Marketing Chapter 1

what does amazon mainly focus on?

-customer satisfaction -CEO and Founder Bezoz "Obsess over customers" -What do our customers need? Who are our customers? And then they develop whatever capabilities are required to meet those needs -Have an empty chair in their meetings that represents the all important customer

product

-create a need satisfying market offering product -how will it make your life better or fulfill a need -Why is it better than your competitors?

Product concept

-holds that consumers will favor products that offer the most quality, performance, and features; therefore, the organization should devote its energy to making continuous product improvements -can lead to marketing myopia

Production concept

-idea that consumers will favor products that are available and highly affordable; therefore, the organization should focus on improving production and distribution efficiency -an older concept that guides sellers -can lead to marketing myopia

promotion

-must communicate with target customers about the offering and persuade them of its merits -buy one get one less, coupons etc. (They have an end date) -creates urgency in the customer and so the company can gage how many people use it (give out 500 and only 200 are used)

butterflies

-potentially profitable but not loyal -people who float in and out- buy product one time and that's it

true friends

-profitable and loyal -someone who comes in and buys the product multiple times

place

-put tiffany in a nice upscale mall and not a strip mall in Orange -Cereal company rents the space within a store -Cheerios wants a specific spot/shelf -Wants it to at eye level etc.

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 -Ex: UPS--3 pronged corporate sustainability mission stresses economic prosperity, social responsibility, and mental stewardship

want

-something you can live without but would enjoy (the form human needs take as they are shaped by culture and individual personality) -ex: eat a taco for lunch because it sounded good

need

-something you must have (states of felt deprivation) -ex: must have food to survive

price

-target vs. walmart -Target "expect more" aka from walmart but then added "pay less" to make it about everyone after --The two companies compete on price

Growing share of customer

-the portion of the customers purchasing that a company gets in its product categories -Airlines want greater "share of travel" restaurants want more "share of stomach" -To increase share of customer, firms can offer greater variety to current customers

market

-the set of all actual and potential buyers of a product or service -the buyers share a particular need or want that can be satisfied through exchange relationships

Building customer equity

-the total combined customer lifetime values of all the company's customers -a measure of the future value of the company's customer base

Marketing process

-understanding the marketplace and customer needs -designing a customer driven marketing strategy -constructing a marketing program, -building and managing profitable customer relationship

Partner relationship management

-working closely with partners in other company departments and outside the company to jointly bring greater value to customers -rather than letting each department go its own way, firms must link all departments in the cause of creating customer value

Zappos example

-wow philosophy, they don't use coupons because they want people to buy for their service not the sale -they know their customer and know that because they like the service they come back for it so they maximize on it...express shipping

barnacles

highly loyal but not very profitable

Focuses on ____ they sell a product not ___ product they are selling

how, what

marketing definition

is managing profitable customer relationships

strangers

low profitability and low loyalty

Consumer 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 want -Not limited to physical products, they can also include services -ex: banking, airline, hotel, retailing, home repair services

product

spend time educating people why they should buy this product vs. another product

demand

when a want is backed by buying power → more powerful than a want (human wants that are backed by buying power)

what must you decide fist when marketing?

whom it will serve→ market segmentation and target marketing

Consumer generated marketing

-Brand exchanges created by consumers themselves both invited and uninvited by which consumers are playing and increasing role in shaping their own brand experiences and those of other consumers -Asking consumers for new product and service ideas -ex: my Starbucks idea site

expanding your share

-Expand what you offer -Create a new product -Increase awareness -Ex: the milk council → too many drinks out now so college students don't drink milk → did the "Got Milk?" campaign

Societal marketing concept

-Idea that a company's marketing decisions should consider consumers' wants, the company's requirements, consumers long run interests, and society's long run interest -Calls for sustainable marketing

Selling concept

-Idea that consumers will not buy enough of the firms products unless the firm undertakes a large scale selling and promotion effort -Typically practiced with unsought goods- those that buyers do not normally think of buying (ex: insurance) -Focuses on sales transactions rather than building a long term profitable relationship

amazons "discovery factor"

-Makes them very special -You are compelled to stay a while once you are already on the website -Creates direct, personalized customer relationships and satisfying online experiences

Consumer managed relationships

-Marketing relationships in which customers empowered by todays new digital technologies interact with companies and with each other to shape their relationships with brands -Ex: using social media to interact with customers

Customer relationship management

-Overall process of building and maintain profitable customer relationships by delivering superior customer value and satisfaction -Satisfied customers are more likely to be loyal customers and give the company a larger share of their business

Marketing concept

-Philosophy in which achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do -The job is not to find the right customers for your product, but to find the right products for your customers

choosing a value proposition:

-Set of benefits or values it promises to deliver to consumers to satisfy their needs -Helps differentiate one brand from another

marketing myopia

-The mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products -Creating a brand experience for consumers: you don't just visit Disney world resort, you immerse yourself and your family in "the heart of magic"

Production

-companies that make goods to stock the shelves so they sell, don't have to convince the customer to buy them because they are products that sell -ex: toilet paper

selling

Ex: polaroid camera- first instant camera → was equipped to make everything involved for the camera to be successful but then digital cameras happened so they went out of business they thought that customers would want the photo in their hand and they were wrong so they went out of business

Customer lifetime value

Loosing a customer means more than a single sale, it means losing the entire stream of purchases that the customer would make over a lifetime

Marketing management

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

Customer perceived value

the customers evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers -more satisfaction= more loyalty -consumer evangelists- customers who spread the word about their good experience to others -ex: JetBlue- "You above all"

who is amazons main competition?

walmart