BOM chp 11

relationship marketing

establishing long-term, mutually satisfying buyer–seller relationships

Customer relationship management (CRM)

using information about customers to create marketing strategies that develop and sustain desirable customer relationships

customer lifetime value (CLV)

a measure of a customer’s worth (sales minus costs) to a business over one’s lifetime

Utility

the ability of a good or service to satisfy a human need

Form utility

utility created by converting production inputs into finished products

Place utility

utility created by making a product available at a location where customers wish to purchase it

Time utility

utility created by making a product available when customers wish to purchase it

Possession utility

utility created by transferring title (or ownership) of a product to a buyer

marketing concept

a business philosophy that a firm should provide goods and services that satisfy customers’ needs through a coordinated set of activities that allow the firm to achieve its objectives.

market

a group of individuals or organizations, or both, that need products in a given category and that have the ability, willingness, and authority to purchase them

Consumer markets

consist of purchasers and/or household members who intend to consume or benefit from the purchased products and who do not buy products to make profits.

Business-to-business (B2B) (industrial markets)

are grouped broadly into producer, reseller, governmental, and institutional categories. These markets purchase specific kinds of products for use in making other products for resale or for day-to-day operations.

Producer markets

consist of individuals and business organizations that buy certain products to use in the manufacture of other products.

Reseller markets

include intermediaries, such as wholesalers and retailers, that buy finished products and sell them for a profit.

Government markets

consist of federal, state, county, and local governments that buy goods and services to maintain internal operations and to provide citizens with such products as highways, education, water, energy, and national defense.

Institutional markets

include churches, not-for-profit private schools and hospitals, civic clubs, fraternities and sororities, charitable organizations, and foundations. Their goals are different from the typical business goals of profit, market share, or return on investment.

marketing strategy

a plan that will enable an organization to make the best use of its resources and advantages to meet its objectives

marketing strategy consists of…

1. the selection and analysis of a target market and

2. the creation and maintenance of an appropriate marketing mix

marketing mix

a combination of product, price, distribution, and promotion developed to satisfy a particular target market

target market

a group of individuals or organizations, or both, for which a firm develops and maintains a marketing mix suitable for the specific needs and preferences of that group

undifferentiated approach

directing a single marketing mix at the entire market for a particular product

market segment

a group of individuals or organizations within a market that shares one or more common characteristics

market segmentation

the process of dividing a market into segments and directing a marketing mix at a particular segment or segments rather than at the total market

concentrated market segmentation

single marketing mix is directed at a single market segment.

differentiated market segmentation

multiple marketing mixes are focused on multiple market segments.

Product

• most visible marketing mix element

  decisions typically relate to the product’s design, functions, features, brand name, packaging, and warranties.

Pricing

• concerned with both base prices and discounts

• decisions are intended to achieve particular goals, such as to maximize profit or to make room for new models.

Distribution

• involves not only transportation and storage, but also intermediaries.

• Companies may have to alter the distribution ingredient over time.

Promotion

focuses on providing information to target markets. The major forms of promotion are advertising, personal selling, sales promotion, and public relations.

market share

the percentage of a market that actually buys a specific product from a particular company.

external marketing environment:

• Economic forces—the effects of economic conditions on customers’ ability and willingness to buy;

• Sociocultural forces—influences in a society and its culture that result in changes in attitudes, beliefs, norms, customs, and lifestyles;

• Political forces—influences that arise through the actions of political figures;

• Competitive forces—the actions of competitors, who are in the process of implementing their own marketing plans;

• Legal and regulatory forces—laws that protect consumers and competition and government regulations that affect marketing; and

• Technological forces—technological changes that can create new marketing opportunities or cause products to become obsolete rapidly.

marketing plan

a written document that specifies an organization’s resources, objectives, strategy, and implementation and control efforts to be used in marketing a specific product or product group

marketing analytics

the collection, organization, and interpretation of data about marketing performance

Marketing research

the process of systematically gathering, recording, and analyzing data concerning a particular marketing problem

primary data

directly from consumers when they conduct mail, telephone, personal interview, online, focus group, or social networking surveys or conduct direct observation of consumer behavior.

secondary data

sources compiled inside or outside of the firm to help support marketing research initiatives. These sources often include commercial and government reports as well as internal databases.

Buying behavior

the decisions and actions of people involved in buying and using products

Consumer buying behavior

the purchasing of products for personal or household use, not for business purposes

Business buying behavior

the purchasing of products by producers, resellers, governmental units, and institutions

routine decision making

involves very little search or decision-making effort

limited decision making

purchases made occasionally, or when they need more information about an unknown product in a well-known product category.

extended decision making.

When buying an unfamiliar or expensive item, or one that is seldom purchased,