Consumer-Drive Marketing

What is marketing?

The process of exploring, developing, and delivering value to satisfy the needs of a target market.

What is the alternate definition of marketing?

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

What is the primary goal of marketing?

Mutually beneficial exchanges between customers and marketers.

Who is the focal point of marketing activities?

Customers.

What do customers expect from a marketing transaction?

A reward or benefit greater than the cost they incur.

What do marketers generally expect from a marketing transaction?

Something of value, generally a profit.

What is a target market?

A specific group of customers on whom an organization focuses its marketing efforts.

What are the four marketing-mix variables?

Product, price, promotion, and distribution.

Why are marketing-mix variables considered controllable?

Because they can be managed.

What is a product?

A good, service, or idea.

What is a good?

A physical entity that you can touch.

What is a service?

The application of human and mechanical efforts to people or objects to provide tangible benefits to customers.

What are ideas in marketing?

Concepts, philosophies, images, and issues.

What does the product variable involve?

Researching customers' needs and wants and designing a product that satisfies them.

What does price establish for a product?

Its value.

What is the most flexible marketing-mix variable?

Price, because it can be changed quickly.

What is the formula for revenue?

Revenue = Price × Quantity.

How can high pricing affect a product's image?

It can establish a premium image.

What is the purpose of distribution?

To make products available in the quantities desired to as many target-market customers as possible while managing inventory, transportation, and storage costs.

What is supply chain management?

Maintaining a flow of products through logistics activities.

What is promotion?

Activities used to inform, persuade, and initiate a desired response.

What are some purposes of promotion?

Increasing awareness, educating customers about product features, and urging people to take a particular stance or action.

Is promotion limited to advertising?

No. It also includes personal selling and sales promotions.

What is value?

A customer's subjective assessment of benefits relative to costs in determining the worth of a product.

What is the customer value formula?

Customer Value = Customer Benefits − Customer Costs.

What are customer benefits?

Anything a buyer receives in an exchange.

What are examples of customer benefits?

Level of service, amenities, and atmosphere.

What are customer costs?

Anything a buyer must give up to obtain the benefits a product provides.

What are four types of customer costs?

Cost, time, effort, and risk.

How can a company reduce customers' time and effort costs?

By increasing product availability.

How can companies reduce customer risk?

By offering good basic or extended warranties, liberal return policies, and high levels of customer service.

What factors influence how customers determine value?

Expectations and previous experience, comparisons with competing products, personal preferences and emotions, and aesthetics.

How can the marketing mix enhance customers' perception of value?

By providing features or enhancements that offer benefits or by creating an image or prestige that customers consider valuable.

What is an exchange in marketing?

The provision or transfer of goods, services, or ideas in return for something of value.

What four conditions must exist for an exchange to take place?

1. Two or more parties participate and possess something the other desires. 2. The exchange provides benefit or satisfaction to both parties. 3. Each party has confidence in the other party's promise of something valuable. 4. The parties meet expectations.

What are stakeholders?

Constituents who have a stake or claim in some aspect of a company's products, operations, markets, industry, or outcomes.

What is the marketing environment?

The competitive, economic, political/legal/regulatory, technological, and sociocultural forces that surround the customer and affect the marketing mix.

What can environmental forces create for marketers?

Both threats and opportunities.

What are three ways environmental forces affect marketing?

They influence customers, determine whether and how marketing activities can be performed, and influence buyers' reactions to the marketing mix.

Can marketers control environmental forces?

No. They can plan for changes but cannot control them.

What is the marketing concept?

A managerial philosophy that an organization should try to satisfy customers' needs through a coordinated set of activities that also allows the organization to achieve its goals.

What is the major focus of the marketing concept?

Consumer satisfaction.

What mistake causes firms to fail to attract customers?

Focusing on making a product rather than helping potential customers satisfy their needs and wants.

What should organizations do to implement the marketing concept?

Determine what buyers want and use that information to develop satisfying products.

What are the three stages in the evolution of the marketing concept?

Production orientation, sales orientation, and market orientation.

What is production orientation?

An approach where products were poured into the marketplace because demand for manufactured goods was strong.

What is sales orientation?

An approach focused on selling products to many buyers as competition increased.

What activities were especially important during the sales orientation?

Personal selling, advertising, and distribution.

What is market orientation?

An organization-wide commitment to researching and responding to customer needs.

What are six values required for organizations to become more market oriented?

Trust, openness, honoring promises, respect, collaboration, and listening.

What does CRM stand for?

Customer Relationship Management.

What is Customer Relationship Management (CRM)?

Using information about customers to create marketing strategies that develop and sustain rewarding customer relationships.

What is the fundamental goal of every marketing strategy according to the notes?

Achieving the full profit potential of each customer.

What are three ways profits can be obtained through customer relationships?

Acquiring new customers, enhancing the profitability of existing customers, and extending the lifespan of customer relationships.

What should companies do with customers who have defected?

Focus on reestablishing relationships with them.

What is relationship marketing?

Establishing long-term, mutually satisfying buyer-seller relationships.

How does relationship marketing build trust?

As customers' confidence grows, the firm's understanding of customer needs increases.

How can companies retain and increase profitability through relationship marketing?

Through customer loyalty.

How can digital strategies affect customer relationships?

They allow companies to personalize customer relationships.

Approximately how much of a buyer's dollar goes toward marketing costs?

One-half.

How do nonprofit organizations use marketing?

To create, price, distribute, and promote programs that benefit particular segments of society.

Why is marketing important to businesses?

It creates revenue to sustain operations and provide financial returns to investors.

Why are profits important to businesses?

Without profit, businesses cannot perform their functions, provide jobs, or contribute to social causes.

How has technology helped global marketing?

Advances in technology and lower political and economic barriers have made marketing across national borders commonplace.

How has the internet affected smaller businesses?

Social media and the internet allow smaller businesses to achieve global reach similar to large companies.

How does marketing knowledge benefit consumers?

It gives consumers more information and therefore more power in buying decisions.

What is big data?

Massive data files that can be obtained from both structured and unstructured data.

How does technology help marketers?

It helps them understand and satisfy more customers and provides new methods to store, communicate, and share information.

How can AI affect marketing?

AI can use analytics to develop smart systems that have the potential to change the marketing environment.

What is blockchain?

A record-keeping technology that creates a decentralized database that no one can alter.

What can blockchain-enabled AI develop?

Data blocks that record ordered transactions.

What is the sharing economy?

A business model involving people operating their own businesses through companies such as Uber, Lyft, and TaskRabbit.

How have cloud computing and low-cost information technology affected businesses?

They have empowered individuals and small businesses to compete with large businesses.

What role do social responsibility and ethical conduct play in marketing?

They are part of strategic planning and the implementation of marketing activities.

What is green marketing?

A strategic process involving stakeholder assessment to create meaningful, long-term relationships with customers while maintaining, supporting, and enhancing the natural environment.

What are Certified B Corporations?

For-profit companies that have achieved private certifications regarding their social and environmental performance and contribute to environmental causes.

What is one concern regarding AI and marketing?

Predictive analytics may not consider diversity, potentially causing discrimination against some population segments.

What is another major concern with technology and marketing?

Consumer privacy.

What is one benefit of blockchain mentioned in the notes?

It can prevent fraud and provide accurate transaction records.

In what industries can you find marketing positions?

All industries.

What type of positions remain attractive when unemployment is high?

Sales positions.

Why are marketing positions considered secure according to the notes?

Because of the need to manage customer relationships.