Chapter 1: Marketing: Creating And Capturing Customer Value

Front 1

What is the aim of marketing?

Back 1

To create value for the customer and to capture value from customers in return.

Front 2

What does strong companies (like H&M) have in common?

Back 2

They are strongly customer focused and they are heavily committed to marketing.

Front 3

What is one definition of marketing?

Back 3

It is managing profitable customer relationships.

Front 4

What is the twofold goal of marketing?

Back 4

1. Attract new customers by promising superior value
2. To keep and grow current customers by delivering satisfaction

Front 5

What is the old way of marketing?

Back 5

Telling and selling

Front 6

What is the new way of marketing?

Back 6

Satisfying customer needs.

Front 7

What is the marketer's tasks?

Back 7

Understand customer needs
Develop products that provide superior customer value
Price, distribute and promote the products effectively

Front 8

Briefly describe the marketing process.

Back 8

In the first four steps, the company tries to understand customers, create customer value and build strong customer relationships. In the fifth step, companies reap the rewards of creating superior customer value.

Front 9

Name the five steps of marketing.

Back 9

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

Front 10

Name the five core customer and marketplace concepts.

Back 10

1. Needs, wants and demands
2. Market offerings (products, services and experiences)
3. Value and satisfaction
4. Exchanges and relationships
5. Markets

Front 11

Describe customer needs, wants and demands.

Back 11

• Human needs are states of felt deprivation. They include physical, social and individual
• Wants are shaped by the culture and individual personality
• When backed by buying power, wants become demands. Given their wants and resources, people demand products with benefits that add up to the most value and satisfaction.

Front 12

Describe market offerings.

Back 12

Market offerings are some combination of products, services, information or experiences offered to a market to satisfy a need or want.

Front 13

What is marketing myopia?

Back 13

Marketing myopia is the mistake of paying more attention the specific products a company offers than to the benefits and experiences produced by those products. Sellers that suffer from this focus only on what the customers wants and lose sight of underlying customer needs.

Front 14

Describe customer value and satisfaction

Back 14

Marketers must be careful to set the right level of expectations.
- Too low: fail to attract new customers
- Too high: Customers are disappointed

Front 15

Describe exchanges and relationships.

Back 15

Marketing occurs when people decide to satisfy needs and wants through exchange relationships. Exchange is the act of obtaining a desired object from someone by offering something in return.

Front 16

Describe markets.

Back 16

A market is the set of actual and potential buyers of a product. These buyers share a particular need or want that can be satisfied through exchange relationships.

Front 17

Explain what "marketing management is the art and science of choosing target markets and building profitable relationships with them" means?

Back 17

Art: the importance of understanding the marketplace
Science: the need for a systematic gathering of knowledge about what is happening in the marketplace.

Front 18

What is the aim of marketing management?

Back 18

To find, attract, keep and grow target customers by creating, delivering and communicating superior customer value.

Front 19

Which two questions need to be answered in order to design a great marketing strategy?

Back 19

1. What customers will we serve (target market)?
2. How can we serve these customers best (what’s our value proposition)?

Front 20

How can a firm create a value proposition?

Back 20

To create a value proposition, the firm must create a need-satisfying market offering (product), it must decide how much it will charge for the offering (price), and how it will make the offering available to target customers (place). It also must communicate with target customer about the offering and persuade them of it merits (promotion).

Front 21

How do firms choose value proposition?

Back 21

1. The production concept: improving production and distribution efficiency
2. The product concept: devote energy to making continuous product developments
3. The selling concept: the idea that consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort. The company is trying to sell what the company makes rather than what the customer wants.
4. The marketing concept: achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfaction better than competitors do.
5. The societal marketing concept: the idea that a company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-term interests, and society’s long-term interests.

Front 22

Name two customer selection processes.

Back 22

- Market segmentation
- Target marketing

Front 23

What is customer relationship management (CRM)?

Back 23

The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, keeping and growing customers.

Front 24

What is customer perceived value?

Back 24

Customer-perceived-value is the customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers.

Front 25

Which challenges can new communication introduce to the company?

Back 25

They give customers more power and control. Now firms must create marketing by attraction, which means creating market offerings and messages that involve consumers rather than interrupt them. This is called consumer-generated marketing.

Front 26

Describe partner customer lifetime value.

Back 26

The value of the entire stream of purchases a customer makes over a lifetime of patronage.

Losing a customer means more than losing a sale, it means losing the entire stream of purchases that the customer would make over a lifetime of patronage, in addition to the image losses that the customers may express if the company doesn’t live up to the expectations.

Front 27

Describe customer equity.

Back 27

It is the aim of customer relationship management, and it is the total combined customer lifetime values of all of the company’s customers (current and potential).

Front 28

Name the four relationship groups that a customer can be divided into.

Back 28

Butterflies – a good fit between company’s offerings and customer’s needs, this group has high profit potential
High profitability, short-term customers

True friends – a good fit between company’s offerings and customer’s needs: highest profit potential
High profitability, long-term customers

Strangers – little fit between company’s offerings and customer’s needs: lowest profit potential. Don’t invest in them
Low profitability, short-term customers

Barnacles – limited fit between company’s offerings and customer’s needs: low profit potential
Low profitability, long-term customers

Front 29

Explain the information revolution.

Back 29

The new marketing revolution is mainly technology-driven in the last years. Marketers learn about and track customers in another way than they used to do. The new information environment means that marketers can no longer expect consumers to seek them out, nor can they always control the conversations taking place about their brand.