Marketing Concept (1)

Question 1

Definition of marketing

Answer 1

Kotler describes marketing as “the process by which companies create value for customers and build strong customer relationships to capture value from the customers in return”

Question 2

What is step 1 of the marketing process?

Answer 2

understanding the marketplace and customer needs

Question 3

what are the core marketing concepts to consider during this step 1?

Answer 3

Needs, wants and demands
Marketing offers
Value and satisfaction
Transactions and relationships

Question 4

What are the definitions of Needs, wants and demands of a customer?

Answer 4

Needs: Basic human needs, social and individual. EG Hunger, need to purchase lunch
Wants: Human needs that are shaped by culture and personality, EG If someone likes chocolate, they are going to want chocolate more than some people who dont
Demands: wants+buying power = demand

Question 5

How do firms satisfy needs and wants?

Answer 5

A combination of products, services, value and information/experiences

Question 6

Definitions of value and satisfaction

Answer 6

Value: Perceived benefits - perceived sacrifice
Satisfaction: Matching/exceeding expectations

Question 7

What is meant by marketing myopia?

Answer 7

Described as an inward looking approach to marketing that focuses on the needs of the company , instead of defining the company and its products in terms of the customers needs and wants. It results in failure to see and adjust the rapid changes in their markets

Question 8

How can marketing myopia be avoided?

Answer 8

Have a clear vision - take measures to define your business to easily adapt to the requirements of the market
Be customer orientated, not product orientated - You will naturally cast a wider net to appeal to a larger audience

Question 9

What is step 2 of the marketing process?

Answer 9

Design and customer driven strategy

Question 10

Definition of marketing management

Answer 10

What marketers do, the art of choosing target markets and building profitable relationships with them

Question 11

How is marketing management used to design a customer driven strategy

Answer 11

Selecting the customers to serve through segmentation, targeting
Decide on a value proposition, differentiation and positioning

Question 12

What are the 5 concepts/philosophies of marketing management?

Answer 12

Production concept
Product concept
Sales concept
Marketing concept
Societal marketing concept

Question 13

Explain the production concept

Answer 13

Putting the factory first

• Focuses on production and distribution efficiency
• Assumes customers are primarily concerned with price
• Managers focusing on this concept concentrate on achieving production efficiency, low costs and mass distribution

Question 14

Explain the product concept

Answer 14

Putting the product first

• Assumes customers are primarily interested in the product itself
• Organisations should devote their resources to making continuous improvements to product quality
• Assumes customers prefer products that have the most quality, performance and features
• this could lead to marketing myopia

Question 15

Explain the sales concept

Answer 15

Saying that the customer comes first

• Customers need encouragement to purchase
• Focuses on the needs of the seller not the buyer
• This could result in dissatisfied customers, as marketing is supposed to focus on the needs of the buyer
• This aims to sell what the company makes rather than making what the market wants

Question 16

Explain the marketing concept

Answer 16

Actually puts the customer first and watching competition

• Focuses on needs and wants of target market - Externally orientated
• Market orientated
• Use of segmentation techniques to focus on customers
• Guides the whole organisation not just a single function
• ‘find the right products for your customers’

Question 17

Explain the social marketing concept

Answer 17

Putting consumers and the society first
- Questions the long term costs of the marketing concept in its pure form
- Considers Customers ( satisfaction)
Company (profits)
Society (human welfare )
- Calls for sustainable marketing, socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs

Question 18

Explain the main differences between the selling concept and the marketing concept

Answer 18

Selling concept
- suitable with unsought goods, those that buyers do not normally think of buying like insurance
- Any company following selling concept is at high risk
Marketing concept
- Suitable for almost any type of product and market
- companies that follow the marketing concept requires to bare less risk and uncertainty

Question 19

What are the characteristics of a market orientated firm?

Answer 19

• Customer concern throughout whole business and production
• Know customer choice criteria and match marketing mix
• Segment by customer differences
• Try to understand the competition
• Search for new markets
• Invest in market research and track market changes

Question 20

What are the characteristics of an internally driven market?

Answer 20

• Convenience comes first
• Assume price and product performance are key to most sales
• Segment by product
• Ignore competition
• Stick with the same
• Rely on anecdotes and received wisdom

Question 21

What is step 3 of the marketing process?

Answer 21

Construct an integrated marketing programme that delivers superior value

• product and service design, building strong brands
• Pricing create real value
• Distribution manage demand and supply chains
• promotion - communicate the value proposition

Question 22

What is step 4 of the marketing process?

Answer 22

Build profitable relationships and create customer delight

• Customer relationship management, build strong relationships with chosen customers
• Partner relationship management, build strong relationships with marketing partners

Question 23

What is step 5 of the marketing process?

Answer 23

Capture value in return from the customers to create profits and customer equity

• Create satisfied loyal customers
• capture customer lifetime value
• Increase share of market and share of customer