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Marketing: Building Profitable Customer Connections

37 important questions on Marketing: Building Profitable Customer Connections

What is form utility?

Satisfying the wants of consumers by converting inputs into a finished form. E.g. potatoes into fries. Almost al products have some kind of form utility.

What is time utility?

Satisfies the wants of consumers by providing goods and services at a convenient time for customers. e.g. 24-hour, evening delivery, etc.

What is place utility?

Satisfies wants of customers by providing goods and services at convenient places for customers. e.g. vending machines, budget lodging at the bottom of freeways, etc.

What is ownership utility?

Satisfies the wants of customers by smoothly transferring ownership of goods and services from seller to buyer. e.g. financing options when buying a car, parcel-tracking, etc.

What are the 4 types of marketing?

1. People marketing - people are the product that you're trying to market. e.g an artist.
2. Place marketing - drawing people to a particular place. e.g city
3. Event marketing - marketing or sponsoring events like sports events or telethons
4. Idea marketing - marketing ideas that change how people think or act. don't smoke, buckle your seatbelt

What are the 4 time eras?

1. Production era
2. Selling era
3. Marketing era
4. Relationship era

What characterised the production era?

Early 1900s. Customer wasn't important yet, as with the small range of products available, every produced good was bought anyway. Priority: produce large quantities of goods as efficiently as possible.

What characterised the selling era?

1920s. Production capacity exceeded demands, around the depression and war times people didn't want to part with their money, so selling gained momentum.

What characterised the marketing era?

1950s. Product flood on the post-war market, trying to get your product bought through marketing. The marketing concept was the main idea. Delivering unmatched value to the customer is the only effective way to reach long-term profitability.

What characterises the relationship era?

Now. Long-term customer relationships is the focus. Acquiring new customers is pricier than keeping old ones, so it is cost-efficient to invest in relationships with existing customers. It can also give positive word-of-mouth promotion.

What is the marketing concept?

A business philosophy that makes customers satisfaction - now and in the future - the central focus of the entire organisation.

What is a full marketing partnership?

A partnership in which the marketer tries to gather as much information about each customer as possible, and includes the customer in key aspects of the product development process.

What is customer satisfaction?

When customers perceive that a good or service delivers value above and beyond their expectations.

What is the difference between perceived and actual value?

Having actual value alone is not enough, customers also need to think it actually has more value. This is called perceived value. Sometimes a company has a lot of perceived value (customers think their product have a lot of value) but don't have a lot of actual value (quality).

What are the 2 traps you can encounter when trying to achieve customer satisfaction?

1. Overpromising. Customer will be disappointed if your product falls short of their expectations.
2. Underpromising. Not a lot of customers will be willing to try product, which will lead to only a small base of satisfied customers, which is often not enough to sustain a business.

What are the 4 characteristics of a well-chosen target market?

1. Size - must be enough people in the group to sustain your business
2. Profitability - people must be willing to spend more than costs + marketing of product
3. Accessibility - target must be reachable through affordable channels
4. Limited competition - crowded market is tougher to crack

What are consumer marketers (B2C)?

Business-to-Consumer marketers. Marketers who direct their efforts towards people who buy the products for their own personal use. e.g. toothpaste.

What are business marketers (B2B)?

Marketers who direct their efforts toward people who are buying products to use (in)directly to make other products. e.g. lumber.

What are the 4 types of consumer market segmentation?

1. Demographic - based on measurable characteristics of people, e.g. age, income, etc.
2. Geographic - based on where consumers live, e.g. no big cars in small-street cities
3. Psychographic - based on consumer attitudes, interest and lifestyles, e.g. green cars
4. Behavioural - based on behaviour consumers towards product, e.g. heavy users

What are the 3 types of business market segmentation?

1. Geographic - based on concentration of customers, e.g. silicon valley or 'auto corridor'
2. Customer-based - based on characteristics of customers, e.g. size or type
3. Product-use-based - based on how customers use product, e.g. software package support

What is a marketing mix?

The blend of market strategies for
1. product - brand name, package design, customer service, etc.
2. price - fair price that is relative to benefits products
3. distribution - delivering to the right people, is about warehousing, selling outlets, etc.
4. promotion - communication about the product

What are the 5 key elements of the external environment?

1. Competitive environment (how are the market shares divided, what are (indirect) competitors doing?)
2. Economic environment (monitor economic change, and react to it)
3. Social/cultural environment (lifestyle, population shifts, etc.)
4. Technological environment (both on the surface (iPhone) and below (production processes)
5. Political/legal environment (changing laws, etc.)

What are indirect competitors?

Competitors that meet the same consumer needs, but with a different product.

What is a market share?

The percentage of a market controlled by a given marketer.

What is consumer behaviour?

How people act when buying, using and discarding goods for their own personal consumption, and the reasons behind their actions too.

What are the 4 elements that influence consumer behaviour?

1. cultural (culture, subculture and social class)
2. Social (family, friends, reference groups (group that gives consumers point of comparison))
3. Personal (demographics (age, etc.) and personality)
4. Psychological (Motivation, attitudes, perceptions, learning)

What are the steps in the consumer decision process?

1. Need recognition - notice you need something
2. Information search - where can I find product, etc.
3. Evaluation of alternatives - compare prices, brands, etc.
4. Purchase decision - the actual buying
5. Postpurchase behaviour - regret for spending too much, etc.

Does the consumer decision process always apply?

Not always. When there is a case of a low-involvement decision (e.g. buying a candybar), they won't go through all the steps. In case of more expensive goods however, it usually applies.

What is business buyer behaviour?

How people act when they are buying products to use (in)directly to produce other goods.

In what ways do consumers and business buyers often differentiate in behaviour?

Business buyers, having often received special training, use more rational criteria in their decision-making process. They try to minimise personal judgement and whim, unlike consumer buyers.

For what 3 causes do businesses use marketing research?

1. To identify external opportunities and threats (competition, social trends, etc.)
2. To monitor and predict customer behaviour
3. To evaluate and improve each area of the marketing mix

What are the 2 main categories of marketing data?

1. Primary data (new data that marketers compile for a specific research project)
2. Secondary data (existing data that marketers gather or purchase for a research project)

What are the advantages and disadvantages of primary data?

+ Customised to meet your needs
+ Data is fresh, not outdated
+ No one else has it - proprietary
- Often expensive
For secondary data it is the other way around

What is observation research?

Marketing research that does not require the researchers to interact with the research subject.

What is the advantage and disadvantage of survey research?

+ You can get information on what people are thinking
- People might not be honest or accurate about their motivations, etc.

What 2 factors have had a very big impact on marketing in the last few decades?

1. Surge of the social responsibility movement (marketers need to actively contribute to the needs of the broader society)
2. Emergence of internet and digital technology (caused shift in power from producer to customer)

What is green marketing?

Developing and promoting environmentally sound products and practices to gain a competitive edge

The question on the page originate from the summary of the following study material:

Introduction to Business: Processes and Context | 9781473754461 | Wiilliam M Stewart, et al

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