Marketing Chapter 1

supply chain

The group of firms that make and deliver a given set of goods and services.

B2C (business-to-consumer)

The process in which businesses sell to consumers.

C2C (consumer-to-consumer)

The process in which consumers sell to other consumers.

B2B (business-to-business)

The process of selling merchandise or services from one business to another.

marketing channel

The set of institutions that transfer the ownership of and move goods from the point of production to the point of consumption; consists of all the institutions and marketing activities in the marketing process.

exchange

The trade of things of value between the buyer and the seller so that each is better off as a result.

ideas

Intellectual concepts—thoughts, opinions, and philosophies.

goods

Items that can be physically touched.

value cocreation

Customers act as collaborators with a manufacturer or retailer to create the product or service.

customer relationship management (CRM)

A business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm's most valued customers.

relational orientation

A method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long-term relationship.

entrepreneurs

A person who organizes, operates, and assumes the risk of a new business venture.

marketing plan

A written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four Ps, action programs, and projected or pro forma income (and other financial) statements.

marketing

An organizational function and a set of processes for creating, capturing, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

services

Any intangible offering that involves a deed, performance, or effort that cannot be physically possessed; intangible customer benefits that are produced by people or machines and cannot be separated from the producer.

Define the role of marketing in organizations.

Marketing is the activity, set of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Marketing strives to create value in many ways. If marketers are to succeed, their customers must believe that the firm's products and services are valuable; that is, they are worth more to the customers than they cost. Another important and closely related marketing role is to capture value of a product or service based on potential buyers' beliefs about its value. Marketers also enhance the value of products and services through various forms of communication, such as advertising and personal selling. Through communications, marketers educate and inform customers about the benefits of their products and services and thereby increase their perceived value. Marketers facilitate the delivery of value by making sure the right products and services are available when, where, and in the quantities their customers want. Better marketers are not concerned about just one transaction with their customers. They recognize the value of loyal customers and strive to develop long-term relationships with them.

marketing mix (four Ps)

Product, price, place, and promotion - the controllable set of activities that a firm uses to respond to the wants of its target markets

value

Reflects the relationship of benefits to costs, or what the consumer gets for what he or she gives.

Understand why marketing is important, both within and outside the firm.

Successful firms integrate marketing throughout their organizations so that marketing activities coordinate with other functional areas such as product design, production, logistics, and human resources, enabling them to get the right product to the right customers at the right time. Marketing helps facilitate the smooth flow of goods through the supply chain, all the way from raw materials to the consumer. From a personal perspective, the marketing function facilitates your buying process and can support your career goals. Marketing also can be important for society through its embrace of solid, ethical business practices. Firms "do the right thing" when they sponsor charitable events, seek to reduce environmental impacts, and avoid unethical practices; such efforts endear the firm to customers. Finally, marketing is a cornerstone of entrepreneurialism. Not only have many great companies been founded by outstanding marketers, but an entrepreneurial spirit pervades the marketing decisions of firms of all sizes.

Describe how marketers create value for a product or service.

Value represents the relationship of benefits to costs. Firms can improve their value by increasing benefits, reducing costs, or both. The best firms integrate a value orientation into everything they do. If an activity doesn't increase benefits or reduce costs, it probably shouldn't occur. Firms become value driven by finding out as much as they can about their customers and those customers' needs and wants. They share this information with their partners, both up and down the supply chain, so the entire chain collectively can focus on the customer. The key to true value-based marketing is the ability to design products and services that achieve precisely the right balance between benefits and costs. Value based marketers aren't necessarily worried about how much money they will make on the next sale. Instead, they are concerned with developing a lasting relationship with their customers so those customers return again and again.