Chapter 1: Marketing: Creating Customer Value and Engagement

Question 1

Simple marketing definition

Answer 1

engaging customers and managing profitable customer relationships

Question 2

The twofold goal of marketing

Goals of marketing

Answer 2

to attract new customers by promising superior value and to keep and grow current customers by delivering value and satisfaction.

satisfaction and value

Question 3

Marketing definition

Answer 3

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 4

The marketing process

Answer 4

1) understand the marketplace and customer needs and wants
2) Design a customer value driven marketing strategy
3) Construct an integrated marketing program that delivers superior value
4) Engage customers, build profitable relationships, and create customer delight
5) Capture value from customers to create profits and customer equity

Question 5

The marketing process explained

Answer 5

In the first four steps, companies work to understand consumers, create customer value, and build strong customer relationships. In the final step, companies reap the rewards of creating superior customer value

The first four steps focus on

Question 6

Understanding the Marketplace and Customer Needs

Five core customer and marketplace concepts:

Answer 6

Broken into 5 core customer and marketplace

(1) needs, wants, and demands;
(2) market offerings (products, services, and experiences);
(3) customer value and satisfaction;
(4) exchanges and relationships;
(5) markets.

Question 7

Needs

Answer 7

States of felt deprivation

Include: Basic physical needs for food, clothing, warmth and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression.

Markers did not create these, it is human makeup

Question 8

Wants

Answer 8

the form human needs take as they are shaped by culture and individual personality

Wants are shaped by one’s society and are described in terms of objects that will satisfy those needs

Question 9

Demands

Answer 9

Human wants that are backed by buying power

Question 10

Market Offerings

Answer 10

Products, services, information, and experiences

Some combination of products, services, information, or experiences offered to a market to satisfy a need or a want
not limited to physical products

Also include services—activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything.

Examples include banking, airline, hotel, retailing, and home-repair services.

Question 11

Marketing Myopia

Answer 11

The mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products

Question 12

Exchange

Answer 12

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

Question 13

Market

Answer 13

the set of actual and potential buyers of a product or service.

Question 14

Both ____ and ____ carry out marketing

Answer 14

Buyers

Sellers

Question 15

marketing management

Answer 15

the art and science of choosing target markets and building profitable relationships with them.

Question 16

The marketing manager’s aim

Answer 16

is to engage, keep, and grow target customers by creating, delivering, and communicating superior customer value.

Question 17

the marketing manager must answer two important questions:

two questions

Answer 17

What customers will we serve (what’s our target market)?

and

How can we serve these customers best (what’s our value proposition)

Question 18

A brand’s value proposition

Answer 18

the set of benefits or values it promises to deliver to consumers to satisfy their needs.

answer the customer’s question: “Why should I buy your brand rather than a competitor’s?”

Question 19

five alternative concepts under which organizations design and carry out their marketing strategies:

Marketing Management Orientations

Answer 19

the production, product, selling, marketing, and societal marketing concepts.

Question 20

The Production Concept

Answer 20

The idea that consumers will favour products that are available and highly affordable.

Therefore, management should focus on improving production and distribution efficiency.

Question 21

The Product Concept

Answer 21

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

Under this concept, marketing strategy focuses on making continuous product improvements.

Can lead to marketing myopia``

Question 22

The Selling Concept

Answer 22

The idea that consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort.

Often seen in normally non bought things such as life insurance or blood donations

Question 23

The Marketing Concept

Answer 23

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

The job is not to find the right customers for your product but to find the right products for your customers.

Question 24

The selling concept figure 1.3

Answer 24

Factory - Existing products - Selling and promoting - Profit through sales volume

Question 25

The marketing concept figure 1.3

Answer 25

Market - customer needs - integrated marketing - profits through customer satisfaction

Question 26

The Societal Marketing Concept

Answer 26

The idea that a company’s marketing decisions should consider consumer’s wants, the company’s requirements, consumer’s long-run interests, and society’s long-run interests

Question 27

companies should balance three considerations in setting their marketing strategies:

Answer 27

company profits, consumer wants, and society’s interests

Question 28

The major marketing mix tools are classified into four broad groups, called the four Ps of marketing:

FOUR P’S of Marketing

Answer 28

1) product,
2) price,
3) place,
4) promotion

Question 29

_________ management is perhaps the most important concept of modern marketing

Answer 29

Customer relationship

Question 30

customer relationship management

Answer 30

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

It deals with all aspects of acquiring, engaging, and growing customers.

Question 31

customer-perceived value

Answer 31

The customer’s evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers

Question 32

customers often do not judge values and costs “accurately” or “objectively.”

They act on ________

Answer 32

perceived value.

Question 33

Customer satisfaction

Answer 33

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

If the product’s performance falls short of expectations, the customer is dissatisfied

If performance matches expectations, the customer is satisfied.

If performance exceeds expectations, the customer is highly satisfied or delighted.

Question 34

customer-engagement marketing

Answer 34

Making the brand a meaningful part of consumer’s conversations and lives by fostering direct and continuous customer involvement in shaping brand conversations, brand experiences, and brand community

Question 35

consumer-generated marketing

Answer 35

Brand exchanges created by consumers themselves – both invited and uninvited – by which consumers are playing an increasing role in shaping their own brand experiences and those of others.

Question 36

Partner Relationship Management

Answer 36

working with others inside and outside the company to jointly engage and bring more value to customers.

Question 37

Customer lifetime value

Answer 37

The value of the entire stream of purchases a customer makes over a lifetime of patronage

Question 38

Share of customer

Answer 38

The potion of the customer’s purchasing that a company gets in its product categories

examples: Supermarkets and restaurants want to get more “share of stomach.” Car companies want to increase “share of garage,” and airlines want greater “share of travel.”

Question 39

Customer equity

Answer 39

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

May be better measure of a firm than market share or profits

Question 40

________ may be a better measure of a firm’s performance than current sales or market share.

Whereas sales and market share reflect the past, customer equity suggests the _____

Answer 40

Customer equity

future

Question 41

Customer relationship groups

Answer 41

Strangers, Butterflies, Barnacles, True Friends

Question 42

Strangers

Answer 42

show low potential profitability and little projected loyalty

Don’t invest anything in them; make money on every transaction.

Question 43

Butterflies

Answer 43

potentially profitable but not loyal.

There is a good fit between the company’s offerings and their needs.

However, like real butterflies, we can enjoy them for only a short while and then they’re gone

Example: stock market investors who trade shares often and in large amounts but who enjoy hunting out the best deals without building a regular relationship with any single brokerage company

Question 44

True friends

Answer 44

both profitable and loyal

• strong fit between their needs and the company’s offerings
• Best of the best

Question 45

Barnacles

Answer 45

Highly loyal but not very profitable

There is a limited fit between their needs and the company’s offerings

Example: bank customers who bank regularly but do not generate enough returns to cover the costs of maintaining their accounts

Question 46

Major trends and forces that are changing the marketing landscape and challenging marketing strategy

Answer 46

1) the digital age,
2) the growth of not-for-profit marketing,
3) rapid globalization,
4) the call for sustainable marketing practices.

Question 47

The Digital Age: Online, Mobile, and Social Media Marketing

Answer 47

Engaging consumers via their digital devices using digital marketing tools

Question 48

Digital and social media marketing

Answer 48

involves using digital marketing tools such as websites, social media, mobile ads and apps, online video, email, blogs, and other digital platforms to engage consumers anywhere, anytime via their computers, smartphones, tablets, internet-ready TVs, and other digital devices

Question 49

Mobile Marketing

Answer 49

perhaps the fastest-growing digital marketing platform

Using mobile channels to stimulate immediate buying, make shopping easier, and enrich the brand experience

Question 50

Big Data

Answer 50

Mass amounts of information that can be used to benefit a brand and customers.

use such big data to gain deep customer insights, personalize marketing offers, and improve customer engagements and service.

Question 51

artificial intelligence (AI)

Answer 51

AI involves machines that think and learn in a way that looks and feels human but with a lot more analytical capacity

Question 52

The Growth of Not-for-Profit Marketing

Answer 52

many not-for-profit organizations, such as universities, hospitals, museums, zoos, symphony orchestras, foundations, and even churches.

Sound marketing can help them attract membership, funds, and support.

Question 53

market segmentation

Answer 53

dividing the market into segments of customers

Question 54

target marketing

Answer 54

selecting which segments it will cultivate

Question 55

Target Market

Answer 55

• Selecting customers to serve
• Market segmentation refers to dividing the markets into segments of customers.
• Target marketing refers to selecting which segments to go after.
• The company wants to select only customers that it can serve well and profitably!

Question 56

Marketing Management Orientations

Answer 56

• Production concept
• Product concept
• Selling concept
• Marketing concept
• Societal marketing concept

Question 57

Managing Customer Relationship sand Capturing Customer Value

Answer 57

Engaging customers and managing customer relationships–Customer relationship management–Customer-engagement marketing–Consumer-generated marketing–Partner relationship management

Question 58

Capturing Value from Customers

Answer 58

–Creating customer loyalty and retention
–Growing share of customer
–Building customer equity

Question 59

Customer-driven companies

Customer driven

Answer 59

research customers deeply to learn about their​ desires, gather new product​ ideas, and test product improvements.

Question 60

Frequency marketing program

Answer 60

Asher Airlines instituted a marketing program whose intent is to create a relationship with customers with seat upgrades and free miles for their continued patronage. What customer relationship tool is Asher Airlines​ using?