Marketing Chapter 1

target market

A specific group of customers on whom an organization focuses its marketing efforts

green marketing

A strategic process involving stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment

Marketing mix

Four marketing activities—product, promotion, distribution, and pricing—that a firm can control to meet the needs of customers within its target market

value

The customers subjective assessment of benefits relative to costs in determining the worth of a product

Briefly describe the marketing environment.

The marketing environment, which includes competitive, economic, political, legal and regulatory, technological, and sociocultural forces, surrounds the customer and the marketing mix. These forces can create threats to marketers, but they also generate opportunities for new products and new methods of reaching customers. These forces can fluctuate quickly and dramatically.

product

a good, service or idea

Marketing Concept

a management orientation that focuses on identifying and satisfying consumer needs to ensure the organization's long-term profitability

relationship marketing

establishing long-term, mutually satisfying buyer-seller relationships

Customer Relationship Management (CRM)

using information about customers to create marketing strategies that develop and sustain desirable customer relationships

Stakeholders

Constituents who have a "stake," or claim, in some aspect of a company's products, operations, markets, industry, and outcomes

Marketing

A group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase those products

Summarize the marketing concept.

According to the marketing concept, an organization should try to provide products that satisfy customers' needs through a coordinated set of activities that also allows the organization to achieve its goals. Customer satisfaction is the marketing concept's major objective. The philosophy of the marketing concept emerged in the United States during the 1950s, after the production and sales eras. Organizations that develop activities consistent with the marketing concept become market-oriented organizations. To implement the marketing concept, a market-oriented organization must establish an information system to discover customers' needs and use the information to create satisfying products. It must also coordinate all its activities and develop marketing mixes that create value for customers in order to satisfy their needs.

Describe how marketing creates value.

Individuals and organizations engage in marketing to facilitate exchanges—the provision or transfer of goods, services, and ideas in return for something of value. Four conditions must exist for an exchange to occur. First, two or more individuals, groups, or organizations must participate, and each must possess something of value that the other party desires. Second, the exchange should provide a benefit or satisfaction to both parties involved in the transaction. Third, each party must have confidence in the promise of the "something of value" held by the other. Finally, to build trust, the parties to the exchange must meet expectations. Marketing activities should attempt to create and maintain satisfying exchange relationships.

Explain the different variables of the marketing mix.

Marketing involves developing and managing a product that will satisfy customer needs, making the product available at the right place and at a price acceptable to customers, and communicating information that helps customers determine if the product will satisfy their needs. These activities—product, price, distribution, and promotion—are known as the marketing mix because marketing managers decide what type of each variable to use and in what amounts. Marketing managers strive to develop a marketing mix that matches the needs of customers in the target market. Before marketers can develop a marketing mix, they must collect in-depth, up-to-date information about customer needs. The product variable of the marketing mix deals with researching customers' needs and wants, and designing a product that satisfies them. A product can be a good, a service, or an idea. The price variable involves decisions and actions associated with establishing pricing policies and determining product prices. In dealing with the distribution variable, a marketing manager tries to make products available in the quantities desired to as many customers as possible. The promotion variable relates to activities used to inform individuals or groups about the organization and its products. These marketing-mix variables are often viewed as controllable because they can be changed, but there are limits to how much they can be altered.

Explain why marketing is important to our global economy.

Marketing is important to our economy in many ways. Marketing costs absorb about half of each buyer's dollar. Marketing activities are performed in both business and nonprofit organizations. Marketing activities help business organizations generate profits, and they help fuel the increasingly global economy. Knowledge of marketing enhances consumer awareness. New technology improves marketers' ability to connect with customers. Socially responsible marketing can promote the welfare of customers and society. Green marketing is a strategic process involving stakeholder assessment to create meaningful, long-term relationships with customers while maintaining, supporting, and enhancing the natural environment. Finally, marketing offers many exciting career opportunities.

Define marketing

Marketing is the process of creating, pricing, distributing, and promoting goods, services, and ideas to facilitate satisfying exchange relationships with customers and to develop and maintain favorable relationships with stakeholders in a dynamic environment. The essence of marketing is to develop satisfying exchanges from which both customers and marketers benefit. Organizations generally focus their marketing efforts on a specific group of customers called a target market. A target market is the group of customers toward which a company directs a set of marketing efforts

identify the importance of building customer relationships.

Relationship marketing involves establishing long-term, mutually satisfying buyer-seller relationships. Customer relationship management (CRM) focuses on using information about customers to create marketing strategies that develop and sustain desirable customer relationships. Managing customer relationships requires identifying patterns of buying behavior and using that information to focus on the most promising and profitable customers. A customer's value over a lifetime represents an intangible asset to a marketer that can be augmented by addressing the customer's varying needs and preferences at different stages in his or her relationship with the firm. Customer lifetime value is a key measurement that forecasts a customer's lifetime economic contribution based on continued-relationship marketing efforts. Knowing a customer's potential lifetime value helps marketers determine how to best allocate resources to marketing strategies to sustain that customer over a lifetime.

Marketing Environment

The competitive, economic, political, legal and regulatory, technological, and sociocultural forces that surround the customer and affect the marketing mix

customers

The purchasers of organizations' products; the focal point of all marketing activities

Market orientation

an organization wide commitment to researching and responding to customer needs

exchanges

the provision or transfer of goods, services or ideas in return for something of value