UTK BUAD 332 HOMEWORK QUIZ 1

________ marketing is perhaps the fastest-growing marketing platform.

mobile

Many leading business and marketing thinkers are now preaching the concept of "shared value" which recognizes that ________ needs, not just economic needs, define markets.

societal

Companies like Coca-Cola and Facebook deliver customer satisfaction by spreading happiness and connecting individuals through shared experiences.

true

Customer evangelists are those who ________.

Tell others about their good experiences with a brand or product

Market offerings are limited to physical products.

false

Xenon Corp. releases frequent updates to improve its expensive software products. This marketing approach used by the firm is most likely based on the production concept.

false

Various government agencies have launched campaigns to encourage energy conservation and concern for the environment as well as discourage smoking, illegal drug use, and obesity. This illustrates ________ marketing.

social

Cosmetic retailer Lush knows that doing what's right benefits both customers and the company. Their premium beauty products are made by hand from the freshest possible natural ingredients. This is an example of the ________ concept.

societal marketing

Through consumer-generated marketing, consumers themselves are playing a bigger role in shaping their own brand experiences and those of others.

true

________ refers to a channel stretching from raw materials to components to final products that are carried to final buyers.

a supply chain

Companies that practice marketing by ________ create offerings and messages that engage consumers rather than interrupt them.

attraction

Which of the following terms refers to a customer's evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers?

customer-perceived value

Abel now has the buying power to purchase the computer that he wanted to buy six months ago. Abel's want has most likely become a ________.

demand

Dividing a market into several sections of customers is known as ________.

market segmentation

The ________ concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.

marketing

Which of the following is most likely a consequence of the Great Recession of 2008 to 2009?

more sensible and mindful consumption

________ are defined as states of felt deprivation.

needs

The ultimate aim of customer relationship management is to ________.

produce high customer equity

The ________ concept holds that consumers will favor goods and services that offer the most in quality, performance, and innovative features.

product

Henry Ford's philosophy was to perfect the Model-T so that its cost could be reduced further for increased consumer affordability. This most likely reflects the ________.

production concept

PC manufacturer, Lenovo, focuses on low labor costs and mass distribution to ensure the continuous availability of its products at reasonable prices. Lenovo most likely follows the ________.

production concept

Sally purchased a newly introduced moisturizing lotion. By attempting to find out if the lotion's perceived performance matched her expectations, Sally was measuring her level of customer ________.

satisfaction

In which of the following customer relationship groups do organizations generally avoid investing?

strangers

________ are customers who show low potential profitability and little projected loyalty.

strangers

________ marketing is defined as socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs.

sustainable

Dollar General profitably appeals to families with more modest means. The retailer's approach is most likely referred to as ________.

target marketing

Customers who are classified as true believers ________.

tell others about their good experiences with a company

Which of the following transforms marketing strategies into real values for consumers?

the four Ps of marketing

Which of the following concepts is based on a customer-centered philosophy?

the marketing concept

Which of the following concepts calls for sustainable marketing?

the societal marketing concept

A brand's value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs.

true

A market is a segment of potential consumers who share a common need or want.

true

Customer-perceived value is defined as a customer's evaluation of the perceived difference between all the benefits and all the costs of a market offering relative to those of competing offers.

true

In the final step of a marketing process, a company reaps the rewards of its strong customer relationships by capturing value from customers.

true

Market offerings include entities such as people, places, information, and ideas.

true

Organizations that follow the societal marketing concept most likely practice socially and environmentally responsible marketing.

true

Product, price, place, and promotion make up the elements of a firm's marketing mix.

true

Success at delivering customer value rests on how well a company's entire supply chain performs against competitors' supply chains.

true

The marketing concept is a customer-centered, sense-and-respond philosophy.

true

The product concept holds that consumers will favor products that offer the most in quality, performance, and innovative features.

true

A customer who is both loyal and profitable is referred to as a ________.

true believer

The Amazon Prime program strives to convert casual shoppers into loyal customers. An Amazon Prime customer can be classified as a ________.

true believer

According to the five-step model of the marketing process, the first step in marketing is ________.

understanding the marketplace and customer needs and wants

A brand's ________ is the set of benefits that it promises to deliver to consumers to satisfy their needs.

value proposition

JetBlue's promise to put "You Above All" by "bringing humanity back to travel" is their ________.

value proposition

________ are the form human needs take as they are shaped by culture and individual personality.

wants

In which of the following circumstances is an organization likely to engage in full partnerships with key consumers?

when the market has few customers and high margins

Carla, a team leader in charge of customer relationship management, is planning strategies to improve the profitability of her firm's least profitable but loyal customers. She is also examining methods for "firing" customers in this group who cannot be made profitable. To which of the following customer relationship groups do these customers belong?

barnacles

Cylog, a leading provider of personal computer systems, began manufacturing tablet devices after predicting a future consumer need for portability. Which of the following was most likely implemented by Cylog?

customer-driving marketing

Why do companies generally divide a market into segments of customers?

A company decides whom it will serve by dividing the market into segments of customers and selecting which segments it will go after. Some people think of marketing management as finding as many customers as possible and increasing demand. But marketing managers know that they cannot serve all customers in every way. By trying to serve all customers, they may not serve any customer well. Hence, companies usually want to select only customers that they can serve well and profitably. Ultimately, marketing managers must decide which customers they want to target and on the level, timing, and nature of their demand.

What is marketing? Briefly describe the marketing process.

Marketing can be defined as the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. The marketing process consists of five steps. In the first four steps, companies work to understand consumers, create customer value, and build strong customer relationships. In the final step, companies reap the rewards of creating superior customer value. By creating value for consumers, they in turn capture value from consumers in the form of sales, profits, and long-term customer equity.

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

Marketing management

________ refers to working closely with people inside and outside the company to jointly bring more value to customers.

Partner relationship management

________ refers to the portion of the customer's purchase that a company gets in its product categories.

Share of customer

Which of the following is a difference between the marketing concept and the selling concept?

The marketing concept focuses on customer needs, whereas the selling concept focuses on existing products.

Marketing is primarily concerned with engaging customers and secondarily with managing profitable customer relationships.

False

Explain, with examples, the different types of relationships that a company can build with its customers.

At one extreme, a company with many low-margin customers may seek to develop basic relationships with them. For example, Proctor & Gamble's Tide does not phone or call on all of its consumers to get to know them personally. Instead, it creates relationships through brand-building advertising, public relations, and social media presence. At the other extreme, in markets with few customers and high margins, sellers want to create full partnerships with key customers. For example, P&G sales representatives work closely with Walmart, Kroger, and other large retailers that sell Tide. In between these two extremes, other levels of customer relationships are appropriate. Beyond offering consistently high value and satisfaction, marketers can use specific marketing tools to develop stronger bonds with customers. For example, many companies offer frequency marketing programs that reward customers who buy frequently or in large amounts. Airlines offer frequent-flyer programs, hotels give room upgrades to their frequent guests, and supermarkets give patronage discounts to "very important customers." Other companies sponsor club marketing programs that offer members special benefits and create member communities.

Explain market offerings and marketing myopia.

Consumers' needs and wants are fulfilled through market offerings - some combination of products, services, information, or experiences offered to a market to satisfy a need or a want. Market offerings are not limited to physical products. They also include services - activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything. Examples include banking, airline, hotel, retailing, and home repair services. More broadly, market offerings also include other entities, such as persons, places, organizations, information, and ideas. Many sellers make the mistake of paying more attention to the specific products they offer than to the benefits and experiences produced by these products. These sellers suffer from marketing myopia. They are so taken with their products that they focus only on existing wants and lose sight of underlying customer needs. They forget that a product is only a tool to solve a consumer problem. A manufacturer of quarter-inch drill bits may think that the customer needs a drill bit but what the customer really needs is a quarter-inch hole. These sellers will have trouble if a new product comes along that serves the customer's need better or less expensively. The customer will have the same need but will want the new product.

________ is the total combined customer lifetime values of all the company's current and potential customers.

Customer equity

Define customer equity, and explain why it is important to a company.

Customer equity is the sum of the lifetime values of all the current and potential customers of a company. Customer equity is dependent upon customer loyalty from a firm's profitable customers. Because customer equity is a reflection of a company's future, companies must manage it carefully, viewing customers as assets that need to be maximized. It is important that companies not only acquire customers but also keep and grow them. When companies create profitable customers, they earn a greater share of their purchases, and capture their customer lifetime value.

The aim of customer relationship management is to create not just customer satisfaction, but customer delight as well. Explain.

Customer satisfaction cannot be taken for granted. Since brand loyalty is dependent upon strong customer satisfaction, companies strive to retain, satisfy, and even delight current customers. Firms create customer delight by promising only what they can deliver and then delivering more than what they promise. They also create emotional relationships with key customers. Delighted customers make repeated purchases and become customers for life. More importantly, they also essentially become an unpaid sales force for the firm as "customer evangelists" who tell other potential customers about their positive experiences with a product.

Define customer-perceived value.

Customer-perceived value is defined as the customer's evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers. Importantly, customers often do not judge values and costs accurately or objectively. They act on perceived value. A customer buys from the firm that offers the highest customer-perceived value.

Customer relationship management focuses on retaining existing customers but not on acquiring new customers.

False

Which of the following is an example of consumer-generated marketing?

Fun & Run, a local amusement park, promotes its services by allowing consumers to upload videos and write reviews about the park.

Using suitable examples, briefly compare and contrast the concepts of needs, wants, and demands. Discuss how these concepts relate to marketing practices.

Human needs are states of felt deprivation. Needs are part of the human make-up; they are not created by external forces. Humans have a basic physical need for food, clothing, warmth, and safety, a basic social need for belonging and affection, and a basic individual need for knowledge and self-expression. Unlike needs, wants are not innate. Instead, wants are needs shaped by culture, society, and individual personality. For example, an American needs food, wants a Big Mac and soft drink, and demands lunch at McDonalds. Wants become demands when they are backed by consumers' buying power. Marketers conduct extensive research to understand customers' needs, wants, and demands. They then attempt to fulfill customers' needs, wants, and demands through their market offerings.

Explain how the Internet has transformed the way in which we do business today.

The Internet links individuals and businesses of all types to each other. The Internet allows firms access to exciting new market spaces. The consumer love affair with digital and mobile technology makes it fertile ground for marketers trying to engage customers. Digital and social media marketing involves using digital marketing tools such as Web sites, social media, mobile ads and apps, online video, e-mail, blogs, and other digital platforms that engage consumers anywhere, anytime via their computers, smartphones, tablets, Internet-ready TVs, and other digital devices. At the most basic level, marketers set up company and brand Web sites that provide information and promote the company's products. Many of these sites also serve as online brand communities, where customers can congregate and exchange brand-related interests and information. The social media provide exciting opportunities to extend customer engagement and get people talking about a brand. Nearly 90 percent of all U.S. companies now use social media as part of their marketing mixes. Mobile marketing is perhaps the fastest-growing digital marketing platform. Smartphones are ever-present, always on, finely targeted, and highly personal. This makes them ideal for engaging customers anytime, anywhere as they move through the buying process. For example, Starbucks customers can use their mobile devices for everything from finding the nearest Starbucks and learning about new products to placing and paying for orders.

Describe and compare the four types of customers classified by their potential profitability to an organization. Identify how an organization should manage each type of customer.

The four types of customers are strangers, butterflies, true friends, and barnacles. 1. "Strangers" have low potential profitability and loyalty. A company's offerings do not fit well with a stranger's wants and demands. Companies should not invest in building a relationship with this type of customers. 2. Another type of customer in which a company should not invest is the "barnacle." Barnacles are highly loyal but not very profitable because there is a limited fit between their needs and the company's offerings. The company might be able to improve barnacles' profitability by selling them more, raising their fees, or reducing service to them. However, if they cannot be made profitable, they should be "fired." 3. Like strangers, "butterflies" are not loyal. However, they are potentially profitable because there is a good fit between the company's offerings and their needs. Like real butterflies, this type of customer will come and go without becoming a permanent, loyal consumer of a company's products. Companies should create satisfying and profitable transactions with them, and then cease investing in them until the next time around. 4. The final type of customers is "true friends." They are both profitable and loyal. There is a strong fit between their needs and the company's offerings, so the company should make continuous relationship investments in an effort to go beyond satisfying and to delight these customers. A company should try to delight true friends so that they will tell others about their good experiences with the company.

Compare and contrast the product and production concepts.

The production concept holds that consumers will favor products that are available and highly affordable. Therefore, it dictates that management should focus on improving production and distribution efficiency. This concept is one of the oldest orientations that guides sellers. The production concept is still a useful philosophy in some situations. For example, both personal computer maker Lenovo and home appliance maker Haier dominate the highly competitive, price-sensitive Chinese market through low labor costs, high production efficiency, and mass distribution. However, although useful in some situations, the production concept can lead to marketing myopia. Companies adopting this orientation run a major risk of focusing too narrowly on their own operations and losing sight of the real objective - satisfying customer needs and building customer relationships. The product concept holds that consumers will favor products that offer the most in quality, performance, and innovative features. Under this concept, marketing strategy focuses on making continuous product improvements. Product quality and improvement are important parts of most marketing strategies. However, focusing only on products can also lead to marketing myopia. For example, manufacturers of mousetraps might believe that if they can build a better mousetrap, their profits will soar but they are often rudely shocked. Buyers may be looking for a better solution to a mouse problem but not necessarily for a better mousetrap. The better solution might be a chemical spray, an exterminating service, a house cat, or something else that suits their needs even better than a mousetrap. Furthermore, a better mousetrap will not sell unless the manufacturer designs, packages, and prices it attractively, places it in convenient distribution channels, brings it to the attention of people who need it, and convinces buyers that it is a better product.

Compare the selling and marketing concepts, and list the key components of each concept.

The selling concept reflects an inside-out perspective, while the marketing concept takes an outside-in perspective. The selling concept is typically practiced when an organization markets products or services that buyers do not normally think of purchasing, such as insurance or blood donation. Aggressive selling focuses on creating sales transaction rather than on building long-term relationships with customers, with the aim of selling what a company makes rather than making what the customer wants. The marketing concept, on the other hand, is based on identifying the needs and wants of target markets and then satisfying those needs and wants better than competitors do. Under the marketing concept, customer focus and value are the paths to sales and profits. Instead of a product-centered make-and-sell philosophy, the marketing concept is a customer-centered sense-and-respond philosophy. The job is not to find the right customers for a product but to find the right products for customers.

Briefly explain the societal marketing concept.

The societal marketing concept questions whether the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare. Is a firm that satisfies the immediate needs and wants of target markets always doing what's best for its consumers in the long run? The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer's and society's well-being. It calls for sustainable marketing, socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. Companies like GE, Dow, Google, IBM, and Nestle are concerned not just with short-term economic gains, but with the well-being of their customers, the depletion of natural resources vital to their businesses, the viability of key suppliers, and the economic well-being of the communities in which they produce and sell.

Discuss the opportunities and challenges that new communication technologies have created for marketers.

Through the Internet and related technologies, people can now interact in direct and surprisingly personal ways with large groups of others, from neighbors within a local community to people across the world. With communication technologies such as e-mail, blogs, Web sites, online communities, online social networks, and Twitter, today's marketers incorporate interactive approaches that help build targeted, two-way customer relationships. Marketers can create deeper consumer involvement and a sense of community surrounding a brand, making a brand a meaningful part of consumers' conversations and lives. However, while new communication tools create relationship-building opportunities for marketers, they also create challenges. They give consumers a greater voice, and therefore greater power and control in the marketplace. Today's consumers have more information about brands than ever before, and they have a wealth of platforms for airing and sharing their brand views with other consumers.

Compare and contrast customer-managed relationships and consumer-generated marketing.

Today's consumers have more information about brands than ever before, and they have a wealth of platforms for airing and sharing their brand views with other consumers. Thus, the marketing world is now embracing not only customer relationship management, but also customer-managed relationships. Greater consumer control means that companies can no longer rely on marketing by intrusion. Instead, marketers must practice marketing by attraction - creating market offerings and messages that involve consumers rather than interrupt them. Hence, most marketers now augment their mass-media marketing efforts with a rich mix of direct marketing approaches that promote brand-consumer interaction. For example, many brands are creating dialogues with consumers via their own or existing online social networks. A growing part of the new customer dialogue is consumer-generated marketing, by which consumers themselves are playing a bigger role in shaping their own brand experiences and those of others. This might happen through uninvited consumer-to-consumer exchanges in blogs, video-sharing sites, and other digital forums. Increasingly, companies are also inviting consumers to play a more active role in shaping products and brand messages. One drawback of this process is that harnessing consumer-generated content can be time-consuming and expensive.

The societal marketing concept holds that ________.

a company's marketing decisions should focus on creating economic value in a way that also creates value for the surrounding environment

Procter & Gamble's Tide detergent does not phone or call on all of its consumers to get to know them personally. Instead, Tide creates engagement and relationships through brand-building advertising, Web sites, and social media presence. Which of the following types of associations would be most profitable for the firm to develop with these customers?

basic relationships

Mattel's American Girl Doll creates special ________ between the dolls and the girls who adore them.

brand experiences

Efforts to convert ________ into loyal customers are rarely successful.

butterflies

A consumer who is potentially profitable but not loyal to a firm's offerings is referred to as a ________.

butterfly

Stew Leonard's has created what has been the "Disneyland of Dairy Stores," complete with costumed characters, scheduled entertainment, and a petting zoo. It's built 30 additions onto the original store, which now serves more than 300,000 customers each week. This legion of loyal shoppers is largely a result of the store's passionate approach to customer service. Instead of focusing on individual transactions, Stew and his staff are putting a priority on ________.

capturing customer lifetime value

The final step in the marketing process is ________.

capturing value from customers

________ companies research customers deeply to learn about their desires, gather new product ideas, and test product improvements.

customer-driven

Customer-driven marketing is most effective when ________.

clear needs exist and customers know what they want

Apple encourages customers to form local Apple user groups. This is an example of a ________.

club marketing program

For the past nine years, PepsiCo's Doritos brand has held a "Crash the Super Bowl" contest in which it invites 30-second ads from consumers and runs the best ones during the game. This is an example of ________.

consumer-generated marketing

The selling concept holds that ________.

consumers will not buy enough of a firm's products unless the firm undertakes large-scale persuasion and promotion efforts

Marketers are said to suffer from marketing myopia when they ignore underlying consumer needs and focus excessively on ________.

consumers' existing wants

Ritz-Carlton is fervently dedicated to anticipating customers' slightest needs. Without ever asking, they seem to know when customers want a king-size bed, non-allergenic pillow, extra body gel or the blinds open upon arrival. An amazing 95 percent of departing guests report that their stay has been a truly memorable experience. This is an example of ________.

customer delight

The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction is referred to as ________.

customer relationship management

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

exchange

A greater focus on underlying customer needs than on existing customer wants leads to marketing myopia.

false

Barnacles are customers who are potentially profitable but not loyal.

false

Club marketing programs reward customers who buy frequently or in large amounts.

false

Customer equity is a measure of the past value of a company's customer base.

false

In markets with few customers and high margins, sellers should try to develop basic relationships rather than full partnerships.

false

Since less than ten percent of smartphone owners use their phones for shopping-related activities, mobile marketing is a slow growing digital marketing platform.

false

The more loyal a firm's profitable customers, the lower its customer equity.

false

When backed by buying power, wants become needs.

false

When sellers pay less attention to the specific products they offer and more attention to the benefits and experiences produced by these products, they suffer from marketing myopia.

false

The "Stop the Texts. Stop the Wrecks." campaign co-sponsored by the Ad Council and the National Highway Traffic Safety Administration is an example of a marketing offering for a(n) ________.

idea

Imaginative Web sites, smartphone apps, and social media allow marketers to deliver messages that are direct and personal so consumers can ________.

live the brand

Consumers' needs and wants are fulfilled through ________.

market offerings