Everything that is highlighted in yellow is on the test Marketing Study Guide What is Marketing Numerous definitions 1 The science of exchange 2 The science of transactions 3 The science of adding value to product offerings 4 The four p s price product promotion place Book Definition Marketing is the process by which companies create value for customers and society resulting in strong customer relationshi0ps which capture value from the customers in return What is the definition of Integrated Marketing Communications Customers are contributing to the product message Examples from class Five Guys burger video United Airlines Guitar video Which of the following is not a part of the Marketing Process all of the following are a part of the Marketing Process 1 Understand the marketplace and customer needs and wants 2 Design a customer driven marketing strategy 3 Construct an integrated marketing program that delivers superior value 4 Build profitable relationships and create customer delight 5 Capture value from customers to create profits and customer equity Step 1 Understanding the Marketplace and Customer Needs Five key concepts underline this step 1 Needs wants and demands 2 Market offerings products services experiences 3 Value and satisfaction 4 Exchanges and relationships 5 Markets Needs A need is a state of deprivation Not invented by marketers Wants Needs that are influenced by culture and personality Demands Given unlimited wants and limited resources Consumers must make choices What is a product Anything that can be offered to a market to satisfy a want or need Which of the following is not a type of market offering product all of the following are types of market offerings products 1 Tangible 2 Service 3 Experience 4 Information What is the definition of value proposition A set of benefits or values that a company promises the deliver to consumers to satisfy their needs Discrete transaction a one time transaction Exchanges Relationships and Markets Marketing occurs when people decide to satisfy needs and wants through Exchange obtaining a desired object from someone by offering exchange something in return Beyond transactions the goal of marketing is to create lasting relationships with customers Value Satisfaction and Expectations Customer Value the difference between the benefits and costs of obtaining the product Satisfaction The extent to which expectations are met Expectations Anticipated outcome of a purchase Formed by Past experiences Product reviews Opinions of friends Market Information Step 2 Designing Customer Driven Strategy What is Marketing Management The art and science of choosing target markets and building profitable relationships with them Two questions for Step 2 Management Orientations 1 What is our target market What customers will we serve 2 How can we serve these customers best What is our value proposition 1 Production Orientation customers will favor products that are highly affordable and available Should focus on production and distribution Problem Lose focus of customers 2 Product Orientation Offer products that have the best of the best Problem Lose focus of customers What is myopia Short sightedness Example pink drill bits didn t satisfy customer s needs 3 Selling Orientation Customer will not buy enough of the product unless the organization undertakes a large sales and promotions effort sell as much as you can Problem Lose focus of the customer s needs 4 Market Orientation Determining the needs and wants of consumers more effectively and more efficiently than competitors Step 3 Preparing the Integrated Marketing Plan Selecting the marketing mix Product Price Place Promotion Marketing mix and programs discussed in detail in future chapters Step 4 Building Profitable Customer Relationships Low Frequency High Frequency High Profitability Low Profitability Try to get these customers to come more These are your best customers reward them often These customers will follow promotions ensure your promotions make money Some of these quests have the potential to become more profitable Relationship Marketing Building strong social and economic ties with customers by delivering high quality products and services CRM Customer Relationship Management Customer Value Building Tools Financial benefits Structural ties social and financial benefits Social and financial benefits Examples Jersey Mike s punch card What is a customer called that is on a first name basis A client Step 5 Capturing Value Increasing customer loyalty and retention Satisfaction vs delight lifetime value Increase share of customer Share of customer is the share of the customer s purchase in the product category Building customer equity Customer equity is the lifetime value of all current and future customers Lifetime Value of the Customer Losing a customer means losing more than a single sale It means losing the entire stream of purchases that the customer would make over a lifetime of patronage A company can lose money on a specific transaction but still benefit greatly from a long term relationship This is one of the reasons successful companies empower employees to resolve customer complaints KEY TERMS FOR CHAPTER 1 Customer Equity the discounted lifetime values of all the company s current and potential customer Customer expectations based on past buying experiences the opinions of friends and market information Customer Relationship Management CRM involves managing detailed information about individual customers and carefully managing customer touch points in order to maximize customer loyalty Customer Touch Point any occasion on which a customer encounters the brand and product from actual experience to personal or mass communications to causal observations Customer value the difference between the benefits that the customer gains from owning and or using a product and the costs of obtaining the product Demands human wants that are backed by buying power Exchange the act of obtaining a desired object from someone by offering something in return Hospitality Industry Made up of those businesses that offer one or more of the following accommodation prepared food and beverage service and or entertainment Human need a state of felt deprivation in a person Human want the form that a human need takes when shaped by culture and individual personality Lifetime value the lifetime value of a customer is the stream of profits a customer will create over the life of his or her relationship