Marketing 304 Chapter 1

customer managed relationships

marketing relationships in which customers, empowered by today's new digital technologies, interact with companies and with each other to shape their relationships with brands. Todays consumers have more information about brands than every before, and they have a wealth of platforms for airing and sharing their brand views with other consumers. Thus, the marketing world is now embracing not only customer relationship management but also customer-managed relationships.

Market offerings

some combination of products, services, information, or experiences offered to a market to satisfy a need or want. Consumers' needs and wants are fulfilled through market offerings. Market offerings are not limited to physical products. They also include services—activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything. Examples include banking, airline, hotel tax preparation, and home repair services.

Customer lifetime value

the value of the entire stream of purchases that the customer would make over a lifetime of patronage. Losing a customer means losing more than a single sale. It means losing the entire stream of purchases that the customer would make over a lifetime of patronage. Tew Leonard, who operates a highly profitable four-store supermarket in Connecticut and New York, says he sees $50,000 flying out of his store every time he sees a sulking customer.

partner relationship management

Working closely with partners in other company departments and outside the company to jointly bring greater value to customers. When it comes to creating customer value and building strong customer relationships, to- day's marketers know that they can't go it alone. They must work closely with a variety of marketing partners. Major changes are occurring in how marketers partner with others inside and outside the company to jointly bring more value to customers.

consumer-generated marketing

- Brand exchanges created by consumers themselves—both invited and uninvited— by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers. This might happen through uninvited consumer-to-consumer exchanges in blogs, video-sharing sites, and other digital forums. But increasingly, companies are inviting consumers to play a more active role in shaping products and brand messages.

Customer perceived value

- the customer's evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers. Customers often face a bewildering array of products and services from which to choose. A customer buys from the firm that offers the highest customer-perceived value.

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. Sellers with marketing myopia are so taken with their products that they focus only on existing wants and lose sight of underlying customer needs. They forget that a product is only a tool to solve a consumer problem.

Demands

Human wants that are backed by buying power. Given their wants and resources, people demand products with benefits that add up to the most value and satisfaction. Outstanding marketing companies go to great lengths to learn about and understand their customer's needs, want, and demands.

Wants

The form human needs take as they are shaped by culture and individual personality. An American needs food but wants taro, rice, yams, and pork. Wants are shaped by one's society and are described in terms of objects that will satisfy those needs.

Selling concept

The idea that consumers will not buy enough of the firm's products unless it 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 insurance or blood donations. The industries must be good at tracking down prospects and selling them on products benefits.

Share of customer

The portion of the customer's purchasing that a company gets in its product categories. Beyond simply retaining good customers to capture customer lifetime value, good customer relationship management can help marketers increase their share of customer Thus, banks want to in- crease "share of wallet." Supermarkets and restaurants want to get more "share of stomach." Car companies want to increase "share of garage," and airlines want greater "share of travel."

Marketing

The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. Marking is a social and managerial process by which individuals and organizations obtain what they need and want through creating and exchanging value with others. Marketing involves building profitable, value-laden exchange relationships with customers.

Market

The set of all actual and potential buyers of a product or service. The concepts of exchange and relationships lead to the concept of a market. These buyers share a particular needs or wants that can be satisfied through exchange relationships.

Customer Equity

The total combined customer lifetime values of all of the company's customers. The ultimate aim of customer relationship management is to produce high customer equity. As such, it's a measure of the future value of the company's customer base. Clearly, the more loyal the firm's profitable customers, the higher its customer equity.

Marketing concept

a philosophy that holds that 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. The job is not to find the right customers for your product but to find the right products for your customers.

Needs

states of felt deprivation.- The most basic concept underlying marketing is that of human needs. 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.

Exchange

the act of obtaining a desired object from someone by offering something in return. Marketing occurs when people decide to satisfy needs and wants through exchange relationships. In the broadest sense, the marketer tries to bring about a response to some market offering.

Marketing Management

the art and science of choosing target markets and building profitable relationships with them. The marketing managers aim is to find, attract, keep, and grow target customers by creating, delivering, and communicating superior customer value.

customer satisfaction

the extent to which a product's perceived performance matches a buyer's expectation. If the products performance falls short of expectations, the customer is dissatisfied. If performance matches expectations, the customer is satisfied.

Societal marketing concept

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. Questions whether the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare.

Production concept

the idea that consumers will favor products that are available and highly affordable and that the organization should therefore focus on improving production and distribution efficiency. Management should focus on improving production and distribution efficiency. This concept is one of the oldest presentations that guide's sellers.

Product concept

the idea that consumers will favor products that offer the most quality, performance and features and that the organization should therefore devote its energy to making continuous product improvements. Under this concept, marketing strategy focuses on making continuous product improvements. Product quality and improvement are important parts of most marketing strategies. However, focusing only on the company's products can also lead to marketing myopia.

Customer relationship management

the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, keeping, and growing customers.

Internet

vast public web of computer networks that connects users of all types all around the world to each other and to an amazingly large information repository. The most dramatic digital technology is the Internet. The number of Internet users world- wide now stands at more than 1.8 billion and will reach an estimated 3.4 billion by 2015. On a typical day, 58 percent of American adults check their e-mail, 50 percent use Google or another search engine to find information, 38 percent get the news, 27 percent keep in touch with friends on social-networking sites such as Facebook and LinkedIn, and 19 percent watch a video on a video-sharing site such as YouTube.