Marketing 314B

Five Core Customer and Marketplace Concepts (ch 1)

1. Needs, wants, and demands 2. Market offerings (products, services, and experiences) 3. Value and satisfaction 4. Exchanges and relationships 5. Markets.

Market Offerings (ch 1)

Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.

The Marketing Concept (ch 1)

A 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. Under the marketing concept, customer focus and value are the paths to sales and profits. Instead of a product-centered make-and-sell philosophy, the marketing concept is a customer-centered sense-and-respond philosophy. Implementing the marketing concept often means more than simply responding to customers' stated desires and obvious needs. Customer-driven companies research customers deeply to learn about their desires, gather new product ideas, and test product improvements.

Customer Relationship Levels and Tools (ch 1)

Companies can build customer relationships at many levels, depending on the nature of the target market. At one extreme, a company with many low-margin customers may seek to develop basic relationships with them. Example: For example, P&G's Tide detergent does not phone or call on all of its consumers to get to know them personally. Instead, Tide creates engagement and relationships through product experiences, brand-building advertising, websites, and social media. At the other extreme, in markets with few customers and high margins, sellers want to create full partnerships with key customers. Example: P&G sales representatives work closely with Walmart, Kroger, and other large retailers that sell Tide.

The Marketing Process: Creating and Capturing Customer Value (ch 1)

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Customer Needs (ch 1)

Human needs are states of felt deprivation. They include basic physical needs for food, clothing, warmth, and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression. Marketers did not create these needs; they are a basic part of the human makeup. Example: An American needs food but wants a Big Mac, fries, and a soft drink. A person in Papua, New Guinea, needs food but wants taro, rice, yams, and pork.

Marketing Management Orientations (ch 1)

Marketing management wants to design strategies that will engage target customers and build profitable relationships with them. There are five alternative concepts under which organizations design and carry out their marketing strategies: 1. the production 2. product 3. selling 4. marketing 5. societal marketing concepts.

Marketing Management (ch 1)

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

Choosing a Value Proposition (ch 1)

The company must also decide how it will serve targeted customers—how it will differentiate and position itself in the marketplace. A brand's value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs. Companies must design strong value propositions that give them the greatest advantage in their target markets.

Selecting Customers to Serve (ch 1)

The company must first decide whom it will serve. It does this by dividing the market into segments of customers (market segmentation) and selecting which segments it will go after (target marketing). Marketing management is customer management and demand management. Example: Nordstrom profitably targets affluent professionals; Dollar General profitably targets families with more modest means.

Engaging Customers and Managing Customer Relationships (ch1)

The first three steps in the marketing process—understanding the marketplace and customer needs, designing a customer value-driven marketing strategy, and constructing a marketing program—all lead up to the fourth and most important step: engaging customers and managing profitable customer relationships.

The Societal Marketing Concept (ch 1)

The idea that a company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests. The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer's and society's well-being. It calls for 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. The concept of shared value focuses on creating economic value in a way that also creates value for society.

The Selling Concept (ch 1)

The idea that consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort. The selling concept is typically practiced with unsought goods—those that buyers do not normally think of buying, such as life insurance or blood donations. It focuses on creating sales transactions rather than on building long-term, profitable customer relationships. It assumes that customers who are coaxed into buying the product will like it. Or, if they don't like it, they will possibly forget their disappointment and buy it again later.

Relationship Building Blocks: Customer Value and Satisfaction (ch 1)

The key to building lasting customer relationships is to create superior customer value and satisfaction. Satisfied customers are more likely to be loyal customers and give the company a larger share of their business. A customer buys from the firm that offers the highest customer-perceived value—the customer's evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers. Customer satisfaction depends on the product's perceived performance relative to a buyer's expectations A customer-centered firm seeks to deliver high customer satisfaction relative to competitors, it does not attempt to maximize customer satisfaction.

Designing a Customer Value-Driven Marketing Strategy and Plan (ch 1)

The marketing manager's aim is to engage, keep, and grow target customers by creating, delivering, and communicating superior customer value. To design a winning marketing strategy, the marketing manager must answer two important questions: 1. What customers will we serve (what's our target market)? 2. How can we serve these customers best (what's our value proposition)?

Marketing Myopia (ch 1)

The mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products.

Customer Relationship Management (ch 1)

The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. Customer relationship management is perhaps the most important concept of modern marketing. It deals with all aspects of acquiring, engaging, and growing customers.

The Product Concept (ch 1)

The product concept holds that consumers will favor products that offer the most in quality, performance, and innovative features. Under this concept, marketing strategy focuses on making continuous product improvements.

The Production Concept (ch 1)

The production concept holds that consumers will favor products that are available and highly affordable. The production concept is still a useful philosophy in some situations. For example, both personal computer maker Lenovo and home appliance maker Haier dominate the highly competitive, price-sensitive Chinese market through low labor costs, high production efficiency, and mass distribution. Companies adopting this orientation run a major risk of focusing too narrowly on their own operations and losing sight of the real objective—satisfying customer needs and building customer relationships.

Consumer Wants (ch 1)

Wants are the form human needs take as they are shaped by culture and individual personality. Wants are shaped by one's society and are described in terms of objects that will satisfy those needs. When backed by buying power, wants become demands. Given their wants and resources, people demand products and services with benefits that add up to the most value and satisfaction.

What Is Marketing? (ch 1)

the process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return.