Foundations Chapter 11

What’s the ultimate benefit that businesses seek from marketing?
Long-term profitability
Define marketing
An organizational function and a set of processes for creating, communications, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
True or false: a successful marketer delivers value by filling customer needs in ways that exceed their expectations.
True
define utility
the ability of goods and services to satisfy consumer “wants.”
Define form utility
Satisfies wants by converting inputs into a finished form
Define time utility
satisfies wants by providing goods and services at a convenient time for customers
Define place utility
satisfies wants by providing goods and services at a convenient place for customers
define ownership utility
satisfies wants by smoothly transferring ownership of goods and services from seller to buyer.
True or false: nonprofit organizations employ more people than the federal government and all 50 state governments combined.
True
What are the four main types of marketing?
1. people marketing – sports, politics, and art dominate this category. Start by figuring out what your customer needs and then ensure that your product delivers above and beyond expectations
2. place marketing – drawing people to a particular place. cities/states use it to attract businesses and tourists
3. event marketing – includes marketing or sponsoring of athletic, cultural or charitable events. Partnerships bt public and private sectors are common.
4. idea marketing – range of public and private organizations market ideas that are meant to change how people think or act. Ex. recycle, don’t drink and drive, etc.
What are the four main eras and briefly explain
1. production era – top business priority was to produce large quantities of goods as efficiently as possible
2. selling era – supply exceeded demand
3. marketing era – delivering unmatched value to customers is the only effective way to achieve long-term profitability
4. relationship era – era today. zeros in on long-term customer relationships
Define marketing concept
A business philosophy that makes customer satisfaction – now and in the future – the central focus of the entire organization
Define customer relationship marketing (crm)
The ongoing process of acquiring, maintaining, and growing profitable customer relationships by delivering unmatched value.
When does CRM work best?
when marketers combine marketing communication with one-on-one personalization
What is an integral part of the CRM process?
information. You can’t do CRM without collecting, managing, and applying the right data at the right time for the right person.
What does the scope of your relationships depend on?
Not just on the data you gather but also on your industry
When are you more likely to pursue a full partnership with each of your key clients?
When you have a high-ticket product and a smaller customer base
Define value
A customer perception that a product has a better relationship than its competitors between the cost and the benefits
True or false: low cost always means high value to consumers
False.
You know you’ve satisfied your customers when you deliver ____ value above and beyond their ______
perceived; expectations
Define customer satisfaction
When customers perceive that a good or service delivers value above and beyond their expectations
What two traps to less savvy marketers frequently fall into?
1. overpromising
2. underpromising
Define 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
Define marketing plan
A formal document that defines marketing objectives and the specific strategies for achieving those objectives
What’s the first step in planning your marketing strategy? Define
Market segmentation, which is dividing potential customers into groups of similar people or segments
Define target market
The group of people who are most likely to buy a product
What 4 characteristics does a well chosen target market target?
1. size – must be enough people to support a business
2. profitability
3. accessibility
4. limited competition
Define consumer marketers (also known as business-to-consumer or b2C)
Marketers who direct their efforts toward people who are buying products for personal consumption
Define business marketers (also known as business-to-business or B2B)
Marketers who direct their efforts toward people whoa re buying products to use either directly or indirectly to produce other products.
What are the four options for segmenting potential customers in a B2C market?
demographic, geographic, psychographic, and behavoiral
Define demographic segmentation
Dividing the market into smaller groups based on measurable characteristics about people such as age, income, ethnicity, and gender
Define 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.
Define psychographic segmentation
Dividing the market into smaller groups based on consumer attitudes, interests, values, and lifestyles
Define behavioral segmentation
Dividing the market into smaller groups 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.
What are the three options for segmenting potential customers in a B2B market?
1. geographic – diving the market based on the concentration of customers.
2. customer based – dividing the market based on the characteristics of customers
3. product-use based – dividing the market based on how customers will use the product.
Once you’ve defined your target market, you must develop compelling strategies for product, price, distribution, and promotion. The blending of these elements becomes your _____ ____
marketing mix
What are the four strategies in the marketing mix? explain
1. product strategy – decisions range from brand name to product image to package design, etc.
2. pricing strategy – challenging area
3. distribution strategy – deliver product to the right people, right quantities, right time, right place.
4. promotion strategy – all the ways marketers communicate about their products.
True or false: when entering the global market you need to reevaluate your marketing mix?
True
Define environmental scanning
The process of continually collecting info from the external marketing environment
What are the key elements of external environment? (5)
1. competitive – understanding it begins with analysis of market share. Must monitor how both dominant and emerging competitors handle each element of their marketing mix
2. economic – identity/ respond to change
3. social/cultural – lifestyle,customs, language, attitudes, interests, and population shifts.
4. technological
5. political/legal – laws, regulations, political climate
Define market share
The percentage of a market controlled by a given marketer
Define consumer behavior
Description of how people act when they are buying, using, and discarding goods and services for their own personal consumption. Consumer behavior also explores the reasons behind people’s actions
What are the 5 steps of the consumer decision process?
1. need recognition
2. information search
3. evaluation of alternatives
4. purchase decision
5. postpurchase behavior
Define cognitive dissonance
Consumer discomfort with a purchase decision, typically for a higher-priced item.
Define business buyer behavior
Describes how people act when they are buying products to use either directly or indirectly to produce other products
Define marketing research
The process of gathering, interpreting, and applying information to uncover marketing opportunities and challenges, and to make better marketing decisions.
What three things do companies use marketing research to do?
1. identify external opportunities and threats
2. monitor and predict customer behavior
3. evaluate and improve each area of the marketing mix
Define secondary data
Existing data that marketers gather or purchase for a research project
Define primary data
New data that marketers compile for a specific research project
What does the following describe, primary or secondary data?:
– tends to be lower cost
– may not meet your specific needs
– frequently outdated
– available to your competitors
Secondary data
Define some characteristics of primary data?
more expensive, customized to meet your needs, fresh, new data, proprietary – no one else has it.
Define observation research
marketing research that dose not require the researcher to interact with the research subject
Define survey research
Marketing research that requires the researcher to interact with the research subject
Whats an advantage to observation research?
People actually do often differs from what they say. it’s cheap and effective.
Whats the biggest downside of observation research?
It doesn’t yield any information on consumer motivation.
Whats the key advantage and disadvantage to survey research?
– advantage: you can secure info about what people are thinking and feeling beyond what you can observe
– disadvantage: many people aren’t honest or accurate about their experiences, opinions, and motivations, which can lead to misleading survey research
What two factors have had a dramatic impact on marketing in the past couple decades?
1. surge in social responsibility movement
2. dramatic emergence of the internet and digital technology
Define green marketing
the development and promotion of products with ecological benefits
What has been the most dramatic change because of the digital age?
The shift in power from producers to customers
define mass customization
the creation of products tailored for individual customers on a mass basis.