Marketing Management Session 1 & 2 PDF

Marketing Management Session 1 Overview of Marketing (I) Prof. Wenbo Wang This Session Overview of marketing What is marketing? Marketing framework ----- class break ----- Overview of course Modern View of Marketing Marketing is the process of planning and executi...

Marketing Management Session 1 Overview of Marketing (I) Prof. Wenbo Wang This Session Overview of marketing What is marketing? Marketing framework ----- class break ----- Overview of course Modern View of 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 goals. (American Marketing Association)  Course Road Map The Framework: Concepts & Tools for Problem Analyses What is my 3C Business? CUSTOMER COMPANY COMPETITION BUSINESS STRATEGY Where do I want to go? SEGMENTATION TARGETING POSITIONING STP MARKETING STRATEGY How do I get there? PRODUCT PRICE PROMOTION PLACE MARKETING MIX/PLAN 4P Look at What is my Business? CUSTOMER COMPANY COMPETITION BUSINESS STRATEGY Business: web social network Who are Youtube’s customers? Who are Youtube’s competitors? What is my Business? CUSTOMER COMPANY COMPETITION BUSINESS STRATEGY Who are the customers? - Users? - Content providers, such as online key opinion leaders (KOLs)? - Advertisers? A simple rule: whoever directly and/or indirectly pay What is my Business? CUSTOMER COMPANY COMPETITION BUSINESS STRATEGY Competitors: how to identify current / potential competitors? A simple rule: Serving the same customers. Satisfying same/similar needs / wants. YouTube mid-roll ads: why force to watch 5-sec but allows skip afterward? Youtube TrueView Ads Pricing: Advertisers pay for an exposure ONLY when a viewer completes >= 30 seconds or the entire ad, or click the ad ggoing to the landing page This pricing is called “cost per view” or “pay–by-completion” Why does Youtube use pay–by-completion (before 2018/19)? Youtube TrueView Ads: Why does Youtube use pay– by-completion (before 2018/19)? One reason: Improve ad quality Nike vs. Adidas Nike: 1000 views, 100 completion Adidas: 1000 views, 500 completion Same bid price per completion, who is more likely to win the bid? Pricing strategies on platform A fixed price for a given program(regardless of effectiveness) - local TV networks like Hong Kong-TVB, US-FOX, US-ABC - video platforms like Tencent Video CPM(cost per thousand impressions): Amazon, Taobao CPC (cost per click): Google search, Baidu search Cost per view or Pay–by-completion: Youtube True View, before year 2018/2019 Why does Youtube not use more aggressive pricing such as “fixed price” like TBV or Tencent video? Why does Youtube not use more aggressive pricing such as “fixed price” like TVB or Tencent video? Two types of content - PGC: Producer generated content, e.g., Woody Allen’s movie - UGC: User generated content, mostly of lower quality compared to PGC TVB, FOX, Tencent Video uses exclusive PGC, of expensive copyright, hence high bargaining power against advertiser Youtube contents are UGC - free content, hence lack bargaining power against advertisers (hence pay-by- completion) - low quality content, hence needs high quality ads (hence need skippable ads) Why does YouTube start to use nonskippable ads around 2018/19? Because of YouTube Premium: Light-Ad plan Ad-free videos and music for offline watching & background play 1-month free trial Then HK$68.00/month We’ll remind you 7 days before your trial ends. Free trial for eligible new members only. Recurring billing. Cancel anytime. Or save money with a family or student plan Does YouTube Premium work as YouTube excepted?  Marketing Framework What is my 3C Business? CUSTOMER COMPANY COMPETITION BUSINESS STRATEGY Where do I want to go? SEGMENTATION TARGETING POSITIONING STP MARKETING STRATEGY How do I get there? PRODUCT PRICE PROMOTION PLACE MARKETING MIX/PLAN 4P Product: goods, services, and ideas. Anything that can satisfy needs and wants, and can be sold. Real Life Product Decisions, examples: How to design a product that fits consumer needs (e.g., Cathay Pacific)? How to allocate company’s recourses when we have multiple products (e.g., P&G, and HKUST)? How to manage them? How to manage product at different stage? Product growth Dall E2  Marketing Framework What is my 3C Business? CUSTOMER COMPANY COMPETITION BUSINESS STRATEGY Where do I want to go? SEGMENTATION TARGETING POSITIONING STP MARKETING STRATEGY How do I get there? PRODUCT PRICE PROMOTION PLACE MARKETING MIX/PLAN 4P Real Life Price Decisions Optimal price (restaurants, mobile phone service)? Seasonal pricing (airlines)? Price reaction to competitors? (price match) Price of buyback, price of second hand book (Amazon bookstore)? Consumer psychology (9.99 vs. 10.02)? ……  Pricing Puzzle for Night Club Two types of pricing plan: 1) An entrance fee + pay for drinks 2) No entrance +pay for drinks Puzzle: Why do some night clubs charge an entrance (bouncer fee) while some don’t ? Nightclubs offer two products: entertainment and drinks. 24 Pricing Puzzle for Night Club If free entrance (no entrance fee), then the club will have to cover the cost of entertainment through the price of drinks. Then heavy drinkers would pay disproportionately more for entertainment and light drinkers pay less. Consequence: 1) The heavy drinkers go elsewhere. Incur a loss in drink revenue. 2) Entertainment revenue that could be earned from light drinkers would be little as they drink little. An entrance fee can fix this problem: cover the entertainment cost by the entry fee. Pricing Puzzle for Night Club When do night clubs not charge an entrance fee? - When the customers are all heavy drinkers and are not much different in drinking quantity, then free entry is fine (no free rider problem). - When there is no entertainment, then free entry is fine. Pricing Puzzle for Night Club Takeaway price is connected something else of the 4P (the cost structure of product in this case)… and connected to customer behavior across market segments (heavy vs. light drinkers)  Marketing Framework What is my 3C Business? CUSTOMER COMPANY COMPETITION BUSINESS STRATEGY Where do I want to go? SEGMENTATION TARGETING POSITIONING STP MARKETING STRATEGY How do I get there? PRODUCT PRICE PROMOTION PLACE MARKETING MIX/PLAN 4P Course & Syllabus What do you want? Learn concepts that can be applied to real business - Guaranteed! You will see key concepts and tons of real life cases. You want to get A (according to the pre-class survey, 96% wants A) - Sure thing! Will max up my quota of A subject to the curve system Course objectives 1: Not about memorizing stuff 2: Being smart. - “text book smart” - “street smart” 3: To develop a way of logic thinking, to identify and address the key decisions facing marketing managers. 4: I will try to use YOUR brands as examples Course website Course website on Canvas You will find:  Syllabus  Guidelines for major assignment  Sample final report  Sample quiz Communication is vital!  Keep your name card with you.  Is your Canvas account operational?  Keep the most updated class schedule with you!  Email: Wenbo Wang [email protected]  Office hours: By appointment Policies I cannot compete with No laptop or cell phone other than for note-taking purpose.  Grade No final exam Quiz In a lecture room in the main building. Quiz dates. The quiz dates cannot be changed. No separate make-up quiz will be scheduled. Summary session before quiz No class on quiz day Quiz Quiz is designed NOT to embarrass or surprise you Consist of objective questions only such as multiple- choice and true or false Quizzes will be exclusively based on class lectures and PPTs (not the textbook) Group Final Project + Presentation Form a group of 6 members Group members are required to sit together Group members have to be from the same class section Submit your group member list thru Canvas-assignment-group formation Form Group under “canvas-assignment”  Group Final Project + Presentation Final project: develop a marketing plan for a product or service that you would like to bring to market See sample project from last year on Canvas A 10 minutes presentation of the report on Late April Attendance is mandatory at all presentations, and every group may be required to comment/mark on every presentation. One class session for group meeting for project. Course materials Core materials  Class lectures and discussions  Lecture PPTs Complementary materials  Business cases  Optional but recommended book Principles of Marketing (15th or 16th edition) by Kotler and Armstrong, Prentice Hall.  Reserved copies of the book from the library under course # MARK2120 Individual Class Participation Confucius’ “Ren (仁) ratio” principle If you add to the classroom experience through comments, questions, answers, humor, or any other good things, you stand to score up to 12 extra points. If you never contribute in class and submit all your assignments in time, your score will simply be zero. Research Credit Earn 3 research credits (worth 3% of the grade). This can be done through participation in 3 marketing experiments (of 1 hour each) OR by completing 3 research assignments. Details are on the instruction manual on Canvas (under “files” - “research credit”) If you choose to do research assignments, you will need to email [email protected] yourself for details. Please do not contact me or TA since your research assignments will be evaluated by the department, not me or TA. How to get a good grade for this course? Attend class and participate in discussion Work with your team members on group work Browsing but not memorizing the textbook Spend about 1 hour preparing for quiz (more hours does not help) Next class Lecture Consumer, Company, Competitor I