Lecture 1Marketing: 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 MARKETING1. They think it raises prices2. They think it invades their privacy/interrupts3. They think it exaggerates and hides benefits4. They think it stimulates cravings not normally thereThree Major Contributions of Marketing1. Marketing raises our standard of living2. Marketing is a major force in Job Creation3. Marketing helps influence beneficial behaviorsGENERAL MARKETING MODEL1. Understand the Marketplace and Customer Needs2. Design a customer value driven market strategy3. Deliver the marketing strategy (4 Ps: Product Price Place Promotion)4. Build Profitable Customer RelationshipsTYPES OF VALUE CREATED BY MARKETINGForm 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 itPossession 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 basisThe Marketing Mix: The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target marketFOUR Ps of MARKETING (From the Sellers perspective)1. Product: goods and services the company offers to the market2. Price: Amount of money customers have to pay for the product3. 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 wants2. Cost to the customer3. Convenience4. CommunicationFour 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: PROFITLecture 2Strategic Planning Steps:1. Defining the Company’s Mission (Mission Statement)2. Setting Company Objectives3. Designing the Business Portfolio4. Implementing the Marketing Strategy5. Defining the Company’s Missiona. 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 Objectivesa. Greater profit is often the primary objective7. Designing the Business Portfolioa. Growth Share Matrix: help firms analyze and design businesses and products to achieve objectives such as enhanced profits, sales, or sharesi. Question Mark: New products and businesses/low sales, share and cash flowii. Star: young but maturing. Have strong sales and cash flows and growing shareiii. Cash Cow: Mature products and business that yield strong sales, share and profitsiv. Dog: Products and businesses in decline.b. Build Strategy: Improve market position for ?s and starsc. Hold Strategy: remain with current position for cows hold on to themas 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 oftenDiversification Strategy: Develop new products for new customers (New products, New Customers) Ex: Porche offers 4 door SUVLECTURE 3Unmet 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 MODELPolitical 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, serviceTechnological Analysis: Internet, TV, Radio (Netflix online DVD Rental)Social Analysis: Trends, Religion, Ethnic Background, DemographicsWOW: 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 Analysisa. Lawsi. Sherman Antitrust Act(1890): Prohibits restraint of tradeii. FTC Act (1914): Prohibits unfair methods of Competitioniii. Robinson Patman (1936)” Prohibits price discriminationiv. Food & Drug Act (1906): prohibits adulteration and misbranding of foods and drugsv. NLEA (1990): New food labeling requirements2. Economic Analysisa. Economic Growthb. Inflation Ratesc. Unemployment Levels/Recessiond. Exchange Ratese. Ecological and Environmental Issues3. Competitive Analysisa. 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 Analysisa. Present and