Business 101: Chapter 11

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
utility
the ability of goods and services to satisfy consumer “wants”
form utility
satisfies wants by converting inputs into a finished form.
-turning fruits into a smoothie to sell
time utility
satisfies wants by providing goods and services at a convenient time for customers
-FedEx delivers some packages on Sundays
place utility
satisfies wants by providing goods and services at a convenient place for customers
-ATMs offer banking services in many large supermarkets
ownership utility
satisfies wants by smoothly transffering ownership of goods and services from seller to buyer
marketing concept
a business philosophy that makes customer satisfaction -now and in the future- the central focus of the entire organization
customer relationship management
the ongoing process of acquiring, maintaining, and growing profitable customer relationships by delivering unmatched value
value
a customer perception that a product has a better relationship than its competitors between the cost and the benefits
customer satisfaction
when customers perceive that a good or service delivers value above and beyond their expectations
customer loyalty
when customers buy a product from the same supplier again and again- sometimes paying even more for it than they would for a competitive product
marketing plan
a formal document that defines marketing objectives and the specific strategies for achieving those objectives
market segmentation
dividing potential customers into groups of similar people, or segments
target market
the group of people who are most likely to buy a particular product
consumer marketers
marketers who direct their efforts toward people who are buying products for personal consumption
business marketers
marketers who direct their efforts toward people who are buying products to use either directly or indirectly to produce other products
demographic segmentation
dividing the market into smaller groups based on measurable characteristics about people such as age, income, ethnicity, and gender
geographic segmentation
dividing the market into smaller groups based on where consumers live. This process can incorporate countries, cities, or population density as key factors
psychographic segmentation
dividing the market into smaller groups based on consumer attitudes, interests, values, and lifestyles
behavioral segmentation
dividing the market based on how people behave toward various products. This category includes both the benefits that consumers seek from products and how consumers use the products
marketing mix
the blend of marketing strategies for product, price, distribution, and promotion
product strategy
ranges from brand name, to product image, to package design, to customer service, to guarantees, to new product development, and more.
pricing strategy
to deliver customer value, your prices must be fair, relative to the benefits of your products.
distribution strategy
the goal is to deliver your product to the right people, in the right quantities, at the right time, in the right place. Key decisions include shipping, warehousing, and selling outlets. The implications of these decisions for product image and customer satisfaction can be significant.
promotion strategy
includes all of the ways marketers communicate about their products. Key elements include advertising, personal selling, sales promotion, public relations, word-of-mouth, and product placement.
environmental scanning
the process of continually collecting information from the external marketing environment
market share
the percentage of a market controlled by a given marketer
competitive environment
affects marketers on a day-to-day basis more than any other element. Understanding this environment begins with the analysis of market share, or the percentage of the marketplace that each firm controls. Marketers must continually monitor how both dominant and emerging competitors handle each element of their marketing mix.
economic environment
The timing of expansions and contractions is virtually impossible to predict. As a marketer it is necessary to identify and respond to changes as soon as possible, keeping in mind that a sharp eye sees opportunity even in economic downturns.
social/culture environment
covers a vast array of factors, including lifestyle, customs, language, attitudes, interests, and population shifts. Trends can change rapidly, with a dramatic impact on marketing decisions. Anticipating and responding to trends can be especially important in industries such as entertainment, fashion, and technology.
technological environment
Changes in technology affects marketers in ways that are not directly visible to them, but are very visible to consumers.
political/legal environment
includes laws, regulations, and political climate. Most US laws and regulations are clear but others are complex and evolving. Political climate includes changing levels of governmental support for various business categories.
consumer behavior
description of how people act when they are buying, using, and discarding goods and services for their own personal consumption. This also explores the reasons behind people’s actions.
cognitive dissonance
consumer discomfort with a purchase decision, typically for a higher-priced item.
business buyer behavior
describes how people act when they are buying products to use either directly or indirectly to produce other products
marketing research
the process of gathering, interpreting, and applying information to uncover marketing opportunities and challenges, and to make better marketing decisions
secondary data
existing data that marketers gather or purchase for a research project
primary data
new data that marketers compile for a specific research project
observation research
marketing research that does NOT require the researcher to interact with the research subject
survey research
marketing research that requires the research to interact with the research subject
green marketing
the development and promotion of products with ecological benefits
mass customization
the creation of products tailored for individual consumers on a mass basis