MGMT Ch. 11- Building Customer Relationships Through Effective Marketing

Ingredients of the marketing mix:

Product - includes decisions about the product's design, brand name, packaging, and warranties. - ex)the decisions McDonald's makes about package designs, sizes of orders, and flavors of sauces Pricing - concerned with both base prices and discounts - ex) rebates offered by automobile manufacturers Distribution - involves not only transportation and storage, but also selecting intermediaries Promotion - focuses on providing information to target markets - Major forms: *Advertising *Personal selling *Sales promotion *Public relations

Marketing concept

a business philosophy that a firm should provide goods and services that satisfy customers' needs through a coordinated set of activities that allow the firm to achieve its objectives

marketing mix

a combination of product, price, place (distribution), and promotion developed to satisfy a particular target market

value

a customer's estimation of the worth of a product based on a comparison of its costs and benefits, including quality, relative to other products

Market segment

a group of individuals or organizations within a market that share one or more common characteristics

Target market

a group of individuals or organizations, or both, for which a firm develops and maintains a marketing mix suitable for the specific needs and preferences of that group

Market

a group of individuals or organizations, or both, that need products in a given category and that have the ability, willingness, and authority to purchase them

Customer lifetime value

a measure of a customer's worth (sales minus costs) to a business over one's lifetime

Marketing information system

a system for managing marketing information that is gathered continually from internal and external sources

Marketing plan

a written document that specifies an organization's resources, objectives, strategy, and implementation and control efforts to be used in marketing a specific product or product group

Which part of the marketing concept is concerned with using information about present and potential customers to provide a product that will satisfy them at a price that is acceptable to them, that will yield a profit, that will promote the product, and ensure that the product is distributed so that it is available to customers where and when it is needed? a. Implementing b. Surveying c. Developing d. Summarizing

a. Implementing

Many homes are decorated in spring colors because these colors are deemed to be uplifting; however, most department stores do not carry products in spring colors in the fall and winter when the focus is on browns and greens. Which of the following utilities explains the reason for spring-colored product availability? a. Time utility b. Form utility c. Possession utility d. Place utility

a. Time utility

When asked about those people who say his Sriracha sauce is too spicy, David Tran jokingly suggests they "use less" of the product. Sriracha's use of a single marketing mix for all potential customers means that the company is using: a. an undifferentiated approach. b. a differentiated approach. c. a common approach. d. a concentrated approach

a. an undifferentiated approach.

The trademarked rooster and package design for Huy Fong's Sriracha sauce is part of the _______ ingredient of the marketing mix. a. product b. promotion c. distribution d. price

a. product

Sales forecast

an estimate of the amount of a product that an organization expects to sell during a certain period of time based on a specified level of marketing effort

Which of the following is not normally included as a central component of a marketing plan? a. Marketing strategy b. Organization's resources c. Consumer protection laws d. Objectives

c. Consumer protection laws

Which of the following is not a step in the marketing research process? a. Interpret the information b. Make a preliminary investigation c. Estimate sales d. Gather factual information

c. Estimate sales

To determine the potential of a specific market segment an organization makes predictions based on a specific relevant time frame, geographic boundaries, and an estimate for the specific product item, product line, or an entire product category. What is the name given to the estimate of the amount of a product that an organization expects to sell during the specific period based on a specified level of marketing effort? a. Market prediction b. Sales data mining c. Sales forecast d. Marketing research

c. Sales forecast

The pending lawsuit from the City of Irwindale is part of the _________ forces in the external environment. a. political b. competitive c. legal and regulatory d. sociocultural

c. legal and regulatory

Sarah and some friends were eating at a local taco restaurant last week. All of Sarah's friends put Sriracha on their tacos and raved about how great it tasted. The next time Sarah went to the grocery store, she purchased a bottle of Sriracha. Sarah's buying decision was influenced by: a. situational influences. b. psychological influences. c. social influences. d. personality influences.

c. social influences.

When considering the external marketing environment, organizations must consider ______, which is the actions of competitors who are in the process of implementing their own marketing plans.

competitive forces

Centrum Silver is a multiple vitamin marketed to individuals over fifty years old. The company divides its market into Centrum Silver for women 50+ and Centrum Silver for Men 50+. The organization is using a __________ approach to market these products.

concentrated market segmentation

Governmental markets

consist of federal, state, county, and local governments that buy goods and services to maintain internal operations and to provide citizens with such products as highways, education, and national defense

Producer markets

consist of individuals and business organizations that buy certain products to use in the manufacture of other products

Consumer markets

consist of purchasers and/or household members who intend to consume or benefit from the purchased products and who do not buy products to make profits

_______ often differs based on the product being purchased. For instances, low-cost items are purchased with routine response behavior and very little search or decision-making, but expensive, seldom-purchased items call for extended research and decision making.

consumer buying behavior

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

customer relationship mgmt

Buying behavior may be defined as the decisions and actions of people involved in buying and using products. Which of the following is normally included as a major focus in the study of buying behavior? a. Governmental buying behavior b. Personal buying behavior c. Institutional buying behavior d. Consumer buying behavior

d. Consumer buying behavior

Which of the following is not normally included in the external marketing environment? a. Economics b. Laws and regulations c. Technology d. Finances

d. Finances

Marketing is based on many different relationships between customers, wholesalers and producers, buyers, and sellers. What does the term relationship marketing refer to? a. Measuring a customer's worth (sales minus costs) to a business during one's lifetime b. Retaining customers by offering them big rewards c. Using information about customers to create marketing strategies that develop and sustain desirable customer relationships d. Marketing decisions and activities focused on achieving long-term, satisfying relationships with customers

d. Marketing decisions and activities focused on achieving long-term, satisfying relationships with customers

A market is a group of individuals or organizations, or both, that need products in a given category and that have the ability, willingness, and authority to purchase them. Which of the following is the name given to the market for intermediaries who buy finished products and sell them for a profit? a. Consumer market b. Industrial market c. Government market d. Reseller market

d. Reseller market

Businesses need to direct their product marketing strategies to the individuals most likely to purchase it. Often marketing managers examine potential markets for their possible effects on the firm's sales, costs, and profits. Which of the following is the designation given for the group to which marketing managers direct the focus of their marketing efforts for a product? a. Market segment b. Mixed market c. Potential market d. Target market

d. Target market

The marketing plan describes

describes the firm's current position or situation, establishes marketing objectives for the product, and specifies how the organization will attempt to achieve these objectives

An accurate measure of a market segment can help a firm to

determine the feasibility of entering new segments and how best to allocate marketing resources and activities among market segments in which it is already active

Undifferentiated approach

directing a single marketing mix at the entire market for a particular product this approach assumes that individual customers in the target market for a specific kind of product have similar needs and that the organization can satisfy most customers with a single marketing mix, which consists of one type of product with little or no variation, one price, one promotional program aimed at everyone, and one distribution system to reach all customers in the total market. ex) staple food items (such as sugar and salt)

Discretionary income

disposable income less savings and expenditures on food, clothing, and housing

Relationship marketing

establishing long-term, mutually satisfying buyer-seller relationships

Institutional markets

include churches, not-for-profit private schools and hospitals, charitable organizations, and foundations

Sociocultural forces

influences in a society and its culture that result in changes in attitudes, beliefs, norms, customs, and lifestyles

Political forces

influences that arise through the actions of political figures

Single-source data

information provided by a single firm on household demographics, purchases, television-viewing behavior, and responses to promotions such as coupons and free samples

Legal and regulatory forces

laws that protect consumers and competition and government regulations that affect marketing

A business philosophy that a firm should provide goods and services that satisfy customers' needs through a coordinated set of activities that allow the firm to achieve its objectives is most often called the ______

marketing concept

The purpose of a _______ is to establish a unified vision for an organization and to communicate this vision among the firm's employees.

marketing plan

________ is an important step of the marketing process because it involves collecting and analyzing data on what consumers want and need, their consumption habits, trends, and changes in the marketing environment.

marketing research

Online information services

offer subscribers access to email, Web sites, downloadable files, news, databases, and research materials

Disposable income

personal income less all additional personal taxes

A pair of shoes is given _______ when it is shipped from a factory to a department store.

place utility

By Abram's Company buying products to use in the manufacture of other products, it has demonstrated that it is part of the _______

producer market

Business-to-business (or industrial) markets

purchase specific kinds of products for use in making other products for resale or for day-to-day operations

Managing customer relationships requires

requires identifying patterns of buying behavior and using this information to focus on the most promising and profitable customers

Managers rely on _______ to purchase raw materials, schedule production, secure financial resources, consider plant or equipment purchases, plan inventory levels, and hire personnel, therefore they must be accurate.

sales forecasts

Technological forces

technological changes that can create new marketing opportunities or cause products to become obsolete rapidly

Utility

the ability of a good or service to satisfy a human need

Competitive forces

the actions of competitors, who are in the process of implementing their own marketing plans

marketing

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

Buying behavior

the decisions and actions of people involved in buying and using products

Economic forces

the effects of economic conditions on customers' ability and willingness to buy

Personal income

the income an individual receives from all sources less the Social Security taxes the individual must pay

Market segmentation

the process of dividing a market into segments and directing a marketing mix at a particular segment rather than at the total market

Marketing research

the process of systematically gathering, recording, and analyzing data concerning a particular marketing problem

Business buying behavior

the purchasing of products by producers, resellers, governmental units, and institutions

Consumer buying behavior

the purchasing of products for personal or household use, not for business purposes

Customer relationship management (CRM)

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

Form utility

utility created by converting production inputs into finished products

Place utility

utility created by making a product available at a location where customers wish to purchase it Ex) A pair of shoes shipped from a factory to a department store

Time utility

utility created by making a product available when customers wish to purchase it ex) Halloween costumes that are manufactured in April but not displayed until September, when consumers start buying them

Possession utility

utility created by transferring title (or ownership) of a product to a buyer

Evolution of the Marketing Concept

§From the start of the Industrial Revolution until the early 20th century, business effort was directed mainly toward producing goods. •Business had a strong production orientation, which placed a strong emphasis on increased output and production efficiency. §In the 1920s, producers had to direct their efforts toward selling goods rather than just producing them. •This new sales orientation was characterized by increased advertising, enlarged sales forces, and, occasionally, high-pressure selling techniques. §During the 1950s, business managers recognized that they were not primarily producers or sellers, but were in the business of satisfying customers' needs. •Marketers adopted a customer orientation—in other words, the organization had to first determine what customers need and then develop goods and services to fill those particular needs.

Marketing strategy

§a plan that will enable an organization to make the best use of its resources and advantages to meet its objectives

Reseller markets

§consist of intermediaries, such as wholesalers and retailers, who buy finished products and sell them for a profit

Forecasting methods:

•Executive judgments •Surveys of buyers or sales personnel •Time-series analyses •Correlation analyses •Market tests

Managers rely on sales forecasts when they:

•Purchase raw materials •Schedule production •Secure financial resources •Consider plant or equipment purchases •Hire personnel

The buying process is influenced by:

•Situational factors •Psychological factors •Social factors and buying behavior which is largely determined by income

Marketers collect secondary data from sources compiled inside or outside the firm for purposes other than specific marketing research, such as:

- Commercial reports - Government reports - Internal databases

Marketers collect primary data directly from consumers when they conduct:

- Mail, telephone, personal interview, online, focus group, or social networking surveys - Direct observation of consumer behavior

Database

- a collection of information arranged for easy access and retrieval ex) LEXIS-NEXIS, Dun & Bradstreet's Global Commercial database

Two market segmentation approaches:

1. Concentrated - a single marketing mix is directed at a single market segment 2. Differentiated - multiple marketing mixes are focused on multiple market segments

Marketing concept process

1. The firm communicates with potential customers to assess their product needs. 2. The firm develops a good or service to satisfy those needs. 3. The firm continues to seek ways to provide customer satisfaction.

To implement the marketing concept (slide 14)

1. The firm must obtain information about its present and potential customers. 2. The firm must use this information to pinpoint the specific needs and potential customers toward which it will direct its marketing activities and resources 3. the firm must mobilize its marketing resources to: - Provide a product that will satisfy its customers - Price the product at a level that is acceptable to buyers and will yield a profit - Promote the product so that potential customers will be aware of its existence and its ability to satisfy their needs - Ensure that the product is distributed so that it is available to customers where and when it is needed 4. The firm must obtain marketing information regarding the effectiveness of its efforts and be ready to modify any or all of its marketing activities based on information about its customers and competitors.

4 kinds of utility

1. form 2. place 3. time 4. possession utility