Customer-Focused Marketing Concepts

Customer-Focused Marketing

• Companies should focus on the benefits they offer customers, rather than just the product. This strengthens consumer connections.
• Example: A car company should be seen as a provider of mobility solutions, not just a car manufacturer.
• The mesolimbic dopamine system, focused on immediate rewards, makes consistent customer focus challenging.

The Marketing Mix (4Ps)

• Product: Goods or services fulfilling customer needs.
• Price: The cost of the product, one of the most adjustable factors.
• Promotion: Communication strategies to persuade and inform customers.
• Distribution (Place): The methods for reaching customers. This area is usually the most difficult to change.

Value Creation and Ethics

• Corporate Social Responsibility (CSR): Four key aspects:
  • Economic: Profitability.
  • Legal: Adherence to regulations.
  • Ethical: Doing what is right, beyond legal requirements.
  • Philanthropic: Contributing to society (e.g., donations, volunteerism).
• Needs vs. Wants:
  • Needs: Basic necessities (e.g., food, water).
  • Wants: Desires influenced by culture and personality (e.g., luxury cars.)
• Ethics: Principles of right and wrong, influenced by society, culture, and religion.
• Consumer Trust Trends:
  • The Edelman Trust Barometer reveals declining overall trust.
  • Americans generally trust businesses more than other institutions.
  • Product ratings of 4.2-4.5 stars are linked to better sales.

Strategic Planning

• Mission Statement:
  • Guides marketing decisions.
  • Should be publicly available and reviewed regularly.
  • Many mission statements sound similar because they are often vague or generic.
• Boston Consulting Group (BCG) Grid: Categorizes products based on market growth and market share:
  • Stars: High growth, high market share; invest heavily.
  • Cash Cows: Low growth, high market share; generate stable profits.
  • Question Marks: High growth, low market share; evaluate viability.
  • Dogs: Low growth, low market share; consider divestment.
• First Mover vs. Late Mover:
  • First Mover:
    • Advantages: Brand loyalty, market dominance.
    • Disadvantages: High risk, significant development costs.
  • Late Mover:
    • Advantages: Learn from first-mover mistakes, lower initial costs.
    • Disadvantages: More difficult to create a unique, differentiated product.
• Product-Market Matrix:
  • Market Penetration: Increasing sales in existing markets.
  • Market Development: Entering new markets.
  • Product Development: Creating new products for current markets.
  • Diversification: Launching new products in new markets.
• Evaluating Marketing Performance:
  • Establish clear performance criteria.
  • Compare sales and costs to the set standards.

The Marketing Environment

• Environmental Analysis:
  • Assess external factors like demographics, competition, economies, politics, law, technology, and culture.
  • Identify opportunities and threats.
• Types of Competition:
  • Brand: Similar products, similar prices (e.g., Coke vs. Pepsi).
  • Product: Same product class, varying features/prices (e.g., luxury vs. budget cars).
  • Generic: Different products solving the same problem (e.g., coffee vs. energy drinks).
  • Total Budget: Competing for the same expenditure (e.g., dining out vs. going to the movies).
• Competitive Structures:
  • Monopoly: One provider controlling pricing and supply.
  • Oligopoly: Several large firms dominating the market (e.g., airlines).
  • Monopolistic Competition: Many competitors offering differentiated products (e.g., apparel brands).
• Economic Factors:
  • Buying Power: Resources for purchases (income, credit, wealth).
    • Disposable Income: Income after taxes.
    • Discretionary Income: Income remaining after basic needs are met.
  • GDP: Total value of goods/services in a country.
  • Consumer Confidence: Measure of willingness to spend based on current economic conditions.
• Regulation:
  • FTC: Prevents false advertising.
  • FDA: Ensures food and drug safety.
  • Consumer Product Safety Commission: Protects against unsafe products.
• Self-Regulation:
  • Better Business Bureau (BBB): Resolving disputes.
  • Industry-specific bodies: Establishing guidelines.
  • Comparison to Government Regulation:
    • Pros: Self-regulation is cost-efficient and flexible.
    • Cons: Limited enforcement and voluntary participation can be issues.