Chapter 1 Flashcards
What is marketing?
building and maintaining profitable relationships, a managing process by which individuals and firms obtain their wants and needs.
Steps of the Marketing Process
1) Understanding the marketplace
2) Design customer driven strategy
3) Prepare integrated marketing plan
4) Build Customer Relationship
5) Capture profits
Goal of the Marketing Process
create profit + capture value
Needs
state of felt deprivation (physical or social)
Wants
form human needs take place when shaped by culture and personality
Demand
wants backed by purchasing power
Market Offerings
what is offered by a firm to satisfy wants and needs
Customer Value and Satisfaction
buying decisions based on expectation about the value and satisfaction that market offering will offer
Marketing management
choose target markets + build profitable relationships with them
Segmenting
divide market into psychographic, demographic, behavioural or geographical groups because one product cannot satisfy everyone.
Targeting
Choosing one or few segments that will be targeted
Value Proposition
benefits promised to deliver to consumer, “why should i buy from you and not your competitor?”.
Production Concept
increase efficiency, decrease cost
risk of marketing myopia
Product Concept
continuous technological innovations, highest quality
e.g. iPhones
risk of marketing myopia
Marketing Myopia
Myopia: narrow view, only focusing on one element out of many
Selling Concept
buyers will not buy enough unless there is enough selling and promotion effort
Marketing Concept
achieving goals: understanding marketplace, satisfying it better than competition. Figure 1.3
Societal Marketing Concept
Knowing society and consumer’s long-run interests, sustainable marketing
Marketing Mix
marketing tools used to implement marketing strategies
4 Ps: promotion, place, price, product
Customer Satisfaction
extent to which performance matches expectations
Customer Value
extent to which cost matches benefit
Customer Relationship Levels
basic vs full partnership
Customer Relationship Tools
frequency marketing programs (loyalty rewards); club marketing programs (membership)
Why create customer loyalty and retention?
cheaper to keep an old customer than to attract a new one, losing a customer = losing lifetime value
Customer Lifetime Value
total amount received by a consumer during lifetime of relationship.
Formula: average value of purchase x number of times client buys per year x average length of customer relationship (in years)
Share of consumer
portion of price that goes to the firm, higher share of consumer = higher prices
Customer Equity
combined customer lifetime values of all company’s current and potential customers
How to manage Customer Equity
build right relationships with right customers
