Session 2

Question 1

What is marketing?

Answer 1

An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders

Question 2

What are the 4 marketing philosophies?

Answer 2

1. Production Orientation
2. Selling Orientation
3. Product orientation (Or Internal Orientation)
4. Market Orientation (Or customer orientation)

Question 3

What is production Orientation?

Answer 3

Focus on improving production efficiency, the assumption is that consumers will favor product that are available and more affordable. Oldest philosy that was used by Ford.

Most useful when:
Demand > Offers
Production cost is too high

Question 4

What is Selling Orientation?

Answer 4

idea is that consumers won’t buy if they are not pushed to buy them, generally in the case of overcapacity. It has dominated mid 20th century.

Also good for goods that people do not usually thing of buying such as encyclopedias

Question 5

What is Product orientation?

Answer 5

AKA Internal Orientation

Idea is that cosumers want product that offers the higher quality. making continuous improvements

Danger is that products dissapear; missing the big picture

Question 6

What is Market orientation?

Answer 6

AKA customer orientation

Customers do not buy products, they buy solutions or benefits. See the product with the eyes of the customer.

EMPHASIS of the class

Question 7

What is value?

Answer 7

Benefit percieved by the consumer, it is the condition of the exchange

Money vs benefit (Needs/wants)

Question 8

What is difference between a need and a want

Answer 8

Need: Lack of something requisite or irreplaceable. Physiological or psychological basis

Want: Strong desire for something. Person’s knowledge, culture and context

Question 9

What is form value?

Answer 9

Utility provided by changing raw materials into a finished product. Created by production but influenced by marketing.

E.g. Ford produces automobiles, creating form value

Question 10

What is time value?

Answer 10

Making a product available when the customer needs it.

e.g. Kroger grocery store open 24hrs

Question 11

What is Possession Value?

Answer 11

Enhancing the ability of the customer to acquire and use the product over time.

E.g. Financing at the point of sale for a car

Question 12

What is Place Value?

Answer 12

Making the product available where customers need it.

E.g. Banks having branches throughout the country

Question 13

What is information Value/

Answer 13

Providing relevant information about product.

E.g. Amazon offers infomration about products on their website

Question 14

What is Service Value?

Answer 14

providing excellent service on ongoing basis

e.g. Offering website and toll-free number to people who have issues with product

Question 15

What are the 4ps of the marketing Mix?

Answer 15

Product, price, place, promotion

Question 16

What is the cost of acquiring a new customer vs keep current customer?

Answer 16

Generally, costs 5-10 times more to attrack new customers than to keep current customer satisfied

Question 17

Why is customer satisfaction so imporant?

Answer 17

Drives customer loyalty, it is easy to keep a client than to get a new one, positive word of mouth may help acquire new clients

Higher willingness to pay more for the product

Question 18

What is customer lifetime value?

Answer 18

Value of the entire stream of purchases that one customer would make over a lifetime of patronage.

It can be negative, if the customer keeps buying but does not pay, sometimes profitable to fire customers (E.g. AMEX firing customers who dont pay credit card)

Question 19

What is customer equity?

Answer 19

Total combined customer lifetime values of all the company’s customers