Questions for Lesson 1 Define marketing and the two goals of marketing. As a company president, explain why each of the two goals of marketing is important to your company. Give examples. Marketing deals mainly with customers although it can have many definitions. This simplest definition is: Marketing is managing profitable customer relationship. (Kotler & Armstrong, 2008). Marketing has two main goals of attracting new customers and keeping current customers. In my company the goals of attracting new customers and maintaining current customers is essential to keeping the company profitable and relevant.
My company Vice GOLD, which is a clothing brand, will be launching soon and our marketing has to be effective. We have good reviews from testing some of our pieces at fashion shows and limited clientele. That is great word of mouth marketing because our current customers are talking about us, and that will get future customers excited when the brand launches. Our current customers appreciate our excellent customer service and creative styles. This makes them want to stay customers because they remember how they were treated during the shopping process.
And with them on our mailing list, they are the first to know of new and limited edition styles. Attracting new customers, is important because we want the company to be profitable and be well known in the fashion world. What is the difference between a need, a want, and a demand? Describe the need versus want for the following items: a car, Gatorade, Nike Shoes, basic foods, an iPod, and housing. Although they may often be confused for each other, there are differences between a need, a want, and a demand.
Our needs are essential for human survival. They include, clothing, water, warmth and safety. The social needs of belonging,love, and individual needs of knowledge and self expression. (Kotler & Armstrong, 2008). Basic foods are needs because if you don’t eat you will die. Housing is another need because we need shelter to protect us from the elements and keep us warm. The things we want are needs that are shaped by our personalities and culture. I need shoes to cover my feet but I want Steve Madden leopard heels because it is my style.
Nike shoes are a want because it is a top sneaker brand with a variety of styles to fit a lot of people. another item that falls into the want category is an iPod which is used for entertainment purposes. it is a popular name brand item for storing and listening to music. Gatorade is also a want because it is a flavorful way to satisfy your thirst. If thirsty you could just drive water, which is a basic need but because may want flavor you might drink Gatorade. Demands are the form that wants take when backed by buying power.
Continuing with the example of shoes; I want nice shoes to wear and if I can afford it, I can purchase $2,000 Christian Louboutin boots which is a very high end brand of shoes. A car can either be a need or want depending on where you live. If you live in a city like New York, having a car would be unnecessary because of their efficient subway system. While in a city without public transportation you would need a car to get around to the places you need to go. Chapter 1 discusses a five-step marketing model process. page5.
Identify and explain each step of the model and why each step is important to a successful marketing strategy. Use examples. There is five-step model of the marketing process that companies need to use to maximize their marketing efforts. The first step is to understand customer needs and wants and the marketplace which they operate. In this step marketers would identify consumer needs, wants, and demands. They would also see how to fulfill them through market offerings which are a combination of products or services that can satisfy the needs and wants of customers.
Its important to know what consumers want that way a company can offer it to the public. Companies do this in many ways like researching consumers and doing market surveys. The creator of Build – a – Bear Workshops, Maxine Clark, even visits her stores a few times a week to talk to employees and meet customers to get to know the people who buy her products. The next step in the process is to design a customer driven marketing strategy. They do this by choosing target markets and work on building profitable relationships. This is important because you have to know who to serve and how to best serve them.
BMW has target market of affluent professionals and their tagline “the Ultimate Driving Machine” promises fun and excitement in driving their cars. The third step is preparing an integrated marketing program that will actually deliver the intended value to target customers. In this step the marketing strategy is turned into action. The marketing mix, which are the tools used to implement a marketing strategy, has four main parts: product, price, place, promotion. The forth and most important step is building profitable customer relationships.
With this step the company must provide excellent customer value and satisfaction because this creates loyal customers. BMW creates value for their customers because of their high performance and reliable vehicles that also serves as a status symbol to their target market. Also BMW is known for it’s highly focused customer service from purchasing to service and maintenance of the vehicles. This creates satisfaction for their current customers and build and builds positive reputation for BMW. This leads to the fifth and final step of the process which is to capture value from customers in return.
This value comes in the form of profits, sales and market share. Identify and explain the four customer relations groups. Is there a way that markets can move a Stranger to a True Friend? Explain how Apple and Toyota could move their “Strangers” to “True Friends”. Butterflies Strangers True Friends Barnacles A company can classify customers according to their potential profitability and manage it s relationships with them accordingly. There are four customer relations groups arranged according to their profitability and loyalty. Strangers” bring little value and are not loyal customers. What the company offers and what the customer needs are not in alignment. Therefore it is best for companies to not market to them. “Butterflies” are profitable but not less loyal. They enjoy finding the best deals without building a relationship. Having promotions will attract them but trying to convert them to “True Friends” won’t work. “True Friends” are loyal and profitable because their needs match the company offerings. Although they are loyal, the “Barnacles” are not very profitable.
They don’t generate enough returns to cover their costs so they should be let go if they can’t become more profitable. Markets can move from a “Stranger” to a “True Friend” by trying to fill the gap in what they offer as a company. One reason a customer could be a “Stranger” is because the company doesn’t offer a particular product or they don’t see the value. Offering products or services targeted towards them could convert “Strangers” to “True Friends”. Apple for example can convert “Strangers” to “True Friends” by showing how easy it is to transition from PC.
A customer might be a “Stranger” because they are used to using PC computers and software to manage their life and business. When they show the simplicity of their products and demonstrate their superiority over the competition people will convert. I think they do a good job of this already with the format of their Apple Store that allow full testing of all the devices, helpful staff and free classes on using the Mac system. Toyota can move “Strangers” to “True Friends” by making cars for every type of consumer.
They are currently doing a good job of showing their range since they cars for a wide variety of consumers. They have vehicles for everyone from soccer moms needing MiniVans, to the environment conscience who want to save on gas and get a Prius Plug – In. They even have the luxury car line, Lexus for the style conscience. If they could combine some of these needs they could convert a customer who for example wants the luxury look and feel of the Lexus and wants a high MPG like the Prius. Kotler, P. , & Armstrong, G. (2008). Principles of marketing. (12e ed. ). Upper Saddle River: Prentice Hall.