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Marketing Management Dawn Iacobucci © 2010 South-Western, a part of Cengage Learning What is Marketing Chapter 1 Discussion Questions What is marketing?
What can marketers market?
What types of decisions do marketers make?
Marketing and Exchange Marketing is an exchange between a firm and customer
Company Customer The customer seeks benefits from the company,
and expects to pay. The company offers benefits to its customers,
and seeks profits. Why might an exchange NOT occur? The criteria needed for an exchange to occur:
Must have something of value to exchange
Need to be able to communicate
Must be able to exchange (under 21 drinking)
Must want to exchange
At least 2 people needed for an exchange to occur
What is the long term benefit to having satisfaction in an exchange? More profitable relationship
Price insensitivity
Inelastic demand
Loyalty
What Can We Market? What Can We Market? Orientations Product/Production
Build a better mousetrap
Selling Orientation
Let’s make a Deal
Marketing/Customer
Building relationships with the customer Selecting a Marketing-Oriented Strategy Is Target Marketing Marketing IS the Business Marketing should permeate the entire organization
Chief Marketing Officers (CMO) need to show results
Quantify results when possible (e.g., market share, revenue growth, income growth, ROIM)
Marketing Framework Start with a Situational Analysis using the 5Cs Marketing Framework Customers (for a chimps’ NPO)
Who are they?
20 to 40 years old
What are they like?
Animal lovers
Do you want to draw different customers?
Yes, other donors to NPO
Company
What are the strengths and weaknesses?
Financial strength (Intel)
Producing flexibility (DaimlerChrysler)
Patents (IBM)
Channel relationships (Kraft)
Loyal customer base (Starbucks)
Technical capability (3M) Examples of Company Strength The One Product Henry Ford made a wonderful car - the Model A- but that's all he made. General Motors decided that many people would like something different and were willing to pay for it. Fortunately, for Ford, he caught on quickly, but Ford almost went out of business with the thinking that one model fit everyone. Examples of Company Weakness Marketing Framework Context (for a chimps’ NPO)
What is happening in the industry that might reshape the future business?
Economy—concerned with economy and job security because donors might not give
Politics—unknown—Democrats and Republicans
Legal—NA
Technological—move more giving online
Societal—more green animal habitats Marketing Framework Collaborators (for a chimps’ NPO)
Can address the customers’ needs while strengthening B2B partnerships?
Good relations with supply chain—partner with pet food stores
Good relations with distribution channel members (where place ads) —broaden beyond Full Standing Inserts (FSI) in two women’s magazines (e.g., periodicals with broader demographic reach)
Marketing Framework Competitors (for a chimps’ NPO)
Who are the competitors that must be consider?
Any donation behavior; other animals, health agencies, museums, and the arts
Competitors’ strengths—some have very good brand names
What are their likely actions and reactions?
More advertising, lobbying, solicitation.
Marketing Framework Proceed to Strategic Marketing Planning with STP Marketing Framework Segmentation (Social network to sell travel vacation packages through testimonials and word-of-mouth—800,000 users)
Customers aren’t all the same; they vary in their preferences, needs, and resources
Current customers—low 20s
Non-customer—40 and older
Ideal customer—mid 20s with good disposable income
Marketing Framework Targeting (sell travel vacation packages)
Attracting some of those customers makes better sense than going after others
Estimate size and profitability—buyers $1,350 one trip every other year
Rank desirability of segments—25 to 35 better disposable income
Marketing Framework Positioning (sell travel vacation packages)
Communicate benefits clearly to intended customers
High quality and high price or low quality and low prices?—high quality, prices are high but they’re good value
Distribution mass or exclusive—to succeed, need some scale, which suggests wide availability/presence and mass promotion if cheap (e-referral program)
Marketing Framework Advance to Marketing Tactics with the 4Ps Marketing Framework Product (small attachment for cell phone which allows user to project presentations onto wall in a small boardroom)
Will customers want what the company is prepared to produce?
Are we high-end or basic—high-end, innovative
What are the primary features—innovative, convenient, light
What are the brand associations—few because minimal awareness as yet
Where are we in product life cycle—Brand new
Marketing Framework
Price (small attachment for cell phone)
Will customers pay what we would like to charge?
What are the customers’ price sensitivities—minimal, this is a cool business toy
Offer occasional price discounts—No reason, benefits outweigh high price
Beneficial to price differently from competitors—No competition yet, but keep price high to gain margin and spend on R&D. Marketing Framework Place (small attachment for cell phone)
Where and how will customers purchase the market offering?
Will we be extensive or selective—Extensive
Use more pull or push—Pull
Any conflicts to resolve—Still forging relationships
Marketing Framework
Promotion (small attachment for cell phone)
What can we tell the customers or do for them to entice them to purchase?
Our marketing communications (advertising) goals—Search engines, get into Sharper image
How to measure ad effectiveness—Click-throughs
How to budget across IMC—Aim for Business Week, Forbes
Framework Considerations 5 Cs, STP and 4 Ps are interdependent
Marketers must understand how one decision impacts other decisions
The 5 Cs are in flux
Marketers must consistently monitor and adjust strategy accordingly Consumer Product Classes Homogeneous Heterogeneous Shopping Products Specialty Products Convenience Products Impulse Emergency New Unsought Regularly Unsought Unsought Products Staples Problem Solving Continuum Routinized Response Behavior Low involvement
Frequently purchased
Inexpensive
Little risk
Little information needed Limited Problem Solving Extensive Problem Solving High involvement
Infrequently purchased
Expensive
High risk
Much information desired Low involvement High involvement Business Product Classes – How They Are Defined Installations; important capital items Accessories; short lived capital items Raw Materials; unprocessed expense items
Component Parts & Materials; expense items that become a part of the final product MRO Supplies
Professional Services Business Product Classes Little Little None Little Straight
Rebuy Organizational Buying Processes Characteristics Time required Multiple influences Review of suppliers Information needed Type of Process Much Much Much Much New-Task
Buying Much Much Much Much New-Task
Buying Medium Some Some Some Modified
Rebuy Much Much Much Much New-Task
Buying Little Little None Little Straight
Rebuy Types of Shopping Multiple Influence and Roles in the Buying Center Gatekeepers Deciders
(power to select &
approve suppliers) Influencers
(write technical
specifications) Users Buyers
(work with suppliers & arrange
terms of sale) Buying Center Purchase Decision Making Two Models for How Buyers Decide Lexicographic method
Compare brands by most important attribute; brands that make the cut go into consideration set; then compare on next important attribute, etc.
Average method
One attribute can’t make or break a brand
If a brand is strong on one attribute and average on another, it will still dominate a brand that was average on all of its attributes This Book… Assumes global customers
Assumes omnipresence of the Internet
Gives fresh, fun examples
Trains you to think like a marketer
Defines terms as necessary
Offers lists of factors to consider
Gives “how to” guidance when feasible This Book… Each chapter opens with the Marketing Framework to maintain a focus on the big picture while also highlighting key concepts and tools about to be covered. This Book… Begins each chapter with coverage of “What” is the topic and “Why” it should matter to you
Every chapter then addresses the question of “How do I do this successfully?” Book Layout Study Question 1 Marketers try to figure out what _____ want and then they try to figure out how to provide it and make money doing so.
a. business owners
b. advertisers
c. customers
d. companies
Study Question 2 Marketers help/work with all of the following EXCEPT
a. athletes.
b. department stores.
c. hotels.
d. All can be helped by marketers.
Study Question 3 Which of the following is NOT part of the 5Cs?
a. context
b. corporation
c. customer
d. competitors
Study Question 4 What order is correct for a situation analysis?
a. 5Cs, 4Ps, STP
b. 5Cs, STP, 4Ps
c. 4Ps, 5Cs, STP
d. STP, 5Cs, 4Ps
Study Question 5 B2B marketers have said there are three kinds of purchases - new buy, modified rebuy, and
a. alternate rebuy.
b. convenience rebuy.
c. old buy.
d. straight rebuy.
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