Chapter 1 company s customers 1 Customer Equity The total combined customer lifetime values of all of the 2 Customer Lifetime Value The value of the entire stream of purchases a customer makes over a lifetime of patronage 3 Customer Perceived Value Not all customers view a market offerings value in the same way Subjective a Example Starbucks 4 Customer Relationship Management Managing detailed information about individual customers and carefully managing customer touch points to maximize customer loyalty a Building and managing profitable customer relationships is key i Attracting new customers while retaining and expanding relationships with current customers 5 Customer Satisfaction Extent to which product s perceived performance matches or exceeds buyer s expectations a Satisfied customers will buy again and tell others good experiences i Long term Brand Loyalty b Dissatisfied customers won t buy again and tell many others about their bad experience 6 Demands Backed by Buying Power 7 Exchange Act of obtaining a desired object from someone by offering 8 9 something in return Industry A group or sellers or providers of a similar product or service Intermediaries Firms that help an organization promote sell and distribute its products services to customers a Resellers b Physical distribution firms c Marketing Service Agencies d Financial Intermediaries 10 Market A set of actual and potential buyers for a product or service 11 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 12 Marketing Concept To be successful an organization needs to determine the needs and wants of specific target markets and deliver the desired satisfaction more effectively and efficiently than competitors a Therefore marketers should make what they can sell and NOT try to sell what they can make 13 Marketing Management The art and science of choosing target markets and building profitable relationships with them 14 Marketing Myopia The mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products 15 Market Offerings Some combination of products services information or experiences offered to a market to satisfy a need or want a Needs and Wants are fulfilled through Market Offerings 16 Needs States of felt deprivation Physical social individual 17 Product Concept Consumers favor products that offer most quality performance and features improvements a Organizations should focus on making continuous product b Can lead to Marketing Myopia focusing on what you make not what customers actually want 18 Production Concept Consumers will favor products that are available or 19 Selling Concept Getting customers to buy what you have decided to make highly affordable or do a Hard Sell is used to persuade customers to buy something even if they don t want it b Example Life Insurance used cars blood donations 20 Share of Customer Portion of the customers purchasing that a company gets in its product categories 21 Societal Marketing Concept Company should make good marketing decisions by considering consumers wants company s requirements consumers long term interests and society s long run interests 22 Wants the form human needs take as they are shaped by culture and personality Chapter 2 matrix company 1 Boston Consulting Group BCG Company that created the Boston Consulting Group BCG approach a A company classifies all its SBUs according to the growth share 2 Business Portfolio Collection of businesses and products that make up the 3 Differentiation Competitive advantages 4 Diversification Start up new or acquire products businesses outside organization s current products and markets 5 Downsizing Reduction of business portfolio by eliminating products or business units that are not profitable or no longer fit firm s strategy a Example GM s sale of Hummer Saab 6 Growth Share Matrix A portfolio planning method that evaluates a company s SBUs in terms of its market growth rate and relative market share a Cash Cows Low growth high market share SBUs that are established and successful b Stars High growth high market share SBUs c Question Marks Low market share SBUs in high growth markets d Dogs Low growth low market share SBUs e Problems With Matrix Approach i Defining SBUs and measuring market share ii Assumes SBUs are independent may be other links or connections iii Focuses on sources and uses of cash iv Considers current businesses not future opportunities 7 Market Development Identify and develop new market segments for current products changing product 8 Market Penetration Increasing sales to current market segments without 9 Market Segment Group of consumers who respond in a similar way to a given set of marketing efforts 10 Market Segmentation Dividing the markets into distinct groups based on needs characteristics or behaviors 11 Market Targeting Selecting one or more markets to enter based on 12 Marketing Mix Set of tactical marketing tools that the firm blends to produce the response it wants in the target market attractiveness a 4 P s i Product ii Price iii Place iv Promotion 13 Marketing Strategy The marketing logic by which the company hopes to create customer value and achieve profitable customer relationships 14 Mission Statement Organization s Purpose What it wants to accomplish 15 Portfolio Analysis The process by which management evaluates the products and businesses that make up that company 16 Positioning How offering is viewed in the mind s of consumers a Example expect more pay less 17 Product Development New or modified products to current market or be segments 18 Product Market Expansion Grid Tool for identifying company growth opportunities using 4 different strategies a Market Penetration b Market Development c Product Development d Diversification 19 Strategic Business Unit SBU A business unit within the overall corporate identity which is distinguishable from other business because it serves a defined external market where management can conduct strategic planning in relation to products and markets 20 Strategic Planning The process of developing and maintaining strategic fit between an organization s goals and its capabilities resources and the changing opportunities in its external environment a Steps in Strategic Planning i Define the Mission Statement ii Setting Firm Objectives and