan for and present an organization’s products or services in ways that build effective customer relationships.

Question 4

Define: marketing plan

Answer 4

A written document composed of an analysis of the current situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four P’s, action programs, and projected or pro forma income (and other financial) statements.

Question 5

Define: need

Answer 5

Basic necessities, such as food, clothing, shelter, and safety

Question 6

Define: target market

Answer 6

The customer segment or group to whom the firm is interested in selling its products and services.

Question 7

Define: want

Answer 7

The particular way in which a person chooses to satisfy a need, which is shaped by a person’s knowledge, culture, and personality.

Question 8

Define: marketing mix

Answer 8

Four P’s: Product, Price, Place and Promotion - the controllable set of activities that a firm uses to respond to the wants of its target markets.

Question 9

Define: B2B

Answer 9

Business-to-business - The process of selling merchandise or services from one business to another.

Question 10

Define: B2C

Answer 10

Business-to-consumer - The process in which businesses sell to consumer.

Question 11

Define: C2C

Answer 11

Consumer-to-consumer - The process in which consumers sell to other consumers.

Question 12

Define: social media

Answer 12

The use of digital tools to easily and quickly create and share content to foster dialogue, social relationships, and personal identities.

Question 13

Define: value

Answer 13

Reflects the relationship of benefits to costs, or what the consumer gets for what he or she gives.

Question 14

Define: relationship orientation

Answer 14

A method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long-term relationship.

Question 15

Define: CRM

Answer 15

Customer relationship management - A business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm’s most valued customer.

Question 16

Define: supply chain

Answer 16

The group of firms and set of techniques and approaches firms use to make and deliver a given set of goods and services.

Raw Material Suppliers -> Manufacturer -> Distributor -> Customer

Question 17

Define: goods

Answer 17

Items that can be physically touched.

Question 18

Define: ideas

Answer 18

Thoughts, opinions, philosophies, and intellectual concepts.

Question 19

Define: services

Answer 19

Intangible customer benefits that are produced by people or machines and cannot be separated from the producer.

Question 20

Define: value cocreation

Answer 20

Customers can act as collaborators to create the product and services. When clients work with their investment advisors, they cocreate their investment portfolios.

Question 21

Define: price

Answer 21

The overall sacrifice a consumer is willing to make - money, time, energy - to acquire a specific product or services.

Question 22

L01: Define the role of marketing and explain the core concepts

Answer 22

Marketing is a set of business practices designed to plan for and present an organization’s products or services in a way that build effective customer relationships.

Marketing strives to create value in many ways. If marketers are to succeed, their customers must believe that the firm’s products and services are valuable; that is, the products and services are worth more to the consumers than they cost.

Marketers also enhance the value of products and services through various forms of communication, such as advertising and personal selling. Through communications, marketers educate and inform customers about the benefits of their products and services and thereby increase their perceived value.

Marketers facilitate the delivery of value by ensuring the right products and services are available when, where, and in the quantities their customers want. Better marketers are not concerned about just one transaction with their customers; they recognize the value of loyal customers and strive to develop long-term relationships with them.

Question 23

L02: Describe how marketers create value for a product or service

Answer 23

Value represents the relationship of benefits to cost. Firms can improve their value by increasing benefits, reducing costs, or both. The best firms integrate a value orientation into everything they do. If a move doesn’t increase benefits or reduce costs, it probably shouldn’t occur.

Firms become value driven by finding out as much as they can about their customers and those customers’ needs and wants. They share this information with their partners, both up and down the supply chain, so the entire chain collective can focus on the customer. The key to true value-based marketing is the ability to design products and services that achieve the right balance between benefits and costs - not too little, not too much.

Value-based marketers aren’t necessarily worried about how much money they will make on the next sale. Instead, they are concerned with developing a lasting relationship with their customers so those customers return again and again.

Question 24

L03: Summarize the 4 orientations of marketing

Answer 24

Product oriented: belief that a good product will sell itself. Manufacturers are concerned with product innovation, not with satisfying the needs of the individual consumers, and keep producing with the assumption that people will buy it. Marketing with this orientation is simply about informing the customer that a product exists, whether it is used at all.

Sales orientation: relying on a sales team to sell. Production is maximized and then heavy doses of personal selling and advertising help distribute and sell the product. The role of the marketing is focused only on the sale of the products.

Market oriented: celebrating the customer, who can decide what is best for him/her, based on the attributes of a product or service. Rather than simply produce and sell, manufacturers with this orientation seeks to learn customer needs and wants, and design products to fit the customers. Marketing plays an important role to communicate the different attributes or value, created by each product.

Value based orientation: in addition to discovering needs and wants, it is critical to deliver more value to customers than competitors. Value reflects the relationship of benefits to costs, or what you get for what you give. Marketing plays an integral role not only in creating and delivering the valuable product, but also in communicating the value, especially in relation to other products available, and transacting the value through the customers.

Question 25

L04: What is the importance of marketing both within and outside the firm

Answer 25

Successful firms integrate marketing throughout their organizations so that marketing activities coordinate with other functional areas, such as product design, productions, logistics, and HR, enabling them to get the right product to the right customers at the right time. Marketing helps facilitate the smooth flow of goods through the supply chain, all the way from raw materials to the consumer. From a personal perspective, the marketing function facilitates your buying process, and can support your career goals.

Marketing also can be important for society through its embrace of solid, ethical business practices. Firms “do the right thing” when they sponsor charitable events, seek to reduce environmental impacts, and avoid unethical practices. Such efforts endear the firm to customers. Finally, marketing is a cornerstone of entrepreneurial-ism. Many great companies have been founded by outstanding marketers, and an entrepreneurial spirit pervades the marketing decisions of firms of all sizes.