MKT Unit 1

3 Methods for collecting/analyzing marketing environment

1. 5 C's Analysis 2. Porter's 5 Forces Analysis 3. SWOT Analysis

Customer Outcomes as the purpose of marketing

1. Acquiring Customers 2. Retaining Customers 3. Incentivizing Customers to become Brand Ambassadors

Empathic Design

- A user-centered design approach that pays attention to the user's feelings toward a product.

Cuties Case Study: Analysis

- Context: where will Cuties grow best and most consistently? - Company: what are the strengths of my company in comparison to my - Competitors: have strength in branding and marketing for a product like Cuties - Collaborators: maybe it is better to collaborate with my competition and their supply chain rather than compete with them

5 Cs of Analysis

- Customer Behavior - Company ability to acquiring and retaining customers - Competition's ability to create value and attract customers - Collaborators available to partner with to attract customers - Context and its limitations on what is possible

Categories of External Forces

- STEEP - Social/Cultural/Demographic - Technological - Environmental - Economic - Political/Regulatory

Cuties Case Study: Aspiration

- Segmenting: cuties could appeal to several potential market segments- college students, older adults, children - Targeting: targeted parents who seek easy-to-pack, healthy snacks for their kids - Positioning: how do we want parents to see us and use our product?

Enviornmental Forces

- The uncontrollable forces that affect a marketing decision - marketing teams must be able to shift their strategies based on these events

What is NOT a customer outcome desired by The Marketing Strategy Framework

- advertising to customers

Resonance Focus Model

- best way to increase CPV - involves demonstrating a deep understanding of customer needs and differentiating or highlighting offerings on the few elements that matter most to target customers

High involvement Purchases

- buyer fully engaged, effortful descision making trends, long time frame, consequence of choice are significant

4 Cs of building a customer centric culture

- coordination: allow employees to improve focus on customer - cooperation: encourage people to work together in the interest of the customer - capability: ensure enough people have the skills to deliver customer focused solutions - connection: developing relationships with external partners to increase value of solutions

Cognitive Decision Making

- deliberate, rational, sequential - EX: buying insurance, weigh coverage, size of deductible, and cost of policy - optimal and rational choice

Emotional Decision Making

- driven by the heart - based on less "rational" desires and more subjective - EX: Hawaiian falling in love with a wool lined bomber jacket despite the fact that it is non functional in Hawaii - purchased because product elicits feeling

4 things a Market Oriented Company seeks to address

- establish relationships with customers - provide value to customers - deliver superior customer value - do research on customers, competitors, and markets

Marketing Plan Components

- executive summary - table of contents - summary of current situation (SWOT) - assesment of market opportunity (STP) - Financial and marketing goals - summary of marketing strategy - month-to-month marketing budget - forecast month-to-month unit sales and revenues - plan for monitoring and evaluating action plans in progress and at the end of plan period

Data that analyzes "why" of marketing

- helps understand events and trends in the market place and drivers of market behaviors - Qualitative data

Touchpoint

- intersection between products, services, and brands with customer activities

Purpose of Marketing Plan

- lays campaign to fulfill a company's marketing strategy - transform product concept into a successful offering that meets the needs of target customers and fulfills company's performance expectations

False Loyalty

- loyalty of a customer because of a promotional event, high switching cost, or proprietary technology - customer will stray the instant they have an alternate choice

Customer Relationship Management (CRM)

- managing detailed information about individual customers and carefully managing customer touch points to maximize customer loyalty

Conjoint Analysis

- marketing research technique to determine how customers value different attributes that make up a product and the trade-offs they are willing to make among those different features

Threat or Opportunity: lots of brands in the marketplace at different price points

- neither; internal control

secondary data

- quicker and cheaper for marketers to access than primary research - often looked at first to assess potential to enhance marketing intelligence

Low Involvement Purchases

- require less effort, happen quickly, lower risk due to cost or could be a routine purchase

Qualitative Research

- seeks in-depth, open-ended responses, not yes or no answers - in depth individual interviews, focus groups, and direct observation

Customer Centricity

- the set of beliefs that puts the customer's interest first, ahead of those of all other stakeholders such as owners, managers, and employees - deeply rooted values that consistently reinforces a customer focus throughout the organizations

Creating the Demand Landscape

- tracking consumer behavior and grouping them into distinct categories to provide contextual elements that makeup customer demand

2 Pillars of "Decisions"

Aspiration: what the firm hopes to achieve in the market Action Plan: create value for the customer and price product to ensure profit

Peloton has established a rigorous recruiting and training system to ensure that its trainers are not just skilled on the equipment but can also be perceived as great DJs, coaches, and TV hosts so they can reliably create an outstanding customer experience.

Building a Customer Centric Culture - est mechanisms that create outstanding customer experience

A firm that wants to develop a deeper understanding of its customers may optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups. This is _____:

CRM (customer relationship management)

Which of the following is NOT one of the factors we analyze as part of understanding the marketing environment (the "Context" from the 5 Cs in the Situation Analysis).

Company Strength and Weakness Factors

Which of the following is NOT one of the correct forces?

Company Strength and Weaknesses

One misstep that Peloton now acknowledges is when it tried to measure customer loyalty while it was a running a program that charged customers a $500 cancellation fee to create a high switching cost for customers interested in moving to a different exercise platform.

Creating False Loyalty rather than true loyalty - false loyalty via high switching cost - true loyalty via superior value

In order to gain a deeper understanding of their customers, last year Peloton tracked several hundred of the customers' behaviors through observations, diaries, journals, and interviews so that they could group them into distinct categories of goals, activities, and priorities.

Creating the Demand Landscape - grouping customers into distinct categories to determine demand

Peloton collects and uses detailed information about its individual customers through all of their touch points to guide the development of product offerings, services, programs, and messages.

Customer Relationship - use touchpoints to guide product development based on customer needs

5 steps of the research process

1. formulate the problem or question 2. determine sources of information/ design research process 3. choose appropriate data collection method 4. collect data 5. analyze and interpret data

Customer Decision Making Process

1. need recognition 2. information search 3. evaluation of alternatives 4. purchase 5. post purchase behavior

Probability Sampling

A type of sampling in which every element in the population being studied has a known chance of being selected for study

A business is concerned with many day-to-day activities. Some of the most important of these activities are the planning and development of a product, its ability to communicate value, its pricing policy, and the distribution strategy. These activities are all a part of:

Marketing

What marketing philosophy asks: "What do customers want or need"

Marketing Orientation

Earl is starting a new bank. Before the opening day, Earl had a meeting with all employees. He discussed their mission, defined objectives for the bank for the coming years, and shared who their target market is. He talked about their product offerings and where their future branches would be located. Earl is sharing the bank's:

Marketing Plan

___________ is research that manipulates the environment and then measures the effect to try to establish causal relationships among factors being studied.

Experimental research

Peloton recognizes that an important intersection between its brand and its customers is the purchase/registration process (either online or by phone).

Touchpoint - intersection

Marketers cannot control the external environment in which their organizations operate.

True

Marketers need a thorough understanding of the laws established by the federal government, state governments, and regulatory agencies.

True

T/F? The Nature of the Marketing Environment is Dynamic

True

In a study whose purpose is to determine the market for a vitamin that is to be chewed like bubble gum, what is the first question to be answered before a sampling plan is selected?

What is the population or universe of interest?

Non Probability Sampling

a sampling technique in which there is no way to calculate the likelihood that a specific element of the population being studied will be chosen

Predictive role

address "what if" questions. For example, the predictive role might be focused on what will happen to the sales of a product (or sales of tickets to an event, in this case) if we do something new in our marketing program.

Big Data

aggregated technological data quantitatively analyzed by researchers to determine the "what" of the marketing picture

Net Promoter Score (NPS)

an indirect word-of-mouth measure of true attitudinal loyalty

CONSUMER DECISION MAKING

begins

CUSTOMER CENTRICITY

begins

MARKETING ENVIORNMENT

begins

MARKETING INTELLIGENCE

begins

MARKETING STRATEGY FRAMEWORK

begins

THE MARKETING PLAN

begins

Threat or Opportunity: Customers moving to higher and lower-priced products

both; presents opportunity if co. develops marketing programs in response that can successfully reach one or both ends of market

Role of Porter's 5 Forces

create profitability potential for industry and for the firms competing within it. Used to develop marketing strategy.

To help understand why attendance at the team's games was so poor, the Atlanta Falcons used marketing research to gather factual information. The organization used in-game surveys and end-of-season surveys of ticket holders. The gathering of factual statements is an example of marketing research in its _____ role.

descriptive

where we try to understand how one factor is correlated to another factor so that we might better understand if one factor is actually the cause of another factor.

diagnostic

Primary Data

information collected for the specific purpose at hand

Selective Relationship Management

targeting fewer, more profitable customer

Threat or Opportunity: introducing new lower-priced products to marketplace

neither; internal decision of company

Customer Perceived Value (CPV)

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

Threat or Opportunity: customer segments what to spend more money on new products

opportunity; develop marketing tactic to respond to opportunity created by some customers

Descriptive Role

focused on the gathering of facts to explain the current situation of a market and/or marketing program.

Which of the following is the first step in a market research process?

formulate the problem or question

Threat or Opportunity: competitors introduce lower-priced option to market place

threat; out of company's control

Threat or Opportunity: Shrinking middle class

threat; outside of company control and negatively affect strategic approach to marketplace

Caroline, the manager of a jewelry store, conducts statewide market research and collects data on customer preferences for various jewelry items. Based on her findings, she has to create a forecast of the items that customers are most likely to purchase. In this scenario, Caroline will most likely be performing the _____ of marketing research.

predictive

Diagnostic Role

provide explanations for what a pattern is happening How is one factor correlated to another? What are the causes of said factor "Were customers in the automotive sector more satisfied with the latest release of product [x] when they were first visited by a sales engineer who gave them a tutorial over the new features?"

Quantitative Data Research

research that collects numeric data, generally through sample surveys that can be used for measurement and statistical analysis

SWOT Analysis

goal: interpret and analyze info gen. from 5Cs and Porters - shorthand summary of information from environmental scanning and market sensing - strengths, weaknesses, opportunities, threats

Porter's 5 Forces

goal: understand industry competitiveness 1. industry competitors 2. potential entrants 3. availability of substitutes 4. buyer power 5. supplier power

While Peloton has the expertise and materials to create a new (expensive) machine, it has decided to branch into more categories of non-machine-based exercise (e.g., Yoga) based on its understanding of its customers.

Plan Brand Extensions based on customer needs, not similarities - does not create a similar product with similar customers-- extension appeals to more customers and satisfies loyal ones

"Our materials make more possible. When you commit to market-leading innovations, amazing things happen. That's how we've continually enabled new possibilities."

Product- oriented

Cuties Case Study: Action Plan

Product: healthy, seedless, easy to peel, conveniently snack sized oranges Place: clementine groves that allows Cuties to lock up a good amount of supply Promotion: collaborated with Resnick's to use television and point-of-sale advertising Price: priced Cuties in larger quantities at higher price points because there were few other options for customers to compare

What marketing philosophy asks: "what can we do or make best"

Production Orientation

"Our products are sold in more than 35 markets around the world and our global independent sales force exceeds 2 million. You've got dreams. Whether it's earning a little extra cash or making a full-time commitment, and a sales consultant opportunity offers the freedom, flexibility and, of course, the fun that you've been looking for."

Sales-oriented

"Our support teams and account managers are some of the longest tenured and best trained you'll find anywhere. You'll routinely see the same faces each time you need assistance. With more than 50 offices around the country and 5 on-shore customer care centers, we are focused on being responsive. We think that building lasting relationships is more important than pushing products and we want to know what's important to you so we can deliver that - quickly and reliably - 24 x 7."

Sales-oriented

What marketing philosophy asks: "what do customers want or need and how can we benefit society?"

Societal Orientation

"Our vision: 100% slave-free chocolate. Not just our chocolate, but all chocolate worldwide. How we are going to achieve that? It won't be easy. And it's pretty complex. But we will accomplish it with the help of Tony's roadmap. Our roadmap has 3 pillars and shows us the way to 100% slave-free chocolate: raise awareness, lead by example, inspire others to act."

Societal-oriented

"We are a consciously clean skincare + wellness brand whose mission is to disrupt the global beauty industry. Our intention is to increase accessibility, transparency, and sustainability in all aspects of what we create. From the fair sourcing of our shea butter, to the creation of our homemade products, down to the responsible representation of people working with us at every end."

Societal-oriented

Peloton and CC: Peloton equipment and service is famously expensive, but Peloton tries to always ensure that its key customers always receive the greatest amount of total benefits for the least amount of total costs.

Maximize Customer Perceived Value - greatest amount of benefits for the least amount of cost

After the customer has an opportunity to experience the machine and classes, Peloton sends them a survey that asks, "How likely are you to recommend us to a friend or colleague?" in order to determine whether a customer experience was a success or failure.

Net Promoter Score - was the customer experience a success or a failure and why

3 roles of marketing research

1. Descriptive 2. Diagnostic 3. Predictive

3 ways customer centricity fits into an org

1. Understanding the Customer: a knowledge management system 2. Building a Customer-Centric Culture: the development of strategic competence as a learning organization 3. Serving the Customer: a foundation for corporate strategy development and execution

Action Plan

4 Ps: Product, Promotion, Place to capture value for product so it can be Priced

What marketing philosophy asks: "how can we sell more aggressively?"

Sales Orientation

Focus group with 8 people for 1 hour

Qualitative

Sitting next to people, observing them navigating a website and asking questions about what is easy and difficult for them

Qualitative

Internet-based survey with 25 Likert-type questions (e.g., strongly agree to strongly disagree)

Quantitative

Scanner-based research (e.g., analyzing data from cash register sales)

Quantitative

Due to Peloton's deep understanding of their customers' needs to enjoy and feel motivated to engage in their workouts, Peloton highlights the unique personalities of their elite trainers as an important point of differentiation from other exercise platforms.

Resonance-Focused Model - highlights unique personalities of elite trainers

Aspiration Decisions

S: segregate market to identify possible groups to serve T: targeting a particular group to address P: positioning product so that it is superior to other options

Post Properties is a company that manages apartments in various communities. It is concerned with a glut of apartments in Atlanta, Orlando, and Dallas. Its market researcher begins by examining the rental markets in the Southeast, the history of apartment buildings, local economies, competitive rents, and ownership—all information that was on hand and did not require any new research to locate. The market researcher looked at:

Secondary data are data previously collected for any purpose other than the one at hand.

With all of the information about its customer that Peloton collects, they are able to examine their customer base in great detail and perform profitability analyses to target fewer, but more lucrative, customers over time.

Selective Relationship Model - target fewer, more lucrative, customers

Schematic of Marketing Strategy Formation Process

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