CHAPTER 1 + 2 EXAM

Customer value

the unique combination of benefits received by targeted buyers that includes quality, convenience, on-time delivery, and both before-sale and after-sale service at a specific price

A Need vs Want

A need occurs when a person feels deprived of basic necessities such as food, clothing, and shelter. A want is a need that is shaped by a person's knowledge, culture, and personality

Goals:

sets targets against which to measure the company's performance; use quantitative terms when possible. nonfinancial and financial targets Core Competency and Competitive Advantage

Five environmental forces

social, economic, technological, competitive, regulatory forces - generally outside its control.

The organization's goals (or objectives)

statements of an accomplishment of a task to be achieved, often by a specific time

utility

the capacity to be useful and provide satisfaction. The benefits or customer value received by users of the product

3 levels of strategy for for-profits and non-profits

the corporate level, where top management directs overall strategy for the entire organization; the strategic business unit level, where managers set a more specific strategic direction for their businesses to exploit value-creating opportunities the functional level, where groups of specialists actually create value for the organization

core values

the fundamental, passionate, and enduring principles of an organization that guide its conduct over time

Profit

the money left after a forprofit organization subtracts its expenses from its total revenues and is the reward for the risk it undertakes in marketing its offerings.

Executive Summary:

the most important element of the plan; sells the plan through clarity and brevity.

Core values

the organization's fundamental, passionate, and enduring principles that guide its conduct over time.

CRM (Customer Relationship Management)

the process of identifying prospective buyers, understanding them intimately, and developing favorable long-term perceptions of the organization and its offerings so that buyers will choose them in the marketplace.

Marketing Mix

the set of tactical marketing tools - product, price, place, and promotion - that the firm blends to produce the response it wants in the target market HOW TO DELIVER VALUE

organizational culture

the set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization

situation analysis

the study of the internal and external factors that affect marketing strategies WHERE ARE WE NOW?

exchange

the trade of things of value between the buyer and the seller so that each is better off as a result

societal marketing concept

the view that organizations should satisfy the needs of consumers in a way that provides for society's well-being - social responsibility and ethic

Societal marketing concept

the view that organizations should satisfy the needs of consumers in a way that provides for society's well-being.

marketing dashboard

the visual computer display of the essential information related to achieving a marketing objective

the strategic marketing process and phases

to allocate its marketing mix resources to reach its target markets and achieve a competitive advantage. This process is divided into three phases: planning, implementation (carries out the marketing plan that emerges from the planning phase.), and evaluation

Marketing managers use marketing dashboards

to visually display the essential information related to achieving a marketing objective

two key questions to set a strategic direction

"Where are we now?" and "Where do we want to go?"

A government agency

a federal, state, county, or city unit that provides a specific service to its constituents.

Four factors needed for marketing to occur -- What are the diverse factors influencing marketing actions?

(1) two or more parties (individuals or organizations) with unsatisfied needs, (2) a desire and ability on their part to be satisfied, (3) a way for the parties to communicate, and (4) something to exchange.

"Where are we now?"

(a) assess its core competencies to understand how its special capabilities provide a competitive advantage; (b) identify its customers and how they receive genuine value and have a satisfying experience c) analyze its competitors from a global perspective to determine the distinctions among them

two primary goals of marketing

1) to discover the needs and wants of prospective customers 2) to satisfy them

What is needed for marketing to occur?

1. Two or more parties with unsatisfied needs 2. Desire and ability to satisfy these needs 3. A way for the parties to communicate 4. Something to exchange

Three types of organizations

1. for-profit (serves its customers to earn a profit so that it can survive) 2. nonprofit 3. government agencies

implementation phase

1. obtaining resources (budget and employees) 2. designing the marketing organization 3. defining precise tasks, responsibilities, and deadlines (Gantt Chart) 4. actually executing the marketing program designed in the planning phase

80/20 rule

20% of users account for 80% of sales Relationship marketing links the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefit.

product

A good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs and is received in exchange for money or something else of value.

LO5 Explain how the marketing mix elements are blended into a cohesive marketing program.

A marketing manager uses information obtained during the SWOT analysis, market-product focus, and goal-setting steps in the planning process to develop marketing strategies and marketing tactics for each marketing mix element for a given product, which are then implemented, as specified in the marketing plan, as a marketing program.

Two key characteristics of the marketing concept

AN organization should 1. strive to satisfy the needs of consumers 2. while also trying to achieve the organization's goals

Dollar Sales ($)

Actual Price Product A × Quantity Sold Product A + Actual Price Product B × Quantity Sold Product B +...

LO1 Describe the kinds of organizations that exist and the three organizational levels of strategy.

An organization is a legal entity of people who share a common mission. There are two kinds. One is a business firm that is a privately owned organization that serves its customers in order to earn a profit so that it can survive. The other is a nonprofit organization that is a nongovernmental organization that serves its customers but does not have profit as an organizational goal. Most large business firms and nonprofit organizations are divided into three levels of strategy: (a) the corporate level, where top management directs overall strategy for the entire organization; (b) the strategic business unit level, where managers set a more specific strategic direction for their businesses to set value-creating opportunities; and (c) the functional level, where groups of specialists actually create value for the organization.

LO4 Describe the strategic marketing process and its three key phases: planning, implementation, and evaluation.

An organization uses the strategic marketing process to allocate its marketing mix resources to reach its target markets. This process consists of three phases, which are usually formalized in a marketing plan. The planning phase consists of (a) a situation (SWOT) analysis of the organization's strengths, weaknesses, opportunities, and threats; (b) a market-product focus through market segmentation, points of difference analysis, and goal setting; and (c) a marketing program that specifies the budget and activities (marketing strategies and tactics) for each marketing mix element. The implementation phase carries out the marketing plan that emerges from the planning phase. It has four key elements: obtaining resources, designing the marketing organization, developing schedules, and executing the marketing program. The evaluation phase compares the results from the implemented marketing program with the marketing plan's goals to identify the "planning gaps" and take actions to exploit positive deviations or correct negative ones.

COMMONLY USED GOALS

Profit•Sales•Market share•Quality•Customer satisfaction•Employee welfare•Social responsibility•Efficiency

customer value vs customer experience

Customer value is the unique combination of benefits received by targeted buyers that usually include quality, price, convenience, on-time delivery, and both before-sale and after-sale service. The internal response that customers have to all aspects of an organization and its offering. both the direct and indirect contacts of the customer with the company

Market segmentation

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action.

LO3. Distinguish between marketing mix elements and environmental forces.

Four elements in a marketing program designed to satisfy customer needs are product, price, promotion, and place. These elements are called the marketing mix, the four Ps, or the controllable variables because they are under the general control of the marketing department. Environmental forces, also called uncontrollable variables, are largely beyond the organization's control. These include social, economic, technological, competitive, and regulatory forces.

Company Description: Strategic Focus and Plan: Mission:

Highlights the recent history and successes of the organization. sets the strategic direction for the organization; must be consistent with proposed actions of the marketing plan. focuses the activities of the organization for stakeholder groups.

How does marketing change as customers change?

It is important to remember that a marketing plan should be able to change as customers change, competitors develop new products, or there is a change in the external environment. In other words, a marketing plan should be flexible to be successful.

LO3 Explain how organizations set strategic directions by assessing where they are now and seek to be in the future.

Managers of an organization ask two key questions to set a strategic direction. The first question, Where are we now? requires an organization to (a) reevaluate its competencies to ensure that its special capabilities still provide a competitive advantage; (b) assess its present and prospective customers to ensure they have a satisfying customer experience—the central goal of marketing today; and (c) analyze its current and potential competitors from a global perspective to determine whether it needs to redefine its business. The second question, Where do we want to go? requires an organization to set a specific direction and allocate resources to move it in that direction. Business portfolio, hedgehog, and blue ocean analyses help do this.

LO6 Explain how marketing creates utilities for consumers.

Marketing creates utility, which consists of the benefits or customer value received by users of the product and is the result of the exchange process. Marketing provides four types of utilities that are designed to get the right product or service to consumers (form utility) where (place utility) and when (time utility) they need it so they can ultimately use or consume it (possession utility).

LO1. Define marketing and identify the requirements for marketing to occur.

Marketing is 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. This definition relates to two primary goals of marketing: (a) assessing the needs of consumers and (b) satisfying them. For marketing to occur, it is necessary to have (a) two or more parties with unmet needs, (b) a desire and ability to satisfy them, (c) communication between the parties, and (d) something to exchange.

marketing plan

Road map for the marketing actions of an organization for a specified future time period, such as one year or five years.

organizational strategies vary

by level in the organization and by product. The strategies are often described in a marketing plan.`

LO2 Describe how core values, mission, organizational culture, business, and goals are important to organizations.

Organizations exist to accompli sh something for someone. To give organizations direction and focus, they continuously assess their core values, mission, organizational culture, business, and goals. Today's organizations specify their foundation, set a direction, and formulate strategies—'why,' 'what,' and 'how' factors, respectively. Core values are the organization's fundamental, passionate, and enduring principles that guide its conduct over time—what Enron forgot when it lost sight of its responsibilities to its stakeholders. The organization's mission is a statement of its function in society, often identifying its customers, markets, products, and technologies. Organizational culture is a set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization. To answer the question, 'What business are we in?' an organization defines its "business"—the clear, broad, underlying industry category or market sector of its offering. Finally, the organization's goals (or objectives) are statements of an accomplishment of a task to be achieved, often by a specific time.

ultimate consumers

People who personally use a good or service to satisfy their own wants

market

People with both the desire and the ability to buy a specific offering. Potential consumers make up a market

PPPP

Product. A good, service, or idea to satisfy the consumer's needs. ∙ Price. What is exchanged for the product. ∙ Promotion. A means of communication between the seller and buyer. ∙ Place. A means of getting the product to the consumer.

strategic marketing process

The approach whereby an organization allocates its marketing mix resources to reach its target markets. 1. SWOT analysis 2. market-product focus and goal setting 3. marketing program implementation phase evaluation phase

LO4 Explain how organizations build strong customer relationships and customer value through marketing.

The essence of successful marketing is to provide sufficient value to gain loyal, long-term customers. Customer value is the unique combination of benefits received by targeted buyers that usually includes quality, price, convenience, on-time delivery, and both before-sale and after-sale service. Marketers do this by using one of three value strategies: best price, best product, or best service.

LO2 Explain how marketing discovers and satisfies consumer needs.

The first objective in marketing is discovering the needs of prospective consumers. This is not an easy task because consumers may not always know or be able to describe what they need and want. A need occurs when a person feels physiologically deprived of basic necessities such as food, clothing, and shelter. A want is a felt need that is shaped by a person's knowledge, culture, and personality. Effective marketing can clearly shape a person's wants and tries to influence what we buy. The second objective in marketing is satisfying the needs of targeted consumers. Because an organization obviously can't satisfy all consumer needs, it must concentrate its efforts on certain needs of a specific group of potential consumers or target market—one or more specific groups of potential consumers toward which an organization directs its marketing program. Having selected its target market consumers, the organization then takes action to satisfy their needs by developing a unique marketing program to reach them.

customer experience

The foundation of customer relationship management The internal response that customers have to all aspects of an organization and its offering. both the direct and indirect contacts of the customer with the company Direct contacts include the customer's contacts with the seller through buying, using, and obtaining service. Indirect contacts most often involve unplanned "touches" with the company through word-of-mouth comments from other customers, reviewers, and news reports.

to produce a cohesive marketing program

The four Ps elements of the marketing mix must be blended

The planning phase

The part of the strategic marketing planning process when marketing executives, in conjunction with other top managers, (1) define the mission or vision of the business and (2) evaluate the situation by assessing how various players, both in and outside the organization, affect the firm's potential for success.

Evaluation Phase

The phase of the systems model of training in which the evaluation occurs. The trainees are evaluated to determine whether the training was successful based on the criteria established in the assessment phase. Comparing results with plans to identify deviations •Planning gap Acting on deviations •Exploiting a positive deviation •Correcting a negative deviation

Customer Relationship Management (CRM)

The process of identifying prospective buyers, understanding them intimately, and developing favorable long-term perceptions of the organization and its offerings so that buyers will choose them in the marketplace and become advocates after their purchase.

defines its "business"

To answer the question, "What business are we in?" an organization defines its "business"—the clear, broad, underlying industry category or market sector of its offering.

LO5 Describe how today's customer relationship era differs from prior eras oriented to production and selling.

U.S. business history is divided into four periods: the production era, the sales era, the marketing concept era, and the current customer relationship era. The production era covers the period to the 1920s when buyers were willing to accept virtually any goods that were available. The central notion was that products would sell themselves. The sales era lasted from the 1920s to the 1960s. Manufacturers found they could produce more goods than buyers could consume, and competition grew, so the solution was to hire more salespeople to find new buyers. In the 1960s, the marketing concept era dawned, when organizations began to integrate marketing into each phase of the business. In today's customer relationship era, organizations focus their efforts on (a) continuously collecting information about customers' needs, (b) sharing this information across departments, and (c) using it to create customer value.

difference between ultimate consumers and organizational buyers

Ultimate consumers are the people who use the products and services purchased for a household. Organizational buyers are those manufacturers, wholesalers, retailers, and government agencies that buy products and services for their own use or for resale.

Diversification analysis and four strategies for growth

a technique that helps a firm search for growth opportunities market penetration (selling more of current products to current markets) market development (selling current products to new markets) product development (selling new products to current markets); diversification (selling new products to new markets).

Diversification analysis

a technique that helps a firm search for growth opportunities from among current and new markets as well as current and new products

customer value proposition

a cluster of benefits that an organization promises customers to satisfy their needs marketing mix also provides clearly

Organization

a legal entity that consists of people who share a common mission and develops offerings (goods, services, or ideas) that create value for both the organization and its customers by satisfying their needs and wants. exist to accomplish something for someone.

Marketing Metric

a measure of the quantitative value or trend of a marketing action or result.

nonprofit organization

a nongovernmental organization that serves its customers but does not have profit as an organizational goal. Its goals may be operational efficiency or client satisfaction.

business plan

a road map for the entire organization for a specified future period of time, such as one year or five years

Organizational culture

a set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization.

mission

a statement of the organization's function in society that often identifies its customers, markets, products, and technologies. VISION

Diversification

a strategy of increasing sales by introducing new products into new markets Develop New Products to Sell in New Markets

Market Development

company growth by identifying and developing new market segments for current company products Sell Current Products to New Markets

market penetration

company growth by increasing sales of current products to current market segments without changing the product Increase Sales of Current Product in Current Markets

product development

company growth by offering modified or new products to current market segments Sell New Products to Current Markets

marketing career paths

corporate agency, general management and marketing expert

The board of directors oversees the three levels of strategy in organizations:

corporate, business unit, and functional.

swiffer

discovered people don't like mopping

first objective in marketing

discovering the needs of prospective customers difficult because they don't know or describe what they want/need (Swiffer)

Marketing

discovers and satisfies the needs and wants of consumers. the activity for creating, communicating, delivering, and exchanging offerings that benefit its customers, the organization, its stakeholders, and society at large. seeks to discover consumer needs through research and then satisfy them with a marketing program.

three value strategies to keep customers coming back

essence of successful marketing is to provide sufficient value to gain loyal, long-term customers best price, best product, or best service

relationship marketing

establishing long-term, mutually satisfying buyer-seller relationships Links the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefit

Parts of a Marketing Plan

executive summary, current marketing situation, threats and opportunities analysis, objectives and issues, marketing strategy, action programs, budgets, controls

market orientation

focuses its efforts on (1) continuously collecting information about customers' needs, (2) sharing this information across departments, and (3) using it to create customer value.

types of organizations

for-profit, nonprofit, mutual-benefit

An organization's marketing strategy runs throughout everything it does

from its organizational structure to its mission to its goals to its products to how it connects with its customer and more.

SWOT analysis

identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T) Taking stock of where the firm or product has been recently, where it is now, and where it is headed in terms of the organization's marketing plans and the external forces and trends affecting it. −Identify Industry Trends −Analyze Competitors −Assess the Organization −Research Present and Prospective Customers

competitor analysis

identifying key competitors; assessing their objectives, strategies, strengths and weaknesses, and reaction patterns; and selecting which competitors to attack or avoid

essential information on a marketing dashboard

key performance measures of a product category, such as sales or market share, known as marketing metrics, which are a measure of the quantitative value or trend of marketing actions or results.

organizational buyers

manufacturers, wholesalers, retailers, and government agencies that buy products and services for their own use or for resale

Market Program and Segments

marketing program—a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers. Ideally, they can be formed into market segments, which are relatively homogeneous groups of prospective buyers that (1) have common needs and (2) will respond similarly to a marketing action.

goals = objectives

objectives ARE NOT strategies one says what , other says how

target market

one or more specific groups of potential consumers toward which an organization directs its marketing program

four marketing mix elements

product, price, promotion, place - largely controlled by the organization

Table of Contents:

provides quick access to the topics in the plan, usually organized by section and subsection headings.

Industry Analysis

provides the backdrop for the subsequent, more detailed analysis of competition, the company, and the company's customers.

"Where do we want to go?"

requires an organization to set a specific direction and allocate resources to move it in that direction, using business portfolio analysis and diversification analysis

Second objective in marketing

satisfying the needs of targeted consumers. TARGETED. Because an organization obviously can't satisfy all consumer needs, it must concentrate its efforts on certain needs of a specific group of potential consumers or target market—one or more specific groups of potential consumers toward which an organization directs its marketing program. NICHE (1) have common needs and (2) will respond similarly to a marketing action.

customer value

utility) is the unique combination of benefits received by targeted buyers that includes quality, convenience, on-time delivery, and both before-sale and after-sale service at a specific price