Lecture 1 Marketing Advertising consumer behavior brands message distribution differentiation activity set of institutions processes for creating offerings that have value to customers and society at large Really saying Creating value for stakeholders WHY SOME PEOPLE DON T LIKE MARKETING 1 They think it raises prices 2 They think it invades their privacy interrupts 3 They think it exaggerates and hides benefits 4 They think it stimulates cravings not normally there Three Major Contributions of Marketing 1 Marketing raises our standard of living 2 Marketing is a major force in Job Creation 3 Marketing helps influence beneficial behaviors GENERAL MARKETING MODEL 1 Understand the Marketplace and Customer Needs 2 Design a customer value driven market strategy 3 Deliver the marketing strategy 4 Ps Product Price Place Promotion 4 Build Profitable Customer Relationships TYPES OF VALUE CREATED BY MARKETING Form Value Utility provided by changing raw material to finished product Created by production but influenced by marketing Time Value Making product more available when the customer needs it Possession Value Enhancing ability of customer to acquire and use product over time Free samples at Costco Place Value Make product available where the customer needs it Information Value Providing relevant info about the product Service Value Providing excellent service on an ongoing basis The Marketing Mix The set of controllable tactical marketing tools that the firm blends to produce the response it wants in the target market FOUR Ps of MARKETING From the Sellers perspective 1 Product goods and services the company offers to the market 2 Price Amount of money customers have to pay for the product 3 Place Company activities that make the product available to target consumers 4 Promotion Activities that communicate the relevance of product to the customer Four Cs of Marketing From the customer s perspective 1 Customer needs and wants 2 Cost to the customer 3 Convenience 4 Communication Four Theories that can help firms build customer value Theodore Levitt 1 There are no commodities All products can be differentiated 2 Products are problem solving tools Consumers think more about holes and thirst than drill bits and colas 3 There is a bias toward the measurable sales profit etc Firms should also attempt to measure more difficult phenomenon like customer satisfaction fun and friendliness 4 Intangibles matter reputation brand make the intangible tangible What is the main purpose of delivering values to customers PROFIT Lecture 2 Strategic Planning Steps 1 Defining the Company s Mission Mission Statement 2 Setting Company Objectives 3 Designing the Business Portfolio 4 Implementing the Marketing Strategy 5 Defining the Company s Mission a Why are we in business b What unique value can we provide c What do we want to achieve i A Mission Statement needs to be market oriented vs Product oriented Defines business in terms of customer needs 6 Setting Company Objectives a Greater profit is often the primary objective 7 Designing the Business Portfolio a Growth Share Matrix help firms analyze and design businesses and products to achieve objectives such as enhanced profits sales or shares i Question Mark New products and businesses low sales share and cash flow ii Star young but maturing Have strong sales and cash flows and growing share iii Cash Cow Mature products and business that yield strong sales share and profits iv Dog Products and businesses in decline b Build Strategy Improve market position for s and stars c Hold Strategy remain with current position for cows hold on to them as they are making money d Harvest Strategy Milk the cow s cash and profits to help businesses and products in and star areas Signals Strategic shift in focus e Divest Strategy Get out of business or stop marketing the product dogs Penetration Strategy Increase Frequency of use among existing customers using existing products Sales Promotion and usage expansion Market Development Strategy Find new customers in new markets New customers same products Widen the Distribution Network Promotion to build demand Ex City bank giving 100 for opening checking acct Product Development Strategy Develop new products for existing customers New Products Same Customers Ex Applebees changes menu often Diversification Strategy Develop new products for new customers New products New Customers Ex Porche offers 4 door SUV LECTURE 3 Unmet Customer Needs Needs customers recognize but are not being met by existing solutions Unmet needs are usually based on shortcomings of existing products Expressed Needs Solutions for customers that are so radical or revolutionary that they can t envision them Unexpressed Needs PECTS MODEL Political Analysis Tariff taed laws alcohol advertising Economic Analysis Income Level Interest Rates Gas Prices Hybrid Car Competitor Analysis Number of competitors in the segment affects price service Technological Analysis Internet TV Radio Netflix online DVD Rental Social Analysis Trends Religion Ethnic Background Demographics WOW An insight that arises from a PECTS analysis that can t be explained solely by the facts from the PECTS themselves EX Post it notes came from bad glue 1 Political Analysis a Laws i Sherman Antitrust Act 1890 Prohibits restraint of trade ii FTC Act 1914 Prohibits unfair methods of Competition iii Robinson Patman 1936 Prohibits price discrimination iv Food Drug Act 1906 prohibits adulteration and misbranding of foods and drugs v NLEA 1990 New food labeling requirements 2 Economic Analysis a Economic Growth b Inflation Rates c Unemployment Levels Recession d Exchange Rates e Ecological and Environmental Issues 3 Competitive Analysis a Competitors How they compete to serve the customer EX competitors can be grouped according to i Pursue Similar Competitive Strategies Use the same distribution channel emphasize heavy media advertising employ low price etc ii Have similar Firm Characteristics size geography culture etc iii Have similar types and sizes of Assets Quality image strong innovation culture capable sales force etc Customer Choice Analysis Based on how the customer defines competing solutions Resulting array of competitors may include firms offering very different offerings 4 Technological Analysis a Present and future state of technology b Competing technologies to present technologies c Innovation potential d Customer use of technology 5 Social Analysis a Demographics b Lifestyle Trends c