Chapter 1.

Marketing in Todays Economy

Commodity: Basic product offered to the same customer groups at

roughly the same prices.
Commoditization: consequence of mature industries where slowing
innovation, extensive product assortment, excess supply, and frugal
consumers force margins to the floor.
Getting out if commodity is not easy, in order to do this, firms must
give consumers a compelling reason to buy their products over
competing products.

THE CHALLENGES AND OPPORTUNNITIES OF MARKETING IN TODAYS

ECONOMY.

Power Shift to Customers: Shift in power from marketers to customers.

Rather than businesses having the ability to manipulate customers via
technology, customers often manipulate businesses because of their access
to information, the ability to comparison shop, and the control they have
over spending.

Massive increase in product selection: The variety and assortment of

goods and services offered for sale on the Internet and in traditional stores is
staggering. Customers can now have the news delivered to them
automatically via smartphone apps, such as Flipboard, that pull from
hundreds of sources. This radical increase in product selection and
availability has exposed marketers to inroads by competitors from every
corner of the globe.

Audience and media fragmentation: Marketers have to rethink &

reinvent the way the way they communicate to potential customers.
Customers nowadays are changing the usage of traditional media and the
 usage of internet and mobile media us on the rise.

Changing value proposition: Even before The Great Recession began in

2008, consumers and business buyers were already facing increasing costs
associated with energy, gasoline, food, and other essentials. Then, as the
economy weakened, buyers were forced to tighten their belts and look for
other ways to lower expenses. Ex: e-books, online travel agencies.

Shifting demand patterns: The changes in technology have shifted

customer demand for certain product categories. Such as newspapers or
itunes

Privacy, security and Ethical Concerns: Society is now much more

open than in the past. As a result, these changes have forced
marketers to address real concerns about security and privacy, both
online and offline. Businesses have always collected routine
information about their customers. Now, customers are much more
attuned to these efforts and the purposes for which the information will
be used. Ex: Facebook, google and mobile devices
Unclear Legal jurisdiction: Doing business in more than one country
can make that business face a dilemma with respect to different legal
system. This happens a lot with Internet based companies.

BASIC MARKET CONCEPTS

Marketing: Marketing is the process of planning and executing the

conception, pricing, promotion, and distribution of ideas, goods, and services
to create exchanges that satisfy individual and organizational objectives
AMA
Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large. AMA 2007
The definition had faced many changes, the most recent include not value
itself but offerings of value, this because of the differentiation than can come
in any part of the offering as a consequence of commoditization. And also
because of the marketings broader role in todays corporation.

Market: A t its most basic level, is a collection of buyers and sellers. And
nowadays is less defined by geography. Until recently, marketers have
considered a market to be a physical location where buyers and sellers meet
to conduct transactions. Although those venues still exist, technology
mediates some of the fastest growing markets

Marketspace: Electronic marketplaces unbounds by time or space. In

marketspace the products are exchanged through computer network.

Exchange Process of obtaining something of value from someone by

offerting something in return; this usually entails obtaining products for
money. For exchange to occur, five conditions must be:

1. At least two parties: can potentially include a limit number of

participants. A good example is online auctions.
2. Each party has something of value to the other party
3. Each Party must be capable of communication and delivery:
Nowadays we can find and communicate with potential exchange
partners anywhere and conduct arms length transactions in real time
4. Each party must be free to accept or reject the exchange:
Return items if more difficult in online transactions. Like airline tickets
bought in online agencies
5. Each party believes it is desirable to exchange with the other
party: In online exchange, customers often know nothing about the
other party. To help resolve this issue, a number of third-party firms
 have stepped in to provide ratings and opinions about online
merchants.

PRODUCT:

Product is something that can be acquired via exchange to satisfy a

need or a want. There are a lot of thing that can be classified as
products:

a. Goods: Tangible goods

b. Services: Intangible products consisting of acts or deeds directed
towards people or they possessions. Ex: Banks, hospitals, lawyers,
package delivery, taxi drivers.
c. Ideas: Promoting a benefit to the customer. Ex: Charitable
organizations
d. Information: Some marketers of information are websites,
magazines, Book publishers, research firms. Ex: TED Talks
e. Digital Products: Software, music, and movies. User have a
license for use them rather than an ownership
f. People: Athletes or celebrities.
g. Places: Marketing of cities, countries or nations to tourist. Ex:
Disney land, Colombia brand
h. Real or Financial Property: Stocks, bonds and real state. Now
the exchange of this products occur online.
i. Organization: Create favorable images with the public.

The list is NOT mutually exclusive.

Utility: ability of a product to satisfy a customers desires.

5 Types of utility:

a. Form Utility: Products that have attributes or features that set them
apart from competition. Often these differences result from the use of
high quality raw materials, ingredients or components.
 b. Time Utility: are available when customers want them. Ex: 24/4
Grocery stores
c. Place Utility: Are available when customers want them, at a specific
moment of where the products need to be at that moment. Ex: Pizza
d. Possession utility: Transfer of ownership to marketer to customer.
Products higher in possession are easier to acquire. Ex: Furniture
e. Psychological Utility: Deliver positive experiential or psychological
attributes that customer find satisfactory. Ex: Disney world

MAJOR MRKETING ACTIVITIES AND DECISIONS

Strategic Planning:

Strategy: A strategy, in effect, outlines the organizations game plan for

success
A good marketing needs strategic planning at various levels in the
organisation.

Tactical Planning: specific markets or market segments and the

development of marketing programs that will fulfill the needs of customers in
those markets

Marketing Plan: provides the outline for how the organization will combine
product, pricing, distribution, and promotion decisions to create an offering
that customers will find attractive. The marketing plan also addresses the
implementation, control, and refinement of these decisions

Research and Analysis:

Strategic planning depends heavily on the availability and

interpretation of information.
 Todays planners are blessed with a lot of information, thanks to
technology.

Types of Analysis:

1. Internal Analysis: Objective review of internal information pertaining

to the firms current strategy and performance, as well as the
current and future available resources
2. Competitive Analysis: Analysis of the competitive environment.
Involves the analysis of the capabilities, vulnerabilities, and
intentions of competing businesses
3. Environmental Analysis: External od the external environment.
PESTEL: Political, economic, social, technological,
environmental, legal.

+DEVELOPING COMPETITIVE ADVANTAGE

Competitive Advantage: A competitive advantage is some- thing that the

firm does better than its competitors that gives it an edge in serving
customers needs and/or maintaining mutually satisfying relationships with
important stakeholders.

MARKETING SRATEGY DECISIONS

1. Segmentations and Targeting: divide the total market into smaller,

relatively homogeneous groups or segments that share similar needs,
wants, or characteristics. When a marketer selects one or more target
markets, they identify one or more segments of individuals,
businesses, or institutions toward which the firms marketing efforts
will be directed.
2. Marketing Program Decisions: Like Marketing mix and Product
decisions.
 Price is important because: (1) Is the only element of the
marketing mix that leads to a revenue / profit. The rest are
expenses. (2) Price have a direct connection with customer
demand. This makes price the most manipulated element of the
marketing mix.

Supply chain decisions: Involve a long line of activities from

the sourcing of raw materials, through the production of finished
products, to ultimate delivery to final customers.
Promotion has been replaced with INTEGRATED MARKET
COMUNICATION (IMC)
3. Branding and positioning: How the elements of the marketing
program work together to create the brans.
Product Positioning: Involves establishing a mental image, or
position, of the product offering relative to competing offerings in
the minds of target buyers

SOCIAL RESPONSIBILITY AND ETHICS

organizations obligation to maximize its positive impact on society, while

minimizing its negative impact. In terms of marketing strategy, social
responsibility addresses the total effect of an organizations marketing
activities on society.

Marketing ethics: Principles and standards that define acceptable conduct

in marketing activities. This can build trust and commitment and is crucial to
build long-term relationships with all stakeholders.

IMPLEMENTATION AND CONTROL:

Put the plan into action. It is a part of the planning itself

Marketing implementation, the process of executing the marketing
strategy, is the how of marketing planning.
The implementation phase of marketing strategy calls into play the fifth P
of the marketing program: People.

Many of the problems with implementations are related to people. Associated

to managers or employees.

DEVELOPING AND MAITAINING CUSTOMER RELATIONSHIPS:

The marketers had discovered that they can learn more about their
customers and earn higher profiles.

Transactional Marketing Goal: is to complete a large number of discrete

exchanges with individual customers. Acquiring customers and make the
sale

Relationship marketing: The goal is to develop and maintain long term

relationships with buyers and seller, focusing on the value obtained from the
relationship

TAKING ON THE CHALLENGES OF MARKETING STRATEGY.

Customers and competition change and strategies are shifting because of
this. A good strategy today might not work in the future.
Customers will buy products today and have no interest in the future.
Marketing strategy is about people (inside an organization) trying to find
ways to deliver value.
One of the most basic shifts involves the increasing demands of customers.
Today, customers have very high expectations about basic issues such as
quality, performance, price, and availability.

Decline in satisfaction:
(1) Customers have become much less brand loyal: Are more
price sensitive (commoditization)
(2) Constantly seel the best value
(3) Are cynical about business in general and are not that
trusting of marketers

unending changecustomers change, competitors

change, and even the marketing organization changes.
the fact that marketing is inherently people-driven.
the lack of rules for choosing appropriate marketing
activities.
the basic evolution of marketing and business practice in
our society.
the increasing demands of customers.
an overall decline in brand loyalty and an increase in price
sensitivity among customers.
increasing customer cynicism about business and
marketing activities.
competing in mature markets with increasing
commoditization and little real differentiation among
product offerings.
increasing expansion into foreign markets by U.S. and
foreign firms.
aggressive cost-cutting measures in order to increase
competitiveness.