Marketing ch.1

Is the target market the market of actual purchasers?

no

How does a firm achieve meaningful customer relationships?

A firm achieves meaningful customer relationships by creating connections with its customers through careful coordination of the product, its price, the way it's promoted, and how it's placed.

promotion

A means of communication between the seller and buyer

place

A means of getting the product to the consumer

What is a want?

A need shaped by a person's knowledge, culture and personality. Learned basis. Marketing does not create need; it shapes wants. Wants are specific

What are the 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.

market orientation

An organization that has a 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. The result shown in Figure 1-5 on the next page is today's customer relationship era that started in the 1980s, in which firms seek continuously to satisfy the high expectations of customers.

Who Buys and Uses What Is Marketed?

Both individuals and organizations buy and use goods and services that are marketed.

As used in the marketing context, what's another synonym for needs and wants?

Desire

What are environmental forces?

Environmental forces are those that the organization's marketing department can't control. These include social, economic, technological, competitive, and regulatory forces.

What are examples of "good" and "bad" want creation?

In a free society where we value free choice by the individual, it is difficult to condemn "bad" candy bars and soft drinks over "good" apples and orange juice if the individual's choice only affects him or her.

Who Benefits?

In our free-enterprise society there are three specific groups that benefit from effective marketing: consumers who buy, organizations that sell, and society as a whole. True competition between products and services in the marketplace ensures that consumers can find value from the best products, the lowest prices, or exceptional service. Providing choices leads to the consumer satisfaction and quality of life that we have come to expect from our economic system. Organizations that provide need-satisfying products with effective marketing programs—for example, Target, IBM, and Avon—have blossomed. But competition creates problems for ineffective competitors, such as eToys and hundreds of other dot-com businesses that failed a decade ago. Finally, effective marketing benefits society. It enhances competition, which both improves the quality of products and services and lowers their prices. This makes countries more competitive in world markets and provides jobs and a higher standard of living for their citizens.

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.

Explain how marketing discovers and satisfies consumer needs.

The first objective in marketing is discovering the needs and wants of consumers who are prospective buyers and customers. This is not easy because consumers may not always know or be able to describe what they need and 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. Effective marketing can clearly shape a person's wants and tries to influence what he or she buys. 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.

What four factors are needed for marketing to occur?

The four factors are (1) two or more parties (individuals or organizations) with unsatisfied needs; (2) a desire and ability to have their needs satisfied; (3) a way for the parties to communicate; and (4) something to exchange.

social responsibility

the idea that organizations are accountable to a larger society.

customer experience

the internal response that customers have to all aspects of an organization and its offering. This internal response includes 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. The foundation of customer relationship management The disconnect between what companies think they are providing versus what customers say they are receiving shows how important customer experience

Ultimate consumers

the people—whether 80 years or eight months old—who use the products and services purchased for a household.

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. This process requires the involvement and commitment of managers and employees throughout the organization and a growing application of information, communication, and Internet technology, as will be described throughout this book. Unfortunately, many expensive CRM computer systems have not provided the expected benefits because they failed to identify exactly which customer segments the company wanted to reach.

exchange

the trade of things of value between buyer and seller so that each is better off after the trade.

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. Loyal, satisfied customers are likely to repurchase more over time. That firms gain loyal customers by providing unique value is the essence of successful marketing. What is new, however, is a more careful attempt at understanding how a firm's customers perceive value and then actually creating and delivering that value.

societal marketing concept

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

Marketing focuses on _________ and_________ consumer needs.

discovering; satisfying

Why devote efforts to the target market?

efficient, creates brand image, largest portion of all consumers of product

product

good, service, or idea to satisfy the consumer's needs

relationship marketing

links the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefit. In terms of selling a product, relationship marketing involves a personal, ongoing relationship between the organization and its individual customers that begins before and continues after the sale. The hallmark of developing and maintaining effective customer relationships today

organizational buyers

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

stakeholders

companies, suppliers, investors, customers. with profit pays taxes

Who Markets?

Every organization markets. It's obvious that business firms involved in manufacturing (Heinz), retailing (Target), and providing services (Marriott) market their offerings. And nonprofit organizations such as your local hospital, your college, places (cities, states, countries), and even special causes (Race for the Cure) also engage in marketing. Finally, individuals such as political candidates often use marketing to gain voter attention and preference.

Distinguish between marketing mix factors and environmental forces.

Four elements in a marketing program designed to satisfy customer needs are product, price, promotion, and place. Theseelements 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.

What Is Marketed?

Goods, services, and ideas are marketed. Goods are physical objects, such as toothpaste, cameras, or computers, that satisfy consumer needs. Services are intangible items such as airline trips, financial advice, or art museums. Ideas are thoughts about concepts, actions, or causes.

How Do Consumers Benefit?

Marketing creates utility

Define marketing and identify the diverse factors influencing marketing activities.

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) discovering the needs of prospective customers and (b) satisfying them. Achieving these two goals also involves the four marketing mix factors largely controlled by the organization and the five environmental forces that are generally outside its control.

What is marketing?

Marketing is the activity for creating, communicating, delivering, and exchanging offerings that benefit the organization, its stakeholders, and society at large .

What is a need?

Occurs when a person feels physiologically deprived of basic necessities, such as food, clothing and shelter.Physiological basis. Needs are generic

Who should decide what is good and bad want creation?

Our society says what is "good" and "bad" is up to the individual unless there are major costs to society as a whole in letting the individual have free choice. Thus, in the case of products like firearms and drugs, society determines what is "good" and "bad" and sets rules or laws controlling their use. Where is this heading? We already have "sin taxes" Cigarettes; alcoholic beverages.Taxing bad food and beverage products that cause ill health later in life, where the costs for care are borne by society's taxpayers.

marketing mix

These four elements are the controllable factors—product, price, promotion, and place—that can be used by the marketing manager to solve a marketing problem. marketing mix elements are called controllable factors because they are under the control of the marketing department in an organization.

Describe how today's customer relationship era differs from prior eras.

U.S. business history is divided into four overlapping periods: the production era, the sales era, the marketing concept era, and the current customer relationship era. The production era covers the period up until 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 late 1950s, the marketing concept era dawned when organizations adopted a strong market orientation and integrated marketing into each phase of their business. In today's customer relationship era that started in the 1980s, organizations seek continuously to satisfy the high expectations of customers—an aggressive extension of the marketing concept era.

What is the difference between ultimate consumers and organizational buyers?

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

Does a firm have the right to "create" wants and try to persuade consumers to buy goods and services they didn't know about earlier?

Yes, a firm has the right to create wants in an attempt to persuade consumers to buy products they didn't know about in the past; new medicines to treat those having high blood pressure or heart attacks are good examples.

customer value proposition

a cluster of benefits that an organization promises customers to satisfy their needs. For example, Walmart's customer value proposition can be described as "everyday low prices for a broad range of products that are always in stock in convenient locations."

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.

marketing program

a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers. These prospects then react to the offering favorably (by buying) or unfavorably (by not buying), and the process is repeated. As shown in Figure 1-3, in an effective organization this process is continuous: Consumer needs trigger product concepts that are translated into actual products that stimulate further discovery of consumer needs.

target market

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

market

people with both the desire and the ability to buy a specific offering (potential consumers)

What are the four marketing mix elements that make up the organization's marketing program?

product, price, promotion, place

An organization can't satisfy the needs of all consumers, so it must focus on one or more subgroups, which are its _________________.

target market

utility

the benefits or customer value received by users of the product. This utility is the result of the marketing exchange process and the way society benefits from marketing. There are four different utilities: form, place, time, and possession. The production of the product or service constitutes form utility. Place utility means having the offering available where consumers need it, whereas time utility means having it available when needed. Possession utility is the value of making an item easy to purchase through the provision of credit cards or financial arrangements. Marketing creates its utilities by bridging space (place utility) and hours (time utility) to provide products (form utility) for consumers to own and use (possession utility).

marketing concept

the idea that an organization should (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization's goals. General Electric probably launched the marketing concept and its focus on consumers when its 1952 annual report stated: "The concept introduces . . . marketing . . . at the beginning rather than the end of the production cycle and integrates marketing into each phase of the business. Starting in the late 1950s, marketing became the motivating force among many American firms and the marketing concept era dawned

price

what is exchanged for the product.

Can different organization's have the same target market? If so, what are the implications?

yes, implications: allies or competitors, what differentiates them in a positive way from their competitors? ex. beer