MKTG 3310 Wolter- Auburn Exam 1

Customers determine value!

Who determines the value of a product?

They offer product propositions-

A brand's value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs.

Value propositions answer the customer's question: "Why should I buy your brand rather than a competitor's?"

If companies don't determine value, what do they do?

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. (What you get) - (what you give)

What is customer's perceived value?

Satisfaction

A pleasurable fulfillment response to a consumption experience. Driven by disconfirmation (not negative per se)

You can go into a place (like McDonalds) with low expectations and the company meets it, then you'll leave satisfied

How is satisfaction determined? What does this tell us about McDonald's?

American Customer Satisfaction Index

It shows that the customer satisfaction matters

What is the ACSI and why does it matter?

Market

The set of actual and potential buyers of a product. Buyers= people with both the desire and ability to buy a specific offering.

NO- come to this conclusion based on how we define a market

Is there such a thing as an Auburn target market? Why or why not?

Book says they do, but professor thinks this is wrong.

Do markets share a common need or want?

LBGT hasn't affected their satisfaction rate. They have good customer service. People who got mad about it, they just don't go.

What does the definition of a market tell us about Chik-Fil-A's customer satisfaction in relation to the LGBTQ controversy?

Aquire cash flow from customer - stimulate demand and manage customer value

What is the unique contribution of marketing to a firm?

Marketing

The art and science of co-creating value

Marketing uses data- science

When does the science not actually hold- art

Why is marketing an art and science?

Marketing is a vague concept

What do I mean when I say marketing is a philosophy, a discipline, a unit, and a set of activities? - not on test

Relays information

Cigarettes are bad

Promotes Red Cross

Epi-Pen marketing gets price down

How would you answer the statements that marketing is advertising, not necessary, selling more things to more people..., or the devil?

Marketing Concept

Achieving the organization's goals depend on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do

Selling, production, product, societal marketing and marketing

What are the different concepts that compete with the marketing concept?

Production concept

holds that consumers will favor products that are available and highly affordable; therefore, the organization should focus on improving production and distribution efficiency. One of oldest orientations that guides sellers

Product concept

Holds that consumers will favor products that offer the most in quality, performance, and innovative features; therefore, the organization should devote its energy to making continuous product improvements

Selling Concept

Holds 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 life insurance or blood donations.

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?

Marketing Orientation

The implementation of the marketing concept throughout an organization. Represented as the generation, dissemination, and use of customer information across an organization.

Generate information on market

Disseminate to other department

And the incentivize for other departments to use

What three characteristics of a firm are needed to be market oriented?

A focus on maximizing shareholder value

What is a shareholder concept?

Companies aren't reinvesting back into their employees. They're not finding growth opportunities

What are potential problems with a focus on shareholders?

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

What is a market offering?

Needs

States of felt deprivation

Wants

The form human needs take as they are shaped by culture and individual personality

Demands

Human wants that are backed by buying power

High prices, deceptive practices, high-pressure selling, shoddy, harmful, or unsafe products, planned obsolescence, poor service to disadvantage customers

False wants and too much materialism, too few social goods, cultural pollution

What are the evils of marketing?

They have the right to expect a product to be safe. Expect a product to perform as claimed.

What are current consumer "rights"

Be well informed about a product, be protected against questionable practices, influence products and marketing in ways that improve "quality of life," consumer in a way that will preserve the world for future generations

Each proposed right has led to more specific proposals by sonsumerists and consumer protection actions by the government.

What are the proposed consumer rights?

One party in exchange has more info that puts the other market in a disadvantage

Who has most information- businesses

What is the argument that consumers need protected rights and not to be held to a buyer beware mentality?

Competition encourages innovation

What is the Milton Friedman view of businesses role in the world?

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

Whereas, the societal marketing concept considered the future welfare of consumers and the strategic planning concept considers future company needs, the sustainable marketing concept considers both

How is societal marketing different than sustainable marketing

We define what the role is for our institutions and organizations

What does the consideration of organizations and institutions have to do with the contrast between Milton Friedman's view of business's role and the societal concept's view?

Consumer wants on some issues

Businesses have some resources

If you do it correctly, there is potential for financial returns

What are the three arguments for businesses to engage in other causes besides seeking a profit?

Firms are rewarded when:

Quality is strong.

Stakeholders make intrinsic attributions about a firm's motive

CSR spending is synergistic with R&D

Advertising spending is higher compared to competitors

What factors determine whether firms are "rewarded" for engaging in CSR?

Good management (CSR -> CSR spending) and Penance (CSI -> CSR) (Companies feel bad about what they've done)

Good management allows returns

Which two mechanisms are the primary ones in effect to explain firm's CSR spending? Which one leads to financial returns?

Cause-Related Marketing CRM

When charitable actions of a firm are tied directly to consumer revenue

Cause sponsorship was estimated at $1.78 billion in 2013, but worldwide advertising spending in 2013 was approximately $500 billion

What is the annual amount of money spent on cause related marketing?

Cause-related marketing is approximately .04% of advertising spending

What is this amount in relation to advertising spending? Big or small?

Brands and the cause must fit--- quality comes first

Conceptual congruence's: corporate values, target market, product positioning, mission, brand personality

Perceptual congruence: color composition, size, shape, visibility

Why is cause-related marketing so hard to get right?

Value Creation

R&D, supply chain coordination, co-creation

Activities influence the potential magnitude of the advantage

Value appropriation

patents, branding, advertising

Activities influence the amount of the advantage a firm is able to capture and the length of time the advantage persists

Firm, Society, Competitiors

Who are the main appropriators?

It seems like it would be appropriation, but its is a mix of the two

Is marketing more related to value creation or appropriation?

Beanie babies- value creation (not everyone can make)

Fidget spinner- value appropriation

Chinese company appropriating Legos

Nike selling shoes for limited time- creation

Wikipedia- everyone can use it

What do fidget spinners, Beanie Babies, Nike, and Legos tell us about marketing's role in value creation and appropriation?

Marketing strategy

Specifies a target market and marketing mix

"Which customers will we serve (segmentation and targeting)? How will we create value for them (differentiation and positioning)?"

The marketing logic by which the company hopes to create customer value and achieve profitable customer relationships

Consumers who respond in a similar way to a given set of marketing efforts

What is a market segment

Product positioning

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

Product Differentiating

Actually differentiating the market offering to create superior customer value

Marketing mix

Set of tactical tools - product, price, place, and promotion- that the firm blends to produce the response it wants in the target market

Product, price, promotion, place

What are the 4 Ps?

Omits or underemphasizes service products

Needs to include packaging as a product decision

What do the 4 A's say about the 4 P's?

product—acceptability

Price—affordability

Place—accessibility

Promotion—awareness

What kind of activities fit under each of the 4 Ps?

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

What is customer lifetime value?

The total combined CLVs of all of a company's current and potential customers

What is customer equity?

Better measure a firm's performance than current sales or market sale

What do the two metrics above allow a firm to do?

The share companies get of a customer's purchasing in their categories

What is share of customer?

It's dangerous. We are always trying to dominate the market

What is market share?

Economies of scale (when you get big, you get more efficient)

Market power

Quality of management

It is not because high market share companies can charge higher prices...

What is the benefit of market share? Why?

It has a negative relationship. It gets harder to serve a big group of customers

How is market share related to customer satisfaction?

Manage

Organize resources to achieve goals effectively, efficiently, and strategically

Accounting

Tracks revenue, cost flows, profits, etc. and communicates these to managers and owners

Finance

Acquire cash flow from investors. Evaluate and manage the firms financial risk, assets, and shareholder value