Lecture 1

Question 1

What is the difference between a need and a want?

Answer 1

Need : state of lacking something
Want : a way of meeting your need

Question 2

What are the different types of demand?

Answer 2

Actual demand: actual sales/volume right now
Potential demand: maximum demand that could be reached for a particular product.
Demand projection: what might demand be in the future.

Question 3

Why is value important?

Answer 3

• Many products and services that fulfill our basic needs also provide symbolic value (and associations) that satisfy other, often higher order needs
• Brands don’t just fulfill our basic needs, they can also help us signal who we are to others and to ourselves
• The notion of value is important for consumers because they want to come out on top in the exchange. For this reason, it is important for the company to fully understand what its customers expect in terms of value (functionally, economically, socially and experientially)

Question 4

How to bring value?

Answer 4

1. Understand the customer
2. Value creation
   - Value creation is accomplished when a company proposes a solution to a customer’s needs or difficulties, alleviating pain or creating gain.
   - Job-to-be-done, pain (trying to avoid), gain, innovation (developing new products)

Question 5

What are the different types of markets?

Answer 5

1. The consumer goods market (B2C)
   - All the individuals who purchase products or services to meet their personal needs.
2. The business market (B2B)
   - Organizations that buy products and services to use them to make other goods, or to meet their internal needs.
   - Prioritize: product, price, sales, and after-sales service
3. Distribution intermediaries market
   - Situated between the producer and the customer, buy products/services with the intention of reselling them, facilitate product distribution.
4. Government market
   - Lowest bidder: prioritize price, product quality and customer service.
5. International market
   - Complex task because of culture. Government regulations and technical standards may differ greatly from one country to another

Question 6

What are the two aspects of customer loyalty? What is the fastest way to customer loyalty?

Answer 6

1. Customer Retention
   * How long has that customer been buying from your brand?
   * Retention rate for the firm y/y is also important
2. Customer Share
   * The proportion of a customer’s relevant purchases that come from your brand (e.g., what percentage of someone’s cereal purchases are from General Mills?)

The fastest way to customer loyalty is usually customer satisfaction. This can lead to tremendous word-of-mouth marketing as loyal customers are highly likely to recommend brands and products

Question 7

What are the benefits of loyalty?

Answer 7

• Higher price
• Word of mouth
• Reduced Costs
• Income growth
• Base profit
• Reduce customer acquisition cost

Question 8

What are the AMA standards for ethics in marketing?

Answer 8

• A product must be safe
• The price must be fair (e.g., no price fixing)
• Advertising may not use fraudulent or inaccurate arguments
• Customer service quality must be consistent, no matter who the customer is