Marketing 311 Study Guide Midterm 1

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1. Managing customers as assets
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* Building the right relationships with the right customers involves treating customers as assets that need to be managed and maximized * Different types of customers require different relationship management strategies * Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior value and satisfaction *

2. Marketing Mix (4 P’s)
* Product, price, place and promotion—the controllable set of activities that a firm uses to respond to the wants of its target markets * Product- goods, services and ideas
* Price-everything the buyer gives up (time, energy, money) in exchange for the product * Place- all the activities necessary to get the product to the right customer when that customer wants it. * Supply chain management- the set of approaches and techniques that firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and other firms involved in the transaction, such as transportation companies into a seamless value chain. This allows merchandise to be produced and distributed in the right quantities, to the right place, and at the right time. * Promotion- Communicating the value of a product to its customers. * 3. Consumer decision making process-

* Need Recognition- consumers recognize that they have an unsatisfied need and want to go from their needy state to a desired state. The bigger this gap is=the greater the need recognition. * Functional needs- pertains to the performance of a product or service. * Psychological needs- pertain to the personal gratification consumers associate with a product or service. **shoes are needed to keep feet clean. $500 shoes satisfy a psychological need. * THE KEY TO SUCCESSFUL MARKETING: establishing a balance between these two needs that best appeals to that firm’s target market * Search For Information- second step is to search for info about various options that will satisfy the need. The length of time spent on this will relate to how much risk is involved should you choose the wrong option. * Internal search for information- the buyer examines his own memory and knowledge about the option. * External search for information- buyer seeks information from outside himself to make a decision. Talking with friends, family, sales people, research online… * Factors the affect consumer’s’ search process

* Perceived Benefits vs. Perceived Costs – is it worth the time and effort? If there is high risk (buying a house) people will spend more time researching. * The Locus of Control – people with internal locus control believe they have control over the outcomes of their actions. These people do more researching. People with external locus of control believe that fate and external factors control outcomes. It doesn’t matter to them how long they spend searching. * Actual or Perceived Risk- Performance, Financial and psychological risks influence how long and how much research will be done. * Performance Risk- risk of getting a bad (poorly performing) product. * Financial Risk- risk with money outlay. Warranties reduce that risk * Psychological risks- how people feel if a product does not convey the right image * Type of Product or Service- specialty, shopping, and convenience products * Specialty goods and services- people have a strong preference and will expend time looking for the best supplier (prius vs other hybrid…) * Shopping goods and services- going from store to store looking for a product (perfume, shoes….) * Convenience goods and services- things that do not require research and are often purchases without very much thought (bread, soap…) * Evaluation of...
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