Chapter 1

Question 1

Marketing

Answer 1

• managing profitable cutomer relationships through creating and capturing valie using the marketing mix
• helps a company increase the value pie and capture as much of the VP as possible as profits

Question 2

Marketing Mix

Answer 2

product strategy

pricing strategy

promoting strategy

place strategy (channel)

• Product, promotion and place affect profits by influencing the customers’ WTP.
• Price helps the company capture as much of the value pie as possible

Question 3

Marketing Math

Answer 3

analytical approach to study how marketing actions impact profits

Question 4

Marketing research

Answer 4

• understanding customers
• segmenting and selecting customers
• managing competition

Question 5

Value Pie

Answer 5

= whole area under the demand curve

=Sum of customers WTP

Question 6

Willingness to Pay (WTP)

Answer 6

the highest price a customer is willing to pay

Question 7

Five step model of marketing process

Answer 7

1. understand marketplace and customer needs and wants
2. design a customer-driven marketing strategy
3. construct an integrated marketing program that delivers superior value
4. build profitable relationships and create customer delight
5. capture value from customers to create profits adn customer equity

***first 4 are FOR the customers, 5th is FROM the customer

Question 8

needs

Answer 8

states of felt deprevation

Question 9

five core customer and marketplace concepts

Answer 9

1. needs wants and demands
2. market offerings
3. value and satisfaction
4. exchanges and relationships
5. markets

Question 10

wants

Answer 10

the form human needs take as shaped by culture and individual personality

Question 11

demands

Answer 11

human wants that are backed by buying power

Question 12

market offering

Answer 12

some combination of products, services, information or experiences offered to a market to satisfy a need or want

-also can include persons, places, organizations, information and ideas

Question 13

marketing myopia

Answer 13

the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products

Question 14

exchange

Answer 14

the act of obtaining a desired object from someone by offering something in return

Question 15

market

Answer 15

the set of all actual and potential buyers of a product or service

Question 16

marketing management

Answer 16

the art and science of choosing target markets and building profitable relationships with them

• design cutomer-driven marketing strategy
• what customers will we serve (target market)?
• how can we serve these cutomers best (value proposition)?

**customer management and demand management**

Question 17

Selecting customers to serve

Answer 17

• market segmentation (divides market into segments)
• selecting which segments to target (target marketing)
• in cases of excess demand (ex: yosemite national park), may practice demarking to reduce the number of customers

Question 18

Choosing a value proposition

Answer 18

• value proposition = the set of beliefs or values it promises to deliver to customers to satisfy their needs

Question 19

Five alternate concepts for marketing strategies:

Answer 19

1. prodcution
2. product
3. selling
4. marketing
5. social marketing

Question 20

Production concept

Answer 20

the idea that consumers will favor products that are available and highly affordable and that the organization should therefore focus on improving production and distribution efficiency

-ex: chinese labor PC costs

Question 21

Selling concept

Answer 21

the idea that consumers will not buy enough of the firms products unless it undertakes a large scale-selling and promotion effort

ex: blood donations, insurance
- doesnt focus on building relationships

Question 22

marketing concept

Answer 22

the marketing management philosophy that holds that acheiving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do

• find the right products for your customers
• outside - in perspective
• customer driven (what do customers want)
• and customer driving (knowing what they want before they do) - ex: ipod

Question 23

social marketing concept

Answer 23

the idea that a company’s marketing decisions should consider cunsumners’ wants, the compay’s requirements, consumers’ long run interests and society’s long-run interests

• long run welfare
• improves customer and society well ebing
• balance company profits, consumer wants, and society’s interests

Question 24

customer relationship management

Answer 24

the overall process of buiding and maintaining profitable customer relationships by delivering superior customer value and satisfaction

• most important concept
• maximize customer loyalty

Question 25

customer percieved value

Answer 25

the customers evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those competing offers -customers dont judge values and costs objectively

Question 26

customer satisfaction

Answer 26

the extent to which a products perceived performance matches a buyers expectations ex: Ritz carlton - wants to deliver high customer satisfaction, but does not want to maximize it

Question 27

customer relationship levels

Answer 27

- basic relationships-- with low margin customers (ex: P&G doesnt call all of its customers who buy Tide) - full partnerships -- in markets with few customers nad high margins (ex: P&G working with Wal-mart) - frequency marketing programs -- reward customers who buy frequently or in large amounts (ex: FF miles) - club marketing programs -- offer members special benefits and create communities (ex: Harley Davidson)

Question 28

selective relationship management

Answer 28

companies now use customer profitability analysis to weed out losing customers and target winning ones for pampering

Question 29

marketing by attraction

Answer 29

- creating market offerings and messages that involve consumers rather than interrupt them - companies are even inviting consumers to play a role in shaping brand messages and ads

Question 30

consumer-generated marketing

Answer 30

marketing mesages, ads, and other brand exchanges created by consumers themselves - both invited adn uninvited

Question 31

partner realtionship management

Answer 31

working closely with partners in other compnay departments and outside the company to jointly bring greater value to customers -supply chain management also strengthens company's connections with partners

Question 32

customer lifetime value

Answer 32

the value of the entire stream of purchases that the customer would make over a lifetime of patronage

Question 33

share of customer

Answer 33

the portion of the customer's purchasing that a company gets in its product categories

Question 34

customer equity

Answer 34

the total combined customer lifetime values of all of the company's customers - may be a better measure of performance than current sales or market share - not all customers (or even loyal customers) are good investments though

Question 35

types of customers

Answer 35

- strangers = low profitability and low loyalty - butterflies= potentialy profitable but not loyal - true friends = profitable and loyal --\> want to turn these into "true believers" who tell others about good experiences - barnacles = highly loyal but not really profitable