Market-Oriented Culture

Question 1

What is marketing?

Answer 1

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners and society at large.

Question 2

What are the principles of marketing?

Answer 2

• Meeting and satisfying the needs of diverse stakeholders affected by a transaction by delivering value.
• It is based on the ‘value’ principle: firms have to offer more value from their products/services to customers than competitors, or there will be no reason for customers to buy from them.

Question 3

What are the stages of marketing evolution?

Answer 3

1. Production era
2. Sales era
3. Marketing department era
4. Marketing organisation era

Question 4

What is the physical process sequence?

Answer 4

make product > sell product

Question 5

What is the value delivery sequence?

Answer 5

choose value > provide value > communicate value

Question 6

What is a market-oriented culture?

Answer 6

• focuses on identifying and meeting needs of customers

- profit maximisation done by conforming to consumer’s needs

Question 7

What are the characteristics of market-oriented firms?

Answer 7

1. value-driven strategies
   2, leadership, innovation, resources, flexibility
2. they have a market oriented culture

Question 8

What are the 3 interrelated processes of market-oriented firms?

Answer 8

1. Generate market intelligence
2. Disseminate that intelligence
3. Be responsive to that information

Question 9

How do market-oriented firms generate market intelligence?

Answer 9

• Market research
• Searching secondary sources
• Observing and listening to customers and clients
• Benchmarking/competitive analysis
• Grafting – hiring someone from a competitor and using the information obtained
• Organisational memory – information from older people, their experiences and how to with problems etc.

Question 10

How do market-oriented firms disseminate market intelligence?

Answer 10

Share them amongst all departments:

• Encouraging cross-functional teams and job rotation between departments
• Decision support systems and databases
• Internal reporting and documentation
• Customer engagement summits
• Councils.

Question 11

How do market-oriented firms be responsive to market intelligence?

Answer 11

Allow these insights to influence the way you work. Use the insights to alter mental models, develop and execute new strategies and plans, and embrace innovation.

Question 12

What is marketing myopia?

Answer 12

It refers to the short sightedness by firms causing management to define their business, and hence their competitors and market opportunities, too narrowly.

Question 13

What is value?

Answer 13

Value refers to the tangible and intangible benefits a customer receives from buying a product/service. It essentially means creating an experience of customers.

Question 14

What is value proposition?

Answer 14

Value proposition is a marketplace offering that fairly and accurately sums up the value that the customer will realize if he/she purchases the product/service.

Question 15

How does creating value for customer bring good profit and competitor advantage?

Answer 15

Through earnings from creating customer value, which in turn, creates customers who are loyal, who will purchase more of the firm’s product and who will recommend the firm to others. Therefore, firms should always strive to make good profits.

Question 16

What are benefits?

Answer 16

Benefits – refer to all tangible and intangible desirable attributes of the product consumed over the life of its ownership. They are the outcomes sought by the customer, which motivates buying behaviour and satisfies their needs or wants. Benefits are in terms on the results delivered to the customer, not in terms of the actual product and service features. These results include: improved performance, improved operating productivity, improved asset productivity and reduced risk.

Question 17

What are costs?

Answer 17

Costs – refer to all tangible and intangible costs incurred by the customer over the life of ownership (or relationship lifecycle). This includes: less money, less time, less effort, less psychic/cognitive cost (is not in terms of purchase price). You want to make it easy for customers to buy your products!!!! Therefore, must minimize the costs as much as possible

Question 18

What is the goal for firms in creating value?

Answer 18

The goal for firms is to create superior and sustainable perceived value, where customers will perceive higher value for their products than any competing alternative. We want to maximise value by maximizing benefits and minimizing costs to the customer over the product and relationship lifecycle.

Question 19

What is the equation for value?

Answer 19

value = benefits / costs

Question 20

What is the equation for firm value?

Answer 20

firm value = (margin x volume)/ investment

Question 21

2 flow charts for firm value:

Answer 21

1. increased customer loyalty > increased purchases and referrals > premium prices
2. increased volume > increased cash flow and experience > reduced costs

Question 22

What are the sources of value creation (benefits)?

Answer 22

product, relationship management, image, support services.

Question 23

What are the sources of value creation (costs)?

Answer 23

search cost, acquisition cost, set-up cost, maintenance cost, financing cost, exit cost

Question 24

What are the 4 marketing toolkit?

Answer 24

1. product
2. place
3. promotion
4. price

Question 25

What is product in the marketing toolkits?

Answer 25

whatever is offered for sale in the transaction/exchange (a good/service, idea, place, person). Includes the development of new product/service, building the brand, repositioning the brand, augmented product, design and packaging of a good, its physical features and quality of any associated services such as delivery.

Question 26

What is price in the marketing toolkits?

Answer 26

Price: the value that the customer gives up or exchanges in order to obtain a desired product.

Question 27

What are the 3 price costs?

Answer 27

1. time cost 2. social cost 3. lifestyle cost + Value-based pricing, A consumer-based view of pricing and The pricing strategy or approach we take The long-term view on price

Question 28

How do consumers usually view price and product?

Answer 28

The long-term view on price | Most consumers will use price as a way of judging product quality, even through sometimes this isn’t the case.

Question 29

What is place in the marketing toolkits?

Answer 29

Place/Distribution/Channel: the availability of the product to the customer at the desired time and location.

Question 30

What are the 4 characteristics of place/distribution/channel?

Answer 30

1. Selecting distribution channels and channel partners 2. Finding complementarities between routes to market 3. Designing and implementing channel controls 4. Designing promotional plans for channels

Question 31

What is promotion in the marketing toolkit?

Answer 31

Promotion: involves communicating the value proposition. Includes all the activities, coordination and efforts marketers undertake to influence attitudes or behaviour, to inform consumers about their products/ideas, and encourage/persuade them to buy these products.

Question 32

What are characteristics of promotion?

Answer 32

- Determining promotion objectives for our advertising campaign - The development of communications content and creative - The selection of media/communication channel - Designing control and evaluation methodology to evaluate our effectiveness in communications - Timing Also includes: personal selling, advertising, sales promotion, public relations, direct and online marketing, sponsorship and word-of-mouth