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Question 1

What is Marketing?

Answer 1

Marketing is a form of exchange- physical good, service, idea, info, money. Objective is for all parties in the exchange to feel satisfied and gain something of value.
Facilitate repurchasing through creating long-term satisfaction not short-term deception
Attract and retain customers at a profit.

Question 2

How does Gronroos describe marketing

Answer 2

Gronroos- objective of marketing to establish, develop and comercialise long-term customer relationships so the objectives are met.

Question 3

The investment needed to attract new customers costs how much more than retaining existing ones

Answer 3

The investment needed to attract new customers costs 6X more than retaining existing ones

Question 4

Dynamic markets- growth of digital economy has significantly increased the opportunities to

Answer 4

to gather, analyse and exploit customer data and influenced how we behave, interact, communicate and trade.

Question 5

The modern marketing concept can be expressed as

Answer 5

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

Question 6

To apply this concept, three conditions should be met

Answer 6

Customer satisfaction focus, integrated effort, management commitment

Question 7

production orientation

Answer 7

an inward-looking stance whereby managers become focused on the internal aspects of their business.

Question 8

market-driven companies

Answer 8

market-driven companies seek to adapt their product and service offerings to the demands of current and latent markets.

Question 9

When is product orientation mainly used and why is this a disadvantage

Answer 9

Common in manufacturing companies- management becomes cost focused and believes that its job is to attain economies of scale by producing a limited range of products to minimize production costs. Could lead to aggressive selling to customers rather than focusing on delivering value and customer satisfaction

Question 10

Latent market

Answer 10

A latent market is a potential market, i.e., a market for a good or service but without a supplier. In other words, there is demand for something but it is not available. A company that can identify a latent market and subsequently supply that market can earn significant profits.

Question 11

In a study of 1,700 senior marketing executives, Hooley and Lynch (1985) reported the marketing characteristics of high- versus low-performing companies. Found that high fliers were :

Answer 11

committed to marketing research

were more likely to be found in new, emerging or growth markets adopted a more proactive approach to marketing planning, were more likely to use strategic planning tools placed more emphasis on product performance and design rather than price for achieving a competitive advantage, worked more closely with the finance department, placed greater emphasis on market share as a method of evaluating marketing performance.

Question 12

Narver and Slater (1990)

Answer 12

studied the relationship between market orientation and business performance. For commodity businesses, the relationship was U-shaped, with low and high market orientation businesses showing higher profitability than the businesses in the mid-range of market orientation.

Businesses with the highest market orientation had the highest profitability, and those with the lowest market orientation had the second-highest profitability. Narver and Slater explained this result by suggesting that the businesses lowest in market orientation may achieve some profit success through a low-cost strategy.

For the non-commodity businesses, the relationship was linear, with the businesses displaying the highest level of market orientation achieving the highest levels of profitability. Superiority of market orientation

Question 13

Kira, Jayachandran and Bearden (2005)

Answer 13

analysed the findings from a wide range of studies that sought to identify the consequences of market orientation. Their findings showed that a market orientation led to higher overall business performance (higher profits, sales and market share), better customer consequences (higher perceived quality, customer loyalty and customer satisfaction), better innovative consequences (higher innovativeness and better new product performance) and beneficial employee consequences. (higher organizational commitment, team spirit, customer orientation and job satisfaction, and lower role conflict). Their analysis of the antecedents of the market orientation showed the importance of top management’s emphasis on marketing, good communications between departments and systems that reward employees for market success to the implementation of market orientation.

Question 14

Limitations of the market orientation studies

Answer 14

. Most were cross-sectional studies based on self-reported data. With any such survey there is the question of the direction of causality.

Question 15

Market-driven Businesses- list some features

Answer 15

Market focus
Customer concern throughout business
Knowledge of customer choice criteria enables matching with marketing mix
Segment by customer differences
Invest in market research (MR) and track market changes
Welcome change
Try to understand competition
Marketing spend regarded as an investment
Innovation rewarded
Search for latent markets
Are fast
Strive for competitive advantage
Are efficient and effective

Question 16

Some features of an internally-focused business

Answer 16

Convenience comes first
Assume price and product performance is key to generating sales
Segment by product
Rely on anecdotes and received wisdom
Cherish status quo
Ignore competition
Regard marketing spend as a luxury
Innovation punished
Stick with the same
Think ‘Why rush?’
Are happy to be ‘me too’
Are efficient

Question 17

Risk of being internally-focused

Answer 17

Businesses that are focused internally segment by product and, consequently, are vulnerable when customers’ requirements change

Question 18

key feature of market-driven businesses

Answer 18

key feature of market-driven businesses is their recognition that marketing research expenditure is an investment that can yield rich rewards through better customer understanding.

Question 19

How do internally focused businesses view marketing research

Answer 19

Internally driven businesses see marketing research as a non-productive intangible

Question 20

How do market driven businesses and internally focused ones differ in terms of innovation

Answer 20

In market-orientated companies, those employees who take risks and are innovative are rewarded. Recognition of the fact that most new products fail is reflected in a reluctance to punish those people who risk their career championing a new product idea. Internally orientated businesses reward time-serving and the ability not to make mistakes. This results in risk avoidance and the continuance of the status quo. Market-driven businesses search for latent markets-markets that no other company has yet exploited.

Question 21

Example of Apple exploiting latent markets

Answer 21

iPhone (smart phone), iPad (tablet) and Apple watch. Also Pokemon Go (not Apple) is an example

Question 22

Abell, 1978- what does intensive competition mean for market-driven businesses

Answer 22

Intensive competition means market-driven companies should respond quickly to latent markets. They need to innovate, manufacture and distribute their products and services rapidly if they are to succeed before the strategic window of opportunity closes

Question 23

Another key difference concerning competitive advantage

Answer 23

A key feature of market-orientated companies is that they strive for competitive advantage. They seek to serve customers better than the competition does. Internally-orientated companies are happy to produce me-too copies of offerings already on the market. Market orientated are effective and efficient, as opposed to just efficient

Question 24

Efficiency

Answer 24

Efficiency is concerned with inputs and output- cost per unit of output is low so can offer low prices to gain market share or charge medium to high prices and achieve high profit margins. For example, car companies attempt to achieve efficiency by gaining economies of scale and building several models on the same sub-frame and with the same components. However, to be successful, a company needs to be more than just efficient-it needs to be effective as well

Question 25

Effectiveness

Answer 25

Effectiveness means doing the right things- operating in attractive markets and making products that customers want to buy. Conversely, companies that operate in unattractive markets or are not producing what customers want to buy will go out of business.

Question 26

Ethical business market

Answer 26

In the UK, the market is more than £81 billion.

Question 27

Should a business be effective or efficient

Answer 27

A combination of efficiency and effectiveness leads to optimum business success. Such firms do well and thrive because they are operating in attractive markets, supplying products that consumers want to buy and benefiting from a low-cost base. E.g. Toyota

Question 28

Essential difference between efficiency and effectiveness

Answer 28

The essential difference between efficiency and effectiveness is that the former is primarily cost focused, while the latter is customer focused. An effective company can attract and retain customers while remaining cost-efficient

Question 29

Why does the definition of efficiency and effectiveness need to adapt

Answer 29

Technology e.g. customers no longer happy waiting 7 days for a parcel. To achieve this new level of efficiency, firms have had to make changes and streamline their logistical operations, and to be effective they have, in many cases, had to increase the number of delivery channels and increase the predictability of when deliveries are made in order to meet customer expectations. Such changes are contributing to the evolution of marketing and also creating opportunities to meet and exceed customer expectations

Question 30

Four key benefits can be derived from adopting marketing as a guiding business philosophy:

Answer 30

1 customer value
2 customer satisfaction
3 customer loyalty
4 long-term customer relationships

Question 31

QSCV

Answer 31

quality, service, cleanliness and value

Question 32

customer value = perceived benefits - perceived sacrifice

Answer 32

Customer value is dependent on how the customer perceives the benefits of an offering and the sacrifice that is associated with its purchase.

Question 33

Perceived benefits can be derived from

Answer 33

the product (e.g. the taste of the hamburger), the associated service (e.g. how quickly customers are served and the cleanliness of the outlet) and the image of the company (e.g. whether the image of the company/product is favourable). If one of those factors-e.g. product benefits-changes, then the perceived benefits and customer value also change. For instance, fast food restaurants largely rely on using disposable packaging and utensils for their products, much of which is not recyclable and bad for the environment. So many brands addressing issue. McDonald’s is to end the use of plastic straws and will switch to using paper

Question 34

Perceived sacrifice is

Answer 34

the total cost associated with buying a product. This consists of not just monetary cost, but the time and energy involved in purchase. For example, with fast-food restaurants, good location can reduce the time and energy required to find a suitable eating place. But marketers need to be aware of another critical sacrifice in some buying situations.
This is the potential psychological cost of not making the right decision.

Question 35

standards are under threat of franchise termination. Higher levels of customer satisfaction are associated with higher levels of

Answer 35

customer retention, financial performance and shareholder value.

Question 36

‘Kano model’

Answer 36

The Kano Model is a way of assessing the impact of services or product features on customer satisfaction. The model says that a product or service is about much more than just functionality – it’s also about customers’ emotions. For example, all customers who buy a new car expect it to stop when they hit the brakes, but many will be delighted by its voice-activated parking-assist system.

Question 37

Kano Model Explained

Answer 37

‘Must be’ characteristics are expected to be present and are taken for granted. For example, in a hotel, customers expect service at reception and a clean room. The lack of these characteristics causes annoyance, but their presence only brings dissatisfaction up to a neutral level.

‘More is better” characteristics can take satisfaction past neutral into the positive satisfaction range. For example, no response to a telephone call can cause dissatisfaction, but a fast response may cause positive satisfaction or even delight.

‘Delighters” are the unexpected characteristics that surprise the customer. Their absence does not cause dissatisfaction, but their presence delights the customer. For example, a UK hotel chain provides a free basket of fruit on arrival in visitors’ rooms.

Question 38

Another way to delight a customer according to White

Answer 38

Another way to delight the customer is to under-promise and over-deliver (e.g. by saying that a repair will take about 5 hours, but getting it done in 2 hour-)
White 1999

Question 39

Problem for marketers with delighters

Answer 39

A problem for marketers is that, over time, delighters become expected. This means that marketers must constantly strive to find new ways of delighting. Innovative thinking and listening to customers are key ingredients in this.

Question 40

Brand love

Answer 40

an extension of the concept of loyalty. Researchers have found that the connections between individuals and the brands they choose are closely associated with the concept of interpersonal physical love. However, while brand love has been found to involve passion, positive emotional connections, long-term relationships, positive attitudes and distress at the thought of separation, it does not leave brand lovers as profoundly committed to a product as they might be to a personal partner.

Question 41

Looking for ways to maintain this high level of commitment to the relationship can be achieved by maximizing three key opportunities:

Answer 41

1) Facilitate ‘passion-driven behaviour’, 2) Build brands that engender self-brand integration. This is the way the brand connects to an individual’s values and deeper thought processes. Rewards can be used effectively to emphasize the benefits of this higher-level commitment. Samsung is an example of a brand that is attempting to connect with customers by engendering self-identity through brand values associated with the environment.
3)Create positive emotional connections. Brands that succeed in being regarded as an ‘old friend’ and creating a strong bond with the customer benefit by finding a place in the customer’s heart.
E.g. Body Shop

Question 42

Relationship marketing according to Sheth and Parvartiyar (1995),

Answer 42

relationship marketing is a change in direction for marketing thinking and practices, and it places ‘emphasis on relationships as opposed to transaction-based exchanges.’

Question 43

Figure about firms with a good service history

Answer 43

more than 70 per cent of customers are likely to spend more if a firm has a good service history

Question 44

Strategic marketing- Hamel and Prahalad, 1994

Answer 44

Strategy is defined as a firm’s conscious efforts to use its resources to leverage advantage

Question 45

Booms and Bitner, 1981 - The Service Marketing Mix

Answer 45

The services marketing mix adds three decision areas to consider: people, physical evidence and process (Booms and Bitner, 1981).

Question 46

Marketing strategy/ implementation

Answer 46

Marketing strategy concerns the issues of what should happen and why it should happen. Implementation focuses on actions: who is responsible for various activities, how the strategy should be carried out, where things will happen and when action will take place. So managers devise marketing strategies to meet new market opportunities, counter environmental threats and match core competences.

Question 47

The marketing concept as an ideology

Brownie and Saren (1992)

Answer 47

They argue that there are other valid considerations that companies must take into account when making decisions (e.g. economies of scale), apart from giving customers exactly what they want. Marketers’ attention should focus not only on propagation of the ideology but also on its integration with the demands of other core business functions in order to achieve a compromise between the satisfaction of consumers and the achievement of other company requirements.

Question 48

Bloom and Greyser (1981) presented an alternative view. They regard consumerism as

Answer 48

compelling marketers to consider consumer needs and wants that may have been overlooked: “The resourceful manager will look for the positive opportunities created by consumerism rather than brood over its restraints.’

Question 49

Ward and Lewandowska (2008) studied marketing strategies to find out which work best for firms in Australasia, the Netherlands and China, and found

Answer 49

found societal marketing strategies to be among the most effective. They advocate that marketing managers should find ways to introduce societal marketing and match this with their trading environment and the preferences of their target markets.

Question 50

Marketing as a constraint on innovation

Tuber (1974) presented a third criticism of marketing-that is

Answer 50

how marketing research discourages major innovation. The thrust of his argument was that relying on customers to guide the development of new products has severe limitations. This is because customers have difficulty articulating needs beyond the realm of their own experience.

Question 51

Limitations of the limitations of marketjng

Answer 51

how marketing research discourages major innovation. The thrust of his argument was that relying on customers to guide the development of new products has severe limitations. This is because customers have difficulty articulating needs beyond the realm of their own experience.

Question 52

Marketing as a source of dullness

Answer 52

A fourth criticism of marketing is that its focus on analysing customers and developing offerings that reflect their needs leads to dull marketing campaigns, me-too products, copying promotion and marketplace stagnation.

Question 53

Criticism of marketing being dull

Answer 53

Instead, marketing should create demand rather than simply reflect it. On one hand, this approach can eventually lead to business failure as in the case of BlackBerry. But, on the other hand, ‘dullness’ can be a source of innovation. Fever Tree- Charles Rolls and Tim Warrillow were at a tonic water tasting in the USA and noticed that many of these products contained preservatives and artificial sweeteners (Fever-Tree, 2018). So, they went on a journey to make a new product range that offered something different.

Question 54

Marketing as an intrusion

Answer 54

A fifth and growing criticism of marketing has intensified as big data and digital information
firms, like Facebook, Google and Instagram, gather and analyse data in such detail that they
have great insight into what, when and where to send marketing messages to trigger
purchases (Kotler, 2017). as the world has become digital, the capacity and scope to send such messages has increased significantly. Google and Facebook use targeted messaging as a basis for their advertising revenue models for their platforms.