Chapter 1

Question 1

What is marketing?

Answer 1

Marketing is engaging customers and managing profitable customer relationships.

The process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return.

Question 2

Name the steps in a marketing process

Answer 2

1. Understand marketplace and customer needs and wants
2. Design a customer-driven marketing strategy
3. Construct an integrated marketing program that delivers superior value
4. Build profitable relationships and create customer delight
5. Capture value from customers to create profits and customer equity

Question 3

What are the five customer and marketplace concepts?

Answer 3

1. Needs, Wants, Demands
2. Market offerings
3. Value & Satisfaction
4. Exchanges & Relationships
5. Markets

Question 4

What is the need, want, demand concept?

Answer 4

Needs: states of felt deprivation – physical, social, individual

Wants: needs shaped by culture, society, and personality (ex. tea vs coffee vs water)

Demands: wants backed with money $$$ (ex. bottled water vs tap water)

Question 5

What is the market offering concept?

Answer 5

Marketing Offerings: combination of products, services, information, and experiences
offered to a market to satisfy a need or a want.

Many sellers make the mistake of paying more attention to the specific products they offer than to the benefits and experiences produced by these products. These sellers suffer from marketing myopia.

Question 6

What is the value & satisfaction concept?

Answer 6

Customers will form expectations about the V&S that market offerings will deliver
& buy accordingly.
à satisfied customers buy again, and tell others; positive
à dissatisfied customers go to the competitors, and tell others; negative

Question 7

What is the exchanges and relationships concept?

Answer 7

Exchange is the act of obtaining a desired object from someone by offering something in return.

Question 8

What is the markets concept?

Answer 8

A market is the set of actual and potential buyers of a product or service. These buyers share a particular need or want that can be satisfied through exchange relationships.

Question 9

What is the modern marketing system?

Answer 9

Suppliers, Company / Competitors, Marketing intermediaries, Consumers

Question 10

What is marketing management?

Answer 10

We define marketing management as the art and science of choosing target markets and building profitable relationships with them.

marketing management is customer management and demand management

Question 11

What are the two questions to ask when designing a winning marketing strategy?

Answer 11

1. What customers will we service (target market)?
2. How can we serve these customers best (value proposition)

Question 12

How does selecting customers to serve work?

Answer 12

1. Divide market into segments – market segmentation
2. Select which segments you will go after – target marketing

Question 13

How does choosing a value proposition work?

Answer 13

Companies must decide how it will serve targeted customers – differentiate and
position itself in the marketplace.

Value proposition: benefits/values promised to be delivered to the customers to satisfy
their needs.

Question 14

What are the 5 concepts of marketing management orientations?

Answer 14

1. The Production Concept
2. The Product Concept
3. The Selling Concept
4. The Marketing Concept
5. The Social Marketing Concept

Question 15

What is the production concept?

Answer 15

Consumers will favor products that are available and highly affordable.

Focus on: production improvement & distribution efficiency.

*Potential negative: Marketing Myopia; focus too hard on operations rather than
satisfying customers.

Question 16

What is the product concept?

Answer 16

Consumers favor products that offer the most quality, performance and
innovative features.

Focus on: continual product improvements.

*Potential negative: Marketing Myopia; consumers do not necessarily want a new
version of the product, but rather a better version to fix the problem.

Question 17

What is the selling concept?

Answer 17

Not enough of the product will be sold unless the company undertakes a large-scale selling and production effort – bring it to them.

Potential negative: aggressive selling carries high risks, focus is on creating sales
rather than making the needs/wants of the market – assumptions that customers
will automatically like the product.

Question 18

What is the marketing concept (orientation)?

Answer 18

Customer-centered sense-and-respond philosophy; delivers desired satisfaction.
Outside-in perspective – start with a well-defined market and focus on customer needs.

Understand customer needs better than they do, need the right product for them.

Question 19

What is the societal marketing concept?

Answer 19

Marketing decisions should consider consumer’s wants, company’s
requirements, consumer’s long-run interests, and society’s long-run interests.

• Society (human welfare)
• Consumers (want satisfaction)
• Company (profits)

Question 20

What is a marketing strategy?

Answer 20

Which customers will be served & how value is created.

Question 21

What are the 4 P’s for marketing mix?

Answer 21

1. Product; need-satisfying market offering, branding
2. Price; what will be charged, sales
3. Place; channels
4. Promotion; advertising

Question 22

What is customer relationship management?

Answer 22

Overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

Acquiring, keeping, and growing customers

Question 23

What is customer value?

Answer 23

Customer’s evaluation of the difference between all the benefits and all the
costs of a market offering relative to those of competing offers, act of “perceived”
value

Question 24

What is customer satisfaction?

Answer 24

The extent to which a product’s perceived performance matches a buyer’s
expectations.

Producers do not try to maximize satisfaction because that would require lower
prices and more services – they look to generate customer satisfaction profitably.

Question 25

What is customer-engagement marketing?

Answer 25

Direct and continual customer involvement in shaping brand conversations,
brand experiences, and brand community.

Question 26

What technique should companies use instead of intrusion?

Answer 26

Attraction

Question 27

What is consumer-generated marketing?

Answer 27

Consumers are shaping their own brand experiences and those of others through
blogs, videos, social media, etc. This could be invited or uninvited.

Question 28

What is partner relationship management?

Answer 28

Working closely with others inside and outside the company to jointly bring more
value to customers.

Question 29

What are the two factors to capturing value from customers?

Answer 29

1. Creating Customer Loyalty and Retention

*It is five times cheaper to keep an old customer than acquire a new one

2. Growing Share of Customer

Share of Customer – portion of the customer’s purchasing that a company gets in its
product categories.

3. Building Customer Equity

total combined customer lifetime values of all the company’s current and
potential customers.

Question 30

What are the 4 types of customers?

Answer 30

1. Butterflies
2. True friends
3. Barnacles
4. Strangers