Chapter 1: managing profitable customer relationships

Question 1

Marketing is

Answer 1

social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.

Question 2

Simple model of the marketing process:

Answer 2

1. UNDERSTAND marketplace, customer and their wants/needs
2. Design a customer-driven MARKETING STRATEGY
3. construct a marketing program that delivers SUPERIOR VALUE
4. Build profitable RELATIONSHIPS and CUSTOMER DELIGHT(high level of satisfaction beyond needs)
5. CAPTURE VALUE from customers to create PROFIT and CUSTOMER EQUITY (total combined lifetime value of a company’s customers.)

Question 3

Market segmentation

Answer 3

divides the market into segments of customers

Question 4

Target marketing

Answer 4

select the segment to cultivate

Question 5

Marketing management

Answer 5

demand management
demarketing

Question 6

Demand management is

Answer 6

finding and increasing demand, also changing or reducing demand, such as in demarketing.

Question 7

Demarketing is

Answer 7

temporarily or permanently reducing the number of customers or shifting their demand.

Question 8

Marketing management philosophies

Answer 8

1. Production concept
2. Product concept
3. Selling concept
4. Marketing concept
5. societal marketing concept

Question 9

according to Production concept:

Answer 9

consumers will favor products that are available and highly affordable. Therefore, management should focus on improving production and distribution efficiency.

Question 10

according to Product concept:

Answer 10

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

Question 11

according to selling concept

Answer 11

consumers will not buy enough of the firm’s products unless it undertakes a largescale selling and promotion effort.

Question 12

according to marketing concept

Answer 12

achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.

Question 13

according to societal concept

Answer 13

questions whether the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare

Question 14

The selling concept
Starting point:
Focus:
Means:
Ends:

Answer 14

Starting point: Factory
Focus: Existing products
Means: Selling and promoting
Ends: Profit through sales volume

Question 15

The marketing concept
Starting point:
Focus:
Means:
Ends:

Answer 15

Starting point: Market
Focus: Customer needs
Means: Integrated marketing
Ends: Profits through customer satisfaction

Question 16

The societal marketing concept is a triangle between:

Answer 16

Society- human welfare
Company- profits
Consumers- want satisfaction

Question 17

Partner relationship marketing:

Answer 17

Partners inside the firm:
1. all employees are customer focused
2. Teams coordinate efforts towards customers

Partners outside the firm:
1. supply chain management
2. strategic alliances

Question 18

Why Customer loyalty retention:

Answer 18

customer lifetime value(customer equity):
entire stream of purchases that the customer would make over a lifetime of patronage

Share of customer:
portion or percentage of a customer’s total purchasing in a particular product category that a specific company captures.

Question 19

True friends

Answer 19

Good fit between company’s offerings and customer’s needs; highest profit potential and long term customer

Question 19

Customer relationship Groups:

Answer 19

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

Question 20

Butterfly

Answer 20

Good fit between company’s offerings and customer’s needs; high profit potential but short term customer

Question 21

strangers

Answer 21

Little fit between company’s offerings and customer’s needs; lowest profit potential.
short term and low profitability

Question 22

Barnacles

Answer 22

Limited fit between company’s offerings and customer’s needs; low profit potential.
long term customer but low profitability

Question 23

New marketing landscape:

Answer 23

> Rapid globalization
Not-for-profit marketing
Ethics and social responsibility
New world of marketing relationships