CHAPTER 1: Defining Marketing for the 21st Century

Define: Marketing

&

What is its purpose?

Marketing: "meeting needs profitably."

An organizational function and set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

(Create a loyal customer base)

• Goods
• Services
• Events
• Experiences
• Persons
• Places
• Properties
• Organizations
• Information
• Ideas

Industry to Market

(A collection of sellers to a collection of buyers)

*Honesty is the best policy in marketing.

Industry

Outgoing: Goods and Services + Communication

Incoming: Money and Information

Market

Opposite of Industry

(Incoming - Goods/Communication. Outgoing - Money and Information)

• Consumer
• Business
• Global
• Nonprofit/Government

Core Concepts:

5 Types of Consumer Needs

(...wants, and demands)

• Stated
• Real
• Unstated
• Delight
• Secret

Core Concepts:

Target Markets, Positioning and Segmentation

Core Concepts:

Offerings and Brands

Value proposition: a set of benefits that satisfy consumer needs.

Core Concepts:

Value and Satisfaction

The offering (proposition) will be successful if it is perceived to have the most value to consumers.

Satisfaction: a person's judgement of a product's perceived performance in relationship to expectations.

• Performance

Core Concepts:

Marketing Channels

• Communication
• Distribution
• Service

Core Concepts:

Supply Chain

Core Concepts:

Marketing Environment

• Demographic
• Economic
• Political - Legal
• Socio - Cultural
• Technological
• Natural

Core Concepts:

Marketing Planning

• Network Information Technology
• Globalization
• Deregulation
• Privatization
• Heightened Competition
• Industry Convergence
• Retail Transformation
• Disintermediation
• Consumer Buying Power
• Consumer Participation
• Consumer Resistance

Major Societal Forces

(Class Notes)

• Technology is growing which makes network information and social networking so important.
• BRIC Countries (Brazil, Russia, India & China) are fast growing Economies and Markets
• NAFTA & EU

4 Company Orientations

• Production
• Product (Constantly improving it)
• Selling
• Marketing

Holistic Marketing

- Questions to Address

• Very Important
• Good Corporate citizenship & Ethics

• What value opportunities are available?
• How can we create new value offerings efficiently?
• How can we deliver the new offerings efficiently?

Holistic Marketing

- What is it?

• Customers
• Employees
• Marketing Partners
• Financial Community

What is Internal Marketing?

Financial Accountability

&

Social Responsibility Marketing

• Corporate social marketing
• Cause marketing
• Cause-related marketing
• Corporate philanthropy
• Corporate community involvement
• Socially responsible business practices

The Marketing Mix

(The 4 P's)

• Product
• Price
• Promotion
• Place

• People
• Process
• Programs
• Performance

• Develop market strategies and plans
• Capture marketing insights
• Connect with customers
• Build strong brands
• Shape market offerings
• Deliver value
• Communicate value
• Create long-term growth

• Chosing the Value
• Providing the Value
• Communicating the Value

The chain of activities any organization needs to undertake in order to create more customer value.

• Production
• Marketing
• Delivering
• Support its Product

• Market-sensing process
• New-offering realization process
• Customer acquisition process
• Customer relationship management process
• Fulfillment management process

• A source of competitive advantage
• Applications in a wide variety of markets
• Difficult to imitate

Maximizing Core Competencies

(3 "Re-"s)

• (Re)define - the business concept
• (Re)shape - the business scope
• (Re)position - the company's brand identity

The Strategic Planning, Implementation and Control Processes

(Figure 2.1)

The central instrument for directing and coordinating the marketing effort.

It operates at a strategic and tactical level.

Levels of a Marketing Plan

(Strategic and Tactical Chart)

Strategic:

• Target marketing decisions
• Value proposition
• Analysis of marketing opportunities

Tactical

• Product Features
• Promotion
• Merchandising
• Pricing
• Sales Channels
• Service

• Define the corporate mission
• Establish strategic business units (SBU's)
• Assign resources to each SBU
• Assess growth opportunities

• Small number of goals
• Stress on major policies and values
• Define major competitive spheres
• Take a long-term view
• Short, Memorable, & Meaningful!

• Industry
• Products
• Competence
• Marketing Segment
• Vertical Channels
• Geographic

Dimensions Define a Business

• Customer Groups
• Customer Needs
• Technology

Characteristics of SBU's

(Strategic Business Units)

• Single Business
• Own set of competitors
• Has a leader responsible for strategic planning and profitability.

Business Mission ->

External Environment

to SWOT analysis

to Internal Environment

-> Goal formulation

-> Strategy formulation

-> Program formulation

-> Implementation

->Feedback and Control

(Feedback feeds back into the bussiness mission)

• Economy (Recession)
• Competition (Most Threatening)
• Technology

Strengths

Weaknesses

Opportunities

Threats

• Unit's objectives must be hierarchical
• Objectives should be quantitative
• Goals should be realistic
• Objectives must be consistent

• Overall cost leadership (Outsourcing = Cheaper labor & materials)
• Differentiation (Warranty's and what separates you from the competition.)
• Focus

4 Categories of Marketing Alliances

Define: Strategic Alliance

• Product or service alliance
• Promotional alliance
• Logistics alliances
• Pricing collaborations

Strategic Alliance: Joining forces strengthens positioning in the market.

• Skills (Hire a highly skilled staff)
• Staff
• Style
• Strategy
• Structure
• Systems
• Shared Values

• Executive Summary
• Table of Contents
• Situation Analysis
• Marketing Strategy
• Financial Projections
• Implementation Controls

• Is the plan simple?
• specific?
• realistic?
• complete?

Measuring Marketing Performance

• Marketing Metrics
• Marketing Dashboards
• Marketing Plan Performance

CHAPTER 3: Collecting Information and Forecasting Demand

What is a Marketing Information System?

• Order-to-payment cycle
• Sales information systems
• Databases, warehousing, data mining
• Marketing intelligence system

• Syndicated
• Custom
• Specialty-line

1. Define the problem - and specify decision alternatives and state research objectives. Types of Research: Exploratory, Descriptive and Casual
2. Develop research plan - data sources, research approach, research instruments, sampling plan, contact methods
3. Collect information
4. Analyze information
5. Present findings
6. Make decision

• Observational and ethnographic
• Focus group
• Survey
• Behavioral
• Experimental

• Questionaires
• Qualitative Measures
• Technological Devices

• Word Associations
• Visualization
• Projective Techniques
• Laddering

• Sampling Unit: Who to survey?
• Sample Size: How many?
• Sampling Procedure: How should the respondents be chosen?

Forecasting and Demand Measurement -

How can we measure market demand?

• Potential Market
• Available Market
• Target Market
• Penetrated Market

• Market Demand
• Market Forecast
• Market Potential
• Company Demand
• Company Sales Forecast
• Company Sales Potential

Calculations: Multiply potential number of buyers by average quantity each purchases times price.

Chain-ratio Method

• Survey of Buyers' Intentions
• Composite of Sales Force Opinions
• Expert Opinion
• Past-Sales Analysis
• Market-Test Method

• Demographic
• Political-Legal
• Economic
• Technological
• Socio-cultural
• Natural

Population and Demographics

*ON TEST* What are the trends?

<1% Growth US (Immigration)

Amer. Pop. is getting older

Birth rate is on the decline.

• Population Growth
• Population Age Mix
• Ethnic Markets
• Educational Groups
• Household Patterns

• Consumer Psychology
• Income Distribution
• Income, Savings, Debt, Credit

• Subsistence economies (countries barely making it)
• Raw-material-exporting economies
• Industrializing economies
• Industrial Economies

• Views of themselves
• Views of others
• Views of organizations
• Views of society
• Views of nature
• Views of the universe

• Shortage of raw materials
• Increased energy costs
• Anti-pollution pressures
• Governmental protections

• Change of Pace
• Opportunities for innovation
• Varying R&D budgets
• Increased regulation of change

• Business Legislation
• Growth of Special Interest Groups

Potential Market: the set of consumers with a sufficient level of interest in a market offer.

Available Market: The set of consumers who have interest, income, access, and qualifications for the offer.

3 Research Instruments:

Three Main Instruments in collecting primary data:

- questionaires

- qualitative measures: unstructured, permit a range of possible responses. (consumers may reveal more about themselves.)

- technological devices: neuromarketing/brain research

Research Approaches

(Five Main Ways)

1. Through Observation
2. Focus Groups
3. Surveys
4. Behavioral Data
5. Experiments
   

Types of Research:

Exploratory

Descriptive

Casual

• Exploratory: to shed light on the nature of the problem and suggest possible solutions or new ideas.
• Descriptive: to quantify demand (how many? how much?)
  
• Casual: to test a cause and effect relationship
  

Marketing Research Process

Pg. 37-40

1. Define the problem - and specify decision alternatives and state research objectives. Types of Research: Exploratory, Descriptive and Casual
2. Develop research plan - data sources, research approach, research instruments, sampling plan, contact methods
3. Collect information
4. Analyze information
5. Present findings
6. Make decision