Chapter 1

who is in charge

"There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else."

what does the marketing concept include

-Focusing on customer wants and needs so that the organization can distinguish its product(s) from competitors' offerings -Integrating all the organization's activities, including production, to satisfy customer wants -Achieving long-term goals for the organization by satisfying customer wants and needs legally and responsibly

what are the five conditions of an exchange

-There must be at least two parties. -Each party has something that might be of value to the other party. -Each party is capable of communication and delivery. -Each party is free to accept or reject the exchange offer. -Each party believes it is appropriate or desirable to deal with the other party.

Promotion

-organizations communicate with present and prospective customers about the merits and characteristics of their organization and products• Effective promotion is an essential part of effective marketing

Costco believes

-that treating employees well contributes to good customer service. The company not only pays its employees well at $22 per hour, it also provides them with generous benefits including full health and dental coverage (even to its part-time employees); a 401(k) with stock options after a year; liberal vacation time; and family leave. -Employees are also given a great deal of responsibility, which translates into higher motivation. The company's retention rate for employees who have been there a year is 94 percent—significantly higher than that of its competitors.

what percentage do consumers consider how companies treat their employees before deciding what to buy or where to shop

84%

Customer Relationship Management

Company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction-By focusing on highly defined and precise customer groups•On-demand marketing-Delivering relevant experiences, integrated across both physical and virtual environments, throughout the consumer's decision and buying process

market oriented

Firms that adopt and implement the marketing concept meaning they assume that a sale does not depend on an aggressive sales force but rather on a customer's decision to purchase a product

the organizations focus

Historic sources of competitive advantage—technology, innovation, economies of scale—allowed companies to focus their efforts internally and prosper.•Many successful firms derive their competitive advantage from an external, market-oriented focus

Empowerment

In addition to training, many market-oriented firms are giving employees more authority to solve customer problems on the spot. The term used to describe this delegation of authority ex- In order to empower its workers, the Ritz-Carlton chain of luxury hotels developed a set of 12 "Service Values" guidelines.

Customer Value Requirements

Offer products that perform•Earn trust•Avoid unrealistic pricing•Give the buyer facts•Offer organization-wide commitment in service and after-sales support•Co-create with customers

End Targets of an Organization

Sales-oriented organization-Targets its products at everybody or the average customer•Market-oriented organization-Aims at specific groups of people

The Firm's Primary Goal

Sales-oriented organizations -Seek to achieve profitability through sales volume-Make a profit by creating customer value, providing customer satisfaction, and building long-term relationships with customers•Market-oriented organizations-Make a profit by creating customer value, providing customer satisfaction, and building long-term relationships with customers

what was google the number-one position in Fortune's "100 Best Companies to Work For" for the fifth year in a row

The company pays 100 percent of employees' health care premiums, offers paid sabbaticals, and provides bocce courts, a bowling alley, and 25 cafés—all for free. Google also recently increased its parental leave benefits. New parents (including dads, domestic partners, adoptive parents, and surrogate parents) now receive up to 12 weeks of fully paid baby bonding time. Google also provides $500 of "Baby Bonding Bucks" for every new parent to use during the first three months of his or her child's life.

customer satisfaction

The customers' evaluation of a good or service in terms of whether that good or service has met their needs and expectations -Firms that have a reputation for delivering high levels of customer satisfaction do things differently from their competitors. Top management is obsessed with customer satisfaction, and employees throughout the organization understand the link between their job and satisfied customers. The culture of the organization is to focus on delighting customers rather than on selling products.

customer value

The relationship between benefits and the sacrifice necessary to obtain those benefits -customers value goods and services that are of the quality they expect and that are sold at prices they are willing to pay

what is the critical component of a market orientation.

Understanding your competitive arena and competitors' strengths and weaknesses ex:Zara and H&M—offer consumers up-to-date fashions more quickly and at more affordable prices than traditional retailers can like american apparel

Today, companies of all sorts are spurring change

across a broad range of issues including climate change, education, and poverty. Many have also made a commitment to eliminate waste and reuse valuable materials within their own walls. ex:Procter & Gamble has begun making the world's first recyclable shampoo bottle from up to 25 percent recycled beach plastic

how can companies expand market share

attracting new customers, increasing business with existing customers, and retaining current customers

what is a sales orientation

based on the belief that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits. Not only are sales to the final buyer emphasized, but intermediaries are also encouraged to push manufacturers' products more aggressively

Teamwork

entails collaborative efforts of people to accomplish common objectives

what is the societal marketing orientation

extends the marketing concept by acknowledging that some products that customers want may not really be in their best interests or the best interests of society as a whole. This philosophy states that an organization exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve or enhance individuals' and society's long-term best interests

what are some dangers of sales orientation & what do they do when this happens

failing to understand what is important to the firm's customers. When that occurs, sales-oriented firms sometimes use aggressive incentives to drive sales ex: apple reduced the cable's price to $39 and introduced a shorter $29 versionbc ppl complained about the $49 thunderbolt cable

what is an example of a company that is in the production orentation industry

furniture stores (ashley) because they always have the same stuff and styles and ppl still buy

The Internet and the widespread use of social media

have accelerated the shift in power from manufacturers and retailers to consumers and business users. This shift began when customers began using books, electronics, and the Internet to access information, goods, and services.

how can a production orientation fall short

if it does not consider whether the goods and services that the firm produces most efficiently also meet the needs of the marketplace. On the other hand, sometimes what a firm can best produce is exactly what the market wants. ex apple

superior customer value and satisfaction

in 2016, J.D. Power and Associates ranked Jaguar Audi highest in customer satisfaction with dealer service among luxury automotive brands, while Buick ranked highest among mass-market brands

what are the two facets in marketing

is a philosophy, an attitude, a perspective, or a management orientation that stresses customer satisfaction. Second, marketing is an organization function and a set of processes used to implement this philosophy.

Relationship marketing

is a strategy that focuses on keeping and improving relationships with current customers. It assumes that many consumers and business customers prefer to have an ongoing relationship with one organization rather than switch continually among providers in their search for value

value

is something that shoppers of all markets and at all income levels look for. Lower-income consumers are price sensitive, so they may respond positively to special offers and generic brands. Low-income consumers who are both paid and shop by the day may respond to reduced packaging sizes that lower the cost per unit while still offering quality and value for the money

what is the American Marketing Association (AMA)'s definition of marketing

marketing is 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.

what is an exchange

people giving up something in order to receive something else they would rather have

To sales-oriented firms, what does marketing mean

selling things and collecting money

what is the recipe for success

to develop a thorough understanding of your customers and your competition, your distinctive capabilities that enable your company to execute plans on the basis of this customer understanding, and how to deliver the desired experience using and integrating all of the resources of the firm ex: Kellogg's recently introduced Open for Breakfast

Marketers Interested in Customer Value

understand that they need to provide a superior user experience that goes beyond the basic product or service offering. An increasing number of global brands are hoping to generate long-term customer loyalty by creating deeper engagement through unique user experiences ex: Under Armour purchased fitness apps MyFitnessPal and MapMyFitness, which allow users to book fitness classes directly through the apps ex: Starbucks wants to make the customer experience as easy and as comfortable as possible. For example, the company installed LCD screens that let customers know what song is playing as they wait for their drinks.

when can a production-oriented firm survive and even prosper

when competition is weak or demand exceeds supply

what are the four competing philosophies that strongly influence an organization's marketing processes

production, sales, market, and societal marketing orientations.

AMA's definition of marketing

recognizes the importance of a societal marketing orientation by including "society at large" as one of the constituencies for which marketing seeks to provide value.

long-term focus on customer needs is a hallmark of

relationship marketing

the firms business

Advantages:•Ensures firm's focus on customers•Encourages innovation and creativity•Stimulates an awareness of change in customer preferences

what does marketing do

It uses communication, distribution, and pricing strategies to provide customers and other stakeholders with the goods, services, ideas, values, and benefits they desire when and where they want them

Why Study Marketing

Marketing Affects You Every Day!-Important to Business-Important to Society-Good Career Opportunities

what do firms that succeed in competitive markets have

a clear understanding that they must first determine what customers want and then produce it, rather than focus on what company management thinks should be produced and hope that the product is something customers want

what are the differences between sales and market orientations

The two orientations can be compared in terms of five characteristics: the organization's focus, the firm's business, those to whom the product is directed, the firm's primary goal, and the tools used to achieve the organization's goals.

what is a production orientation

a philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace. A production orientation means that management assesses its resources and asks these questions: "What can we do best?" "What can our engineers design?" "What is easy to produce, given our equipment?"

what is a marketing concept

a simple and intuitively appealing philosophy that articulates a market orientation. It states that the social and economic justification for an organization's existence is the satisfaction of customer wants and needs while meeting organizational objectives

Marketing products and containers that are less toxic than normal, are more durable, contain reusable materials, or are made of recyclable materials is consistent with

a societal marketing orientation

how to Achieve a market orientation

involves obtaining information about customers, competitors, and markets; examining the information from a total business perspective; determining how to deliver superior customer value; and implementing actions to provide value to customers.

Shake Shack

is a fast-casual burger restaurant that targets people who care about how their food tastes and where it comes from. The company sells its burgers for higher-than-average prices, but it uses humanely raised, antibiotic- and hormone-free meat that is ground fresh from full muscle cuts instead of scraps. This meat is shipped fresh—not frozen—to all of Shake Shack's locations. Further, the company pledges not to use genetically modified organisms (GMOs) in its hamburger buns. Shake Shack's superior service, which founder Danny Meyer calls "enlightened hospitality," places a major emphasis on the happiness of its employees and customers. This service philosophy is based on the belief that white-tablecloth service is not just for expensive restaurants.

what are the fundamental problems with a sales orientation, and a production orientation

is a lack of understanding of the needs and wants of the marketplace. Sales-oriented companies often find that, despite the quality of their sales force, they cannot convince people to buy goods or services that are neither wanted nor needed.