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CHP1-CREATING & CAPTURING CUSTOMER VALUE

WHAT IS MARKETING?
Marketing is managing profitable customer relationships. To attract new customers by promising superior value and to keep and grow current customers by delivering satisfaction.

Customer Value:
Customer Perceived Valuethe customers evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers.

Customer Satisfaction:
The extent to which a products perceived performance matches a buyers expectations. ie. Ritz-Carlton Hizmette Memorable Experience olusturacak kadar u noktaya gidiliyor!

Marketing Defined:
Mktg is a social and managerial process by which, individuals and organizations obtain what they need and want thru creating and excahnging value with others.

Customer Relationship Levels and Tools:


Frequency Marketing Programs ; Club Marketing Programs Ie. Supply Management Online system of McKesson Corporation helps retailer customers manage their inventories, orders and shelf space.

The Marketing Process

The Changing Nature of Cust. Relationships (Recent Trends)


-Selective Relationship Management: Relating with more carefully selected customers. o Profitability analysis: ie. Angels & Demons policy of Best Buy -Interacive & Deep Relations: o Consumer Generated Marketing: Mktg messages, ads and other brand exchanges created by consumers themselves both invited and uninvited. o Attraction rather than intrusion o Direct marketing and social networks, instead of mass marketing,

UNDERSTANDING THE MARKETPLACE & CUSTOMER NEEDS Customer Needs, Wants, And Demands
Needs are states of felt deprivation Wants are the human needs that are shaped by culture and personality When backed by buying power wants become Demands.

Partner Relationship Management


Marketing Partners Inside The Company:
Company people from all departments & functions are partners of marketers in the Mktg process. ie. Approach of P&G Customer Development Teams instead of independent functions.

Market Offerings- Products,Services & Experiences


Market offerings are products,services, persons, places, organizations, information and ideas. Marketing Myopia: Making the mistake of paying more attention to the specific products they offer than to the benefits and experiences produced by these products.

Marketing Partners Outside the Company:


Networked companies that rely heavily on partnership with other firms. Supply Cahin Members and Supply Chain Management

Customer Value & Satisfaction


Customer value and customer satisfaction are key building blocks for developing and managing customer relationships.

CAPTURING VALUE FROM CUSTOMERS Creating Customer Loyalty And Retention


Even a slight drop from Customer Satisfaction can create an enormous drop in Loyalty. Thus the aim of CRM is to create not just customer satisfaction, but customer delight Frederick Reicheld Customer Life Time Value: the stream of purchases that the customer would make over a lifetime of patronage

Exchanges & Relationships


Marketing consists of actions taken to build and maintain desirable exchange relationships with target audiences involving a product, service, idea, or other object.

Growing Share Of Customer


Instead of market share, the emerging one is Share of Customer. -Share of Wallet, Share of Stomach, Share of Garage, Share of Travel -Cross-Selling and Up-Selling opportunities are explored

Markets
A market is the set of actual and potential buyers of a product. These buyers share a particular need or want that cars be satisfied through exchange relationships.

DESIGNING A CUSTOMER-DRIVEN MARKETING STRATEGY


Marketing management is the art and science of choosing target markets and building profitable relationships with them. Marketing Strategy: What customers will we serve (whats our target market)? How can we serve these customers best (whats our value proposition)?

Building Customer Equity


Customer equity is the combined discounted customer lifetime values of all of the companys current and potential customers.

Building Right Relationships with the Right Customers:

Selecting Customers To Serve


Potential profitability
Marketing management is -Customer Management ( Market Segmentation & Target Marketing) -Demand Management (Demarketing)

Figure 1.5 Customer Relationship Groups (by W erner Rel na rts & V. Kuma r)
High Profi ta bi l i ty Low Profi ta bi l i ty

Butterflies
Good fi t between compa ny's offers a nd cus tomer's needs ; hi gh profi t potenti a l

True Friends
Good fi t between compa ny's offers a nd cus tomer's needs ; hi ghes t profi t potenti a l

Choosing A Value Proposition


Is the set of benefits or values the firm promised to deliver to consumers to satisfy their needs.

Strangers
Li ttl e fi t between compa ny's offers a nd cus tomer's needs ; l owes t profi t potenti a l Short-term cus tomers

Barnacles
Li mted fi t between compa ny's offers a nd cus tomer's needs ; l ow profi t potenti a l Long-term cus tomers

Marketing Management Orientations


What weight to give to the interests of customers, the organization, and society? Often, conflicts.

Projected loyalty

The Production Concept:


Holds that consumers will favor products that are available and highly affordable. Focus on improving production and distribution efficiency. Losing sight of satisfying customer needs and building customer relationships. Products that offer Quality, Performance, Innovation. Focus on product improvement. Make and Sell approach. Losing sight of marketing mix of 4Ps. Products that are supported by Selling & Promo Efforts. Sales volume is aimed. Losing sight of Satisfaction, Retention, Relationships. Inside-Out approach. Products that meet customer needs, wants. Customer satisfaction is aimed. Focus on customer and value. Sense and respond. Outside-In approach. Customer driven marketing vs Customer driving marketing. Consumer Behavior vs Neuro Marketing or Conscious needs vsUnconscious needs. Focuses on Putting People Before Profits The products that meet consumers short-run wants and long-run welfare Improve both consumers and societys well-being.

The Product Concept:

THE NEW MARKETING LANDSCAPE The New Digital Age (Online Marketing) Rapid Globalization (International Marketing) The Call For More Ethics And Social Responsibility
Consumerism and Environmentalism, the caring capitalism Colleges, Museums, Religions, Army , Charities etc.

The Selling Concept: The Marketing Concept:

The Growth Of Not-For-Profit Marketing SO, WHAT IS MARKETING? PULLING IT ALL TOGETHER

The Societal Marketing Concept:


-

PREPARING AN INTEGR. MARKETING PLAN & PROGRAM


Marketing Program delivers the intended value to chosen customers.

BUILDING CUSTOMER RELATIONSHIPS Customer Relationship Management


CRM is perhaps the most important concept of modern marketing. Narrowly, is to manage Customer Data & Customer Touch Points to maximize Customer Loyalty. Broadly,is to building and maintaining profitable customer relationships by delivering superior value and satisfaction. It deals with all aspects of acquiring, keeping, and growing customers.

Relationship Building Blocks: Customer Value & Satisfaction:

CHP2-COMPANY & MARKETING STRATEGY


To understand the role of MKTG, we must understand the company strategic planning process.

COMPANYWIDE STRATEGIC PLANNING: DEFINING MKTGS ROLE


Strategic planningthe process of developing and maintaining a strategic fit between the organizations goals and capabilitips and its changing marketing opportunities. The annual & long-range plans deal with the current businesses and how to keep them going. The strategic plan involves adapting the firm to opportunities in the changing environment.

Market Segmentation :
- Mkt segment is a group of consumers who respond in a similar way to a given set of MKTG programs. - Segmetation is dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, who might require separate products or marketing programs. -Segmentation Types: Geographic, Demographic, Psychographic, Behavioral.

Defining a Market Oriented Mission:


Beware of marketing myopia.Dontt use product & technology terms.Use market oriented terms. Be clear, meaningful, motivating and express what you simply want to give the people. ie. Vivendi Prd oriented We run theme parks Mkt oriented We create fantasies -a place where dreams come true

Market Targeting:
Evaluating each market segments attractiveness and selecting one or more segments to enter. Niche Targeting (targeting single or few segments) ie.Ferrari, Veterinary Pet Insurance, Soy Milk Multi-Segment Targeting: ie. AberCrombie(College, Teens, Kids Original, Hollister, AberCrombie Targeting All Market Segments with different products. ie GM

Setting Company Objectives & Goals:


The mission leads to a hierarchy of objectives, including business objectives and mktg objectives.

Market Differentiation and Positioning


-Differentiate market offering to create superior customer value for each targeted segment . -Positioning identifies possible customer value differences that provide competitive advantage -Positioning: Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the mind of target consumers. Consumers to Buy Differentiation (be better on the desired attribute) Consumers to Pay More Positioning (be better on the overall perceived values)

Designing the Business Portfolio: Collection of businesses of a company.


The best business portfolio is the one that best fits the companys strengths and weaknesses to opportunities in the market. When designing a bsinessportfolio its a good idea to add and support products and businesses that fit closely with the companys core philosophy and competences.

Analyzing The Current Business Portfolio:


Portfolio Analysis:The management evaluates the products and businesses making up the company. To put strong resources into more profitable businesses and phase down or drop weaker ones. Strategic Business Units (SBU): a unit of the company that has a separate mission and objectives and that can be separately planned. Can be a division, a product line, a brand or a product. Resource reassignment among SBUs.

Developing an Integrated Marketing Mix (The companys tactical toolkit)

The Boston Consulting Group Approach:

Sellers View Buyers View

4Ps 4Cs

Product, Pric, Plce, Promo Customer Solution, Customer Cost, Convenience, Communication

MANAGING THE MARKETING EFFORT


MNGMT Decisions: Build / Hold / Harvest / Divest Analysis, Planning, Implementation, Organization, Control

Problems with Matrix Approaches:


Provide little advise for future planning but current situation. Strategic Planning efforts are getting more and more decentralized today.

Strategies for Growth & Downsizing(Analysis for Future Portfolio)


Growth Strategies:

Marketing Analysis (SWOT)


-Strengths: Internal Capabilities, Resources, Positive Situational Factors -Weaknesses: Internal Limitations, Negative Situational Factors -Opprtunities: Favorable external factors or trends -Threats: Unfavorable external factors or trends Analyze markets & MKTG environment to find opportunities & identify threats Analyze company strengths & weaknesses as well as current & possible MKTG actions to determine best opportunities to pursue.

Downsizing Strategies: Prune /Harvest / Divest


BASFs Strategic Plan: Mission-> Help customers to employ chemicals to find innovative solutions. This implies R&D R&D implies profitability Increased Sales or Reduced Cost Overall Objectives Goals Improved Domestic Share or International Share (MKTG (Broad MKTG (Requirements)

Marketing Planning
Product or brand MKTG plans. The outline of a MKTG plan is as follows: -Executive Summary: Review major assessments, goals & recommendations -Detailed SWOT Analysis: Current MKTG situation Potential threats & opportunities -Major Objectives: For the brand or the product. -Detailed Mktg Strategy: Targeting -- Positioning -- MKTG Mix MKTG Expenditure Levels Planner here explains how each strategy responds to threats, opportunities & other critical issues mentioned earlier in the plan. -Action Program for Implementation: -Marketing Budget: Supporting the details of MKTG program -Control Section: -- How to monitor progress - -How to measure ROI -- Corrective Actions

Increased Sales Objectives) Improved Domestic Share Increased Availability & Promo Strategies) Increased Promo Sales People, Advertising, PR

PLANNING MKTG: PARTNERING TO BUILD CUSTOMER RELATIONSHIPS


MKTGs role in company strategicplanning: -Provides MKTG concept: Defines how company strategy revolve around building profitable relationships with important consumer groups. -Provides input by helping to identify market opportunities by assessing the firms potential to take advantage of the market -Design each units strategies for reaching units objectives profitably.

Marketing Implementation - Implementation is as much important as strategy Marketing Department Organization


Funct Org - Geog Org - Product Mng Org - Ctg Mng Org Market Mng Org Cust Mng Org Prod Mng started by P&G 1929 Camay Soap. Trend today from Brand Mng Cust Mng (P&G)

Partnering with Other Company Departments (Value Chain)


MKTG help coordinating all departments as to be customer focused. Value Chain Weakest Link

Marketing Control(-Set Goals-Measr Perf-Identify Diffr & Reasons- Correct Act)


Operating Control:Check ongoing performance against annual plan. Sales , profits, etc. Strategic Control: Check the match between company strategies & opportunities Marketing Audit: Covers all MKTG areas (environment, strategy, organization, mix, productivity & profitability of MKTG etc.) Coducted by an objective, experienced, outside party.

Partnering with Others in the MKTG System (Value Delivery Network)


-Value Delivery Network(McDonalds): The network made up of the suppliers, distributors & customers of Co. who partner with each other to improve the performance of the entire system. -Supplier Satisfaction: Supplier improvement & training them to better function (Toyota) -Competition is between Value Delivery Networks of competitors, rather than competitors alone.

MEASURING & MANAGING RETURN ON MKTG INVESTMENT


-Measurement & Accountability -MKTG Dashboards: Meaningful sets of MKTG measures in a single display used to monitor strategic MKTG perf. -Measures of Current Performance (Traditional) + Measures of Future Performance (NEW) (Awareness, Sales, Profits, Market Share etc.) (Acquisition, Retention, Lifetime Value, Equity)

MARKETING STRATEGY AND THE MARKETING MIX


Guided by MKTG strategy the company designs an integrated MKTG Mix. To find the best MKTG strategy and mix the company engages in MKTG Analysis, Planning, Implementation & Control.

Customer-Driven Marketing Strategy


MKTG logic by which the company hopes to create customer value & achieve profitable relationship.

CHP3-THE MARKETING ENVIRONMENT


THE COMPANYS MICROENVIRONMENT
Company Suppliers MKTG Intermediaries Competitors Publics Customers

Linking purchases of companys products with fundraising for worthwhile causes or charitable organizations.

Cultural Environment
People grow in a society that shapes their basic beliefs and values.

The Company
Value Chain Everybody should Think Consumer Marketing takes the lead.

Persistance of Cultural Values


-Core Beliefs Almost no change ie.honesty, charity, marriage, work etc. Parent to -Secondary Beliefs More open to change. ie. Get married early. Marketers try to child

Suppliers Marketing Intermediaries


Resellers -- Distribution Firms -- Mktg Services Agencies, -- Financial Intermediaries

Shifts in Secondary Cultural Values


Used to predict big cultural changes ie. Yankelovich Monitor Monitors consumer trends & identify consumer segments

Competitors Publics
Is any group that has an actual or potential interest in or impact on an organizations ability t achieve its objectives. Financial Publics Media Publics Citizen-Action Publics Government Publics Local Publics General Public Internal Publics

Peoples Views of Themselves (Self View)


Do-It-Yourself segment, Adventurers segment. ie. MasterCard targets Adventurers

Peopless Views of Others


Cocooning in the digital age. Dar ckmama, evde vakit gecirme.

Peopless Views of Organizations


-Decline in organizational loyalty work is a chore to earn money

Customers
Consumer Markets Reseller Markets Government Markets Intnl Markets Business Markets

Peoples Views of Society


Patriots (wants to defend), Reformers (wants to change), Malcontents (wants to leave) American patriotism has surged within the last decade.

THE COMPANYS MACROENVIRONMENT Demographic Environment


Size, Density, Location, Age, Gender, Race, Occupation & other statistics(US 300M vs 114M households)

Peoples Views of Nature


Segments: Ruled by it --In harmony with it -- To master it -Growing LOHAS market (Lifestyles Of Health And Sustainability)

Changing Age Structure of the Population


Ie. Six-Pocket syndrome of Chinese kids

Peoples Views of the Universe


Increasing Spirituality and religions away from Materialism and struggle. Emerging trend is New Spiritualism: wondering about meaning of life, soul, spirit

The Baby Boomers


Born 1946-1964. 30% of population, 78 M people, 75% of assets, 45-65 ages, $2.3 T of spending Three Segments: Leading Edge Boomers Core Boomers Trailing Edge Boomers Ameriprise Financial targets Baby Boomers

RESPONDING TO THE MARKETING ENVIRONMENT


Reactive (React & Adapt) Proactive (Act & Affect) Proactive Stance: Hire lobbyists to influence legislation Stage media events to gain favorable press coverage Run advertorials to shape public opinion Press lawsuits and complaints against competitors Form contractual agreements to better control the distribution channels ie. Oscar Mayer hot dogs fight against rumosr about refusing to supply US troops in Iraq.

Generation X
Born between 1965-1976, 49 M people, $1.4 T of spending Charles Schwab targets GernerationXers.

Milennials (Gen Y - Echo Boomers)


Born between 1977-2000. 83M people. 45% ethnic Three segments: Tweens, Teens, Young Adults Swash of Tide targets Millennials.

Generational Marketing
-Each generational segment consists of many subsegments to take into special consideration. -Generational segmentation is less effective than lifestyle, life stage, common value segmentation

The Changing American Family


Ie. Peapod Online Grocer

Geographic Shifts in Population


-Movement towards MicroPolitan areas -SOHO: Small Office Home Office -Tele-Commuting:Work at home or remote office & conduct business by phone, internet. ie. WebEx

A Better-Educated, More White-Collar, More Professional Population Increasing Diversity


-Growing ethnic diversity: Hispanics, Asians. ie. Energizer Bunny -LGBT Community: 25% of households. ie. Logo cable TV -Disabilities: 54 millions, about 18%. ie. Disaboom.com

Economic Environment
Industrial Economies Subsistence economiesDeveloping Economies

Changes in Income
-Value Marketing: Right combination of quality & service at fair price -Top 1% gets 21% of total income in the US. Bottom 50% gets 13% Ie. High-end designer Isaac Mizrahi pioneered fashion for the masses at Target stores Less expensive lines are being sold at H&M

Changing Consumer Spending Patterns


Engels Law: As family income rises food expenses decline in percentage; housing remains same; other expenses & savings increase in percentage.

Natural Environment
-Environmentally Sustainable Strategies: -Non-renewable Resources -Increased Pollution -Increased Government Intervention -Green Movement ie. GEsEcomagination (-40% emission) HPs recycling system (800 jumbo jets material re-collected)

Technological Environment
ie. RFID technology use fostered by Wal-Mart

Political & Social Environment


Laws -- Government Agencies -- Pressure Groups

Legislation Regulating Business


Increasing Legislation Changing Government Agency Enforcement

Increased Emphasis on Ethics and Socially Responsible Actions


Socially Responsible Behavior
-Look beyond the regulatory system

Cause-Related Marketing

CHP4-MANAGING MARKETING INFORMATION


MKTG INFORMATION & CUSTOMER INSIGHTS
A Marketing Information System (MIS) consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distritute needed, timely, and accurate information to marketing decision makers. Customer Insights: Fresh understandings of customers and the marketplace.

ASSESSING MARKETING INFORMATION NEEDS DEVELOPING MARKETING INFORMATION Internal Data (All business and customer data within the company) Marketing Intelligence
Systematic collection & analysis of publicly available info about consumers, competitors & developments in the market (Monitoring internet buzz, observing consumer, quizzing employees, benchmarking competitors products, researching the internet, trade shows, rivals trash bins) -Online monitoring services ie NielsenOnline, BrandIntel -Competitive Intelligence: The companies that are using are proved to be 20% faster in taking actions than those are not using competitive intelligence Source:PWC. Sources are employees, suppliers, resellers, customers, analyze competitors products, check published info, examine any type of physical evidence, web, waste bins, annual reports, business publication, online databases, patent offices, BVD, Carol, D&B, EU Patent Office

MARKETING RESEARCH
The systematic design collection & analysis of data relevant to a specific MKTG situation -Gives insights about customer motivations, purchase behavior, satisfaction, assess market potential,market share, measure the effectiveness of 4 Ps

Defining the Problem and Research Objective Developing the Research Plan Gathering Secondary Data Primary Data Collection
Research Approaches
Observational Research Survey Research Experimental Research

Contact Methods
Mail, Telephone and Personal Interviewing Online Marketing Research

Sampling Plan Research Instruments


Questionnnaires Mechanical Instruments

Implementing the Research Plan Interpreting and Reporting the Findings ANALYZING MARKETING INFORMATION Customer Relationship Management (CRM) DISTRIBUTING AND USING MKTG INFORMATION OTHER MARKETING INFORMATION CONSIDERATIONS Mktg Research in Small Businesses and Nonprofit Orgs. International Marketing Research Public Policy and Ethics in Marketing Research
Intrusions on Cnsumer Privacy Misuse of Research Findings

5-CONS BUYER BEHAVI 7 -MARKETING STRATEGY


MODEL
Environment MktStim Produc Price Place Promo Cultural Culture Subcult SociaCls Other Eco Tehno Socio Cultur Social RefGroup Family Role&Sta ByrCharac Deci Proce Attitude Purchase PostPurc Relationsh Psycho Motivation Perceptio Learning Beliefs Attitude BlackBox Respons

9 - NEW PROD DEV & PLC


By Acquisiton or By NPD NEW PROD STRG THE NPD PROCESS Internal/External Sources Idea Generation Filter (RWW: Real, Woth,Win) Idea Screening Concept, Idea, Image Concept Dev&Test 3 Stages Mkt Strg Dev Describe the Target Market State the Value Proposition Define the Goals for the First Year To analyze financial attractivenes Business Analysis Sales Forcast, Cost Estim, Proft Projection

SEGMENTATION Divide mkt into groups for needs,behv,characteris


"Rifle approach instead of shotgun approach"

BUYER CHARACTERISTIC
Personal AgeLifeCyc Occupation EcoSituatio LifeStyle Personality SelfConce

Variables Geopgraphic Demographic Behavioral MultipleSegm BusinMktSegm & IntlMarketSegm Measrbl,Accesbl,Substantl,Differentibl,Actionabl Rules TARGETING Evaluating segm attractiveness&selecting segm Evaluating Size&Growth Segment size and growth
StructAttractv Resourc&Obj Competitor,Buyers,Substitut,Supplrs Company resource&objectives

Culture

Learned values, perceptions, wants, behavio Cultural shift is important to detect

Selecting Undifferentiated Mktg (Mass Mktg) Differentiated Mktg Concentrated Mktg (Niche Mktg) Micromarketing
Local Marketing Individual Mktg Mass Customization, OnetoOne Mktg Makts of One, Self Mktg

Subculture Nationality, religion,race, geography


Base for important mkt segments

Class

Upper, Middle, Working, Lower Wealth, Educ,Occupation, Income

Factors

Company Resources Product Variability Competitor's Strategy

ProductLifeCycle Market Variability If Undiff->Go Diff etc

GroupNetw Reference, Membership, Online Grp&Netw Family Traditional roles are changing, Masculinization
Children getting more important

Socially Responsible Targeting


Unfairly targeting vulnerable segms with questionabl products or tactics against the interest of the targ

RoleStatus Each role carries a status given by the society AgeLifeCyc Traditional:YoungSingles,MarriedCouples
New:UnmarriedCouples,SingleParents,EmptN

DIFFERENTIATION&POSITIONING
USP (UniqueSalesProp) Product Position Value Proposition PerceptualPositMaps

Product Development Prototype Development Torture, Consumer, Lab Tests Quality Test Standard / Controlled / Simulated Test Marketing Commercialization Intro timing Timing Market / Global Rollout Place MANAGING NPD Customer-Centered, Team Based, Systematic PLC STRATEGIES PLC Dev. Intro Innovators no profit Decide +Profit or +Volume Grow EarlAdopt Modify the Mkt / Prod / Mix Matur Mid Major Maintain/Repos/Harvest/Drop Decli Laggards
Diffr for Prod Class / Prod Form / Brand(shortest life) Applies different for Styles / Fashions / Fads

Occupation occupational segmentation & targeting niche EcoSituati Income Sensitive Goods, Luxury Goods LifeStyle Activity,Interest,Opinion
Consumers don't just buy prod but lifestyles

Steps

Identfy a set of differentiating competitive advantg Choose the right competitive advantages Select an overall positioning strategy

Pers&SelfConcept

Traits:Dominance,Defensiveness,

Sociability,Adaptability,Autonomy,Aggresiven

Aaker's BrdPrs Sincer,Excit,Compet,Soph,Rugge Self Concept Possession contribute to reflect self Motivation Needs:Freud,Maslow,McClelland
Motivational Research; ErnstDichter

How to Diff Possible to differentiate at every Cust Touch Point Diff Types Service, Channel, People, Image, Product, Experi CompAdvg Distinctive,Important,Superior,
Preemptive,Affordable,Profitable

Value Prop

Price vs Value

MoreForMore, SameForLess,

MoreForSame, MoreForLess

Strategies Intro Growth Basc Prod Extension Product CostPlus Mass Prc Price Intensive Distribution Selective Innv Aware Mass Awar Advertising Sales Promo heavy, trial -suplyonly ADDITIONAL CONSIDERATIONS Prod Decis&SocialResp
ProdLiability / Warranty(FuLi)

Maturity
Diversifica More Inten Differences +for Switc

Decline
Eliminat Selective - loyals - to min

Competitive Cut Prc

Perception Selective Attention,Distortion,Retention Learning Need->Drive->Motive->Response->Reinforc


Learning->Belief->Attitude->Behavior Stimuli, Stimulus Objest and Cues

8 - PRODUCTS&SERVICES
Products, Services, Experiences WHAT IS Core,Actual,Augmented Levels Conv, Shop, Specialt, Unsought Cons Products Mtrls/Part, Capitl, Suppls/Services Ind Products Organizations, Ideas, Persons, Places DECISIONS Individual Product Decisions Attributes Quality (Level, Consistency) Features(Differentiation) Style & Design

Adaptation to Intl mkts

10 - PRICING
FACTORS TO CONSIDER Customer Perceptions of Value Value Based Prc Good Value Prc Value Added Prc Company & Prod Cost Cost Based Prc
Type of Costs Fixed / Variable / Total Costs at Different Level of Production Costs as Function of Production Experience Cost-Plus Pricing Break-Even Analysis & Target Profit Pricing

Belief&Attit Learned,difficult to change,fit into a pattern TYPES OF BUYING DECISION BEHAVIOR


+Involvem -Involvem +PercDiffr -PercDiffr Complex DissRedu VarSeekng Habitual

Complex Info need, persuasion, takes long time DissReduc Long search, quick purchas(AfterSaleImport) Habitual Key Drivers:Familiarity&Conviction, Passv Lear VarSeek MktLeader triesHabitual vs Follower pirce off BUYER DECISION PROCESS
NeedRec->InfoSear->EvalofAlt->Purc->PostP ExtenProbSolv -LimProbSolv-AutomBuyBeh

NeedRec Need+Int/ExtStimuli->Drive InfoSearch Personal,Commercial,Public,Experient Sourc EvalOfAlter Heuristic,DecisionRules,CopingStrategies PurcDecisi Eval+AttitOfOthers+SituationalFact->Purcha PostPurch All purch have some Cognitive Dissonance BUYER DECISION PROCESS FOR NEW PRODUCTS Adoption Awareness->Interest->Eval->Trial->Adoption Facto
Innovators,EarlAdopt,EarlMaj,LateMaj,Laggards Advg,Compatib,Complxity,Divisib,Communbl

6-BUS MKTS & BUY BEH


BUSINESS MARKETS Factors Market Structure&Demand
Large&few buyers, Deriv Demand,InelasticPrc

Nature of Buying Unit


More informed buyers, proffessional effort

Branding Packaging Labelling Support Product Line Decisions (Streching, Filling) Product Mix Decisions (Width, Depth, Consistency) Brand equity, Brand valuation BRAND STRG Brand Positioning On Attributes / On Utilities/ On Belief&Values Name Selection Sponsorships P/L , Manufacture, Licencing, Cobranding Brand Development (Henry Assael) Line Extension Brand Extension Multi Brands New Brands Management Advertisement Brand Experience Customer Touch Points
Brand Enthusiasm Inside Internal Mktg & Training Emplyee Edu, Train Distr, Dealer Educ

Other Intern / Extern Considerations Overall Mktg Strg. Obj, Mix Organizational Considerations The Market Monopolistic,Oligopolist,Pure Comp,Monopoly Slope / Elasticity The Demand Curve

11 - PRICING STRATEGIES
NEW PRODUCT PRICING Market Skimming / Market Penetration PRODUCT MIX PRICING Product Line Pricing / Optional Product Pricing Captive Prod Pricing / By-Prod Pricing / Bundle Prc PRICE ADJUSTMENT STRG Discount Allowance Pricing Segmented Pricing
Customer Segment Pricing / Location Pricing Product Form Pricing / Time Pricing

Decision Process
Complex decision,formal, team, Suppl devlpm

Psychological Pricing
Reference Prc / Loss Leaders

Interpersnl, Individl, Organizatnl, Envrnl influ Decision Types StraightRebuy Modified Rebuy NewTask Systems Selling Process Problem Recog, Need Descr, Prod Specificati Proposal Solicitation , Supplier Selection OrderRoutineSpecificat, Performance Review Tools&Methods
Product Value Analysis A cost optimization tool Vendor-Managed Inventory E-ProcurementAuctions,BuyingSites,Extranet etc

Geographical Pricing
FOB Prc / Uniform Delivered Prc / Zone Prc Basing Point Prc / Freight-Absorption Prc

Brand Audits SERVICES MKT Four Characteristics


Intangible, Inseperable, Variable, Perishable

SERVICES STRG The Service Profit Chain


Internal Mkt Interactive Mkt External Mkt

Service Differentiation
Offer, Delivery, Image

Service Quality
CustDrivn,ServQual,Retent,ServRecov,Empow

Dynamic Pricing International Pricing PRICE CHANGES Price Changes Price Cuts / Price Inreases Buyer Reactions / Competitor Reactions Responding the Price Changes PUBLIC POLICY & PRICING Pricing within Channel Levels
Price Fixing / Predatory Pricing

INSTITUTIONAL MKTS School,Hosp,Prison (Captive,LowBudg patron) GOVERNMENT Bids,Contract,Bureaucracy,Favoritism, MKTS


No need for marketing orientation

Service Productivity
Work with better people Use Industrialization Increase Quantity Use Technology

Pricing Across Channel Levels


Retail Price Mainten / Unfair Prc Discriminat Deceptive Prc / Scanner Fraud / Prc Confusi

12 - MKTG CHANNELS
SUPPLY CHAIN & VALUE DELIVERY NETWORK How Channel Members Add Value Info Gathering Negotiation Promotion Physical Dist Contact Financing Matching Risk Taking Number of Channel Levels Indirect Marketing Channel Direct Marketing Channel Flows Physical Flow, Ownership Flow, Info Flow,
Promo Flow, Payment Flow

14 - INTEGRATED MKTG C
PROMOTION MIX (MARKETING COMMUNICATIONS MIX) Advertising Sales Promotion Personal Selling Direct MKTG Public Relations INTEGRATED MARKETING COMMUNICATIONS MarcomShift Broadcasting vs Narrowcasting
Mass Markets vs Fagmented, Micro Markets Shift from Traditional Mass Media to New Digital and Narrow Targeted Media

16-PRS SEL,SALES PRMO


PERSONAL SELLING Order Takers or Order Getters MANAGING THE SALES FORCE Sales Force Structure Territorial Prod Sls Force Cust Sls Force Complex Sls Force Sales Force Size # of calls of an average salesman etc Outside vs Inside Sales Force Team Selling RECRUITING SALES PEOPLE Characterist Intrinsic Motivation, Disciplined work,
Ability to close a deal, Ability to build Relationships

CHANNEL BEHAVIOR Channel Conflict


Horizontal Conflict, Vertical Conflict

CHANNEL ORGANIZATION Conventional Mktg Syst Lack of power&ownership=damage Vertical Mktg Systems Has leadership and cooperation Corporate VMS Single ownership Contractual VMS Member sign contrct (Franchise) Administered VMS Leadership owned by size &power Horizontal Mktg Systems Firms at one chn level cooperate
(Mcdonalds&Shell, Migros&Divan)

Need for IMC Rich media choice and clutter necessiates IMC MARCOM PROCESS Sender, Encoding, Message+Medium, Decoding Response, Feedback, Noise MARCOM STEPS Target Objective Buyer Readiness Stage
Awareness->Knowledege->Liking->Preference ->Conviction->Purchase

Desiginig the Msg Msg Content Msg Structure

Rational,Emotional,Moral Appeals Let buyers draw conclusion Strong argument first or last? OneSide or Two-side arguments?

MultiChannel Distribution Systems Hybrid Mktg Channel CHANNEL DESIGN DECISIONS Types of Intermediaries Direc&indirect channels,Resellers Number of IntermediariesDisintermediation trens Intensive Distribution Exclusive Distribution Selective Distribution Evaluation EconomicCriter, Control Criter,Adaptive Criter CHANNEL MANAGEMENT DECISIONS PRM Partner Relationship Management SCM Supply Chain Management PUBLIC POLICY&DISTRIBUTION
Exclusive dealing, Exclusive Territorial Agree Full line forcing, Tying Agreements

Msg Format AttentionBy ContrastNoveltyColorSound Choose Media Personal Comm Channels


WOM,Buzz,OpinionLeader

Nonpersonal Comm Chnls


Print, Broadcast,Display,Online,Atmospher,Event

Select Messge Source SETTING PROMO BUDGET

Celebs,CartoonCharacters (Credibilit

Training the Salespeople Supervising&Motivating the Salespeople Evaluating Sales People PERSONAL SELLING PROCESS Prospecting&Qualifying Referrals,directories,UnplannedVisit Preapproach Research,Stratgy,Objectvs,Apprch Methd,Timing Approach Appearance,Greeting,Opening,Remarks,Listening Presentation Customer Solutions->ValueStory->AskRightQuesti HandlingObj SeekHiddenObjections->TurntoReasonforBuying Closing GetAround,RightMoment,AsktoOrder,OfferPromo FollowUp EnsureSatifaction, ReduceDissonance Relationship Relship building to be the context of sellin process SALES PROMO Aim Ads offer reasonToBuy,Promo offer reasonToBuy NOW Growing Sales Pressure,Less Differntiation,Ad inefficiency Types Consumer Promo
Samples, Coupons, Refunds, Rebates, PricePacks Premiums,POP,Esantiyon,Contests,EventMkt

Affordable Method ,Percentage of Sales Method CompetitiveParity Method, Objective&Task Meth

Trade Promo
Contest,Premium,Discount, Allowance,FreeGoods PushMoney, Specialty(Esantiyon)

Promo Mix Strategies Push Strategy Intensive marketing to the consumer Pull Strategy Push the prod thru Mktg channels Integrate, Plan and CoordinateThePromo Mix
Budget,Teamup,CompatibleComm,Measurem,CentralCoordination

Business Promo
Same Tools + Conventions and TradeShows

MKTG LOGISTICS & SUPPLY CHAIN MANAGEMENT SCM


Outbound, Inbound, Reverse distributions Aim is max customer service & min dist cost

Sales Force Promo

Functions Warehousing Storage or Distribution Inventory Management JIT Transportation Intermodal transportation Logistics Info Mngmt EDI,VMI VendorManagedInventory Integrated Logistics Mngmt ILM 3PL 3rdPrtyLogProv

Social&Ethic Bait&Switch Ads, 3day cooling-off rule,FalseClaims Pull Strategy Push the prod thru Mktg channels Integrate, Plan and CoordinateThePromo Mix
Budget,Teamup,CompatibleComm,Measurem,CentralCoordination

17-DIRECT&ONLINE MKTG
MODEL
Mass Mktg vs Narrowly Targeted Mktg Trend

Social&Ethic

Bait&Switch Ads, 3day cooling-off rule,FalseClaims

15 - ADVERTISING & PR
ADVERTISING Advertising Decisions Possible Ad Objectives
Informative Ad, Persuasive Ad, Reminder Ad

13 - RETAILING&WHOLES
RETAILING Shopper Marketing, Non-Store Retailing TYPES Service,Product Lines, Price, Organization Amount of Service
Self Service, Limited Service, Full Service

Advertising Budget Factors


PLC stage Market Share Goals Number of Competitors Degree of Clutter Differentiantion Level

Product Line
Specialty, Department, Supermarkets,Conveni Superstores, Category Killers, Service Retailer

Old Catalog, Direct Mail, TeleMarketing New Web, Internet BENEFITS Buyer VastChoice, 7/24, info,control,cheap,interactive Seller Database,OneToOne, LowCost,Flexible,Global DIRECT MARKETING FORMS DirectMail Catalogue Telephone Kiosk DirResTV New Digital
MobilePh,Podcast,Vodcast,InteractTV

Price
Discounters Off-Price (Independ,FactoryOutlet,WarehouseClubs)

Advertising Strategy
Creating the Message Breaking Thru the Clutter Message Strategy Statement, Concept, Appeal Message Execution Execution Style SliceOfLife, LifeStyle, Fantasy Mood,Imag,Musical,Personalit Tone Words Format(Illustration, Headline, Copy) Consumer Generated Messages Selecting the Media Deciding on Reach, Frequency, Impact Choosing Among Media Selecting Media Vehicles Deciding on Media Timing positive / humor

Organizational
Corporate Chains, Voluntary Chains,Franchise Retailer Cooperatives, MerchadisingConglomer

ONLINE MARKETING Types Brick&Mortar,ClickOnly,Click&Mortar(+successful) DomainB2C Consumer holds the control B2B Cisco takes 80% of order online C2C Auction sites, e-bay, blogs C2B Consumer contact businesse for offers&complaints Setting Up Online Presence Creating aWeb Site
Corporate or Brand web site (No sales) Marketing web site (Selling or other mktg outcom)

Retail Mktg Decisions Segmentation,Targeting,Differentiation,Position Prod Assortment,ServiceMix,Atmosphere Price EDLP. High-Low Pricing Place Old Concept : CentralBusinessDistricts
Latent Concept: Shopping Centers Regional,Community,Neighborhood Malls New Concept: Power Centers, Lifestyle Centers Hybrid Power-Lifestyle Centers

Effectiv WebSite

Communictn,Connectn,Commerce

Context,Content,Community,Customization

Placing Ads & Promos Creating&Participating Online Social Networks Using E-mail Spam,Permission, Opt-in The Promise&Challenges of Online Marketing

Future New Forms and Shortening Life-Cyles


WHEEL OF RETAILING Begin LowMrg, LowPrc,LowStatus Challenge established to be fat with +Mrg +Cost Growth of Non-Store Retailing Retail Convergence, Rise of MegaRetailers Growing Importance of Technology Global Expansion of Major Retailers

Evaluation

Accountability & ROI

Communication Effects to be measured Sales&Profit Effects to be measured

International Advertising Decisions


Think Global Act Local

WHOLESALING Global Ad Strategies, Local programs Functions PUBLIC RELATIONS Selling&Promoting Financing PR Dept Funtions Buying&Assortment Build Risk Bearing press relations, prod publicity, public affairs Bulk Breaking Market Information lobbying, investor relations,relations with NGO Warehousing Mngmt Service&Advice Role of PR Strong impact on public awareness at low cost Transportion Conflict between Pr practitioners & Mktg Manag Types Merchant Wholesalers, Agents, Brokers PR Tools News, Speech, Event, Written or Multimed Mtrl
Manufacturers own sales branches and offices PublicServ Activity, Corporate Identity, Web2 Buzz mktg, Social Networking

Decisions

Seg+Targ+Diff+Pos + 4Ps

18 - COMPETITIVE ADVG
COMPETITOR ANALYSIS Identifying Competitors Assessing Competitors Selecting Competitors
Strong or Weak competitors to attack Customer Value Analysis (StrategicSweetSpot) (CompetitvOffer,CustomerNeed,Company'sAbility) Close or Distant competitors Good or Bad competitors Competitor Myopia Objectives,Strategies Strength&Weaknesses, Estimating Reactions

19-GLOBAL MARKETPLACE
Global firms gain R&D, production, mktg and financial advantages

20-SOCIAL RESP&ETHICS
SUSTAINABLE MKTG
CONSUMER NEEDS Now Futur NEEDS OF BUSINESS Now Marketing Concept Societal Marketing Future Strategic Planning Conc Sustainabl Mktg Concep

GLOBAL MARKETING ENVIRONMENT Intl TradeSys Tariffs,Quota,ExchControl, Nontariff Trade Barriers WTO & GATT Regional Free Trade Zones
EU, NAFTA,CAFTA,FTAA

Economic Environment Industrial Structure


Subsistence Economy Raw Material Exp Economies Industrializing Economies Industrialized Economies

SOCIAL CRITICISM OF MKTG Mktg's Impact on Consumers High Prices


High Cost of Distribution High Advertising&Promotion Cost Excessive Markups

Finding Uncontested Marketplaces (BlueOcean) COMPETITIVE STRATEGIES Approaches to Marketing Strategy Entrepreneurial Flexible, from the gut, owner devlpd Formulated Strict rules, Bureaucrat, large compns Intrapreneurial Turn from breaucratic to flexible Porter's Four Positioning Strategies Cost Leadership Differentiation Focus Middle of the Roaders MichaelTreacy & FredWiersema's "3 Value Disciplns" Operational Excellence Productivity,Efficiency Customer Intimacy Mktg Relationship,Expr Product Leadership Innovation,Leading COMPETITIVE POSITIONS
Leader ExpandMkt FullFrontAtt Prot Share IndirecAttack DistantFollw ExpandShr CloseFollow Challenger Follower Nicher Customer Market Quality Price Service

Deceptive Practices
Pricing Promotion Packaging

Income Distribution Employement Levels Political-Legal Enviroment


Attitude toward intnl buying Bureaucracy Political Stability Monetary Regulations and Stability

Countertrade Barter, Compensation, Counterpurch Cultural Environment The Impact of Culture on Mktg Strategy The Impact of Mktg Strategy on Culture DECIDING WHETHER TO GO GLOBAL Not every firm needs DECIDING WHICH MARKETS TO ENTER Factors Demographics Sociocultural Geographics Political & Legal Economics MODE OF ENTRY Exporting JointVent DirectInvest
Indirect Direct Licensing Contratc Manuf Mngmt Contract Joint Ownership Assembly Facility Manufacturing Facil

High Pressure Selling Shoddy, Harmfull or Unsafe Products Planned Obsolescence Poor Service to Disadvantaged Consumers Mktg's Impact on Society as a Whole False Wants and too much Materialism Too Few Social Goods More car needs more road Cultural Pollution Mktg's Impact on Other Businesses CONSUMER ACTIONS Consumerism
1st movement: Upton Sinclair's on meat & drug prc 2nd movement: consumer prices in Great Depress 3rd movement 1960 Ralph Nader (Activist)

Environmentalism
Intern Extern

Envitonmental Sustainability Portfolio Today:Greening Tomrrw:BeyondGreen New Clean Technology Sustainability Vision

Pollution Prevention Product Stewardship

Leader Expanding the Total Market


New Users or untapped market segments New uses More usage

GLOBAL MKTG PROGRAM


Standardized vs Adapted

Protecting the Market Share


Prevent or fix weaknesses Maintain strong relationships with customers "Best defense is good offense"->Continous Innov

Product&Communication
Don't Chang COMMUNICATION Don't Chang Adapt Straight Extension Communic Adaptation

PRODUCT Adapt Product Adaptation Dual Adaptation Product Invention New

Expanding Market Share


Profitability increases with increasing market share

Public Actions to Regulate Marketing BUSINESS ACTIONS Sustainable Marketing Principles Consumer Oriented Mktg Mktg in Cons point of View Customer Value Mktg Customer Value Building Innovative Mktg seek Real Product & mktg improvement Sense of Mission Mktg social terms not prod terms Social Marketing
IMMEDIATE SATISFACTION LOW HIGH Desirable Products Pleasing Products LONG TERM Cons Benefit HIGH LOW Salutary Products Deficient Products

Challenger
Choice between Attacking the Leader or Followers Second Mover Advantage

Price

Standard vs differentiated Price escalation, parallel trade

FullFrontalAttact High risk, high return Indirect Attack Attacking the weaknesses of compettr Follower SecondMoverAdvantg, Copying is easier and quick
Follower mostly become the target of challenger Should have distinct Compt Advantg to compete

Distribution Channels
Channels Between Nations Channels Within Nation

Organization
Export Dept Intnl Divisions GeographicOrg vs World Prod Groups Global Organization

Nicher

Targets subsegment with high profitability Customer, market,quality,price or service nicher Multiple niching is required to reduce risk of collaps