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Kotler 11th edition, ch. 5
MKGT
27
Marketing
Graduate
07/26/2012

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Term
Customer perceived value (CPV)
Definition
is the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering and the perceived alternatives.
Term
Total customer value i
Definition
is the perceived monetary value of the bundle of economic, functional, and psychological benefits customers expect from a given market offering.
Term
Total customer cost
Definition
is the bundle of costs customers expect to incur in evaluating, obtaining, using, and dis- posing of the given market offering, including monetary, time, energy, and psychic costs.
Term
The value-delivery system
Definition
includes all the experiences the customer will have on the way to obtaining and using the offering.
Term
satisfaction
Definition
is a person's feelings of pleasure or dis- appointment resulting from comparing a product's perceived performance (or outcome) in relation to his or her expectations.
Term
Customer Expecations are formed from
Definition
past buying experience, friends' and associates' advice, and marketers' and competitors' information and promises.
Term
A profitable customer
Definition
is a person, household, or com- pany that over time yields a revenue stream that exceeds by an acceptable amount the com- pany's cost stream of attracting, selling, and servicing that customer.
Term
Customer profitability analysis (CPA)
Definition
is best conducted with the tools of an accounting technique called Activity-Based Costing (ABC).
Term
Competitive advantage
Definition
is a company's ability to perform in one or more ways that competitors cannot or will not match.
Term
Customer lifetime value (CLV)
Definition
describes the net present value of the stream of future profits expected over the customer's lifetime purchases.
Term
Customer equity
Definition
is the total of the discounted lifetime values of all of the firm's customers.4
Term
Value equity
Definition
is the customer's objective assessment of the utility of an offering based on perceptions of its benefits relative to its costs.
Term
Brand equity
Definition
is the customer's subjective and intangible assessment of the brand, above and beyond its objectively perceived value.
Term
Relationship equity
Definition
is the customer's tendency to stick with the brand, above and beyond objective and subjective assessments of its worth.
Term
The four-step framework for one-to-one marketing that can be adapted to CRM marketing
Definition
• Identify your prospects and customers. • Differentiate customers in terms of (1) their needs and (2) their value to your company. • Interact with individual customers to improve your knowledge about their individual needs and to build stronger relationships. • Customize products, services, and messages to each customer.
Term
Acquiring the right customer
Definition
You've identified your most valuable customers.
Term
Wunderman's suggestions for creating structural ties with the customer:
Definition
1. Create long-term contracts. 2. Charge a lower price to consumers who buy larger supplies. 3. Turn the product into a long-term service.
Term
customer database
Definition
is an organized collection of comprehensive information about individual cus- tomers or prospects that is current, accessible, and actionable for such marketing purposes as lead generation, lead qualification, sale of a product or service, or maintenance of cus- tomer relationships.
Term
Database marketing
Definition
is the process of building, maintaining, and using customer databases and other databases (products, suppliers, resellers) for the purpose of contacting, transacting, and building customer relationships.
Term
customer mailing list
Definition
is simply a set of names, addresses, and telephone numbers.
Term
business database would contain business customers'
Definition
past purchases; past vol- umes, prices, and profits; buyer team member names (and ages, birthdays, hobbies, and favorite foods); status of current contracts; an estimate of the supplier's share of the cus- tomer's business; competitive suppliers; assessment of competitive strengths and weak- nesses in selling and servicing the account; and relevant buying practices, patterns, and policies.
Term
data-mining
Definition
marketing statisticians can extract useful information about individuals, trends, and segments from the mass of data.
Term
Five ways companies use databases:
Definition
1. To identify prospects. 2. To decide which customers should receive a particular offer.3. To deepen customer loyalty.4. To reactivate customer purchases.5. To avoid serious customer mistakes.
Term
1st downside of Database marketing and CRM
Definition
(1) where the product is a once-in-a-lifetime purchase (e.g., a grand piano); (2) where customers show little loyalty to a brand (i.e., there is lots of customer churn); (3) where the unit sale is very small (e.g., a candy bar); and (4) where the cost of gath- ering information is too high.
Term
2nd downside of Database marketing and CRM
Definition
the difficulty of getting everyone in the company to be customer-oriented and to use the available information.
Term
3rd downside of Database marketing and CRM
Definition
not all customers want a relationship with the company, and they may resent knowing that the company has collected that much personal information about them.
Term
4th downside of Database marketing and CRM
Definition
the assumptions behind CRM may not always hold true.
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