Marketing
Five Core Customer and marketplace concepts
1. Needs, wants and demands 2. Market offerings (products, services, and experiences) 3. Value and satisfaction 4. Exchanges and relationships 5. Markets
ways marketing contributes to strategic planning
1. Provides a guiding philosophy 2. Provides inputs to the strategic planners 3. Designs objectives with in the unit to help reach said unit's goals 4. Marketing is also responsible for customer relationship management, partner relationship management, to form a value chain and externally with other companies to form a value delivery network
Five steps in the marketing process
1. Understand the marketplace and customer needs and wants 2. Design a customer-driven marketing strategy 3. Construct and integrated marketing program that delivers superior value 4. Build profitable relationships and create customer delight 5. Capture value from customers to create profits and customer equity
designing a customer driven marketing strategy
1. What customers will we serve? (what is our target market?) Market segmentation -> target marketing Choose only customers the company can serve well Customer management and demand management 2. How will we best serve these customers? (what is our value proposition?) How a company differentiates and positions itself in the marketplace Answers the question "why should I buy your product over the competitors?" Ex- the ultimate driving machine (BMW)
most important step of the marketing process
Building customer relationships
five major changes in the marketing landscape
Five Major developments: the changing economic environment, the digital age, rapid globalization, and the call for more ethics and social responsibility
product, price, place, promotion
Four p's
demands
Humans wants as they are backed by buying power
Strategies for Growth and Downsizing
Marketing must aim to identify, evaluate, and select market opportunities and establish strategies for capturing them
value delivery network
The network made up of the company, its suppliers, its distributors, and ultimately, its customers who partner with each other to improve the performance of the entire system
share of customer
The portion of the customer's purchasing that a company gets in its product categories Can be achieved by expanding selection and up selling or down selling
market segment
a group of consumers who respond in a similar way to a given set of marketing efforts
marketing concept
a philosophy in which achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do Customer focus and value are the paths to sales and profits Sense and respond strategy "customer driven"
product/ market expansion grid
a portfolio- planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification
mission statement
a statement of the organization's purpose- what it wants to accomplish in the larger environment (further broken down into objectives)
Internet
a vast public web of computer networks that connects all users of all types all around the world to each other and to an amazingly large information repository
The changing economic environment
a. After the Great Recession, consumers needed less costly higher value items b. Companies had to focus on providing most bang for the buck a. After the Great Recession, consumers needed less costly higher value items b. Companies had to focus on providing most bang for the buck
rapid globalization
a. Companies compete in a global market place
sustainable marketing
a. Deliver value in an environmentally sustainable and socially responsible way b. Caring capitalism- companies set themselves aside by being socially responsible
the digital age
a. Gives marketers opportunity to track consumer preferences and tailor products to fit b. The company must come to customers, fully integrate internet into marketing strategy c. Most stores have a physical and online store
the growth of not for profit marketing
a. Not for profit entities have realized the importance of marketing (govt agencies, charities, colleges) b. Social marketing campaigns- not for money, just to get the message out there
differentiation
actually differentiating the market offering to create superior customer value
SWOT analysis
an overall evaluation of the company's strengths, weaknesses, opportunities and threats
public
any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives
positioning
arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
consumer generated marketing
brand exchanges created by consumers themselves- both invited and uninvited- by which consumers are playing an increasing role in shaping their own brand experiences and those of their consumers
consumer generated marketing
brand exchanges created by customers themselves- both invited and uninvited- by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers (can be costly and time consuming), can be through private consumers blogs, etc so companies need to acknowledge the power of those sources
generational marketing
can be a good thing but can also alienate other generations, may be more effective to group by things such as lifestyle
developing economies
can offer outstanding opportunities for the right product (think- bottom of the pyramid)
changes in consumer spending
changes in economic factors greatly affect consumer spending, after the Great Recession there's a great emphasis on value marketing
operating control
checking ongoing performance against the annual plan and taking corrective actions when necessary
market development
company growth by identifying and developing new market segments for current company products
market penetration
company growth by increasing sales of current products to current market segments without changing the product
product development
company growth by offering modified or new products to current market segments
diversification
company growth through starting up or acquiring businesses outside the company's current products and markets
customer managed marketing
considering not only how to reach the customer, but how the customer reaches you and how customers reach each other
subsistence economy
consume most of their own agricultural and industrial output and offer few market opportunities
4 C's- consumer POV
customer solution, customer cost, convenience, communication
production concept
customers will favor products that are highly available and highly affordable, therefore the organization should focus on improving production and distribution efficiency Can lead to marketing myopia and losing sight of customer
market or customer organization
design strategies for specific markets or customers, manage customer profit and customer equitability
environmental sustainability
developing strategies and practices that create a world that the planet can support indefinitely
market segmentation
dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs
the economic environment
economic forces that affect consumer purchasing power and spending patterns
marketing intermediaries
firms that help the company to promote, sell, and distribute its goods to final buyers, including resellers, physical distribution firms, marketing service agencies, and financial intermediaries
the technological environment
forces that create new technologies, creating new product and market opportunities □ New technologies= new opportunities for marketers □ RFID chips allow marketers to see what is happening with the product from production to disposal □ Must keep up with new technology to stay current
marketing mix
he set of tactical marketing tools- product, price, place, and promotion- that the firm blends to produce the response it wants in the target market § Product- the entirety of what the consumer is buying (ex car and warranty) § Price- amount of money the consumers must pay to obtain the product § Place- company activities that make the product available to the consumer § Promotion- activities that communicate the merits of the product and persuade target customers to buy it *an effective marketing mix cohesively blends all of these
shared value
idea that societal needs, not just economic needs, define markets
income distribution
in recent years the rich have become richer and the poor have become more poor, shrinking middle class, causes companies to either focus on one economic tier or tailor their offerings to appeal to all
the political environment
laws, government agencies, and pressure groups that influence and limit various individuals and organizations in a given society
strategic control
looking at whether the company's basic strategies are well matched to its opportunities
diversity
many countries now have people of diverse ethnic origins, marketing aimed specially towards to LGBT community, adults with disabilities
consumer managed relationships
marketing relationships in which customers, empowered by today's new digital technologies, interact with companies and with each other to shape their relationships with brands
the changing American family
married parents with children are the minority of households, people are marrying later or not at all, more women are working which changes the needs of the customer
marketing dashboards
meaningful sets of marketing performance measures in a single display used to monitor strategic marketing performance • Can also use customer centered measures- retention, satisfaction etc
marketing control
measuring and evaluating the results of marketing strategies and plans and taking corrective actions when necessary
Interactive customer relationships
new channels to relate with (social media), creates a sense of community, gives customers greater sense of control
geographic shifts in population
people moving from country to country, people in the US moving to the sunbelt states, and people moving from rural areas to the city, more people working at home, changes the needs of the customer and the areas to target □ A better educated, more white collar work force
industrial economies
rich markets for many different kinds of goods
public policy
set of rules and laws to ensure that business is for the good of society as a whole
sustainable marketing
socially and environmentally friendly marketing that that meets the present needs of consumers and businesses while also preserving the ability of future generations to meet their needs
market offerings
some combination of products, services, information, or experiences offered to a market to satisfy a need or a want
generation X
the 49 million people born between 1965 and 1975 in the "birth death" following the baby boom. Value family and experiences over material possessions, more technologically driven and react well to edgy campaigns,
baby boomers
the 79 million people born during the years following World War 2 and lasting until 1964. Many are now working longer and saving more after the Great Recession. Have 50% of US discretionary spending power, view themselves as younger than they are
millenials
the 83 million people born between 1977 and 2000. Most financially strapped generation, fluent in technology, embrace the ability to connect with brands personally through tech.
marketing environment
the actors and forces outside marketing that affect marketing and management's ability to build relationships with target customers
micro environment
the actors close to the company that affect its ability to serve its customers-the company, suppliers, marketing intermediaries, customer markets, publics, and competitors **marketing managers must build strong relationships with all of these
marketing management
the art and science of choosing target markets and building profitable relationships with them
business portfolio
the collection of businesses and products that make up the company § **guided by the mission statement and objectives § A company must analyze investments in the current portfolio then decide what to invest in in the future
product concept
the consumer will favor products that offer the most quality, performance and features and therefore, the company should devote its effort to making continuous product improvements Can also lead to marketing myopia, focus too much on the product and not see other innovations in the market place
customer perceived value
the customer's evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers
customer satisfaction
the extent to which a product's perceived performance matches a buyer's expectations
wants
the form human needs take as they are shaped by culture and individual personality (need food, want a Big Mac)
societal marketing concept
the idea that a company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long run interests, and society's long run interests
selling concept
the idea that consumers will not buy enough of the firm's products unless the firm undertakes a large scale selling and promotion effort Fails to take into consideration building relationships and recovery if a customer does not enjoy their experience
strategic business units
the key businesses that make up a company, most important get more funding
macroenvironment
the larger societal forces that affect the microenvironment- demographic, economic, political, natural, technological, and cultural
marketing strategy
the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships develop marketing mix based on the four p's- product, price, place, and promotion
market myopia
the mistake of paying more attention to the product a company offers than to the benefits and experiences produced by these products
return on marketing investment
the net return from a marketing investment divided by the costs of the marketing investment Can also be measured in terms of brand awareness, sales, or market share
customer relationship management
the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction
the natural environment
the physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities □ Companies should have contingency plans to deal with these externalities □ Shortage of raw materials, pollution, global warming, Intense government regulation of raw materials
marketing
the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return
portfolio analysis
the process by which management evaluates the products and businesses that make up the company
strategic planning
the process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities (can vary in range)
market targeting
the process of evaluating each market segment's attractiveness and selecting one or more segments to enter (a company with limited resources would target less segments)
value chain
the series of internal departments that carry out value creating activities to design, produce, market, deliver and support a firm's products ○ Marketing has to find a way to get other departments to "think customer" even if it prevents them from reaching their objectives as well in their terms
market
the set of all actual and potential buyers of a product or service
marketing mix
the set of marketing tools that work together to satisfy customer needs and build customer relationships
demography
the study of human populations in terms of size, density, location, age, gender, race, occupation and other statistics. Changes in these factors presents both challenges and opportunities
customer equity
the total combined customer lifetime values of all of the company's customers Deals with the future and continually being attractive to the target demographic
customer lifetime value
the value of the entire stream of purchases a customer makes over lifetime of patronage
marketing implementation
turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives
partner relationship management
working closely with partners in other company departments and outside the company to jointly bring greater value to customers, whole organization must by familiar with the marketing in order to create value along the supply chain and interact with customers
The changing nature of customer relationships
~relating more carefully with selected customers ~relating more deeply and interactively
elements of a mission statement
§ Should be market oriented and focused on serving the customer § Should be meaningful and specific, yet motivating § Should not be to be profitable, stick to your mission statement and profits will follow
reasons for public policy
® Protect companies from each other ® Protect consumers from unfair products Protect society against unrestrained business behavior
customer relationship levels and tools
○ Basic relationships- advertising and PR ○ Full relationships- sales reps work one on one with large scale customers ○ Frequency marketing programs- reward customers for their loyalty
marketing planning
○ Companies chooses strategies that will help attain its overall strategic objectives ○ Usually involves a master summary with current strategy, swot analysis, and major future objectives (see page 79) ○ A marketing strategy has specific strategies for target markets, positioning, the marketing mix, and marketing expenditure levels
Customer value and satisfaction
○ Don't set the expectations too low or too high ○ Want to attract new customers while pleasing existing customers so they will buy again
setting up company goals and objectives
○ From the mission statement comes objectives, for the company and for individual managers ○ Marketing strategies and programs must be developed to back up the marketing objectives
