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Marketing Strategy Key Concepts 4

By Michael Parker,2014-11-25 13:06
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Marketing Strategy Key Concepts 4

Marketing Strategy…… KEY CONCEPTS to review for ETS exam….

Marketing Strategy: Key Concepts 1

    Concepts, key terms linked to dictionary

    Link to Discussion Board

    What is Marketing?

    Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services that satisfy individual and organizational goals. --- AMA

    Product is the platform for attracting customers.

    All organizations are in the business of attracting customers.

    Can the above two statements be challenged?

    Is marketing selling OR does it reduce the need for selling?

    Discussion Topic: Challenge the above statements, using your own experiences as reference.

    What are markets?

    Exchange, division of labor, positive sum relationships, barter, money reduces friction. Evolution of markets

    1. Traditional bazaars

    2. Separation of supply and consumption

    3. Mass Markets / Media

    4. Target Markets / Niche Media

    5. Electonic Markets: Meta Markets

    Evolution of the Marketing Concept

    1. Production Concept

    Demand for goods and services > Supply ... therefore consumers gladly

    purchased what was being produced. Producers have a captive market.

    Investment on increasing the efficiencies of production had the greatest

    impact on company profitability. Thus smart businesses focused on

    increasing productivity, rather than understanding the consumer. Henry

    Ford's quote: "The customer can have any color car as long as it is black"

    is closely identified with this era! This is appropriate for developing

    countries, and evolved in the US with the advent of the industrial

    revolution.

2. Sales Concept

    Demand = Supply ... therefore producers had to convince consumers to

    purchase their products. Focus of business investment starts shifting

    towards developing a robust sales mechanism in order to communicate

    with consumers. The sales concept is also relevant for products consumers

    do not seek out ordinarily, such as life insurance and dental treatment. 3. Marketing Concept

    Supply > Demand ... therefore producers need to first understand what

    consumers wanted, then produce those products, then convince consumers

    to purchase those products. Target marketing and market segmentation

    became the new tools to increase company profitability. 4. One 2 One (Relationship) Marketing Concept

    The Marketing era evolved and saw producers further segment their

    markets, targeting smaller groups of consumers within those markets.

    With the potential unleashed by the microprocessor and information

    technology, we are seeing targeting down to the individual, one to one. A

    commonly cited example is Amazon. Notice, if you make a purchase from

    this site (or similar) when you return to the site, you will receive

    recommendations based on your previous purchases. This presentation is

    based not only on your purchases (data stored in your cookie file allows

    for this), but on purchases of others who have bought the same book and

    similar books.

    5. Viral Marketing

    An interesting thing is occuring, as we are now in a networked economy.

    Our consumers are able to "talk" to each other and serve as an extended

    sales force. This lateral communication and / or transaction between

    customers and non-customers can serve as an opportunity for companies

    viral marketing was Hotmail. This Wired to leverage. The pioneer of

    article HotMale discusses this marketing "accident." Another good

    example is Bluemountain.com. Since the receiver of the e-card has to visit

    the site to access the card, this visit serves to promote the service to the

    receiver.

    6. Societal Marketing Concept

    Companies, more aware of society and the environment at large, promote

    their affiation with the environement. Ben & Jerry's and The Body Shop

    are examples.

    Discussion Topic: Identify other companies who follow the societal marketing concept.

    Discuss the merits of this type of marketing.

    Relationship with Selling and Marketing

    Selling is an aspect of marketing.

    Fire versus Ready, Aim and Fire

    Marketing Mix

    Marketing Mix, also known as the Four Ps

    ; Product

    ; Price

    ; Place (Distribution)

    ; Promotion

    Target Markets

    Organizations select target markets within the entire marketplace using market segmentation. They then develop a marketing mix to reach the target market.

    Discussion Topic: Identify the marketing mix for a product you use. Four Cs

    Macroenvironment

    Customers

    Competitors

    Collaborators

    Company

    Market Planning

    4 Cs: Company, Collaborators, Competition, Customers

    4 Ps

    Market Segmentation

    Evaluation and Budgets

    Discussion Topic: Identify a recent marketing campaign designed to create negative

    demand.

    Relevant websites

    American Marketing Association

    Edmunds.com---Meta Market

    SBA: The Marketing Plan

    Link to Discussion Board

    Return to Syllabus

    Old Notes

Marketing Strategy: Key Concepts 2

Section 1, 2

    Strategic Planning Process

    1. Corporate Level

    2. Business Level

    3. Product Level

    Higher levels (corporate) govern lower level planning processes. Strategic planning

    requires:

    1. Planning

    2. Implementation

    3. Control

    Corporate Strategic Planning

    1. Identify the company's Mission

    2. Identify SBUs (customer focused)

    3. Allocate Resources across SBUs (BCG Model; GE Model; Product Life Cycle;

    systems)

    4. Growth Strategies for SBUs (intensive; integrative; diversification) Mission Statement: Purpose; Business; Values Reason to be? Invisible hand etc. Product Terms...outdated

    Technology Terms...outdated

    Market Terms...keep in touch with consumer's needs

    From five years ago, and still relevant:

    ; AT&T is in the communications business not the telephone business.

    ; Visa...allows customers to exchange values...not credit cards

    ; 3M solves problems by putting innovation to work.

    Example Mission Statements:

    ; Mozilla.org

    ; unicef

    ; Ben & Jerry's

    ; PepsiCo

    ; New York State Education's Mission

    Discussion Topic: Find your company's mission statement. How well is this statement understood among employees and customers? Evaluate the missions statements above with respect to purpose, business and values.

    Indentify the limiting factors with the BCG and GE models.

    Insead Wharton Alliance.

    Discussion Topic: Cite examples of strategic alliances. Identify alliances your company participates and why.

    SBU Strategic Planning

    Provides the context for the preparation of the marketing plans for the units products and services.

    1. Defining Business Mission

    2. Analyzing External Environment (OT) (economic, demographic, technology,

    political, legal, socio and cultural, markets, competitors, collaborators etc.)

    3. Analyzing Internal Environment (SW) (competitive advantages, vulnerabilities,

    positioning)

    4. Choosing Objectives and Goals (specific, measurable, achievable and consistent)

    5. Developing Business Strategies (cost leadership; differentiation; focus)

    6. Preparing Programs

    7. Implementing Programs (McKinsey 7-S Framework)

    8. Gathering Feedback and Exercising Control

    If goal is to grow a business by 15%, what other data are relevant to judge the merits of the goal?

    Discussion Topic: Create a SWOT analysis of your own business (business unit).

    Marketing Plans

    Focus on product and market, focus on detailed marketing strategies for achieving the product's objectives in a target market.

    Consider the difference between strategic marketing and tactical marketing. Marketing Planning Process includes:

    1. Analyzing marketing opportunities

    2. Researching and selecting target markets

    3. Designing marketing strategies

    4. planning marketing programs (marketing mix)

    5. implementation and control

    Put another way:

    1. Situation Analysis

    o Corporate Capabilities and Culture

    o Customer Analysis

    o Competitive Analysis

    o Collaborators

    o Macro Issues

    o SWOT Analysis

    o Objectives

    o Alternative Strategies

    2. Action Plans

    o Evaluation and Recommendations

    o Marketing Mix Elements (Product, Price, Promotion, Place)

    3. Implementation and Evaluation

    o Forecasting and Budgeting

    o Measures of Effectiveness

    Discuss Can Priceline Remain Profitable wrt strategic planning issues.

    Identify the four Cs: Customer, collaborator, competition and company

    Consider past and future growth strategies Consider the four Ps: Price, Product, Promotion and Place.

    Business Markets

    More sales by value in B2B than B2C.

    Purchase for:

    o Production

    o Resale

    o Redistribution

    o MRO (Maintenance, Repair and Operations) 80% business purchases

    versus ...

    In order to:

    o Increase Sales

    o Cut Costs

    o Meet Social and Legal Requirements Customers are:

    o Businesses for Profit

    o Non-Profits

    o Governments

    Characteristics of Business Customers:

    o Risk Averse

    o Knowledgeable

    o Price-oriented

    o Fewer and Larger

    o Nature of Demand (Derived, Inelastic, Fluctuating)

    o Purchase versus Lease

    Buying Process consists of:

    o Problem Recognition

    o General Need Description

    o Product Specification

    o Supplier Search

    o Proposal Solicitation

    o Supplier Selection

    o Order Routine Specification

    o Performance Review

    Modified depending on whether: Straight rebuy, Modified rebuy or New task.

    Contrast this with the Consumer buying process?

    Who makes the purchasing decision? What are the contextual elements that impact the decision?

    What is included in purchase: re: customer service levels etc.

    Evolution of Business Buying

    o Develop relationships versus adversarial contest: Extranets; increase lock-

    in.

    o Geographic Concentration: Ecosystems

    The Evolution of B2B: Lessons From the Auto Industry

    GE Global eXchange Services

    Dell Medium and Large Business Home Page

    Dealing with Competition

    Porter's five basic forces of competition: 29. Threat of new entrants

    30. Rivalry among existing competitors

    31. Bargaining power of suppliers

    32. Bargaining power of buyer

    33. Threat of substitutes

    Whenever you make choices with respect to your customers (business or final consumers) you need to be aware how your competition changes as a function of your decisions. Understanding the prisoners dilemma model is useful. Clearly

    your relation compared to other competitors is important (market leader versus follower for instance) and the nature of the marketplace (monopoly, oligopoly and monopolistic competition).

    Consequences of zero percent financing for autos?

    Need to consider competitors AND customers for decisions. Importance of competitive intelligence.

    Classification of competitors (brand, industry, form, generic) Keep competitors?

    Industry Concept of Competition:

    o Impacts of Barriers to Entry and Exit

    o Number of sellers and degree of competition (monopoly, oligopoly,

    monopolistic competition, pure competition)

    o Cost Structure

    o Degree of Vertical Integration

    o Degree of Globalization

    New Entrants:

    Innovators Dilemma

    Disruptive Technology

    Priceline, Expedia and American Airlines versus Travel Agent market place.

    Discussion Topic: Identify and discuss other industries prone to disruptive technologies.

    SBA: The Marketing Plan

    The Marketing Audit Comes of Age

    How to Write a Mission Statement

    Link to discussion board

    Return to Syllabus

Marketing Strategy: Key Concepts 3

    Customers are increasingly important.

    One of multiple stakeholders that need to be addressed (employees, stockholders, suppliers and distributors) ---Grotto Pizza Mission

    Corporate culture needs to be consumer-centric (begins with the mission)

    Acquire customers (set expectations) versus retain customers (do expectations fit with reality) Perceived value (quality, service and value) versus delivered value

    Beat customer expectations. (delight customers) How do customers perceive quality, how do you offer it better than your competitors?

    ; Evolution of Marketing Concept supports this:

    ; Competition in the Marketplace increasing (and global)

    ; Technology (DB and communications) allows

    customers to learn more ---look at the evolution.

    Relationship Marketing Management

    Need to build satisfaction through customer relationship development activities.

    Relationship Marketing, process of attracting and retaining customers. Add financial benefits, social benefits and structural ties.

    Life-time Value of a customer versus cost of acquiring a customer

Customer Acquisition Math Example:

    Cost of Sales Call $500

    Succes of Sales Call: 1 / 5

    Cost of new customer $2,500 (not including overhead) Average Life Value of Customer:

    Annual Customer Revenue: $10,000

    Average Life Time: 3 years

    Profit Margin: 10%

    Life Time Value: $3,000

    This looks at averages, not at different consumers. Do not try to satisfy all customers ... some more profitable than others. Fire customers, or move them to higher profitability (increase price, reduce cost of service). 20-80-30 rule

    Customers don't ordinarily complain, they simply don't buy, and they may tell others! Encourage complaints to filter to your company. (See Kellogg discussion)

    Cost of lost customers?

    Surveying lost customers

    Discussion Topic: How does your company process customer complaints. what is done with them re: interaction with customer and changing business process?

    (Alternatively, as a customer, how have your complaints been handled?)

    Internal marketing needs

    Making Customer Relationship Management Work

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