Chapter 1

Question 1

4 first marketing principles

Answer 1

1. All customers differ
2. All customers change
3. All competitors react
4. All resources are limited

Question 2

Marketing decisions for each principle

Answer 2

1. All customers differ –> Managing customer heterogeneity
2. All customers change –> Managing customer dynamics
3. All competitors react –> Managing SCA
4. All resources are limited –> Managing resource trade-offs

Question 3

Customer heterogeneity

Answer 3

A variation among customers in terms of their needs, desires, and subsequent behaviours

Question 4

Approaches to deal with customer heterogeneity

Answer 4

1. STP approach
2. Customer-centric approach

Question 5

Customer dynamics

Answer 5

The process by which customers’ desires and needs change overtime. Due to seminal (major) events, life stages, knowledge/ expertise, product category maturity, and regular exposure to relevant information.

Question 6

Approaches to deal with customer dynamics

Answer 6

1. Acquisition, expansion, retention (AER) approach
2. CLV approach
3. Lifecycle approach

Question 7

SCA

Answer 7

Competitors are always attacking the firm’s market position, therefore they should anticipate future competitors’ reactions and build barriers to withstand.

Question 8

Marketing-based sources of SCA

Answer 8

1. Brands
2. Offerings
3. Relationships

Question 9

Resource trade-offs

Answer 9

Five critical factors that impact the resource trade-offs:
- resource slack
- changes in customers’ needs
- lifecycle stage of a firm’s product portfolio
- product market landscape
- effectiveness of marketing activities.

Question 10

Chain ratio equation

Answer 10

market demand (units) * market share (%) * average selling price ($), shows the firm’s sales revenue.