Introduction to Marketing Flashcards
What is marketing?
The activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large; a business philosophy and way to approach the market; large change in thought from transaction- and product-driven to relation- and value-driven marketing
What are the two marketing decisions? (Leemon et al., 2001)
Segmentation - understanding customers, their needs, wants, values, reactions, effects with different research techniques;
Value Differentiation - creating customer value through innovative customer journeys, branding and optimised customer relationships
What is Market Orientation?
Narver & Slater, 1990
the organisations culture that most effectively and efficiently creates the necessary behaviour for the creation of superior value for buyers and continuous superior performance for the business; consists of three behavioural components (a, b, c) and two decision criteria (d):
a. Customer Orientation – sufficient understanding of target buyers to create value, increasing benefits in relation to costs and understanding economic and political constraints on all levels in the channel
b. Competitor Orientation – understanding short-term strengths and weaknesses as well as long-term capabilities and strategies of key current/potential competitors
c. Interfunctional Coordination – coordinated utilisation of company resources in creating superior value for target customers
d. Long-term Focus, Profit Objective – no empirical evidence on either one
what is the marketing concept? (Slater & Narver, 1998)
an organisations purpose is to discover needs and wants in its target markets and to satisfy those needs more effectively than competitors; market orientation is the implementation of the marketing concept
What is the tyranny of a served market?
see the world only through current customers’ eyes which constraints a firm’s ability to innovate as ‘customers are notoriously lacking foresight’; value of traditional research tools is limited
What is a lead user?
(potential) customers who have needs that are advanced compared to other market members and who expect to benefit significantly from a solution to those needs; a necessity to innovate
What is a paradigm?
An intellectual perception or view, accepted by an individual or society as a clear example, model or pattern of how the world works; implicit assumptions or perceptions from which one tries to understand and therefore influence the phenomena of the world; marketing thinking, as a contextual topic changes with the situation or environment a company competes in
What is a paradigm shift?
Fundamental change in an individuals or society’s view of how things work in the world, e.g., from flat earth view to globe view, in marketing from exchange to network paradigm
What are the three changes in the way marketing has to be done and researched?
(1) Internet – possibility of direct or multi-channel distribution and communication and worldwide network interaction with consumers and therefore changing business dynamics;
(2) Definition of Business – used to be defined by production capacity, now defined by brand, e.g., Nike outsourced shoe production when they realised the brand counts more than the shoe; defining themselves by brand, not by shoe gave them flexibility in their value chain, as long as they fulfilled the brand promise;
(3) Dependency on Suppliers – suppliers became responsible for fulfilling the brand promise, which made businesses’ dependency on them grow
Describe the evolution of marketing thinking
- Functionalist Paradigm: describes institutions of marketing and their functions
- Marketing Management Paradigm: rooted in a firm view of marketing processes
- Exchange Paradigm: marketing concepts apply to all forms of exchange (information and/or products) between two entities, focus on inter-firm relationships
- Network Paradigm: no discrete entities, networks interacting with networks on all levels of observation; occurs on three dimensions
(see Achrol & Kotler, 2012)
Compare the Marketing Concept and Market Orientation
MC concerns itself with realizing organizational goals by being more effective than competitors in creating superior customer value. In MO, a business uses the three behavioral components (customer and competitor orientation, inter-functional coordination) to understand the customers and competitors and combine those in business efforts so that they are able to create superior customer value. Therefore, MC and MO are related in such a way that businesses use MO to create superior customer value compared to the competition and with that realizing their organizational goals, the MC.
