Unit 1: Overview of the Marketing Concept

Question 1

Primary goal of marketing:

Answer 1

driving revenue growth for the organization

Question 2

The industrial revolution, as companies were striving to move product creation into a more efficient form of mass production, created what we now refer to as the ____________ Orientation.

Answer 2

Production

Question 3

As income levels in the U.S. and other parts of the world began to rise in the early 1920s, companies leaned into a ____________ Orientation as more active and aggressive tactics to convince consumers to part with hard-earned money were needed to drive the purchase transaction.

Answer 3

Sales

Question 4

A _____________ Orientation, and _____________________, did not actually rise as a strategic function in the firm until around the 1950s and 1960s.

Answer 4

Market, marketing as a function

Question 5

Importantly, the ____________ orientation has been shown to lower costs and raise profitability over time.

Answer 5

Market

Question 6

Therefore, organizations became interested in understanding the holistic needs of customers so that they could create more reliable streams of revenue from satisfied customers who would purchase again in the future and refer others in their network to their preferred products and companies. As competition for customers has increased at a faster and faster rate along with customer expectations, firms must establish and maintain longer-term customer relationships.

what type of orientation?

Answer 6

Market orientation

Question 7

The _______________ Orientation has emerged as customers have become more and more interested in purchasing from organizations that are striving to make their communities a better place (whether through the improvement of the environment, their employees, or specific causes) in addition to delivering a more than satisfactory product, service, or overall experience.

Answer 7

Societal Marketing

Question 8

Each orientation can be summarized into a single question that defines a firm’s actions:

Production →

Answer 8

What can we make or do best?

Question 9

Each orientation can be summarized into a single question that defines a firm’s actions:

Sales →

Answer 9

How can we sell more aggressively?

Question 10

Each orientation can be summarized into a single question that defines a firm’s actions:

Marketing →

Answer 10

What do customers want and need?

Question 11

Each orientation can be summarized into a single question that defines a firm’s actions:

Societal →

Answer 11

What do customers want/need and how can we benefit society?

Question 12

Company website: “Our materials make more possible. When you commit to market-leading innovations, amazing things happen. That’s how we’ve continually enabled new possibilities.”

Answer 12

Product-oriented

Question 13

Company profile: “Our products are sold in more than 35 markets around the world and our global independent sales force exceeds 2 million. You’ve got dreams. Whether it’s earning a little extra cash or making a full-time commitment, and a sales consultant opportunity offers the freedom, flexibility and, of course, the fun that you’ve been looking for.”

Answer 13

Sales-oriented

Question 14

Mission statement: “Our vision: 100% slave-free chocolate. Not just our chocolate, but all chocolate worldwide. How we are going to achieve that? It won’t be easy. And it’s pretty complex. But we will accomplish it with the help of Tony’s roadmap. Our roadmap has 3 pillars and shows us the way to 100% slave-free chocolate: raise awareness, lead by example, inspire others to act.”

Answer 14

Societal

Question 15

Company website: “Our support teams and account managers are some of the longest tenured and best trained you’ll find anywhere. You’ll routinely see the same faces each time you need assistance. With more than 50 offices around the country and 5 on-shore customer care centers, we are focused on being responsive. We think that building lasting relationships is more important than pushing products and we want to know what‘s important to you so we can deliver that – quickly and reliably – 24 x 7.”

Answer 15

Sales-oriented

Question 16

aspiration decision

Answer 16

(which we can think about in terms of what value the product will represent to what kind of customer) specifies what the firm hopes to achieve in the market.

Question 17

three steps of the aspiration decision:

Answer 17

(1) segmenting the market to identify possible groups to serve
(2) selecting or targeting a specific group or groups to address
(3) determining the desired positioning in the mind of the selected customers (that is, what should the potential customer be thinking about the product offering, relative to other options?)

Question 18

The steps in working out the aspiration decision are popularly know as…

Answer 18

STP (segmenting, targeting, and positioning).

Question 19

Once the aspiration decision has been made, the firm can begin to work out its action plan, the four…

Answer 19

Ps of the marketing mix.
(We use the term mix because the elements all need to work together to form a cohesive plan.)

Question 20

Three elements of the ________ plan create value for the customers: the ________ offered, the communication to the customer about the product (__________), and the mechanisms to distribute the product to the customer (___________).

Answer 20

action, product, promotion, place

Question 21

The final element of the mix is the ________ charged for the product. This is primarily the firm’s way to __________ some of the value it has created, generating revenue to fund operations and provide for profit.

Answer 21

price, capture

Question 22

An organization needs to analyze the market in order to make good aspiration and action plan decisions. Usually this requires an analysis of the five Cs (__________, __________, __________, __________, and __________). To indicate its primacy for marketing decision making, [the exhibit] places the first C - ___________ - in the center of the circle under analysis.

Answer 22

customer, company, collaborators, competition, and context
customer

Question 23

Which 3 components are included in the Marketing Strategy Framework?

Answer 23

5 Cs (situation analysis), STP (aspiration decisions), and 4 Ps (action plan decisions).

Question 24

The Marketing Strategy Framework from the HBP reading identifies 3 customer outcomes as the “purpose of marketing

Answer 24

acquiring customers, retaining customers, and incenting customers to be brand ambassadors

Question 25

buyer stickiness

Answer 25

resistance of customers to switching easily between one supplier of a good or service to another

Question 26

In January 2014, T-Mobile, which confronted ______________ due to termination fees from other cell phone service providers, offered to pay up to $350 per line for termination fees when a customer switched from other cell phone service providers.

Answer 26

buyer stickiness

Question 27

The _________ rate is 100% minus the customer ___________ percentage rate, which typically measures customers who discontinue a service or subscription within a specified time period.

Answer 27

churn, retention

Question 28

coolhunting

Answer 28

context analysis
Observing and predicting the emergence of and changes in cultural trends, visible in clothing fashions, popular music, urban lifestyles, uses of technology, etc.

Question 29

Place, the third P, refers to __________________, or where and how an organization decides to go to market

Answer 29

distribution channels

Question 30

distribution channels

Answer 30

the network of individuals and organizations involved in the process of moving a product or service from the producer to the end user

Question 31

positioning

Answer 31

(1) Defining a value proposition for the target segments. (2) Differentiating a product or service (or its brand) from others in the perception of customers.

Question 32

A ______________ involves motivating customers to seek out your brand in an active process via tactics such as advertising, customer relationship management (CRM), and sales promotions.

Answer 32

pull strategy

Question 33

A ____________ involves ensuring the customer is aware of your brand at the point of purchase via tactics such as direct selling to customers in showrooms, packaging designs, or point-of-sale displays.

Answer 33

push strategy

Question 34

segmentation

Answer 34

A marketing planning process that involves dividing a broad target market into subsets or groups of customers who have common needs or characteristics.

Question 35

Common Segmentation Variables:

Answer 35

Demographic: (ex. Coke Zero -> Age: young)
Geographic: (ex. Zipcar -> City dwellers and college students)
Psychographic/lifestyle: (ex. Zipcar -> Environmentally concerned)
Benefit sought: (ex. “Bugs” Burger Bug Killers -> Pest elimination, not control)
Usage: (ex. Marriott -> Long stay)

Question 36

Effective Positioning Statements

Answer 36

1. Target customer(s)
2. Wants of the customer(s)
3. Product type & category, as understood by customer
4. Key benefit to be provided to target customer

Question 37

People are more prone to buying if they view product as a __________.

Answer 37

need

Question 38

As a rule, consumers attempt to maximize what is called __________________, that is, they want the greatest benefit (economic, functional, psychological) from the lowest possible cost (evaluating, obtaining, using, disposing) fo the product or service.

Answer 38

customer-perceived value (CPV)
Value = Benefit - Cost

Question 39

“resonance focus” model

Answer 39

involves demonstrating a deep understanding of customer needs and differentiating or highlighting offerings on the few elements that matter most to target customers

Question 40

“Creating the Demand Landscape”

Answer 40

This methodology involves tracking consumer behaviors through observation, diaries, journals, and interviews, and grouping them into distinct categories of goals, activities, and priorities.

Question 41

This results in a comprehensive consumer demand landscape, which should also reveal how products, services, or brands intersect with customer activities. Each of these intersections is called a _____________.

Answer 41

touch point

Question 42

customer relationship management (CRM)

Answer 42

The process of collecting and using the detailed information about individual customers at all of the touch points (intersections between customers’ lives and our products, services, or brands)

Question 43

This information also enables companies to examine their customer bases in great detail, perform profitability analyses, and engage in a process called ____________________ to target fewer, but more lucrative, customers.

Answer 43

selective relationship management

Question 44

Net Promoter Score (NPS)

Answer 44

popular approach that is used across industries categorizes customers into one of three groups - promoters, passives, and detractors - that allows employees throughout a company to see right away whether a customer experience was a success or a failure, and why.

Question 45

Coordination

Answer 45

entails establishing structural mechanisms and processes that allow employees to improve their focus on the customer by harmonizing information & activities across units

Question 46

Cooperation

Answer 46

means encouraging people in all parts of the company – through cultural means, incentives, and the allocation of power – to work together in the interest of customer needs.

Question 47

Capability

Answer 47

means ensuring that enough people in the organization have the skills to deliver customer-focused solutions, as well as a defining a clear career path for employees with those skills

Question 48

Connection

Answer 48

involves developing relationships with external partners to make increasing the value of solutions more cost effective

Question 49

Building a customer centric culture requires:

Answer 49

Coordination
Cooperation
Capability
Connection

Question 50

false loyalty

Answer 50

often a result of loyalty-promotions, high switching costs, or proprietary technology

Question 51

customer lifetime value (CLV)

Answer 51

quantify the present value of the future income stream from a customer calculation is built on
(1) the margin (or profit) that a customer generates from their purchases with us
(2) over each period (typically a year, but could be measured monthly or quarterly)
(3) for the total periods of time they are customers with us (measured by their retention rate)

Question 52

When we total all the lifetime values for all of our customers, we can call that our total customer lifetime value or ______________.

Answer 52

customer equity

Question 53

Peloton equipment and service is famously expensive, but Peloton tries to always ensure that its key customers always receive the greatest amount of total benefits for the least amount of total costs.

Answer 53

Maximizing Customer Perceived Value

Question 54

Due to Peloton’s deep understanding of their customers’ needs to enjoy and feel motivated to engage in their workouts, Peloton highlights the unique personalities of their elite trainers as an important point of differentiation from other exercise platforms.

Answer 54

Resonance-Focus Model

Question 55

In order to gain a deeper understanding of their customers, last year Peloton tracked several hundred of the customers’ behaviors through observations, diaries, journals, and interviews so that they could group them into distinct categories of goals, activities, and priorities.

Answer 55

Creating the Demand Landscape

Question 56

Peloton recognizes that an important intersection between its brand and its customers is the purchase/registration process (either online or by phone).

Answer 56

Touch Point

Question 57

Peloton collects and uses detailed information about its individual customers through all of their touch points to guide the development of product offerings, services, programs, and messages.

Answer 57

Customer Relationship Management

Question 58

With all of the information about its customer that Peloton collects, they are able to examine their customer base in great detail and perform profitability analyses to target fewer, but more lucrative, customers over time.

Answer 58

Selective Relationship Management

Question 59

After the customer has an opportunity to experience the machine and classes, Peloton sends them a survey that asks, “How likely are you to recommend us to a friend or colleague?” in order to determine whether a customer experience was a success or failure.

Answer 59

Net Promoter Score

Question 60

Peloton has established a rigorous recruiting and training system to ensure that its trainers are not just skilled on the equipment but can also be perceived as great DJs, coaches, and TV hosts so they can reliably create an outstanding customer experience.

Answer 60

Building a Customer-Centric Culture

Question 61

One misstep that Peloton now acknowledges is when it tried to measure customer loyalty while it was a running a program that charged customers a $500 cancellation fee to create a high switching cost for customers interested in moving to a different exercise platform.

Answer 61

Creating False Loyalty, rather than True Loyalty

Question 62

While Peloton has the expertise and materials to create a new (expensive) machine, it has decided to branch into more categories of non-machine-based exercise (e.g., Yoga) based on its understanding of its customers.

Answer 62

Plan brand extensions based on customer needs, not component similarities

Question 63

3 basic steps of a customer centricity framework:

Answer 63

1. Understand the customer
2. Build a Customer-Centric Culture
3. Serve the customer

Question 64

Serve customers: make brand decisions subservient to decisions about ___________

Answer 64

customer relationships

Question 65

Star customers:

Answer 65

get high value; provide high value

Question 66

Vulnerable customers:

Answer 66

get low value; provide high value

Question 67

Free Riders:

Answer 67

get high value; provide low value

Question 68

Lost Causes:

Answer 68

get low value; provide low value

Question 69

Marketing Plan Structure

Answer 69

Business Mission Statement
Situation or SWOT Analysis
Objectives
Marketing Strategy, Target Marketing Strategy, Marketing Mix (product, price, place, promotion)
Implementation, Evaluation, Control

Question 70

The “Situation or SWOT Analysis” in our marketing plan is an outcome of the ______________ in the Framework for Marketing Strategy.

Answer 70

5 Cs Analysis

Question 71

The “Objectives,” “Marketing Strategy,” and “Target Market Strategy” in our marketing plan are all outcomes of the ________________ set of decisions in the Framework for Marketing Strategy.

Answer 71

“Aspiration” (Segmentation, Targeting, & Positioning or STP)

Question 72

The “Marketing Mix” in our marketing plan is an outcome of our _____________ set of decision in the Framework for Marketing Strategy.

Answer 72

“Action Plan” (4 Ps)

Question 73

The “Implementation, Evaluation, Control” factors in our marketing plan are the ______________ in the Framework for Marketing Strategy that we want to be sure to measure and monitor.

Answer 73

Outcomes

Question 74

A business is concerned with many day-to-day activities. Some of the most important of these activities are the planning and development of a product, its ability to communicate value, its pricing policy, and the distribution strategy. These activities are all a part of:

Answer 74

marketing

Question 75

Earl is starting a new bank. Before the opening day, Earl had a meeting with all employees. He discussed their mission, defined objectives for the bank for the coming years, and shared who their target market is. He talked about their product offerings and where their future branches would be located. Earl is sharing the bank’s:

Answer 75

marketing plan

Question 76

A firm that wants to develop a deeper understanding of its customers may optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups. This is _____:

Answer 76

customer relationship management