Session 2 Flashcards
What is marketing?
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
What are the 4 marketing philosophies?
- Production Orientation
- Selling Orientation
- Product orientation (Or Internal Orientation)
- Market Orientation (Or customer orientation)
What is production Orientation?
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
What is Selling Orientation?
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
What is Product orientation?
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
What is Market orientation?
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
What is value?
Benefit percieved by the consumer, it is the condition of the exchange
Money vs benefit (Needs/wants)
What is difference between a need and a want
Need: Lack of something requisite or irreplaceable. Physiological or psychological basis
Want: Strong desire for something. Person’s knowledge, culture and context
What is form value?
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
What is time value?
Making a product available when the customer needs it.
e.g. Kroger grocery store open 24hrs
What is Possession Value?
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
What is Place Value?
Making the product available where customers need it.
E.g. Banks having branches throughout the country
What is information Value/
Providing relevant information about product.
E.g. Amazon offers infomration about products on their website
What is Service Value?
providing excellent service on ongoing basis
e.g. Offering website and toll-free number to people who have issues with product
What are the 4ps of the marketing Mix?
Product, price, place, promotion
What is the cost of acquiring a new customer vs keep current customer?
Generally, costs 5-10 times more to attrack new customers than to keep current customer satisfied
Why is customer satisfaction so imporant?
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
What is customer lifetime value?
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)
What is customer equity?
Total combined customer lifetime values of all the company’s customers
