Chapter 1

What is the marketing framework made of?

-5Cs -STP -4Ps

Segmentation, targeting, and positioning (STP)

It's best to identify groups, or segments, of customers who share similar needs and wants. Once we understand the different segments' preferences, we're in a position to identify the segment we should target with our marketing efforts. We then begin to develop a relationship with that target segment by positioning our product to them in the marketplace, via the 4Ps.

How do companies maintain the best marketing exchange?

a company has its best chance at keeping its customers happy if it is in close communication with them. The company that does its marketing research and really listens to its customers will be able to deliver goods and services that delight those customers. The best marketers put themselves in the place of their customers: What are they like? What do they want? How can we play a role in their lives? In this book, we'll elaborate on these themes. If you get overloaded while reading this book, you can step back and remember this: You'll always be a step ahead of your competition if you simply think about your customers! All marketing strategy derives from that.

describe the marketing exchange:

customers -expects to pay -seeks benefits company -seeks profits -offers benefits

4Ps

product, price, promotion, and place. A marketer is responsible for creating a product (goods or services) that customers need or want, for setting the appropriate price for the product, for promoting the product via advertising and sales promotions to help customers understand the product's benefits and value, and finally for making the product available for purchase in easily accessed places

True or false? Marketing speaks to customers wherever they are

true

True or false? Optimal business solutions (in real life or in class case discussions) should reflect a working knowledge of all of these elements, and their connections; as a contextual factor changes, what is the predicted impact on distribution channels? As a collaborator shifts its demands, what will that do to our pricing structure? As our company sells off a nonperforming function, what impact might that have on our positioning and customer satisfaction? The plot thickens!

true

True or false? These days we live in a truly customer-oriented and customer-empowered marketing world. Marketing is even said to be evidence of evolved markets—that an industry or country has moved beyond production and sales and seeks true relationships with its customers.

true

True or false? Thus the 5Cs, STP, and 4Ps operate interdependently.

true

What do management gurus believe about marketing these days?

-Many management gurus believe that marketing has succeeded so well that it isn't just a "function" in an organization anymore. Marketing is more of a philosophy—a way to think about business. The marketing orientation should permeate the organization. -Other responsibilities of other people >>>>Accounting and finance need to acknowledge the importance of marketing. Why? Because their CEOs do. Thinking about customers is unimportant only if you're a monopoly, and even then, you won't be one for long. >>>>Salespeople understand marketing immediately. They're the front line, interfacing with the customer. They want to push their firm's stuff, but they're thrilled when their company actually makes stuff that customers want. Then their jobs are so much easier. >>>>R&D people tend to understand the marketing spirit, too. They're hired because they're technically sophisticated, but they get jazzed when their inventions become popular. It doesn't take much marketing research to test concepts or prototypes and to veer an R&D path one way or another.

What are some factors that stress marketers?

-One of the factors stressing marketers these days is the pressure to show results. It's fair to hold any part of the corporation accountable, and results may be measured for a number of marketing activities. >>>>The Chief Financial Officer (CFO) who wants to see that a recent coupon promotion lifted sales can get reasonably good estimates from the Chief Marketing Officer (CMO) about effectiveness, e.g., the percentage sales increase attributable to the coupon introduction. >>>>The Chief Operating Officer (COO) can also get good estimates of whether a recent direct mail campaign to target customers has been effective in encouraging frequent buyers to go directly to the Web for purchasing. -Non-marketers have the misconception that advertising is supposed to bump up sales. It can, and that bump is easily measured. But really great advertising isn't intended for a short-term effect on sales. Great advertising is intended to enhance brand image, a goal that is relatively longer term and thus more difficult to measure.

What are the elements of the 5Cs?

-customer -company -context -collaborators -competitors

Why is marketing difficult?

-customers' preferences change -competition is also dynamic >>>>who they are changes as well as what they offer your customers. -Factors that are out of your control change as well. -the legal environment in this country is different from that in another's, and each is always in flux. Many such contingencies call for modifying marketing plans. So the inputs keep changing

What is the goal of marketers by overseeing the 5Cs, STP, and 4Ps?

-enhancing the marketing exchange (of goods, services, payment, ideas and information, etc.) between a customer base and a firm. -Group your customers, and figure out which group to target. Then create a position in the marketplace by means of the features of the product, its price, communications and promotions, and distribution choices.

what are the 4Ps

-product -price -place -prromotion

What motivates marketers?

-quantifying the effectiveness of marketing programs -motivated to translate their efforts into dollars for another reason: to have a "seat at the table." Marketers want to make sure that the CMO carries as much weight in the firm as the CEO or CFO or COO. They all speak finance, so the marketer is frequently motivated to translate progress into financial terms. Fortunately, technology and data are increasingly enabling more opportunities for the marketer to make such assessments. >>>>For example, a good customer relationship management (CRM) program allows marketers to run a field study to assess the impact of a new promotion, and tracking Web data allows marketers to determine the product combinations that are most attractive to customers.

How to start to develop a marketing plan:

1. Start with a situation analysis 2. Answer the following questions for a background analysis : >>Customers: Who are they? What are they like? Do we want to draw different customers? >>Company: What are our strengths and weaknesses? What customer benefits can we provide? >>Context: What is happening in our industry that might reshape our future business? >>Collaborators: Can we address our customers' needs while strengthening our business-to-business (B2B) partnerships? >>Competitors: Who are the competitors we must consider? What are their likely actions and reactions? 3. Proceed to strategic marketing planning via STP: >>segmentation: Customers aren't all the same; find out their various preferences, needs, and resources. >>Targeting: Pursue the group of customers that makes the most sense for our company. >>Positioning: Communicate our product's benefits clearly to the intended target customers. 4. marketing tactics to execute the intended positioning derive from a customer focus: >>Product: Will customers want what our company is prepared to produce? >>Price: Will customers pay what we'd like to charge? >>Place: Where and how will customers purchase our market offering? >>Promotion: What can we tell our customers or do for them to entice them to purchase?

Managerial recap:

Marketing can make customers happier and therefore companies more profitable. Marketing will enhance your career, and marketing can make the world a better place. Honest! -Marketing is about trying to find out what customers would like, providing it to them, and doing so profitably. -Ideally, marketing facilitates a relationship between customers and a company. -Just about anything can be marketed. -The overarching marketing management framework—5Cs, STP, 4Ps—will structure the book and help you to think methodically about the big picture of marketing. -Don't forget! Stay focused on your customer! If you can remain customer-centric, you'll be five steps ahead of the competition.

marketing

defined as an exchange between a firm and its customers. -Marketers try to figure out what customers want and how to provide it profitably. -Marketing managers sell simple, tangible goods such as soap or shampoo, as well as high-end luxury goods such as Chanel handbags. Marketers seek to identify their customers' needs and wants, and they try to formulate attractive solutions. Marketing can make customers happier, thereby making companies more profitable. Throughout the book, you'll see how. -Other marketing managers work in services, such as haircuts, airlines, hotels, or department stores. Marketers oversee experiences like theme parks or events like theater and concerts. Marketers help entertainers, athletes, politicians, and other celebrities with their images in their respective "marketplaces" (fans, agents, intelligentsia, opinion -Tourist bureaus have marketers who advertise the selling points of their city's or country's unique features. Information providers use marketing because they want customers to think they're the best (and thereby maximize their ad revenue). Marketers at nonprofits and government agencies work on "causes" (e.g., encouraging organ donation or drinking responsibly). Industries market themselves (think of the beef or milk ads). Naturally, companies use marketing for their brands and themselves. And you can market yourself, e.g., to a job interviewer or potential amour. These goals may look different, but marketing can be used beneficially in all these situations.

the 5Cs

force a businessperson to systematically frame the general analysis of the entire business situation. -the customer and company are the central players in the marketing exchange. -The context includes the backdrop of macro-environmental factors: How is our economy and that of our suppliers doing? What legal constraints do we face, and are these changing? What cultural differences do our global segments manifest? -The collaborators and competitors are the companies and people we work with vs. those we compete against (though drawing the line is sometimes difficult in today's interconnected world).

segments

groups of customers who share similar needs and wants