BMGT350-Exam 1

Five core customer and marketplace concepts

(1) needs, wants, and demands; (2) market offerings (products, services, and experiences); (3) value and satisfaction; (4) exchanges and relationships (5) markets

Responding to the marketing environment

*Proactive: Aggressive actions to affect forces in the environment. Rather than assuming that strategic options are bounded by the current environment, these firms develop strategies to change the environment. *Reactive: Watching and reacting to forces in the environment. Many companies view the marketing environment as an uncontrollable element to which they must react and adapt. They passively accept the marketing environment and do not try to change it. They analyze environmental forces and design strategies that will help the company avoid the threats and take advantage of the opportunities the environment provides. Marketing management cannot always control environmental forces. In many cases, it must settle for simply watching and reacting to the environment. -For example, a company would have little success trying to influence geographic population shifts, the economic environment, or major cultural values. -But whenever possible, smart marketing managers take a proactive rather than reactive approach to the marketing environment

Publics

-A public is any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. Financial publics. This group influences the company's ability to obtain funds. Banks, investment analysts, and stockholders are the major financial publics. Media publics. This group carries news, features, editorial opinions, and other content. It includes television stations, newspapers, magazines, and blogs and other social media . Government publics. Management must take government developments into account. Marketers must often consult the company's lawyers on issues of product safety, truth in advertising, and other matters. Citizen-action publics. A company's marketing decisions may be questioned by consumer organizations, environmental groups, minority groups, and others. Its public relations department can help it stay in touch with consumer and citizen groups. Internal publics. This group includes workers, managers, volunteers, and the board of directors. Large companies use newsletters and other means to inform and motivate their internal publics. When employees feel good about the companies they work for, this positive attitude spills over to the external publics. General public. A company needs to be concerned about the general public's attitude toward its products and activities. The public's image of the company affects its buying behavior. Local publics. This group includes local community residents and organizations. Large companies usually work to become responsible members of the local communities in which they operate.

Age groups

-Baby boomers -Generation X

Millenials

-Both the baby boomers and Gen Xers will one day be passing the reins to the millennials (also called Generation Y or the echo boomers). -Born between 1981 and 1997 -The 20- to 30-something millennials, by their sheer numbers, wield substantial buying power and make up a huge and attractive market, both now and in the future. -One thing that all millennials have in common is their comfort with digital technology. They don't just embrace technology; it's a way of life. The millennials were the first generation to grow up in a world filled with computers, mobile phones, satellite TV, iPods and iPads, and online social media. As a result, they engage with brands in an entirely new way, such as with mobile or social media. -More than sales pitches from marketers, millennials seek authenticity, value, and opportunities to shape their own brand experiences and share them with others. Compared with other generational groups, they tend to be frugal, practical, connected, mobile, and impatient.

People's view of organizations

-Decline of confidence and loyalty toward companies -Many people today see work not as a source of satisfaction but as a required chore to earn money to enjoy their nonwork hours. This trend suggests that organizations need to find new ways to win consumer and employee confidence.

Macroenvironment

-Demographic -Economic -Natural -Technological -Political -Cultural (DEN, tall, pretty, cute)

Socially responsible behavior

-Enlightened companies encourage their managers to look beyond what the regulatory system allows and simply "do the right thing." -These socially responsible firms actively seek out ways to protect the long-run interests of their consumers and the environment. -The boom in online, mobile, and social media marketing has created a new set of social and ethical issues. Critics worry most about online privacy issues.

People's views of the universe

-Finally, people vary in their beliefs about the origins of the universe and their place in it. Although most Americans practice religion, religious conviction and practice have been dropping off gradually through the years. -This changing spiritualism affects consumers in everything from the television shows they watch and the books they read to the products and services they buy. -Less people are saying they are affiliated with a particular religion and more people identify as spiritual instead

Customer Loyalty and Retention

-Good customer relationship management creates customer satisfaction. In turn, satisfied customers remain loyal and talk favorably to others about the company and its products. -Thus, the aim of customer relationship management is to create not only customer satisfaction but also customer deligh -Loyal customers spend more and stay around longer. Research also shows that it's five times cheaper to keep an old customer than acquire a new one. -Conversely, customer defections can be costly. 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. -said that he saw $50,000 flying out of his store every time he saw a sulking customer. Why? Because his average customer spent about $100 a week, shopped 50 weeks a year, and remained in the area for about 10 years. -In fact, a company can lose money on a specific transaction but still benefit greatly from a long-term relationship. This means that companies must aim high in building customer relationships.

Increasing diversity

-Marketers now face increasingly diverse markets, both at home and abroad, as their operations become more international in scope. -diversity in race, sexual orientation, and disabilities mean that marketers need to be aware of these groups and market towards them

People's view of nature

-People vary in their attitudes toward the natural world—some feel ruled by it, others feel in harmony with it, and still others seek to master it. -More recently, however, people have recognized that nature is finite and fragile; it can be destroyed or spoiled by human activities. -the organic and natural food market is gaining a lot of money

People's view of society

-People vary in their attitudes toward their society—patriots defend it, reformers want to change it, and malcontents want to leave it. -People's orientation to their society influences their consumption patterns and attitudes toward the marketplace. -Companies use patriotism in ads if the brands (like pepsi) are associated with America

Secondary beliefs and values

-Secondary beliefs and values are more open to change. -Believing in marriage is a core belief; believing that people should get married early in life is a secondary belief. -Marketers have some chance of changing secondary values but little chance of changing core values. -For example, family-planning marketers could argue more effectively that people should get married later than not get married at all.

Building the right relationships with the right customers

-Strangers -Butterflies -True friends -Barnacles

Geographic shifts in population

-Such population shifts interest marketers because people in different regions buy differently. -And more and more Americans are moving to "micropolitan areas," small cities located beyond congested metropolitan areas -This increases telecommunication -Many marketers are actively courting the lucrative telecommuting market. For example, online applications such as Citrix's GoToMeeting and Cisco's WebEx help people who telecommute or work remotely connect.

A Better-Educated, More White-Collar, More Professional Population

-The U.S. population is becoming better educated. -The workforce also is becoming more white-collar. Job growth is now strongest for professional workers and weakest for manufacturing workers. -The rising number of educated professionals affects not just what people buy but also how they buy.

Summary: the marketing process

-The first four steps of the marketing process focus on creating value for customers. The company first gains a full understanding of the marketplace by researching customer needs and managing marketing information. -It then designs a customer-driven marketing strategy based on the answers to two simple questions. The first question is "What consumers will we serve?" (market segmentation and targeting). Good marketing companies know that they cannot serve all customers in every way. Instead, they need to focus their resources on the customers they can serve best and most profitably. The second marketing strategy question is "How can we best serve targeted customers?" (differentiation and positioning). Here, the marketer outlines a value proposition that spells out what values the company will deliver to win target customers. -With its marketing strategy chosen, the company now constructs an integrated marketing program—consisting of a blend of the four marketing mix elements, the four Ps—that transforms the marketing strategy into real value for customers. The company develops product offers and creates strong brand identities for them. It prices these offers to create real customer value and distributes the offers to make them available to target consumers. Finally, the company designs promotion programs that engage target customers, communicate the value proposition, and persuade customers to act on the market offering. -Perhaps the most important step in the marketing process involves building value-laden, profitable relationships with target customers. Throughout the process, marketers practice customer relationship management to create customer satisfaction and delight. They engage customers in the process of creating brand conversations, experiences, and community. In creating customer value and relationships, however, the company cannot go it alone. It must work closely with marketing partners both inside the company and throughout its marketing system. Thus, beyond practicing good customer relationship management and customer-engagement marketing, firms must also practice good partner relationship management. -The first four steps in the marketing process create value for customers. In the final step, the company reaps the rewards of its strong customer relationships by capturing value from customers. Delivering superior customer value creates highly satisfied customers who will buy more, buy again, and advocate for the brand. This helps the company capture customer lifetime value and greater share of customer. The result is increased long-term customer equity for the firm. -Finally, in the face of today's changing marketing landscape, companies must consider three additional factors. In building customer and partner relationships, they must harness marketing technologies in the new digital age, take advantage of global opportunities, and ensure that they act sustainably in an environmentally and socially responsible way.

Purpose of business legistlation

-The first is to protect companies from each other. -protect consumers from unfair business practices. -The third purpose of government regulation is to protect the interests of society against unrestrained business behavior.

Competitors

-The marketing concept states that, to be successful, a company must provide greater customer value and satisfaction than its competitors do. -Thus, marketers must do more than simply adapt to the needs of target consumers. They also must gain strategic advantage by positioning their offerings strongly against competitors' offerings in the minds of consumers.

The changing American Family

-The modern family is changing The typical household of a man and a wife and children are declining! (Married couples with children under 18 represent only 20 percent of the nation's 125.8 million households.) -More people are divorcing, marrying later, not having kids, there are more interracial relationships and same-sex couples, and women are breadwinners -Marketers must consider the special needs of nontraditional households because they are now growing more rapidly than traditional households. Each group has distinctive needs and buying habits.

The use of social media in customer-engagement marketing

-Today's consumers are better informed, more connected, and more empowered than ever before. Newly empowered consumers have more information about brands, and they have a wealth of digital platforms for airing and sharing their brand views with others. -Greater consumer empowerment means that companies can no longer rely on marketing by intrusion. Instead, they must practice marketing by attraction—creating market offerings and messages that engage consumers rather than interrupt them.

Generation X

-born between 1965 and 1980 -they lie in the shadow of the boomers -Considerably smaller than the boomer generation that precedes them and the millennials who follow, the Generation Xers are a sometimes-overlooked "in-between" consumer group. -From a marketing standpoint, the Gen Xers are a more skeptical bunch. They are sensible shoppers who research products heavily before they consider a purchase, prefer quality to quantity, and tend to be less receptive to overt marketing pitches. But once they find a brand, they tend to be more loyal than other generational groups. -With so much potential, many brands and organizations focus on Gen Xers as a prime target segment. For example, a full 82 percent of Gen Xers own their own homes, making them an important segment for home-and-hearth marketers.

Microenvironment examples

-company -suppliers -marketing intermediaries -competitors -publics -customers (cool shoes man, cool party clothes)

Economics environment

-consists of economic factors that affect consumer purchasing power and spending patterns. -Economic factors can have a dramatic effect on consumer spending and buying behavior. -The new, more frugal spending values don't mean that people have resigned themselves to lives of deprivation. As the economy has improved, consumers are again indulging in luxuries and bigger-ticket purchases, just more sensibly. They are looking for greater value in the things they do buy. -When the economy is not doing well, people buy less -Thus, rather than slashing prices in uncertain economic times, many marketers hold the line on prices and instead explain why their brands are worth it. -Marketers should pay attention changes in major economic variables that have a large impact on the marketplace, such as income, cost of living, and savings and borrowing patterns. Companies watch and predict these variables using economic forecasting. For example, the Great Recession of 2008 to 2009 and its aftermath hit American consumers hard. After two decades of overspending, new economic realities forced consumers to bring their consumption back in line with their incomes and rethink their buying priorities. -But when the economy soured and as buyers increasingly shifted toward low-priced and convenient online retailers such as Amazon, many consumers worried that Target's trendier assortments and hip marketing also meant higher prices. So Target has shifted its balance more toward the "Pay Less" half of the slogan, making certain that its prices are in line with Walmart's and that customers know it.

The political environment

-consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society. -The United States and many other countries have many laws covering issues such as competition, fair-trade practices, environmental protection, product safety, truth in advertising, consumer privacy, packaging and labeling, pricing, and other important areas -Marketers must work hard to keep up with changes in regulations and their interpretations.

5 Customer markets

-consumer -business -reseller -government -international CBRGI

The production concept

-consumers will favor products that are available and highly affordable. -Therefore, management should focus on improving production and distribution efficiency -This concept is one of the oldest orientations that guide sellers. -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.

The product concept

-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. -focusing only on the company's products can also lead to marketing myopia. For example, some manufacturers believe that if they can "build a better mousetrap, the world will beat a path to their doors." But they are often rudely shocked. The customers might want a completely different solution. The better solution might be a chemical spray, an exterminating service, a house cat, or something else that suits their needs even better than a mousetrap.

The selling concept

-consumers will not buy enough of the firm's products unless it undertakes a large-scale selling and promotion effort. -It focuses on creating sales transactions rather than on building long-term, profitable customer relationships. -The aim often is to sell what the company makes rather than to make what the market wants. -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. These industries must be good at tracking down prospects and selling them on a product's benefits

Outcomes of creating customer value

-customer loyalty and retention -share of market and share of customer -customer equity

Customer-engagement marketing

-fostering direct and continuous customer involvement in shaping brand conversations, brand experiences, and brand community. -Customer-engagement marketing goes beyond just selling a brand to consumers. Its goal is to make the brand a meaningful part of consumers' conversations and lives. -The burgeoning internet and social media have given a huge boost to customer-engagement marketing. Today's consumers are better informed, more connected, and more empowered than ever before. Newly empowered consumers have more information about brands, and they have a wealth of digital platforms for airing and sharing their brand views with others. Thus, marketers are now embracing not only customer relationship management but also customer-managed relationships, in which customers connect with companies and with each other to help forge and share their own brand experiences. Beyond building brand loyalty and purchasing, marketers want to create brand advocacy, by which satisfied customers initiate favorable interactions with others about a brand.

Marketing intermediaries

-help the company promote, sell, and distribute its products to final buyers. -They include resellers, physical distribution firms, marketing services agencies, and financial intermediaries. -Thus, today's marketers recognize the importance of working with their intermediaries as partners rather than simply as channels through which they sell their products. -For example, when Coca-Cola signs on as the exclusive beverage provider for a fast-food chain, such as McDonald's, Wendy's, or Subway, it provides much more than just soft drinks. It also pledges powerful marketing support

The marketing concept

-holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do -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. -Customer-driven companies research customers deeply to learn about their desires, gather new product ideas, and test product improvements. Such customer-driven marketing usually works well when a clear need exists and when customers know what they want.

The natural environment

-involves the physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities. -unexpected happenings in the physical environment—anything from weather to natural disasters—can affect companies and their marketing strategies. -Cold weather hurts restaurants and airlines, but helps winter clothing and snow blowers -At a broader level, environmental sustainability concerns have grown steadily over the past several decades. -Marketers should be aware of several trends in the natural environment. The first involves growing shortages of raw materials. -A second environmental trend is increased pollution. Industry will almost always damage the quality of the natural environment. -A third trend is increased government intervention in natural resource management. -Concern for the natural environment has spawned an environmental sustainability movement. -Today, enlightened companies go beyond what government regulations dictate. They are developing strategies and practices that create a world economy that the planet can support indefinitely. Environmental sustainability means meeting present needs without compromising the ability of future generations to meet their needs. -Walmart is doing great at sustainability! -Companies are learning that what's good for customer well-being and the planet can also be good business. -Patagonia telling customers to not buy their products because of the environmental harm...wow. (buy only what you need)

People's view of others

-more people are using technology to connect with others -This new way of interacting strongly affects how companies market their brands and communicate with customers. Consumers increasingly tap digitally into networks of friends and online brand communities to learn about and buy products and to shape and share brand experiences. As a result, it is important for brands to participate in these networks too.

Baby boomers

-people born during the post-World War II baby boom from 1946 to 1964. -Over the years, the baby boomers have been one of the most powerful forces shaping the marketing environment. The youngest boomers are now in their 50s; the oldest are in their early 70s and well into retirement. -The baby boomers are the wealthiest generation in U.S. history. -Baby boomers are actually open to new products and a lot of them are social media savvy -Baby boomers appreciate it when marketers realize they still have a youthful and wild self. To not just focus on their age and giving them medical products (nude beaches, purple hair streaks, zip lining)

The societal marketing concept

-questions whether the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare. -Is a firm that satisfies the immediate needs and wants of target markets always doing what's best for its consumers in the long run? -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.

Marketing Management Orientations There are five alternative concepts under which organizations design and carry out their marketing strategies:

-the production concept -the product concept -the selling concept -the marketing concept -The societal marketing concept

Generation Z

-young people born between 1997 and 2016. -The approximately 80 million Gen Zers make up the important kids, tweens, and teens markets. They spend an estimated $43 billion to $143 billion annually of their own money and influence up to $333 billion of family spending. -Gen z people take technology for granted. It was always around, they don't know a life without them -social media plays a crucial role for marketing to generation Z -The key is to engage these young consumers and let them help to define their brand experiences. -An important Generation Z marketing concern involves children's privacy and their vulnerability to marketing pitches.

The Marketing Process (5-step model)

1) Understand the marketplace and customer needs and wants 2) Design a customer value-driven marketing strategy 3) Construct an integrated marketing program that delivers superior value 4) Engage customers, build profitable relationships, and create customer delight 5) Capture value from customers to create profits and customer equity In the first four steps, companies work to understand consumers, create customer value, and build strong customer relationships. In the final step, companies reap the rewards of creating superior customer value. -By creating value for consumers, they in turn capture value from consumers in the form of sales, profits, and long-term customer equity.

Natural environment shows 3 major trends

1. Shortages of certain raw materials 2. higher pollution levels 3. more government intervention in natural resource management.

AI

AI involves machines that think and learn in a way that looks and feels human but with a lot more analytical capacity. Marketers can use AI to analyze data at lightning speed and apply the insights to engage customers in real time and help them through the buying process.

Capturing value from customers

By creating superior customer value, the firm creates satisfied customers who stay loyal, buy more, and advocate the brand to others. outcomes of creating customer value: customer loyalty and retention, share of market and share of customer, and customer equity. The value of a company comes from the value of its current and future customers. Companies want to not only create profitable customers but also "own" them for life, earn a greater share of their purchases, and capture their customer lifetime value.

Marketing environment

Consists of the actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers. -microenvironment -macroenvironment -The marketing environment consists of all the actors and forces influencing the company's ability to transact business effectively with its target market. -Companies must constantly watch and manage the marketing environment to seek opportunities and ward off threats.

Core beliefs and values

Core beliefs and values are passed on from parents to children and are reinforced by schools, businesses, religious institutions, and government. -Their core beliefs and values have a high degree of persistence. For example, most Americans believe in individual freedom, hard work, getting married, and achievement and success. These beliefs shape more specific attitudes and behaviors found in everyday life.

Customers

Customers are the most important actors in the company's microenvironment. The aim of the entire value delivery network is to engage target customers and create strong relationships with them. -Consumer markets consist of individuals and households that buy goods and services for personal consumption. -Business markets buy goods and services for further processing or use in their production processes, -whereas reseller markets buy goods and services to resell at a profit. -Government markets consist of government agencies that buy goods and services to produce public services or transfer the goods and services to others who need them. Finally, international markets consist of these buyers in other countries

Customer value and satisfaction

Customers form expectations about the value and satisfaction that various market offerings will deliver and buy accordingly. Satisfied customers buy again and tell others about their good experiences. Dissatisfied customers often switch to competitors and disparage the product to others. Marketers must be careful to set the right level of expectations. If they set expectations too low, they may satisfy those who buy but fail to attract enough buyers.

Generational marketing

Do brands need to create separate products and marketing programs for each generation? -Some experts warn that marketers need to be careful about turning off one generation each time they craft a product or message that appeals effectively to another. -Others caution that each generation spans decades of time and many socioeconomic levels (each group has its own beliefs and behaviors) -Thus, marketers need to form more precise age-specific segments within each group. -More important, defining people by their birth date may be less effective than segmenting them by lifestyle, life stage, or the common values they seek in the products they buy.

Sustainable marketing

Every company action can affect customer relationships. Today's customers expect companies to deliver value in a socially and environmentally responsible way. Forward-looking companies, however, readily accept their responsibilities to the world around them. They view sustainable marketing as an opportunity to do well by doing good.

Butterflies

High profitability, low loyalty Butterflies are potentially profitable but not loyal. There is a good fit between the company's offerings and their needs. However, like real butterflies, we can enjoy them for only a short while and then they're gone.

Not for profit marketing

In recent years, marketing has also become a major part of the strategies of many not-for-profit organizations, such as colleges, hospitals, museums, zoos, symphony orchestras, foundations, and even churches. The nation's not-for-profits face stiff competition for support and membership. Sound marketing can help them attract membership, funds, and support.

The company

Marketing management takes other company groups into account—groups such as top management, finance, research and development (R&D), purchasing, operations, human resources, and accounting. With marketing taking the lead, all departments—from manufacturing and finance to legal and human resources—share the responsibility for understanding customer needs and creating customer value.

Mobile marketing

Mobile marketing is perhaps the fastest-growing digital marketing platform. Smartphones are ever present, always on, finely targeted, and highly personal. This makes them ideal for engaging customers anytime, anywhere as they move through the buying process. -Four out of five smartphone users use their phones to shop

People's views of themselves

People use products, brands, and services as a means of self-expression, and they buy products and services that match their views of themselves. -Sperry Top-Siders are more than just shoes. They are the embodiment of customers' self-views and lifestyles.

Four P's of marketing (Marketing mix)

Product, Price, Place, Promotion To deliver on its value proposition, the firm must first create a need-satisfying market offering (product). It must then decide how much it will charge for the offering (price) and how it will make the offering available to target consumers (place). Finally, it must engage target consumers, communicate about the offering, and persuade consumers of the offer's merits (promotion) -The firm must blend each marketing mix tool into a comprehensive integrated marketing program that communicates and delivers the intended value to chosen customers.

The key to engagement marketing is to find ways to enter targeted consumers' conversations with engaging and relevant brand messages.

Simply posting a humorous video, creating a social media page, or hosting a blog isn't enough. Successful engagement marketing means making relevant and genuine contributions to targeted consumers' lives and interactions.

Marketing

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

Social media marketing

Social media provide exciting opportunities to extend customer engagement and get people talking about a brand. Online social media provide a digital home where people can connect and share important information and moments in their lives. As a result, they offer an ideal platform for real-time marketing, by which marketers can engage consumers in the moment by linking brands to important trending topics, real-world events, causes, personal occasions, or other happenings in consumers' lives. -Snicker's hungerithim

Needs

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.

Suppliers

Suppliers form an important link in the company's overall customer value delivery network. They provide the resources needed by the company to produce its goods and services. -Supplier problems can seriously affect marketing. Marketing managers must watch supply availability and costs. Supply shortages or delays, natural disasters, and other events can cost sales in the short run and damage customer satisfaction in the long run. -Rising supply costs may force price increases that can harm the company's sales volume. -treat suppliers like partners

Exchanges and relationships

The act of obtaining a desired object from someone by offering something in return. the marketer tries to bring about a response to some market offering Marketing consists of actions taken to create, maintain, and grow desirable exchange relationships with target audiences involving a product, service, idea, or other object. -The response may be more than simply buying or trading products and services. A political candidate, for instance, wants votes; a church wants membership and participation; an orchestra wants an audience; and a social action group wants idea acceptance.

Preparing an Integrated Marketing Plan and Program

The company's marketing strategy outlines which customers it will serve and how it will create value for these customers. -Next, the marketer develops an integrated marketing program that will actually deliver the intended value to target customers. -The marketing program builds customer relationships by transforming the marketing strategy into action. -It consists of the firm's marketing mix, the set of marketing tools the firm uses to implement its marketing strategy.

Customer satisfaction

The extent to which a product's perceived performance matches a buyer's expectation depends on the product's perceived performance relative to a buyer's expectations. If the product's performance falls short of expectations, the customer is dissatisfied. If performance matches expectations, the customer is satisfied. If performance exceeds expectations, the customer is highly satisfied or delighted. -Most studies show that higher levels of customer satisfaction lead to greater customer loyalty, which in turn results in better company performance. Companies aim to delight customers by promising only what they can deliver and then delivering more than they promise. Delighted customers not only make repeat purchases but also become willing brand advocates and "customer evangelists" who spread the word about their good experiences to others.

Globalization and global marketing

Thus, managers in countries around the world are increasingly taking a global, not just local, view of the company's industry, competitors, and opportunities. They are asking: What is global marketing? How does it differ from domestic marketing? How do global competitors and forces affect our business? To what extent should we "go global"

cause-related marketing

To exercise their social responsibility and build more positive images, many companies are now linking themselves to worthwhile causes. -Thus, companies using cause-related marketing might find themselves walking a fine line between an improved image and perceptions of exploitation or inauthenticity. However, if handled well, cause-related marketing can greatly benefit both the company and the cause. The company gains an effective marketing tool while building a more positive public image. -These days, every product seems to be tied to some cause. For example, AT&T joined forces with competitors Verizon, Sprint, and T-Mobile to spearhead the "It Can Wait" campaign, which addresses the texting-while-driving epidemic by urging people of all ages to take the pledge to never text and drive.

To design a winning marketing strategy, the marketing manager must answer two important questions:

What customers will we serve (what's our target market)? -It does this by dividing the market into segments of customers (market segmentation) and selecting which segments it will go after (target marketing). For example, Nordstrom profitably targets affluent professionals; Dollar General profitably targets families with more modest means. How can we serve these customers best (what's our value proposition)? -A brand's value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs. -Such value propositions differentiate one brand from another. They answer the customer's question: "Why should I buy your brand rather than a competitor's?" JetBlue promises to put "You Above All" by bringing "humanity back to travel." By contrast, Spirit Airlines gives you "Bare Fare" pricing: "Less Money. More Go.

Demands

When wants are 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.

Big Data and Artificial Intelligence (AI)

With the explosion in digital technologies, marketers can now amass mountains of data. They are tapping information sources ranging from customer transactions to real-time data flowing from website and social media monitoring, connected Internet of Things (IoT) devices, and many others. Brands can use such big data to gain deep customer insights, personalize marketing offers, and improve customer engagements and service.

environmental sustainability

a management approach that involves developing strategies that both sustain the environment and produce profits for the company

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 -Some companies ask consumers for new product and service ideas. -For example, Oreo recently ran a #MyOreoCreation contest asking fans to come up with new flavor ideas. -As another example, at the My Starbucks Idea site, Starbucks collects ideas from customers on new products, store changes, and just about anything else that might make their Starbucks experience better.

companies should balance three considerations in setting their marketing strategies Societal marketing concept focuses on:

company profits, consumer wants, and society's interests. -Company, consumers, and society

The cultural environment

consists of institutions and other forces that affect a society's basic values, perceptions, preferences, and behaviors.

Microenviornment

consists of the actors close to the company that affect its ability to engage and serve its customers—the company, suppliers, marketing intermediaries, customer markets, competitors, and publics.

Macroenvironment

consists of the larger societal forces that affect the microenvironment—demographic, economic, natural, technological, political, and cultural forces.

Demography/ demographic environment

demography: the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. -The demographic environment is of major interest to marketers because it involves people, and people make up markets. -The world's large and highly diverse population poses both opportunities and challenges.

The technological enviornment

forces that create new technologies, creating new product and market opportunities -Technology has released such wonders as antibiotics, air travel, the internet, smartphones, artificial intelligence, and driverless cars. It also has released such horrors as nuclear missiles and assault rifles. -Digital technologies and the dawn of the Internet of Things (IoT) have created a brave new world of marketing. The seemingly unending barrage of digital advances is affecting every aspect of how consumers learn about, shop for, buy, and experience brands -The technological environment changes rapidly, creating new markets and opportunities. However, every new technology replaces an older technology.

True friends

high profitability, high loyalty True friends are both profitable and loyal. There is a strong fit between their needs and the company's offerings. The firm wants to make continuous relationship investments to delight these customers and engage, nurture, retain, and grow them.

Barnacles

low profitability, high loyalty -most problematic customers There is a limited fit between their needs and the company's offerings. An example is smaller bank customers who bank regularly but do not generate enough returns to cover the costs of maintaining their accounts. Like barnacles on the hull of a ship, they create drag. Barnacles are perhaps the most problematic customers.

Strangers

low profitability, low loyalty There is little fit between the company's offerings and their needs. The relationship management strategy for these customers is simple: Don't invest anything in them; make money on every transaction.

Shifts in Secondary Cultural Values The major cultural values of a society are expressed in people's views of themselves and others as well as in their views of organizations, society, nature, and the universe.

people's views of themselves, people's views of others, people's views of organizations, people's views of society, people's views of nature, people's views of the universe

Shared value

recognizes that societal needs, not just economic needs, define markets

Market offerings

some combination of products, services, information, or experiences offered to a market to satisfy a need or a want. Market offerings are not limited to physical products. They also include services

Marketing management

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

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. To some consumers, value might mean sensible products at affordable prices. To other consumers, however, value might mean paying more to get more. For example, a Steinway piano—any Steinway piano—costs a lot. But to those who own one, a Steinway is a great value: -Importantly, customers often do not judge values and costs "accurately" or "objectively." They act on perceived value.

Wants

the form human needs take as they are shaped by culture and individual personality. An American needs food but wants a Big Mac, fries, and a soft drink. -Wants are shaped by one's society and are described in terms of objects that will satisfy those needs

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 Smart marketers look beyond the attributes of the products and services they sell. By orchestrating several services and products, they create brand experiences for consumers. For example, Walt Disney World Resort doesn't just offer amusement park rides, it uses its famed Disney magic to create carefully orchestrated family experiences -They are so taken with their products that they focus only on existing wants and lose sight of underlying customer needs. -For example, your local Buffalo Wild Wings restaurant doesn't just serve up wings and beer; it gives customers the ultimate "Wings. Beer. Sports." fan experience -But the real "Disney Magic" lies in the company's obsessive dedication to "make people happy" and to "make dreams come true."

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, engaging, and growing customers.

Markets

the set of actual and potential buyers of a product or service. These buyers share a particular need or want that can be satisfied through exchange relationships. Marketers are no longer asking only "How can we influence our customers?" but also "How can our customers influence us?" and even "How can our customers influence each other?"

Growing Share of Customer

the share they get of the customer's purchasing in their product categories -To increase share of customer, firms can offer greater variety to current customers. -A higher share of wallet means that your customers are spending more money to buy your products than to buy your competitors' products.

Customer equity

total combined customer lifetime values of all of the company's current and potential customers. As such, it's a measure of the future value of the company's customer base. -The moral: Marketers should care not just about current sales and market share. Customer lifetime value and customer equity are the name of the game. -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. Customer equity may be a better measure of a firm's performance than current sales or market share. Whereas sales and market share reflect the past, customer equity suggests the future.

Customer-driving marketing

understanding customer needs even better than customers themselves do and creating products and services that meet both existing and latent needs, now and in the future. -Our job is to figure out what [consumers are] going to want before they do

Digital and social media marketing

using digital marketing tools such as websites, social media, mobile ads and apps, online video, email, blogs, and other digital platforms to engage consumers anywhere, anytime via their computers, smartphones, tablets, internet-ready TVs, and other digital devices.

Partner relationship management

working with others inside and outside the company to jointly engage and bring more value to customers. -However, in today's more connected world, every functional area in the organization can interact with customers. The new thinking is that—no matter what your job is in a company—you must understand marketing and be customer focused. Rather than letting each department go its own way, firms must link all departments in the cause of creating customer value. -Marketers must also partner with suppliers, channel partners, and others outside the company. Marketing channels consist of distributors, retailers, and others who connect the company to its buyers. The supply chain describes a longer channel, stretching from raw materials to components to final products that are carried to final buyers. Through supply chain management, companies today are strengthening their connections with partners all along the supply chain. They know that their fortunes rest on how well their entire supply chain performs against competitors' supply chains.