Product placement. Where does it happen

Music, movies, tv shows, videogames, books

Doesn't always go as planned

Companies pay for their products to be shown in movies

In the news

Tim Cook CEO 

Technology company or marketing company?

Easy for advertisers to reach the customers

Named marketer of the decade

The Advertising Legacy 

The Brand

Jobs himself 

- Don't sell products, people buy what other people have

-Never be the 1st to market, they make something good great 

-Empower early adopters

-Make your message memorable

-Surprise and delight your customers 

Creating

Communicating

Delivery

Exchanging

-Collaborating with suppliers and customers

-Create offerings that have value to the customer 

-Describe those offering

-Learning from customers 

-Getting those offering to the consumer

-In a way that optimizes value 

-Trading those offerings to the consumer

-5 components of exchange 

-Must be atleast 2 parties

-Each party must have something of value to the other party

-Each party is capable of communication and delivery

-Each party is free to accept or reject the exchange offer

-Each party believes it is appropriate or desirable to deal with the other party 

-Product: creating offerings

-Promotion: communicating

-Place: delivering

-Price: exchanging/capturing value 

Fundamental purpose of marketing: to create value

-benefits

-firm, partners, customers and society 

Profitable exchange

What is the personal value equation? 

Personal Value Equation

Value= Benefits received- (cost+hassle)

-Philosophy underlying everything marketers do

-Seek to satisfy customer needs and wants 

-Offer excess to allow for plenty of product

-Monitor the marketplace

-Share information

-Balance benefits with costs

-Build relationships with customers 

-Just buyers and sellers exchanging money

-Simply about making a profit 

**-A random activity**

-Production-oriented era:If you build it they will come (Ford Model T), internal capabilities of the firm

-Sales-oriented era: Aggressive salespeople can sell anything

-Market-oriented era: Focus on what customer wants 

Value Based Marketing

-customer value, customer satisfaction

1. offer products that perform

2. earn trust

3. avoid unrealistic pricing

4. give the buyers the facts

5. offer organization wide commitment in service and sales support

6. co-creation

-For-profit companies

Defined by customers, defined by functions

-Non-profit organzations

-Individuals (personal marketing plan) 

CHAPTER 2

Markteting strategy

1. Identifies a firms target markets

2. A related marketing mix- their 4 P's

3. The bases upon which the firm plans to build a sustainable competitive advantage 

-What is the organizations main activity at a particular time?

-How will it reach its goals?

Customer value in center 

1. customer excellence- great customer service (USAA bank)

2. operational excellence- best costs (walmart)

3. locational excellence- better location than anyone else (cracker barrel right next to highway)

4. product excellence- better product than anyone else (BMW, rolex) 

-If you fail to plan, you plan to fail

-Overall analysis of how the firm is going to get the marketing strategy accomplished

-Helps employees and management work toward common goals

-Allows the marketing manager to enter the marketplace with an awareness of possibilites and problems

-What business are we in?

-Should focus on the market or markets the organization is trying to serve rather than a good or service offered 

-DONT WANT:Marketing myopia: defingin a business in terms of goods and services rather in terms of the beenfits that customers seek. 

-DONT WANT to be too broad either

-Also may include sustainable competitive advantage 

internal S(Strengths)-Things the company does well

internal W(Weaknesses)- Things the company doesn't do well

external O(Opportunites)- Conditions in the external environment that favor strengths

external T(Threats)- Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness 

(Step 2)

What is environmental scanning

Helps identify opportunites and threats

Guidelines for designing marketing strategy based on 6 macroeconomic forces 

Environmental scanning

What are the 6 macroeconomic forces?

social

demographic

economic

technological

political/legal

competitive 

Segmentation->Targeting->Positioning 

Which segmetns of customers can you satisfy

Evaluation of each segements attractiveness

How are you positioning the product within the target segments. 

Product value creation

price value capture

place value delivery

promotion value communication 

Cost-based pricing

competitor-based pricing 

value-based pricing

value-based pricing 

-Who is responsible for performance?

-Performance objectives and measures

-Financial performance metrics

-Portfolio analysis

Stars- Large profits, need cash for growth

Cash cows- Dominant market share, technological developement, allocate excess cash to categories with growth potential 

Problem Children- Need cash, invest heavily or drop 

Dogs- Low growth and small market share, drop 

CHAPTER 4

Target Market

Defined group most likely to buy a product 

-Changes as consumers age

-External elements change customers' desires 

Core competency

Existing knowledge, facilities, patents etc. applied to 

New markets, new products etc 

-Competitive intelligence (CI)

-Proactive rather than reactive strategy 

-Firms are part of alliances

-Align with competitors, suppliers etc.

-Just in Time Delivery System (JIT)

-Core beliefs

-Passed on from parents to children

-Reinforced by schools, churches, business, and government

-Secondary beliefs and values

-More open to change than core beliefs

-spending power of ethnic markets in 2012

-Hispanics $1 trillion

-African Americans $921 billion

-Asian Americans $526 billion

-Diversity can result in bottom line benefits to companies

-The population's diversity creates challenges for targeting this group

-Hispanics tend to be brand loyal, but are not aware of many US brands

-68% of US hispanics have home internet access 

-Many firms are creating products for African American market.

-Promotional dollars and media choices directed toward African Americans continue to increase 

-MARKETERS DREAM

-Younger, better educated, and have highest average income of all groups

-Many products have been developed for Asian American market

-Cultural diversity within the Asian American market complicates promotional efforts 

-Multiculturalism ocurrs when all major ethnic groups in an area (city, country, or census tract) are roughly equally represented

-US trend is toward greater multiculturalism

-Americans racial+ethnic patterns have taken on distinctly regional dimensions 

-People are the basis for any market

-Demograpic characteristics relate to buyer behavior

-Tailoring products to what customers value is key to sales

-Demographic cohorts have their own needs, values, and consumption patterns

-39 million born before 1946

-Most likely to complain

-Need special attention

-Take time browsing before purchasing

-Made in the USA 

-Not into designer labels

-Loyal and willing to spend but quality conscious and want convenient hassle free shopping

-77 million people born between 1946 adn 1964

-Wealthiest generation in history

-Account for 50% of consumer spending

-Holds 3/4 of nation's financial assests

-Recession hit baby boomers hard, cutting into savings and retirement prospects

-Represent strong targets for financial services 

-40 million born from 1965-1976

-Most educated generation to date

-Less matieralistic than other groups

-Skeptical of marketing

-Careful spenders 

60 million born between 1977-2000

$733 billion in purchasing power

ethnically diverse

fluent with digital techonology

personalization and product customization are key to marketing success

raised by soccer mom

psychologically impacted by danger in world

school desks in pods, not rows

birthdays take an entire week

everyone gets a trophy (just for showing up)

early education about pollution and environment

new breed of feminism dont use "f" word

open minded and multicultural

get along with and actually like parents

politically active

extremely tech savvy "digital natives"

resilient and not bothered by set backs

job satisfaction over money or opportunity 

needs lots of supervision and structure

an "echo" generation 

29 million age 8-14

purchasing power of $39 billion annually

Parents spend $200 billion on tweens annually 

view tv ads as "just advertising"

aspire to be older- but are still children

want to be unique- but also fit in 

purchasing power is tied to income

census bureau tracks income

many middle calss families feel the decline in purchasing power in recent years 

male/female roles have been shifting

marketing has changed to reflect these shifts 

Core american values (first 200 years of US)

Greener customers

marketing to children-- Attitudes

privacy concerns-- Values

time-poor society-- Lifestyles

technology has impacted every aspect of marketing

new products 

new forms of communication

new retail channels

consumers income

purchasing power

inflation

recession

improve existing products and introduce new ones 

maintain and expand customer services

emphasize top-of-the-line products and promote product value

1. Regulate competitive environment

2. Regulate pricing practices

3. Control false advertising

-6 out of 10 men identified themselves as the family's decision maker on packaged goods, health, pet, and clothing purchases

-men are more brand loyal 

-women view shopping as a personal aisle experience

-men view shopping as a mission

Consumer behavior=how

1. how consumers make purchase decisions

2. how consumers use and dispose of product 

1. Need recognition

2. Information search

3. Alternative evaluation

4. Purchase

5. Post purchase 

Functional needs

psychological needs 

internal information search

-recall information in memory

external information search

-seek information in outside environment

-nonmarketing controlled

-marketing controlled 

NEED LESS INFO

less risk 

more knowledge

more product experience

low level of interest

confidence in decision

NEED MORE INFO

more risk

less knowledge

less product experience

high level of interest

lack of confidence 

internal locus of control- more search activities, you have control

external locus of control- fate, external factors, you have no control 

Actual vs. perceived risk

Performance risk

Financial risk

Psychological risk 

specialty goods/services

convenience goods/services

shopping goods/services 

Universal- everywhere that sells the polos

Retrevial- all the store you can think of where they sell polos

Evoked- stores you would actually consider to maket the purchase

-analyze product attributes

-use cutoff criteria

-rank attribues by importance 

ritual consumption- toothpast (brush teeth every day)

moms birthday card every year 

self-actualization

esteem

love 

safety

physiological 

motives

attitudes

cognitive (general know how)

affective (that which affects others)

behavioral (persons intentions in short/long run)

perception

types of perception

selective exposure- consumer notices certain stimuli and ignores others

selective distortion- consumer changes or distorts information that conflicts with feelings or beliefs

selctive retention- consumer remembers only that info that supports personal beliefs

GROUPS

family

friends

coworkers

famous people

PROVIDE

information

rewards

self-image