Chapter 1: Marketing — Creating and Capturing Customer Value Flashcards
What is marketing?
Marketing is the management of profitable customer relationships.
What is a decoy in marketing?
A decoy is a tactic which aims to persuade customers into choosing a more profitable option for the company.
What are the two main goals in marketing?
- To attract new customers by offering superior quality.
- To keep and build current customers by offering satisfaction.
Explain the marketing process.
The marketing process involves 5 core steps which are 1) understanding the marketplace and customer needs and wants 2) design a customer-driven marketing strategy 3) construct a marketing program that delivers superior value 4) build profitable relationships and create customer delight 5) capture value from those profitable relationships.
Discuss the five core marketplace concepts.
The five core marketplace concepts are 1) needs, wants, and demands 2) market offerings 3) value and satisfaction 4) exchanges and relationships 5) markets
How does customer needs differ from customer wants? Give an example for each item.
Customer needs is a state of felt deprivation that is not created by marketers. In the case of customer wants, it is a form of need that is shaped by culture and individual personality.
Customer need = Food
Customer want = Luxury 5-five star seafood course
What creates demand?
Demand is created when there are wants and buying power from customers.
What is marketing myopia? Name an example.
Marketing myopia is when marketers focus too much on delivering satisfaction for customer wants and lose sight of the customer needs. In other terms, they focus too much on specific products rather than its benefits and experiences.
Example = The Sony Walkman offers a remote for its device but it can only play 12 songs; Apple’s doesn’t offer a remote but it can play 1000 songs.
What is a market offering? and what are some types of it?
A market offering is what a business will present to the customers to satisfy their needs and wants. Some types of a market offering would be a person, an idea, a product, a service, and a organization.
Why should marketers be careful of when setting expecations?
Because in some cases where the performance of a product doesn’t exceed its expectations, it will cause customer dissatisfaction. On the contrary, if a product’s performance exceeds its expectations, it will cause customer delight.
What is a market in marketing?
A market is the set of actual and potential buyers of a product who share a need or want that can be satisfied.
Elaborate on the marketing system.
The marketing system involves several different parties which are the company, its competitors, its suppliers, its intermediaries, and, lastly, its customers, all of which play a role in adding value to a product.
What do you need to think of when designing a marketing strategy?
- Who are your customers or your target market.
- How can we best serve these customers or your value proposition.
How do firms in the same market offering the same product differentiate from others?
They differentiate from others in their value proposition or what they promise to deliver to satisfy customer needs.
Discuss marketing management orientations that guide strategy.
There are five main concepts to marketing management orientations which are 1) the production concept (in which firms believe customers prefer products that are inexpensive and widely available) 2) the product concept (in which firms believe customers prefer products that offer the most quality, performance or innovative features) 3) the selling concept (in which firms produces their products first then try to promote and sell it) 4) the marketing concept (in which the marketing process begins with identifying customer needs and wants) 5) the societal-marketing concept (in which companies are responsible to make decisions that consider the society’s long-run interest.
What should a company consider when approaching with a societal-marketing concept?
It should consider society (human welfare), consumers (want satisfaction), and itself (profits).
What is the function of an integrated marketing plan?
An integrated marketing plan puts the marketing strategy into action with that also considering the marketing mix which are now consumers, costs, convenience, and communication.
What is customer relationship management?
It is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
What is the one thing that companies should always consider?
The profitability.
How are customer relationships changing? and are there any principles on which this is based on?
Companies are now looking to build deeper, more direct, and more lasting relationships with more carefully selected customers. This is based on Pareto’s principle (80/20 rule).
Through which channels is value captured from customers?
Value is captured via current and future sales, market share, and profit.
Discuss the four customer relationship groups.
The four customer relationship groups are 1) strangers (S-T customers with low profitability; firms should not invest in this group) 2) butterflies (S-T customers with high profitability; good fit between the company’s offering and customer’s need; efforts to convert them into loyal customers are rarely successful) 3) barnacles (L-T customers with low profitability; the most problematic group for its low revenue; firms should seek out methods to reduce service costs to this group) 4) true friends (L-T customers with high profitability; strong fit … ; firms should seek to make continuous relationship investments to delight them).
How is the marketing landscape changing?
The marketing landscape is changing through the uncertain economic environment, the digital age, rapid globalization, calls for more ethics and social responsibility, and the growth of not-for-profit marketing.
Explain the importance of understanding customers.
Understanding the customers allows you to offer products that better match customer needs and wants, create more customer delight, and capture more value from customers.
