Chapter 1 Review Notes
1. Define marketing and discuss how it is more than just “telling and selling.”
Marketing is managing profitable customer relationships. The twofold goal of marketing is to attract new customers by promising superior value and to keep and grow current customers by delivering satisfaction. Hence, marketing is defined as the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. Today, marketing must be understood not in the old sense of making a sale—“telling and selling”—but in the new sense of satisfying customer needs. If the marketer understands consumer needs; develop products and services that provide superior customer value; and prices, distributes, and promotes them effectively, this goal will be achieved easily.
2. Marketing has been criticized because it “makes people buy things they don’t really need.” Refute or support this accusation.
The most basic concept underlying marketing is that of human needs. Human needs are states of felt deprivation. They include basic physical needs for food, clothing, warmth, and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression. These needs were not created by marketers; they are a basic part of the human makeup. Wants are the form human needs take as they are shaped by culture and individual personality. Wants are shaped by one’s society and are described in terms of objects that will satisfy needs. Although marketers do not create customers’ needs, they may influence their wants.
3. Discuss the two important questions the marketing manager must answer to design a winning marketing strategy. How does the manager go about answering these questions
To design a customer-driven marketing strategy, the marketing manager must answer two important questions: What customers will we serve (what’s our target market)? and How can we serve these customers best (what’s our value proposition)? The company must first decide who it will serve—that is, the target market. It does this by dividing the market into segments of customers (market segmentation) and selecting which segments it will go after (target marketing). Some people think of marketing management as finding as many customers as possible and increasing demand. But marketing managers know that they cannot serve all customers in every way. By trying to serve all customers, they may not serve any customers well. Instead, the company wants to select only customers that it can serve well and profitably. Ultimately, marketing managers must decide which customers they want to target and on the level, timing, and nature of their demand. Simply put, marketing management is customer management and demand management. The company must also decide how it will serve targeted customers—how it will differentiate and position itself in the marketplace. A company’s value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs.
4. What are the five different marketing management orientations? Which orientation do you believe Apple follows when marketing products such as the iPhone and iPad?
The five alternative concepts under which organizations design and carry out their marketing strategies are: the production, product, selling, marketing, and societal marketing concepts. 1) The production concept holds that consumers will favor products that are available and highly affordable. Therefore, management should focus on improving production and distribution efficiency. 2) The product concept holds that consumers will favor products that offer the most in quality, performance, and innovative features. Under this concept, marketing strategy focuses on making continuous product improvements. 3) The selling concept holds that consumers will not buy enough of the firm’s products unless it...
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