Principles of Marketing - Exam 1 Study Guide

Principles of Marketing - Exam 1 Study Guide - Chapter 1...

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Chapter 1 Marketing  – an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer  relationships in ways that benefits the organization and its stakeholders Market  – people with both the desire and the ability to buy a specific product Target market  – one or more specific groups of potential consumers toward which an organization directs its marketing program Customer relationship management (CRM)  – the process of identifying prospective buyers, understanding them intimately, and developing favorable  long-term perceptions of the organization and its offerings so that buyers will choose them in the market place Customer perceived value  – difference of cost and benefits of competitive companies Customer lifetime value  – entire stream of purchases that the customer would make in a lifetime of patronage Share of customer  – share a company gets of the customer’s purchasing in their product categories Production Era - making the product available and affordable - demand > supply = production era philosophy - continued in America through the 1920s Product Era - how to differentiate products from competitors (make better, add features) Sales Era - people won’t buy unless there is a strong promotional effort - unsought goods - large inventory (overstock) Marketing Concept Era - focus on wants/needs of customers in target market - deliver desired satisfaction more efficiently/effectively than competition - emphasizes that marketing ideas are fed into the production cycle before an item is designed rather than after it is produced - many companies found this concept very difficult Market Orientation Era - focuses on continuously collecting information about customers needs, sharing the information across departments, and using it to create customer value - firms seek to satisfy the high expectations of customers Societal Marketing Era - similar to marketing concept - also concerned with society’s well being - directly related to macromarketing (study of a nation’s goods/services to benefit society) and micromarketing (focus on how individual organizations direct  marketing activities to benefit customers) Needs  – state of felt deprivation – the “gap” between your current state and your desired state Wants  – form that a need takes Demands  – wants backed up by buying power ($$$)  The marketing mix  – consists of the 4 P’s (product, place, price, promotion) - if performance is lower than expectations, satisfaction is low - if performance is higher than expectations, satisfaction is high
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Principles of Marketing - Exam 1 Study Guide - Chapter 1...

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