Marketing 3250 Midterm Study Guide Chapter 1 Marketing Creating and Capturing Customer Value What is marketing o The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return o Process 1st 4 steps create value for customers last step captures value from customers Understand marketplace and customer needs and wants Design a customer driven marketing strategy Construct an integrated marketing program that delivers superior value Build profitable relationships and create customer delight Capture value from customers to create profits and customer equity Customer Needs Wants and Demands o Customer Needs states of deprivation Physical food clothing warmth and safety Social belonging and affection Individual knowledge and self expression personality Marketing Myopia o Customer Demands wants backed by buying power o Customer Wants form that needs take as they are shaped by culture and individual o Focusing only on existing wants and losing sight of underlying consumer needs Customer dissatisfaction satisfaction and delight o Satisfaction product s perceived performance matches the buyer s expectations o Dissatisfaction product s performance falls short of expectations o Delight performance exceeds expectation Customer Equity the total combined customer lifetime values of all of the company s customers Customer Lifetime Value value of the entire stream of purchases a customer makes over a lifetime of patronage What role does creating and capturing customer value play in marketing o Builds strong customer relationships o Path to sales and profits Market Orientations o Production Concept idea that consumers will favor products that are available and highly Company should focus on improving production and distribution efficiency o Product Concept consumers will favor products that offer the most quality performance affordable and features Company should devote its energy to making continuous product improvements o Selling Concept consumers won t buy enough of the firm s products unless the firm undertakes a large scale selling and promotion effort o Marketing Concept philosophy in which achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than the competitors do o Societal Marketing Concept company s marketing decisions should consider consumers wants the company s requirements consumers long run interests and society s long run interests Customer Driven Marketing o Find attract keep and grow target customers by creating delivering and communicating superior customer value o Who will company serve Market segmentation Target marketing o How will it serve targeted customers Differentiation Positioning Chapter 2 Company and Marketing Strategy Partnering to Build Customer Relationships Steps in Strategic Planning o Define company mission o Set company goals and objectives o Design business portfolio o Plan marketing and other functional strategies What is a firm s mission environment o A statement of the organization s purpose what it wants to accomplish in the larger o Organization s purpose what it wants to accomplish in the larger environment o What business are we in What customers should we serve How should we develop the firm s capabilities and focus its efforts How do an organization s goals relate to its mission o Goals measure how well the organization s mission is being accomplished o Organizations set their goals objectives from their mission statement The company needs to turn its mission statement into detailed supporting objectives for each level of management Each manager should have objectives and be responsible for reaching them 42 o Boston Consulting Group BCG Matrix A portfolio planning method that evaluates a company s SBU s strategic business unit in terms of market growth rate and relative market share Design Business Portfolio Star high growth high share businesses or products Cash cow low growth high share businesses or products Question mark low share business units in high growth markets Dogs low growth low share businesses or products o Under the classic BCG portfolio planning approach the company invests funds from mature successful products and businesses cash cows to support promising products and businesses in faster growing markets stars and question marks hoping to turn them into future cash cows 45 o Product Market Growth Matrix Identify growth opportunities Market penetration increase sales of existing products to existing markets Market development introduce existing products to new markets Product development selling new products to existing markets Diversification emphasize both new products and new markets o An overall evaluation of the company s strengths S weaknesses W opportunities O SWOT Analysis and threats T Customer Driven Marketing Strategy o Market Segmentation dividing a market into distinct groups of buyers who have different needs characteristics or behaviors and who might require separate products or marketing programs o Market Targeting the process of evaluating each market segment s attractiveness and selecting one or more segments to enter o Positioning arranging for a product to occupy a clear distinctive and desirable place relative to competing products in the minds of target consumers 4 P s of Marketing Marketing Mix o Product good service offered to target market o Price o Place distribution activities that make product available to target consumers o Promotion communicate merits of the product and persuade target customers Chapter 3 Analyzing the Marketing Environment Microenvironment actors close to the company that affect its ability to serve its customers o Company o Suppliers o Marketing intermediaries firms that help the company promote sell and distribute its goods to final buyers o Customer markets o Competitors o Publics any group that has an actual or potential interest in or impact on an organization s ability to achieve its objectives Financial Media Government Citizen action Local General Internal Macroenvironment larger societal forces that affect the microenvironment o Major Factors in the Macroenvironment Demographic Environment study of human populations in terms of size density location age gender race occupation and other statistics Changing age structure o Baby boomers post WW2 wealthiest generation think younger o Generation X less materialistic
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