1
Introduction to Business
Chapter 11: Creating Products and Pricing Strategies to Meet
Customer’s Needs
11.1 The Marketing Concept
Marketing includes those business activities that are designed to satisfy consumer needs and
wants through the exchange process. Marketing managers use the “right” principle—getting
the right goods or services to the right people at the right place, time, and price, using the right
promotional techniques. Today, many firms have adopted the marketing concept. The
marketing concept involves identifying consumer needs and wants and then producing
products (which can be goods, services, or ideas) that will satisfy them while making a profit.
Relationship marketing entails forging long-term relationships with customers, which can lead
to repeat sales, reduced costs, and stable relationships.
11.1 Review Questions
1. Define the following terms:
a. Marketing
b. Exchange
c. Marketing Concept
d. Customer Satisfaction
2. What is marketing focused on creating?
3. What is the marketing concept based on?
4. How does the marketing concept use marketing data?
5. What does the marketing concept involve?
6. What is customer value the ratio of?
7. Why is creating customer value important?
8. What is relationship marketing’s focus?
9. Why is building relationships beneficial?
11.2 Creating a Marketing Strategy
A firm creates a marketing strategy by understanding the external environment, defining the
target market, determining a competitive advantage, and developing a marketing mix.
Environmental scanning enables companies to understand the external environment. The
target market is the specific group of consumers toward which a firm directs its marketing
efforts. A competitive advantage is a set of unique features of a company and its products that
are perceived by the target market as significant and superior to those of the competition.
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11.2 Review Questions
1. What is a marketing strategy?
2. What are the five components of the marketing strategy?
3. Define the following terms in relation to marketing:
a. Product
b. Price
c. Place
d. Promotion
e. People
4. Can products be goods?
5. Are products considered tangible or intangible?
6. What are the two forms price can take?
7. What tasks does place include?
8. What is promotion as method of, what components does it include, and what is it often
mistaken for?
9. What is the purpose of people in the marketing mix, and why are they crucial?
10. What is environmental scanning, and what was its goal?
11. What factors make up each of the following six categories of environmental data that
shape most marketing decisions?
a. Cultural/social forces
b. Demographic forces
c. Economic forces
d. Technological forces
e. Political and legal forces
f. Competitive forces
12. What is the target market?
13. What is the benefit of identifying the target market?
14. What is competitive advantage, and what is it also known as?
15. List and define the four types of competitive advantage
a.
b.
c.
d.
16. What can organizations that have a cost competitive advantage do, and what may cause
them to fail or lose their advantage?
17. Which cost competitive advantage is considered more durable?
18. What makes differential competitive advantage beneficial?
19. Service differentiation is more important for what type of product?
For more free, peer-reviewed, openly licensed resources visit OpenStax.org.
Introduction to Business
Chapter 11: Creating Products and Pricing Strategies to Meet
Customer’s Needs
11.1 The Marketing Concept
Marketing includes those business activities that are designed to satisfy consumer needs and
wants through the exchange process. Marketing managers use the “right” principle—getting
the right goods or services to the right people at the right place, time, and price, using the right
promotional techniques. Today, many firms have adopted the marketing concept. The
marketing concept involves identifying consumer needs and wants and then producing
products (which can be goods, services, or ideas) that will satisfy them while making a profit.
Relationship marketing entails forging long-term relationships with customers, which can lead
to repeat sales, reduced costs, and stable relationships.
11.1 Review Questions
1. Define the following terms:
a. Marketing
b. Exchange
c. Marketing Concept
d. Customer Satisfaction
2. What is marketing focused on creating?
3. What is the marketing concept based on?
4. How does the marketing concept use marketing data?
5. What does the marketing concept involve?
6. What is customer value the ratio of?
7. Why is creating customer value important?
8. What is relationship marketing’s focus?
9. Why is building relationships beneficial?
11.2 Creating a Marketing Strategy
A firm creates a marketing strategy by understanding the external environment, defining the
target market, determining a competitive advantage, and developing a marketing mix.
Environmental scanning enables companies to understand the external environment. The
target market is the specific group of consumers toward which a firm directs its marketing
efforts. A competitive advantage is a set of unique features of a company and its products that
are perceived by the target market as significant and superior to those of the competition.
For more free, peer-reviewed, openly licensed resources visit OpenStax.org.
, 2
11.2 Review Questions
1. What is a marketing strategy?
2. What are the five components of the marketing strategy?
3. Define the following terms in relation to marketing:
a. Product
b. Price
c. Place
d. Promotion
e. People
4. Can products be goods?
5. Are products considered tangible or intangible?
6. What are the two forms price can take?
7. What tasks does place include?
8. What is promotion as method of, what components does it include, and what is it often
mistaken for?
9. What is the purpose of people in the marketing mix, and why are they crucial?
10. What is environmental scanning, and what was its goal?
11. What factors make up each of the following six categories of environmental data that
shape most marketing decisions?
a. Cultural/social forces
b. Demographic forces
c. Economic forces
d. Technological forces
e. Political and legal forces
f. Competitive forces
12. What is the target market?
13. What is the benefit of identifying the target market?
14. What is competitive advantage, and what is it also known as?
15. List and define the four types of competitive advantage
a.
b.
c.
d.
16. What can organizations that have a cost competitive advantage do, and what may cause
them to fail or lose their advantage?
17. Which cost competitive advantage is considered more durable?
18. What makes differential competitive advantage beneficial?
19. Service differentiation is more important for what type of product?
For more free, peer-reviewed, openly licensed resources visit OpenStax.org.
