Principles of Marketing: Creating and Capturing Customer Value

Comprehensive vocabulary flashcards covering marketing fundamentals, the marketing process, strategic planning matrices, marketing research, consumer behavior, and customer value-driven market strategies.

Marketing

The process by which customers create value for themselves and build strong customer relationships, aiming to attract new customers by promising superior value and keep current customers by delivering satisfaction.

Needs

States of felt deprivation, including basic physical needs (food, water, shelter), social needs (belonging, affection), and individual needs (knowledge, self-expression).

Wants

The forms that human needs take when they are shaped by culture and individual personality.

Demands

Human wants that are backed by buying power.

Market Offering

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

Exchange

The act of obtaining a desired object from someone by offering something in return.

Market

The set of all actual and potential buyers of a product or service.

Value Proposition

The set of benefits or values a company promises to deliver to consumers to satisfy their needs.

Production Concept

The marketing management philosophy that consumers will favor products that are available and highly affordable.

Product Concept

The marketing management philosophy that consumers will favor products that offer the most quality, performance, and innovative features.

Selling Concept

The idea that consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort.

Marketing Concept

A philosophy that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfaction better than competitors do.

Societal Marketing Concept

The idea that a company's marketing decisions should consider consumers' wants, the company's requirements, and long-run societal interests.

Customer Relationship Management (CRM)

The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

Customer-Perceived Value

The customer's evaluation of the difference between all the benefits and all the costs of a marketing offer relative to competing offers.

Customer Satisfaction

The extent to which a product's perceived performance matches a buyer's expectations.

Customer-Engagement Marketing

Making the brand a meaningful part of consumers' conversations and lives by fostering direct and continuous customer involvement.

Consumer-Generated Marketing

Brand exchanges created by consumers themselves—both invited and uninvited—by which consumers play an increasing role in shaping their own and other consumers' brand experiences.

Partner Relationship Management

Working closely with partners in other company departments and outside the company to jointly bring greater value to customers.

Customer Lifetime Value

The value of the entire stream of purchases a customer makes over a lifetime of patronage.

Customer Equity

The total combined customer lifetime values of all of the company's current and future customers.

Strangers

A customer relationship group characterized by low potential profitability and short-term projected loyalty.

Butterflies

A customer relationship group characterized by high potential profitability but short-term projected loyalty.

True Friends

A customer relationship group characterized by both high potential profitability and long-term projected loyalty.

Barnacles

A customer relationship group characterized by low potential profitability despite long-term projected loyalty.

Strategic Planning

The process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities.

Mission Statement

A statement of the organization's purpose—what it wants to accomplish in the larger environment—defined in terms of satisfying basic customer needs.

Business Portfolio

The collection of businesses and products that make up the company.

Strategic Business Unit (SBU)

A unit of the company that has a separate mission and objectives and can be planned independently from other company businesses, such as a company division, a product line, or a single brand.

Cash Cow

In the BCG Growth-Share Matrix, a low-growth, high-share business or product that generates a lot of cash with little need for investment.

Dog

In the BCG Growth-Share Matrix, a low-growth, low-share business or product that does not promise large amounts of growth or funds.

Star

In the BCG Growth-Share Matrix, a high-growth, high-share business or product that requires heavy investment to finance rapid growth.

Question Mark

In the BCG Growth-Share Matrix, a high-growth, low-share business unit that requires a lot of cash to hold its share.

Market Penetration

A strategy for company growth by increasing sales of existing products to existing market segments without changing the product.

Product Development

A strategy for company growth by offering modified or new products to existing market segments.

Market Development

A strategy for company growth by identifying and developing new market segments for existing products.

Diversification

A strategy for company growth through starting up or acquiring businesses outside the company's current products and markets.

Microenvironment

The actors close to the company that affect its ability to serve its customers: the company, suppliers, marketing intermediaries, customer markets, competitors, and publics.

Macroenvironment

The larger societal forces that affect the microenvironment: demographic, economic, natural, technological, political, and cultural forces.

Marketing Intermediaries

Firms that help the company to promote, sell, and distribute its goods to final buyers, including resellers, physical distribution firms, marketing services agencies, and financial intermediaries.

Public

Any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives.

Demography

The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.

Customer Insights

Fresh marketing information-based understandings of customers and the marketplace that become the basis for creating customer value, engagement, and relationships.

Marketing Information System (MIS)

People and procedures dedicated to assessing information needs, developing the needed information, and helping decision makers use the information to generate actionable customer and marketing insights.

Internal Databases

Collections of consumer and market information obtained from data sources within the company network.

Competitive Marketing Intelligence

The systematic monitoring, collection, and analysis of publicly available information about consumers, competitors, and developments in the marketing environment.

Marketing Research

The systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.

Exploratory Research

Marketing research used to gather preliminary information that will help define problems and suggest hypotheses.

Descriptive Research

Marketing research used to better describe marketing problems, situations, or markets, such as the market potential for a product or the demographics and attitudes of consumers.

Causal Research

Marketing research used to test hypotheses about cause-and-effect relationships.

Secondary Data

Information that already exists somewhere, having been collected for another purpose.

Primary Data

Information collected for the specific research purpose at hand.

Ethnographic Research

A form of observational research that involves sending trained observers to watch and interact with consumers in their natural environments.

Experimental Research

Gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses.

Behavioral Targeting

Using online consumer tracking data to target advertisements and marketing offers to specific consumers.

Consumer Buying Behavior

The buying behavior of final consumers—individuals and households that buy goods and services for personal consumption.

Culture

The set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions.

Subculture

A group of people with shared value systems based on common life experiences and situations.

Opinion Leaders

People within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert social influence on others.

Adoption Process

The mental process through which an individual passes from first hearing about an innovation to final adoption.

Derived Demand

Business demand that ultimately comes from the demand for consumer goods.

Supplier Development

Systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others.

Designing a Customer Value-Driven Market Strategy

The strategic process of creating value for targeted customers consisting of selecting customers to serve (via segmentation and targeting) and deciding on a value proposition (via differentiation and positioning).

Market Segmentation

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs.

Targeting

Evaluating each market segment's attractiveness and selecting one or more market segments to enter.

Differentiation

Differentiating the market offering to create superior customer value.

Positioning

Arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

Geographic Segmentation

Dividing a market into different geographical units, such as nations, states, regions, counties, cities, or neighborhoods.

Demographic Segmentation

Dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation.

Psychographic Segmentation

Dividing a market into different segments based on social class, lifestyle, or personality characteristics.

Occasion Segmentation

Dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item.

Benefit Segmentation

Dividing the market into segments according to the different benefits that consumers seek from the product.

Intermarket Segmentation

Forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries.

Undifferentiated Marketing

A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.

Differentiated Marketing

A market-coverage strategy in which a firm targets several market segments and designs separate offers for each.

Concentrated Marketing

A market-coverage strategy in which a firm goes after a large share of one or a few smaller segments or niches.

Micromarketing

Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments.

Perceptual Map

A visual diagram showing consumer perceptions of brands versus competing products on important buying dimensions.