Chapter 1 Questions

How do you implement the marketing concept?

-an organization strives to determine what buyers want and uses this information to develop satisfying products -focuses of customer analysis, competitor analysis, and integration of the firms resources to provide customer value and satisfaction

Profits can be obtained through relationships in the following ways:

1) by acquiring new customers 2) by enhancing the profitability of existing customers 3) by extending the duration of customer relationships

4 conditions for an exchange to take place

1) two or more individuals must participate and have something of value 2) exchange should provide a benefit to both parties 3) each party must have confidence in the promise of the something of value 4) each party must meet expectations

target market

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

A Subaru representative has a solid relationship with Phil, a satisfied customer. Phil loves Subaru and will not accept anything else. The representative determines that if Phil continues to do business with Subaru every time he wants to purchase a new car, his total value to the company would be $350,000. This includes purchases made by customers who were referred to the firm by Phil. The Subaru representative has calculated Phil's _______.

Customer Lifetime Value

Anthony works at a local electronics retailer. He has two customers in particular that he sees regularly. One customer, Mr. Johnson, comes in frequently asking about new deals. However, he rarely buys anything, and when he does buy something it is usually small. The other customer, Mr. Montoya, comes in a little less frequently. He does not purchase products all the time, but when he does the products are expensive. Anthony recognizes that Mr. Montoya is a more valuable customer over time than Mr. Johnson. He has therefore worked hard to develop a strong relationship with Mr. Montoya. What marketing method is Anthony most likely using to direct his actions?

Customer Lifetime Value

Which of the following equations describes customer value?

Customer value= customer benefits - customer costs

Which stakeholders are the focal point of all marketing activities?Which stakeholders are the focal point of all marketing activities?

Customers

What is the first step for marketers in implementing the marketing concept?

Establish an information system to discover customers' real needs

The essence of marketing is to develop satisfying _______ from which both customers and marketers benefit.

Exchanges

Marketing environmental forces are often _______.

Interdependent

Which of the following sentences is true about a marketing exchange?

It requires four conditions to take place.

The marketing concept is based upon the idea that 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. During which orientation (time period) are marketers most likely to adopt the marketing concept?

Market Orientation

Sheryl works at Southwest Airlines as a digital marketer. A major part of her job is communicating with customers, answering questions and letting them know about how the airline offers them the best in customer value. Sheryl is working to create long-term, mutually beneficial arrangements in which both the buyer and seller focus on value enhancement through the creation of more satisfying exchanges with customers. This is an example of _______.

Relationship Marketing

Charlotte loves her mom's edible cookie dough recipe, and she assumes everyone else will too. She starts a cookie dough business. Charlotte views promotion, such as advertising and personal selling, as the most important activities needed to sell her product. She figures that consumers only have to learn about her product before becoming loyal and steadfast customers. What type of orientation does Charlotte seem to embrace?

Sales Orientation

Kroger decided to introduce a new product that appeals to Hispanic consumers. While the product is highly successful among Hispanic consumers, other ethnic groups seem to like the product as well. For this product, Hispanic consumers comprise Kroger's _______.

Target Market

Shannon is driving in downtown Santa Fe. She is not very familiar with the area and is running late for her appointment. She heads to a nearby paid parking lot and is told that it costs $20 to park. Shannon is irritated by the price. Although there are likely other paid parking lots that are less expensive, Shannon pays the price to park there. Different cost considerations impacted Shannon's decision, but clearly one stood out over all the others. Which cost exerted the most influence over Shannon's decision to park in the $20 parking lot?

The non-monetary cost of time

marketing

The process of creating, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers and to develop and maintain favorable relationships with stakeholders in a dynamic environment

You are advising a local nonprofit on strategy. The nonprofit supports cancer research and relies entirely on donations. You recommend that the nonprofit engage in marketing activities. The executive director tells you that because it is a nonprofit that does not engage in selling activities and has a small budget, the nonprofit has no use for marketing. You disagree and explain that marketing is not just for for-profit organizations. You explain the different ways the nonprofit can engage in marketing without changing its practices or the mission. Which of the following marketing activities would be most feasible for this nonprofit?

Use inexpensive digital marketing tools to inform the community about an upcoming fundraising event

the forces of the marketing environment affect....

a marketers ability to facilitate value-driven marketing exchanges in 3 ways 1) they influence customers by affecting their lifestyles, standards of living, and preferences and needs for products 2) can determine whether and how a marketing manager can perform certain marketing activities 3) may shape a marketing managers decisions and actions by influencing buyers' reactions to the firm's marketing mix

Market Orientation

a philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customer's decision to purchase a product; it is synonymous with the marketing concept

Product Orientation

an inward-looking approach that focuses on making products that can be made - or have been made for a long time - and then trying to sell them

a marketing mix can _________

be used to enhance perceptions of value

Subaru developed a new luxury car model, but, after performing some market tests, it realized that it was pricing its vehicles too high, even for the luxury market. Subaru had to make some changes in its marketing mix. Unfortunately, it made the mistake of launching its product right when a recession hit. As unemployment rose, sales of luxury products such as Subaru's new luxury vehicle tend to decrease. In this case, the pricing of its vehicle is a(n) _______ force for Subaru, while the economic downturn is a(n) _______ factor.

controllable; uncontrollable

What is the major focus of the marketing concept?

customer satisfaction

Customer Relationship Management (CRM)

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

CLV is a key measurement that ...

forecasts a customer's lifetime economic contribution based on continued relationship marketing efforts

marketing environment

includes competitive, economic, political, legal and regulatory, technological, and sociocultural forces, surrounds the customer and affects the marketing mix dramatic difficult to predict

relationship marketing

long-term, mutually beneficial arrangements in which both the buyer and seller focus on value enhancement through the creation of more satisfying exchanges -continually deepens the buyer's trust in the company

Customer Lifetime Value (CLV)

predicts the net value (profit or loss) for the future relationship with a customer

marketing mix variables

product, distribution, promotion, price controllable can be modified

Marketing environment forces can fluctuate...

quickly and dramatically

Sales Orientation

the belief that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits

marketing concept

the idea that an organization should try to satisfy customers' needs through coordinated activities that also allow it to achieve its own goals

Essense of Marketing

to develop satisfying exchanges from which both customers and marketers benefit