Chapter 1: An Overview of Strategic Marketing

Product Orientation (Evolution of Marketing)

(1860s-1920s) Industrial Revolution improved speed and efficiency, large increases in available products

Sales Orientation (Evolution of Marketing)

(1920s-1960s) many products with not enough demand, businesses view sales and selling as the main means of increasing profits

Market Orientation (Evolution of Marketing)

(1960s-current) an organization-wide commitment to researching and responding to customer need, determine what customers want and produce those products

Samuel spent $500 on a new television set. How much of this price is likely to go toward marketing expenses?

About $250

Which of the following equations describes customer value?

Customer value= customer benefits - customer costs

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

Establish an information system to discover customers' real needs

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

It requires four conditions to take place.

Which of the following is a major benefit of marketing?

Marketing knowledge enhances consumer awareness.

Marketing Mix (4 P's)

Product Variable, Price Variable, Distribution Variable, and Promotion Variable

In which of the following situations is the marketer selling an idea, rather than a service or good?

The Green Party holds a press conference to let the public know its views on capital punishment

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

Value

a customer's subjective assessment of benefits relative to costs in determining the worth of a product

The Marketing Concept

a management philosophy 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

Product Variable

a product can be a good, service or idea

Target Market

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

Stakeholders

constituents who have a "stake", or claim, in some aspect of a company's products, operations, markets, industry, and outcomes

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

Importance of Marketing

costs consume a sizable portion of buyers dollars, is used in nonprofit organizations, is important to businesses and the economy, fuels our global knowledge, knowledge enhances consumer awareness, connects people through technology, offers many exciting career prospects

Marketing is the process of

creating, distributing, promoting, and pricing products to facilitate, satisfying exchange relationships with customers and to develop and maintain favorable relationships with stakeholders in a dynamic environment

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 stakeholders are the focal point of all marketing activities?

customers

______ are the focal points of all marketing activities

customers

During the holiday season, a Bluetooth speaker was in such high demand that it sold out quickly at a local Walmart. When Walmart tried to order more, it learned that the suppliers had so many orders to fill that it would not be able to fill Walmart's order for two weeks. What type of marketing mix variable does this problem involve?

distribution

Marketing Environment Forces

economic forces, political forces, legal and regulatory forces, technological forces, socio-cultural forces, competitive forces

Implementing the Marketing Concept

establish an information system to discover customer's real needs, use the information to create satisfying products, and coordinate all activities

Relationship Marketing

establishing long-term mutually satisfying buyer/seller relationships

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

exchanges

Promotion Variable

inform individuals or groups about the organization and its product/services-- advertising, public relations, personal selling, promotions, street teams, and viral marketing

Marketing environmental forces are often _______.

interdependent

Distribution Variable

make products available in quantities desired, minimize costs (Inventory, Transportation, and Storage), select/motivate intermediaries, establish/maintain inventory control, and develop/manage transportation and storage systems

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

Lime is using social media to ask consumers about the qualities they desire in an electric scooter. The firm hopes to develop a new type of electric scooter based on the feedback it receives. Which marketing mix variable is Lime addressing?

product

Socially Responsible Marketing

promoting the welfare of customers and stakeholders

Lumos Labs, the maker of brain-training app Lumosity, released advertisements that claimed its app was able to prevent Alzheimer's. The Federal Trade Commission fined Lumos Labs $2 million, saying that the company did not have the science to back up its ads. What type of marketing mix variable is involved in this situation?

promotion

The _____ variable of the marketing mix relates to activities used to inform individuals or groups about the organization and its product

promotion

Price Variable

relates to decisions and actions associated with establishing price objectives and policies, relates to determining product prices, and determines the value of the exchange

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

Customers choose to go to Buffalo Wild Wings based upon the value they place on the total product—including the food, service, atmosphere of the restaurant, and more. The process consumers use to determine value is highly _______.

subjective

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

Distribution, price, promotion, and product are all elements of

the marketing mix

Marketing

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

Exchange

the provision or transfer of goods, services, or ideas in return for something of value

Customers

the purchasers of organizations' products, are the focal point of all marketing activities

Marketing Environment

the six forces that surround the customer and affect the marketing mix

Customer Lifetime Value

the worth of individual customers and estimates their lifetime value to the company

Customer Relationship Management (CRM)

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