Chapter 1

Question 1

What is marketing?

Answer 1

building and maintaining profitable relationships, a managing process by which individuals and firms obtain their wants and needs.

Question 2

Steps of the Marketing Process

Answer 2

1) Understanding the marketplace
2) Design customer driven strategy
3) Prepare integrated marketing plan
4) Build Customer Relationship
5) Capture profits

Question 3

Goal of the Marketing Process

Answer 3

create profit + capture value

Question 4

Needs

Answer 4

state of felt deprivation (physical or social)

Question 5

Wants

Answer 5

form human needs take place when shaped by culture and personality

Question 6

Demand

Answer 6

wants backed by purchasing power

Question 7

Market Offerings

Answer 7

what is offered by a firm to satisfy wants and needs

Question 8

Customer Value and Satisfaction

Answer 8

buying decisions based on expectation about the value and satisfaction that market offering will offer

Question 9

Marketing management

Answer 9

choose target markets + build profitable relationships with them

Question 10

Segmenting

Answer 10

divide market into psychographic, demographic, behavioural or geographical groups because one product cannot satisfy everyone.

Question 11

Targeting

Answer 11

Choosing one or few segments that will be targeted

Question 12

Value Proposition

Answer 12

benefits promised to deliver to consumer, “why should i buy from you and not your competitor?”.

Question 13

Production Concept

Answer 13

increase efficiency, decrease cost
risk of marketing myopia

Question 14

Product Concept

Answer 14

continuous technological innovations, highest quality
e.g. iPhones
risk of marketing myopia

Question 15

Marketing Myopia

Answer 15

Myopia: narrow view, only focusing on one element out of many

Question 16

Selling Concept

Answer 16

buyers will not buy enough unless there is enough selling and promotion effort

Question 17

Marketing Concept

Answer 17

achieving goals: understanding marketplace, satisfying it better than competition. Figure 1.3

Question 18

Societal Marketing Concept

Answer 18

Knowing society and consumer’s long-run interests, sustainable marketing

Question 19

Marketing Mix

Answer 19

marketing tools used to implement marketing strategies
4 Ps: promotion, place, price, product

Question 20

Customer Satisfaction

Answer 20

extent to which performance matches expectations

Question 21

Customer Value

Answer 21

extent to which cost matches benefit

Question 22

Customer Relationship Levels

Answer 22

basic vs full partnership

Question 23

Customer Relationship Tools

Answer 23

frequency marketing programs (loyalty rewards); club marketing programs (membership)

Question 24

Why create customer loyalty and retention?

Answer 24

cheaper to keep an old customer than to attract a new one, losing a customer = losing lifetime value

Question 25

Customer Lifetime Value

Answer 25

total amount received by a consumer during lifetime of relationship.
Formula: average value of purchase x number of times client buys per year x average length of customer relationship (in years)

Question 26

Share of consumer

Answer 26

portion of price that goes to the firm, higher share of consumer = higher prices

Question 27

Customer Equity

Answer 27

combined customer lifetime values of all company’s current and potential customers

Question 28

How to manage Customer Equity

Answer 28

build right relationships with right customers