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DEFINITIONS

Customer value: benefits a customer receives from buying and using a good of service in relation to the costs and sacrifices of buying and using it.

market value: qualities that set you apart from others and abilities other people want and need.

marketing: activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large. Creating value aligned with organizational objectives through sustainable strategy.

target markets: the group(s) of consumers or customers on which an organization focuses its marketing plan and toward which it directs its marketing efforts.

stakeholders: people or organizations who influence or are influenced by marketing decisions

exchange: the process by which some transfer of value occurs between a buyer and a seller

marketing concept: a business orientation that focuses on achieving organizational objectives by understanding customer needs, and creating and delivering value in exchanges that satisfy the needs of all parties --> key concept that organizations exist to create value for consumers

need: the recognition of any difference between a consumer's actual state and some ideal or desired state.

want: the desire to satisfy needs in specific ways that are culturally and socially influenced.

benefit: the outcome sought by a customer that motivates buying behavior. Satisfies a need or want

demand: customers' desire for products coupled with the resources to obtain them. Example: Brand new BMW. People who want the car - the people who cannot afford to buy the BMW = DEMAND

market: all customers and potential customers who share a common need that can be satisfied by a specific product, who have the resources to exchange for it, who are willing to make the exchange, and who have the authority to make the exchange.

marketplace: any location or medium used to conduct an exchange. An exchange occurs

lifetime value of a customer: how much profit companies expect to make from a particular customer, adding the contribution of each and every purchase s/he will make from them now and in the future and subtracting the cost to the company of maintaining this relationship.

Product: any good, service or idea that can be marketed. GOOD: tangible item SERVICE: intangible. Can be exchanged directly between the producer and the customer

business to business marketing: the marketing of those goods and services that business and organization customers need to product other goods and services, for resale or to support their operation.

industrial goods: goods individuals or organizations buy for further processing or for their own use when they do business

marketing principles encourage people to endorse ideas or change their behaviors in positive ways

strategy: set of decisions that explain what an organization is going to do in order to achieve its objectives

tactics: the decisions that explain how the strategies will be implemented

marketing segment: a distinct group of customers within a larger market who have similar needs, wants, preferences, and behaviors, who seek similar product solutions, and whose needs differ from other customers in the larger market

market segmentation: a process of dividing the overall market into groups of consumers who seek very different solutions for their needs and wants than other groups of consumers.

mass market: all possible customers in a market, regardless of the differences in their specific needs and wants. Targeting to the mass market is usually not viable in the long run.

positioning: how an organization wants its brand to be known to its customers as being different and better than competing brands

distinctive competency: a capability of a firm that is superior to that of its competition. First step of positioning.

differential benefit: providing an outcome or result valued by customers that competitors are not able to offer as well. Second step: turning the distinctive competency into a differential benefit. Doesn't mean you're just offering something different.

Brand personality: final step in positioning. a distinctive image that captures a good or service's character and benefits.

Marketing mix: a combination of the product itself, the price of the product, the place where it is made available, and the activities that introduce it to consumers, which creates a desired response among a set of predefined customers.

four p's: product, price, promotion, and place. "fifth p": people. these elements represents an offer of value to the consumer--what the customer will receive in an exchange

product: it's a good, service, idea, place, person - whatever is offered for exchange. Strategy beings with objectives: what did you want to achieve with your product decision. Make decisions about what they are going to offer the customer: key features, functions, design and other attributes. Also include branding strategy's.

price: seller's assignment of value to a product. Agreement between a buyer and seller on a product's economic value. Start off with pricing objectives - what do you want to accomplish with your pricing decisions? (ex. do you want to be a luxury brand? do you want to increase market share?) With different objectives you have different pricing policies (ex. everyday low prices at Walmart. P&G determines price by what other countries can afford). Price point have to take in consideration the cost of creating and delivering the product, competitors' prices and what the customer is willing to pay. Then you have the pricing terms and conditions: when does it need to be paid, how can it be paid, are there any special deals or discounts?

place: (also known as distribution) availability of the product to the customer at the desired time and location. Also known has the channels of distribution --> firms that work together to get a product from a producer to a consumer. (ex. retailers, outlets, websites). Need to start with some distribution decisions like are you trying to make the product as widely available as possible, minimize the cost of getting the product to the customer, or make it easy for customers to compare your product with others. Need to decide on a distribution system: what type will be created, how many and what types of channel partners will be involved. Supply chain management: involves a systems and processes to ensure efficient and effective value creation, from the sourcing of raw materials to the customer receiving the value. Includes logistics, physical distribution of goods etc

promotion: the coordination of communication efforts by a marketer to influence consumers or organizations about goods, services, or ideas. Starts with deciding the audience (audience is are the receivers of the communication), or the target of the communication, not the communication objective. Once you've decided on your audiences, design different promotion strategies for each audience (communication objective). What kind of message do you want to send to your audience? Then need to decide on the approach to the strategy. Need to decide on the key messages and what tactics will be used to get the attention of the target audience. Need to decide on a creative strategy that will get the attention of the audience, schedule the timing and placement of any advertising, determine a budget to do this and develop a way to evaluate whether the strategy has been effective or not.

implementation: how to plan for implementation ---> identifying the key actions that need to be done, assigning tasks to people to do them, and developing a schedule of when they need to be completed. Need to develop benchmarks (targets) to assess if they are working and a contingency plan that outlines what needs to be done if things don't go as planned. Need to identify key assumptions that have been made in developing our plan and outline how we will use market research to test those assumptions and ensure we are making informed decisions. Need to specify and allocate a budget to make it all happen. Next step is execution, getting it done, and then measuring performance against the plan.

value chain: a series of activities involved in designing, producing, marketing, delivering, and supporting any product. Each link in the chain has the potential to either add or remove value from the product the customer eventually buys. Successful firm is the one that can perform one or more of these activities better than other firms (competitive advantage).

customer-generated content: everyday people functioning in marketing roles, such as participating in creating advertisements, providing input to new product development, or serving as wholesalers or retailers.

online social networking: using internet technology to keep in contact with friends, relatives, and business associates.

open source model: a practice used in the software industry in which companies share their software codes with anyone to assist in the development of a better product.

triple bottom line: a business perspective that measures economic, social and environmental (sustainable) value creation.

customer relationship management (CRM): a systematic tracking of consumers' preference and behaviors over time in order to tailor the value proposition as closely as possible to each individual's unique wants and needs. CRM allows firms to talk to individual customers and to adjust elements of their marketing programs in light of how each customer reacts.

attention economy: a perspective that consumer spending, and hence the economy, is driven by psychological attachment to brands, the relevance of information and solutions. Consumers choose where to spend their attention and their money.

social marketing concept: a management philosophy that marketers must satisfy customers' needs in ways that benefit society and also deliver profit to the firm

sustainable development: meeting present needs without compromising the ability of future generations to meet their needs.

green marketing: the development of marketing strategies that support environmental stewardship

ROI (return on investment): the revenue or profit margin generated by an investment, divided by the cost of the investment.

product orientation: a management philosophy that emphasizes the most efficient ways to produce and distribute products.

selling orientation: a managerial view of marketing as a selling function, or a way to move products out of warehouses to reduce inventory

consumer orientation: a management philosophy that focuses on ways to satisfy customers' needs and wants. Most progressive than the other orientations.

consumer addiction: a physiological or psychological dependency on goods or services.

consumerism: a social movement that attempts to protect consumers from harmful business practices.

NOTES

For an exchange to occur, at least two people or organizations must be willing to make a trade, and each must have something the other wants. Each party must be free to accept or reject the other's for the exchange.

lots of companies think of the consumers as partners now. They realize that it is more expensive getting new customers than keeping existing customers.

to estimate lifetime value of a customer: estimate how much the person will spend and then subtract what it will cost to maintain this relationship.

what role do marketers play in the firm? 1/3 of CEO's have a marketing background. Marketing has begun to be integrated with other business functions

marketers influence what is popular, but products and the communication of those products also reflect the key social beliefs and values of the times.

THE MARKETING DECISION PROCESS: 1. understanding the opportunity 2. marketing strategy: specify the value 3. marketing mix: create the value 4. implementation & evaluation: realize the value

understanding the opportunity: external & internal analysis. SWOT analysis. Other analysis. Marketing theory, concepts, principles

marketing strategy: marketing objectives, target market, positioning

marketing mix: product, price, distribution, communication

implementation: plan the implementation, evaluation, execute the plan, measure performance.

difference between segment and segmentation. Segment is a group while segmentation is the process of dividing the overall marketing into groups of consumers based on their needs and wants.

Targeting: have to decide how many market segments to focus on when creating the products. When deciding which segments to target and how many segments to target is made by evaluating each of the segments in terms of profitability potential against a number of factors. After analysis, the chosen segments becomes the companies target markets.

For differential benefit: effective product benefits must be both different from the competition and things that customers want

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