Ch 1 - Creating Customer Relationships and Value through Marketing Flashcards
Learning Objectives and Key Terms
Define marketing and identify the diverse factors influencing marketing activities.
Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. This definition relates to two primary goals of marketing: (a) discovering the needs of prospective customers and (b) satisfying them. Achieving these two goals also involves the four marketing mix factors largely controlled by the organization and the five environmental forces that are generally outside its control.
Explain how marketing discovers and satisfies consumer needs.
The first objective in marketing is discovering the needs and wants of consumers who are prospective buyers and customers. This is not easy because consumers may not always know or be able to describe what they need and want. A need occurs when a person feels deprived of basic necessities such as food, clothing, and shelter. A want is a need that is shaped by a person’s knowledge, culture, and personality. Effective marketing can clearly shape a person’s wants and tries to influence what he or she buys. The second objective in marketing is satisfying the needs of targeted consumers. Because an organization obviously can’t satisfy all consumer needs, it must concentrate its efforts on certain needs of a specific group of potential consumers or target market—one or more specific groups of potential consumers toward which an organization directs its marketing program. Having selected its target market consumers, the organization then takes action to satisfy their needs by developing a unique marketing program to reach them.
Distinguish between marketing mix factors and environmental forces.
Four elements in a marketing program designed to satisfy customer needs are product, price, promotion, and place. These elements are called the marketing mix, the four Ps, or the controllable variables because they are under the general control of the marketing department. Environmental forces, also called uncontrollable variables, are largely beyond the organization’s control. These include social, economic, technological, competitive, and regulatory forces.
Explain how organizations build strong customer relationships and customer value through marketing.
The essence of successful marketing is to provide sufficient value to gain loyal, long-term customers. Customer value is the unique combination of benefits received by targeted buyers that usually includes quality, price, convenience, on-time delivery, and both before-sale and after-sale service. Marketers do this by using one of three value strategies: best price, best product, or best service.
Describe how today’s customer relationship era differs from prior eras.
U.S. business history is divided into four overlapping periods: the production era, the sales era, the marketing concept era, and the current customer relationship era. The production era covers the period up until the 1920s, when buyers were willing to accept virtually any goods that were available. The central notion was that products would sell themselves. The sales era lasted from the 1920s to the 1960s. Manufacturers found they could produce more goods than buyers could consume, and competition grew, so the solution was to hire more salespeople to find new buyers. In the late 1950s, the marketing concept era dawned when organizations adopted a strong market orientation and integrated marketing into each phase of their business. In today’s customer relationship era, organizations seek continuously to satisfy the high expectations of customers—an aggressive extension of the marketing concept era.
customer value
The unique combination of benefits received by targeted buyers that include quality, convenience, on-time delivery, and both before-sale and after-sale service at a specific price. p. 10
customer value proposition
A cluster of benefits that an organization promises customers to satisfy their needs. p. 9
environmental forces
The uncontrollable forces in a marketing decision involving social, economic, technological, competitive, and regulatory forces. p. 9
exchange
The trade of things of value between a buyer and seller so that each is better off after the trade. p. 5
market
People with both the desire and the ability to buy a specific offering. p. 8
market orientation
An organization that focuses its efforts on (1) continuously collecting information about customers’ needs, (2) sharing this information across departments, and (3) using it to create customer value. p. 14
marketing
The activity for creating, communicating, delivering, and exchanging offerings that benefit its customers, the organization, its stakeholders, and society at large. p. 5
marketing concept
The idea that an organization should (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization’s goals. p. 13
marketing mix
The marketing manager’s controllable factors—product, price, promotion, and place—that can be used to solve a marketing problem. p. 9
marketing program
A plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers. p. 11
