Textbook Study Guide

Textbook Study Guide - Chapter 1: An Overview of Marketing...

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Chapter 1: “An Overview of Marketing” 1. What does the idea of “market orientation” entail, and what are its implications? The idea that the social and economic justifications for an organization’s existence is the satisfaction of customer wants and needs while meeting organizational objectives It is based on an understanding that a sale doesn’t depend on an aggressive sales force, but rather on a customer’s decision to purchase a product What a business thinks it produces is not of primary importance to its success. Instead, what customers think they are buying—the perceived value—defines a business o Focusing on customer wants and needs so that the organization can distinguish its product(s) from competitors’ offerings o Integrating all the organization’s activities, including production, to satisfy these wants o Achieving long-term goals for the organization by satisfying customer wants and needs legally and responsibly Achieving a market orientation involves obtaining information about customers, competitors, and markets o Examining the information from a total business perspective o Determining how to deliver superior customer value o Implementing actions to provide value to customers Understanding your competitive arena and competitors’ strengths and weaknesses is a critical component of a market orientation 2. What are some characteristics of firms “interested in customer value?” Customer value is the relationship between benefits and the sacrifice necessary to obtain those benefits o Customer value is simply not a matter of high quality (a high-quality product that is available only at a high price will not be perceived as a good value, nor will bare-bones service or low-quality goods selling for a low price) Marketers interested in customer value . . . o Offer products that perform o Earn trust o Avoid unrealistic pricing o Give buyers facts o Offer organization-wide commitment in service and after-sales support 3. Within the context of customer satisfaction, what did the study on customer attrition show? Customer satisfaction is the customer’s evaluation of a good or service in terms of whether it has met their needs and expectations Keeping current customers satisfied is just as important as attracting new ones and a
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lot less expensive One study showed that . . . o Reducing customer attrition by just 5-10% could increase annual profits by as much as 75% Firms that have a reputation for delivering high levels of customer satisfaction do things differently from their competitors o Top management is obsessed with customer satisfaction, and employees throughout the organization understand the link between their job and satisfied customers o The culture of the organization is to focus on delighting customers rather than on selling products ex. Nordstrom’s impeccable reputation for customer service 4. What does the strategy of “relationship management” involve? Relationship marketing is a strategy that focuses on keeping and improving
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Textbook Study Guide - Chapter 1: An Overview of Marketing...

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