Goal and Definitions of Marketing

Goal- managing profitable customer relationships DefinitionProducing products and services to meet the needs and wants of customers and prospects

Societal Marketing Concept

Psychology (individuals) Economics Sociology (groups of people)

Society (human welfare) Company (profits) Consumers (wants satisfied)

Three Sciences of Marketing

The stages and concepts of marketing history

Production Concept (engineering focus) Product Concept (inventor focus) Selling Concept (salesperson focus) Marketing Concept (Consumer centered) Societal Marketing Concept *Companies go down through the process *know where your competitors are at

Market Strategy

Criteria: Has to be executable Has to be clearly communicable Has to provide focus for all audiences Has to provide long-term strategic advantage Good: within an arms reach of every person in the world Bad: become $100 billion company Product Price Place Promotion POSITION= Perception based on the combination of all 4 Ps

Vision Components

The Marketing Mix- 4 Ps

The Promotional Mix BCG and SBU

Advertising PR: events Personal Selling: 1 on 1 Sales Promotion: short-term stimulus (coupons, sales, etc.) Relative Market Share High Low High star question mark

Low cow dog (market growth rate) *size of pie: how big the SBU is as part of the company *slices: market share *? to star to cow to dog Three ways to grow Expand with expanding market Expand by taking market share away from competitors Create new markets

Product-market grid

Existing New Existing Mkt Product Penetration Dev New Mkt Diversify Dev (market) Company Suppliers Marketing Intermediaries Customers Competitors Publics Cultural Political* Technological Natural Economic Demographic

Micro-environmental Forces

Macro-environmental Forces
*Sherman Antitrust Act (1890) - forbids restraint of trade Clayton Act (1914) - forbids actions that lessencompetition Robinson-Patman Act (1936) - unlawful to discriminate in prices charged for same product Internal Research: Company Market Intelligence: Suppliers, market intermediaries, customers, publics Competitor Intelligence: competitors Environmental Scanning: Cultural, political, technological, natural, economics, demographics ALL = competitive intelligence Baby Boomers: 41-62. Spend on travel, entertainment, health and fitness. 5658% of consumer purchases Gen X: 29-40. Self-reliant, entrepreneurial, supportive of diversity. Better educated Gen Y: 11-28. Connected, 75 million in # (US), $103/week in disposable income Millennials: 1-10. Tech savvy and hands on marketing

Monitoring the Environment

Demographic Groups and trends

Mass vs. Custom Marketing and Media

Mass Marketing: one product for all customers Target Marketing: a product for a sub-group Custom Marketing: each product unique for each person

Survey of Buyers Intention Remember types of questions and layout Sales force Research potential problem? Expert Opinion Forecasting Methods Test Marketing Time Series Multivariate Analysis Total Available Market (TAM) Demand Market Potential- What would it be if we had the whole market? Including competitors share Area Available Market (AAM) Demand Geographic Area Potential Serviceable Available Market (SAM) Demand What customers you can actually reach and serve Types of Demand Market Share Actual Sales/TAM TAM= customers x quantity x price x repurchase rate Potential area market BPI=Buying Power Index Based on population, disposable income, retail sales Primary demand- for the whole product category Selective demand- for a specific brand

Funnel Analysis

Funnel = focus
Revenue -VC = Margin Marketing expense =net marketing contribution -operating expenses = NIBIT

Marketing Analysis: NMC, NIBIT

3 Types of Market Research

Exploratory Descriptive Causal

Define the Problem & Research Objectives Develop the Research Plan for Collecting Information Implement the Plan- Collect & Analyze Data Interpret and Report the Findings

Market Research Process

Why do this? Avoid unwanted surprises Uncover opportunities Understand trends and changes

Data Types

Collection Methodologies

Six Roles of CI

Primary- Research Observation Survey Experiment Focus Groups Secondary- Use whats already out there Cheap Quick Check for: relevance, accuracy, currency, impartiality Observation: Discovers behavior NOT motivations. (ex) mystery shoppers, traffic counters, web site cookies Focus Groups: 8-12 people. Need a moderator. Looks for ideas, concepts, thoughts Experimental: control for extraneous behaviors Survey: mail, phone, personal, online Describing the competitive environment Forecasting the future competitive environment Challenging the underlying assumptions Identifying and compensating for exposed weaknesses Adjusting strategy to the changing environment Determining when strategy is no longer sustainable OSINT: Open source intelligence. Open to the public, already collected HUNINT: Human Intelligence. Interviewing, phone calls, etc.

OSINT HUMINT

The CI Process

Collection Analysis Strategy Formulation

Cultural Hispanic: Branded, quality. Growing fast African-American: Price and brand name conscious Asian: Fastest growing, affluent, price sensitive Social Personal Psychological: Motivation Beliefs Attitude learning (next slide) Perception: selective attention: screen out information selective distortion: people interpret to support beliefs selective retention: people retain points to support attitudes Drives Internal stimulus that calls for action Stimuli Objects that move drive to motive Cues Minor stimuli that affect response Reinforcement Feedback on action Evoked Set: products the consumer deems acceptable and will possibly buy

Key Factors impacting Consumer Behavior

Drives, Motivation, Learning Cues

PRODUCT DIFFERENCES High Low

Types of Consumer Buyer Behavior

High Complex Dissonance Red Low Var. Seeking Habitual (involvement) Self-actualization (self realization) Esteem needs (recognition) Social needs (love) Safety needs (security) Physiological needs (hunger, thirst) Time of Adoption left to right Innovators (2 1/2%) Early Innovators (13 1/2%) Early Majority (34%) Late Majority (34%) Laggards (16%) Satisfaction= Performance- Expectation 30,000 Dissatisfied Customers = 250,000 Negative Word of Mouth Impressions Know how to calculate CLV (see aircomm)

Maslow

Adoption and Diffusion

Customer Satisfaction

B2B Marketing

Business to Business
Compared to consumer purchases: Business purchases involve more buyers in the decision process. Purchasing efforts are undertaken by professional buyers. Customers are clustered geographically Compared to consumer markets: Business markets have fewer but larger customers Business customers are concentrated geographically Demand is different Derived demand Price inelastic Fluctuates more, and changes more quickly *derived demand In comparison to consumer purchases: Business buyers face more complex buying decisions. The buying process is more formalized. Buyers and sellers work together closely and build long-term relationships. Users, buyers, influencers, deciders, gatekeepers

Business Buyer Behavior

Business Markets

Participants in Buying Process Economic Cycle

Recovery Prosperity Recession Depression

Recovery
Environmental: economic, supply, technology, politics, competition, culture Organizational: objectives, policies, procedures, organization Influences on business buyer behavior and structure, systems Interpersonal: authority, status, empathy, persuasiveness key factors Individual: Age, education, job position, personality, risk attitudes, authority Buyers Stage 1: Problem Recognition Stage 2: General Need Description Stage 3: Product Specification Stage 4: Supplier Search Business buying process Stage 5: Proposal Solicitation Stage 6: Supplier Selection Stage 7: Order-Routine Specification Stage 8: Performance Review Business Buying on the Internet 75% of purchased at least something online 13% of all direct material purchases (2004) Reverse auctions account for much of the online purchasing activity. Online business buying E-procurement offers many benefits: Access to new suppliers Lower purchasing costs Quicker order processing and delivery Institutional Markets Consist of churches, schools, prisons, hospitals, nursing homes and other institutions that provide goods and services to people in their care. Often characterized by low budgets and captive patrons. Government Markets Government buyers often favor: Institutional and Depressed business firms and areas government Small businesses Minority-owned businesses Firms which follow non-discriminatory practices More than 82,000 buying units