73) Company X, a manufacturer of office supplies, follows the selling concept. Explain how the firm may lose sight of customer relationships with this marketing orientation.
Answer: The selling concept of Company X focuses on selling its office supplies rather than making what the market wants; such a strategy creates sales transactions but not long-term customer relationships. The company would most likely have a faulty assumption that customers who are persuaded to buy the product will like it or that they will buy the product again later even if they weren't really initially satisfied. Company X will not foster customer loyalty with this approach.
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Challenging
74) Explain why electronics and pharmaceuticals manufacturers use customer-driving marketing.
Answer: In such industries, consumers do not know exactly what new products are available; therefore, consumers rely on such firms to tell them what they need. Customer-driving marketing focuses on understanding customer needs even better than customers themselves do and creating products and services that meet both existing and latent needs, now and in the future.
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Challenging
75) Compare the selling and marketing concepts, listing the key components of each philosophy.
Answer: The selling concept reflects an inside-out perspective, while the marketing concept takes an outside-in perspective. The selling concept is typically practiced when an organization is marketing products or services that buyers do not normally think of purchasing, such as insurance or blood donation. Aggressive selling focuses on creating sales transactions rather than building long-term relationships with customers, with the aim of selling what the company makes rather than making what the customer wants. The marketing concept, on the other hand, is based upon identifying the needs and wants of target markets and then satisfying those needs and wants better than competitors do. In contrast to the selling concept, marketing focuses on the customer, not the product, as the path to profits.
AACSB: Written and oral communication
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Moderate
76) Briefly explain the societal marketing concept. Give an example of an organization that has effectively used the societal marketing concept.
Answer: According to this concept, firms will succeed if they take underlying consumer needs and society's well-being into account over the long term. A pure marketing concept can damage consumers' long-run welfare by focusing exclusively on satisfying consumers' short-run wants. Over a long period of time, this too-narrow focus can be damaging to the company. In setting their marketing strategies, marketers today need to balance company profits, consumer wants, and society's interests. The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer's and society's well-being. It calls for sustainable marketing, socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. UPS has a mission that stresses economic prosperity, social responsibility, and environmental stewardship. The company proactively seeks opportunities to act responsibly and efficiently. For example, UPS works to make its operations "green" and supports employees volunteering in their communities.
AACSB: Ethical understanding and reasoning
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Moderate
77) In which of the following situations has a company most actively embraced customer-managed relationships?
A) American Airlines awards frequent flyer points to returning customers.
B) Paige Premium Denim jeans provide superior quality and perfect fit.