Nature of Marketing

Question 1

The Marketing Mix

Defined by Borden (1964)

Answer 1

Borden (1964) composed a twelve-item list of elements the manufacturer should consider when developing its marketing mix policies and procedures:

1. Product planning
2. Pricing
3. Branding
4. Channels of distribution
5. Personal selling
6. Advertising
7. Promotions
8. Packaging
9. Display
10. Servicing
11. Physical handling
12. Fact finding and analysis

Question 2

Marketing Mix (Simplified)
Defined by Eugene McCarthy (1960)

Answer 2

• Product: the offering and how it meets customer’s needs, its packaging and labelling
• Place: the way in which the product meets’ customers needs
• Price: the cost to customer/profit to seller
• Promotion - how the product’s benefits and features are conveyed tot he potential buyer

Question 3

Changes in marketing

Answer 3

• Should not only be thought of as ‘telling-and-selling’
• Marketing is satisfying a customers needs
• ‘The aim of marketing is to make selling unnecessary’’

Question 4

Marketing Mix

Answer 4

A set of marketing tools that work together to engage customers, satisfy customer needs, and build customer relationships.

Question 5

Broad definition of marketing

Answer 5

Social and managerial process by which individuals and obtain what they want by obtaining and sharing value with others

Question 6

Business definition of marketing

Answer 6

Market involves building profitable and valuable relations with customers

Question 7

Balanced definition of marketing

Answer 7

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

Question 8

What is the goal of marketing?

Answer 8

Long-term customer satisfaction

Question 9

Drucker, P.F. (1999) The Practice of Management. London: Heinemann

Answer 9

“Because the purpose of business is to create and keep customers, it has only two central functions- marketing and innovation. the basic function of marketing is to attract and retain customers at a profit”

Question 10

What does Drucker (1999) tell us?

Answer 10

1. it places marketing in the central role for business success
2. it is a reality of commercial life that it is much more expensive to attract new customers than to retain existing ones.

Question 11

The Modern Marketing Concept can be expressed as…

Answer 11

the achievement of corporate goals through meeting and exceeding customer needs better than the competition

Example: Netflix has added to its successful movie rental and streaming services by providing original TV show content. In addition, all of the content is available on mobile devices to watch on the move- significant advantage over cable operators

Question 12

What should company activities be focused on providing?

Answer 12

Customer satisfaction

Question 13

How does a company achieve customer satisfaction through integrated effort?

Answer 13

By implementing the concept within the marketing department, but also through production, finance, research and dev elopement, engineering and other departments.

Question 14

For integrated effort to come about, management must believe..

Answer 14

that corporate goals can be achieved through satisfied customers

Example: Nike was a late entrant into the running shoes company and established itself as the world’s leading sportswear company through delivering powerful brand values

Question 15

What are the key components of the marketing concept?

Answer 15

1. Customer orientation
2. Integrated effort
3. Goal achievement

Question 16

Define Customer Orientation

Answer 16

Corporate activities are focused upon providing customer satisfaction

Question 17

Define Integrated effort

Answer 17

All staff accept the responsibility for creating customer satisfaction

Question 18

Define Goal achievement

Answer 18

The belief that corporate goals can be achieved through customer satisfaction

Question 19

What is an important task in marketing?

Answer 19

• To create and communicate value to customers

- To drive their satisfaction, loyalty and profitability

Question 20

Define Customer Value

Answer 20

CUSTOMER VALUE = PERCEIVED BENEFITS - PERCEIVED SACRIFICE

Question 21

Perceived benefits

Answer 21

Derived from…

1. Product
   Example: Hotel room and restaurant
2. Service
   Example: How responsive the hotel is to the specific needs of the customer
3. Image
   Example: is the image of the company/product favourable?

Question 22

Define Perceived Sacrifice

Answer 22

The total cost associated with buying the product

This could be monetary costs, but also time and energy involved with a purchase

Question 23

Why is it important to ensure value offered exceeds that of competitors?

Answer 23

Once a product has been purchased, customer satisfaction depends on its perceived performance compared with the buyers expectations

• will be achieved if expectations are met or exceeded

Question 24

The Kano Model

Joiner, B.L. (1994) Fourth Generation Management. New York: McGraw-Hill.

Answer 24

The Kano Model helps to separate characteristics that cause dissatisfaction, satisfaction and delight.

Underlined as: Must be, more is better and delights