Intro to Marketing

Question 1

what is marketing

Answer 1

a process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.

Question 2

(what is marketing)

The twofold goal of marketing:

Answer 2

= attract new customers by promising superior value

= grow current customers by delivering satisfaction

Question 3

(what is marketing)

The 5 steps of the marketing process

Answer 3

Companies work to understand consumers, creating customer value and strong r/s

1) Understand marketplace + customer needs + wants
2) Design a customer value-driven marketing strategy
3) Construct an integrated marketing program that delivers superior value
4) Build profitable r/s + create customer delight

5) Capture value from customers to create profits and customer equity
==> By creating superior customer value, companies capture value from consumers in the form of SALES, PROFITS + LONG-TERM CUSTOMER EQUITY

Question 4

Understanding marketplace + customer needs/wants/demands

Answer 4

needs = states of deprivation, physical (food,clothing,safety), social (affection,belonging), individual (knowledge, self expression)

wants = the form that needs take as they are shaped by one’s society and are described in terms of objects that will satisfy those needs

demands = wants that are backed by buying power, they become demands

Question 5

(Understanding the Marketplace and Customer Needs)

market offerings

Answer 5

some combination of products, services, information, or experiences offered to a market to satisfy a need or want.

Question 6

(Understanding the Marketplace and Customer Needs)

marketing myopia

Answer 6

the mistake of focusing only on existing wants and losing sight of underlying consumer needs.

Question 7

(Understanding the Marketplace and Customer Needs)

customer value and satisfaction

Answer 7

Customers form expectations about the value and satisfaction that various market offerings will deliver and buy accordingly.

Satisfied customers buy again and tell others about their good experiences.

Dissatisfied customers often switch to competitors and disparage the product to others.

Marketers have to set the right lvl of expectations
if too low = hey may satisfy those who buy but fail to attract enough buyers.
if too high = buyers will be disappointed.

Question 8

(Understanding the Marketplace and Customer Needs)

Exchanges and Relationships

Answer 8

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

Marketing occurs when people decide to satisfy their needs and wants through exchange relationships. Marketing actions try to create, maintain, and grow desirable exchange relationships.

Question 9

(Understanding the Marketplace and Customer Needs)

Markets

Answer 9

Suppliers
             ↓            ↓
  Company     Competitors
             ↓            ↓
 Marketing Intermediaries
                     ↓
          Final Consumers

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.

Marketing means managing markets to bring about profitable customer relationships. Activities such as consumer research, product development, communication, distribution, pricing, and service are core marketing activities.

today’s marketers must also deal effectively with customer-managed relationships asking “How can our customers influence us/eachother?”

Question 10

(Designing a Customer Value-Driven Marketing Strategy)

Marketing management

Answer 10

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

What customers will we serve?

How can we best serve these customers?

Question 11

(Designing a Customer Value-Driven Marketing Strategy)

Market segmentation

Answer 11

refers to dividing the markets into segments of customers.

The marketing manager’s aim is to find, attract, keep, and grow target customers by creating, delivering, and communicating superior customer value.

Question 12

(Designing a Customer Value-Driven Marketing Strategy)

Target marketing

Answer 12

refers to which segments to go after.

To design a winning marketing strategy, the marketing manager must answer two important questions:
What customers will we serve (what’s our target market)?
How can we serve these customers best (what’s our value proposition)?

Question 13

(Designing a Customer Value-Driven Marketing Strategy)

What is a value proposition?

Answer 13

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

Question 14

(Designing a Customer Value-Driven Marketing Strategy)

Marketing Management Orientations

Answer 14

The 5 concepts under which organisations design and carry out their marketing strategies

Production concept
Product concept
Selling concept
Marketing concept
Societal Marketing concept

Question 15

(Designing a Customer Value-Driven Marketing Strategy)

Production concept

Answer 15

management focuses on improving production and distribution efficiency.

Consumers will favor products that are available and highly affordable.

dominate through low labor costs, high production efficiency, and mass distribution but can lead to marketing myopia

Question 16

(Designing a Customer Value-Driven Marketing Strategy)

Product concept

Answer 16

The focus is on continuous product improvements.

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

buyers may look for alternative solutions rather than an upgraded original solution so can lead to marketing myopia

Question 17

(Designing a Customer Value-Driven Marketing Strategy)

Selling concept

Answer 17

Consumers will not buy enough of the firm’s products unless the firm undertakes a large-scale selling and promotion effort.

typically practiced with unsought goods (dont normally think of buying e.g. life insurance/blood donations)

Aggressive selling, however, carries high risks. It focuses on creating sales transactions rather than on building long-term, profitable customer relationships. The aim often is to sell what the company makes rather than making what the market wants.

Question 18

(Designing a Customer Value-Driven Marketing Strategy)

Marketing concept

Answer 18

Know the needs and wants of the target markets and deliver the desired satisfactions better than competitors.

customer focus and value are the paths to sales and profits.

the marketing concept is a customer-centered sense-and-respond philosophy. The job is not to find the right customers for your product but to find the right products for your customers.

Question 19

(Designing a Customer Value-Driven Marketing Strategy)

Societal marketing concept

Answer 19

The company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests.

These companies donate, contribute, or offer services to charities and not-for-profit organizations.

deliver value to customers in a way that maintains/improves both the consumer’s and society’s well-being. calls for sustainable marketing, socially and environmentally responsible marketing. Many companies have Corporate Social Responsbility (CSR) programs.

Question 20

(Designing a Customer Value-Driven Marketing Strategy)

The selling concept marketing management orientations

Answer 20

Starting point = FACTORY
↓
Focus = EXISTING PRODUCTS
↓
Means = SELLING AND PROMOTING
↓
Ends = PROFITS THRU SALES VOLUME

inside-out perspective, focusing on existing products, calling for heavy selling and promotion to obtain profitable sales. getting short-term sales with little concern about who buys or why.

Question 21

(Designing a Customer Value-Driven Marketing Strategy)

The marketing concept marketing management orientations

Answer 21

Starting point = MARKET
↓
Focus = CUSTOMER NEEDS
↓
Means = INTEGRATED MARKETING
↓
Ends = PROFITS THRU CUSTOMER SATISFACTION

outside-in perspective, integrates all the marketing activities that affect customers yielding profits by creating relationships with the right customers based on customer value and satisfaction.

Question 22

(Designing a Customer Value-Driven Marketing Strategy)

The societal marketing concept triangle

Answer 22

Society (human welfare), consumers (want satisfaction), company (profits)

Sustainability = good for the environmant and business

Question 23

(Preparing an Integrated Marketing Plan and Program)

Marketing Mix

Answer 23

4 P’s a firm uses to implement its marketing strategy. An integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers.

Product = a need-satisfying market offering
Price = how much it will charge for offering
Place = how offering is made available to target consumers
Promotion = must engage target consumers, communicate about the offering and persuade consumers of the offer's merits

Question 24

(Building Customer Relationships)

Customer Relationship Management

Answer 24

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

Question 25

(Building Customer Relationships)

How do companies engage customers on a deeper lvl in this age of digital and social marketing?

Answer 25

Customer relationship management is perhaps the most important concept of modern marketing. Also known as customer data management activity (a practice called CRM). It involves managing detailed information about individual customers and carefully managing customer touchpoints to maximize customer loyalty.

Question 26

(Building Customer Relationships)

Customer Relationship Levels and Tools

Answer 26

Companies create engagement and relationships through brand-building advertising, websites, and social media presence.

Basic Relationships = low-margin customers

Full Partnerships = high-margin customers

Frequency Marketing Programs = reward customers

All done via CRM

Question 27

(Building Customer Relationships)

Engaging Customers

Answer 27

Customer-Engagement Marketing makes the brand a meaningful part of consumers’ conversations and lives by fostering direct and continuous customer involvement in shaping brand conversations, experiences, and community.

The new marketing is customer-engagement marketing. Today’s consumers are better informed, more connected, and more empowered than ever before.

Question 28

(Building Customer Relationships)
Consumer-Generated Marketing
Braand exchanges

Answer 28

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 other consumers.

Question 29

(Building Customer Relationships)

Partner Relationship Management

Answer 29

involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers.

In today’s more connected world, every functional area in the organization can interact with customers.

Marketers must also partner with suppliers, channel partners, and others outside the company.

Question 30

(Capturing Value from Customers)

Creating Customer Loyalty and Retention

Answer 30

Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage.

Loyal customers spend more and stay around longer. Research also shows that it’s five times cheaper to keep an old customer than acquire a new one.

Question 31

(Capturing Value from Customers)

Share of customer

Answer 31

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

Question 32

(Capturing Value from Customers)

Customer equity

Answer 32

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

the more loyal, the more customer equity

better measure of firms performance as CE suggests the future

Question 33

(Capturing Value from Customers)

Customer equity groups

Answer 33

Strangers = show low potential profitability and little projected loyalty.

Butterflies = potentially profitable but not loyal.

True friends = both profitable and loyal.

Barnacles = highly loyal but not very profitable.