Marketing: Creating and Capturing Customer Value

Vocabulary practice flashcards covering fundamental marketing concepts, the marketing process, strategic planning, marketing environment, research methods, consumer and business buyer behavior, and customer value-driven strategies.

Marketing

The set of strategies and activities by which companies acquire and engage customers, build strong customer relationships, and create superior customer value in order to capture value from customers in return.

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.

Market Offerings

A combination of products, services, solutions, and experiences offered to a market to satisfy a need or a want.

Marketing Myopia

The mistake of paying more attention to the specific products offered than to the customer benefits and experiences they deliver.

The Marketing Process

A five-step framework where companies create value for customers and build customer relationships in the first four steps, and capture value from customers in return in the final step.

Production Concept

The philosophy that consumers will favor products that are available and highly affordable, meaning management should focus on improving production and distribution efficiency.

Product Concept

The philosophy that consumers will favor products that offer the most in quality, performance, and innovative features, requiring continuous product improvement.

The Selling Concept vs. The Marketing Concept

The selling concept takes an inside-out view starting from the factory, focusing on existing products and heavy promotion to achieve profits through sales volume. In contrast, the marketing concept takes an outside-in view starting from the market, focusing on customer needs through integrated marketing to achieve profits through customer satisfaction.

Societal Marketing Concept

The principle that a company's marketing strategy should consider consumer wants, company requirements, consumers' long-run interests, and society's long-run interests.

Customer Relationship Management (CRM)

The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction, covering all aspects of acquiring, engaging, and growing customers.

Customer-Perceived Value

The customer's evaluation of the difference between the benefits delivered by and the costs of obtaining and using a market offering, relative to competing offerings.

Customer Satisfaction

The sense of pleasure a customer feels when a product's perceived performance matches or exceeds expectations.

Customer-Engagement Marketing

Making the brand an important part of customers' conversations and lives by fostering direct and continuous customer involvement in shaping brand conversations, experiences, and community.

Customer-Brand Advocacy

Actions by which satisfied customers initiate favorable interactions about a brand with others.

Customer-Generated Marketing

Brand exchanges created by customers themselves—both invited and uninvited—by which customers play a role in shaping their own brand experiences and those of others.

Partner Relationship Management

Working closely with partners inside and outside the company to jointly engage and bring more value to customers.

Customer Lifetime Value

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

Share of Customer

The portion of a customer's purchasing that a company gets in its product categories.

Customer Equity

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

Strategic Planning

The process of developing and maintaining a profitable long-term 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.

Business Portfolio

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

Cash Cows

Low-growth, high-market-share businesses or products that are profitable and generate cash.

Stars

High-growth, high-market-share businesses or products.

Question Marks

Low-share business units in high-growth markets that require cash to maintain or increase market share.

Dogs

Low-growth, low-market-share businesses and products.

Product/Market Expansion Grid

A portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, and diversification.

Market Penetration

Company growth by increasing sales of existing products to current market segments without changing the product.

Market Development

Company growth by identifying and developing new market segments for current company products.

Product Development

Company growth by offering modified or new products to current market segments.

Diversification

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

Internal Value Chain

The series of interlinked internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm's products.

Value Delivery Network

The network made up of the company, its suppliers, its distributors, and its customers who partner with each other to improve the performance of the entire system.

Marketing Strategy

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

Marketing Mix

The set of tactical marketing tools—product, price, place, and promotion (the four Ps)—that the firm blends to produce the response it wants in the target market.

SWOT Analysis

An overall evaluation of the company's strengths (S), weaknesses (W), opportunities (O), and threats (T).

Managing Marketing

The management process consisting of marketing analysis, planning strategic and marketing plans, implementation and organization to carry out plans, and marketing control to measure, evaluate, and take corrective action.

Marketing Return on Investment (Marketing ROI)

The net return from a marketing investment divided by the costs of the marketing investment.

Microenvironment

The actors close to the company that affect its ability to engage and serve its customers—the company itself, suppliers, marketing intermediaries, competitors, publics, and customers.

Macroenvironment

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

Customer Insights

Deep understandings of customers' stated and unstated needs and wants that become the basis for creating enduring customer value, engagement, and relationships.

Marketing Information Ecosystem (MIE)

The people, processes, and assets dedicated to assessing managers' information needs, developing needed information (internal databases, marketing intelligence, and research), and helping managers analyze and use insights.

Internal Databases

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

Competitive Marketing Intelligence

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

The Marketing Research Process

A four-step process involving: defining the problem and research objectives, developing the research plan for collecting information, implementing the research plan by collecting and analyzing data, and interpreting and reporting the findings.

Exploratory Research

Marketing research to gather preliminary information to better define problems and suggest hypotheses.

Descriptive Research

Marketing research to better describe market and consumer characteristics, such as the market potential for a product or consumer demographics and attitudes.

Causal Research

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

Ethnographic Research

A form of observational research that involves sending observers to watch consumers—usually unobtrusively—in their natural environments as they go about daily lives.

Marketing Analytics

The analysis tools, technologies, and processes by which marketers dig out meaningful patterns in big data to gain customer insights, gauge marketing performance, and improve customer experience.

Maslow's Hierarchy of Needs

A psychological pyramid showing human needs arranged in order of importance, starting at the bottom with physiological needs (hunger, thirst), followed by safety needs, social needs, esteem needs, and culminating in self-actualization needs.

Selective Attention

The tendency for people to screen out most of the information to which they are exposed.

Selective Distortion

The tendency of people to interpret information in a way that supports what they already believe.

Selective Retention

The tendency of consumers to remember good points made about a brand they favor and forget good points made about competing brands.

Cognitive Dissonance

Discomfort caused by postpurchase conflict, arising when consumers second-guess their purchase decision.

Adopter Categorization (Diffusion Process)

A classification of consumers based on relative time of adoption of an innovation: Innovators ($2.5\%$), Early adopters ($13.5\%$), Early mainstream ($34\%$), Late mainstream ($34\%$), and Lagging adopters ($16\%$).

Derived Demand

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

Buying Center

The decision-making unit of a buying organization, consisting of all the individuals and units that participate in the business decision-making process.

Straight Rebuy

A business buying situation in which the buyer reorders something without any modifications.

Modified Rebuy

A business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers.

Systems Selling

Buying a complete solution to a problem from a single seller rather than buying separate products and services from several suppliers and putting them together.

Business Buyer Decision Process

The eight-stage process of business purchasing: Problem recognition, General need description, Product specification, Supplier search, Proposal solicitation, Supplier selection, Order-routine specification, and Performance review.

Market Segmentation

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

Market-Targeting Strategies

A continuum of market coverage strategies ranging from targeting broadly to targeting narrowly: Undifferentiated (mass) marketing, Differentiated (segmented) marketing, Concentrated (niche) marketing, and Micromarketing.

Differentiation

Designing the market offering to create superior customer value that is distinct from that offered by competitors.

Positioning

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

Value Proposition

The full mix of benefits on which a brand is differentiated and positioned in the market.