Defining Marketing for the 21st Century PDF

01  Defining Marketing for the 21st Century Chapter One 01 Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Chapter Questions ▪ Why is...

01  Defining Marketing for the 21st Century Chapter One 01 Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Chapter Questions ▪ Why is marketing important? ▪ What is the scope of marketing? ▪ What are some fundamental marketing concepts? ▪ How has marketing management changed? ▪ What are the tasks necessary for successful marketing management? Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Good marketing is no accident, but a result of careful planning and implementation using state-of-the-art tools and techniques. It becomes both an art and a science as marketers strive to find creative new solutions to challenges in a complex marketing environment. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  In this book, the authors describe how top marketers balance discipline and imagination to address these new marketing realities. In the first chapter, they set the stage by reviewing important marketing concepts, tools, frameworks, and issues. The questions identified in the slide will be our focus. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  What is Marketing? Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Marketing is about identifying and meeting human and social needs. One of the shortest good definitions of marketing is “meeting needs profitably.” ALSO Managing profitable customer relationships Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  The American Marketing Association (AMA) offers the following formal definition: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  What is MARKETING The twofold goal of marketing is: ▪ Attract new customers by promising superior value. ▪ Keep and grow current customers by delivering satisfaction. ▪ Wal-Mart has become the world’s largest retailer by delivering on its promise: “SAVE MONEY. LIVE BETTER.” Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  meeting needs profitably eBay recognized that people were unable to locate some of the items they desired most, it created an online auction clearing house. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  meeting needs profitably When IKEA noticed that people wanted good furniture at a substantially lower price, it created knockdown furniture Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Marketing management takes place when at least one party to a potential exchange thinks about the means of achieving desired responses from other parties. Thus we see Marketing Management as the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  What is Marketed? Goods Services (70-30) Events Experiences (Disney- Pirate ship, Coaches ) Persons (Messi, Cristiano Ronaldo, SALAH) Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  What is Marketed? Places Properties (real state-stocks) Organizations Information Ideas (in the factory we make cosmetics; in the store we sell hope. (UNCF) Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Person Marketing Copyright ©© Copyright 2013 Pearson 2016 Education, Pearson Inc. Publishing Inc. Education, as Prentice Hall Publishing as Prentice Hall 1-‹#› ▪ Person marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular people Rachel Ray ▪ Bearing her name is more than a dozen best-selling cookbooks (the latest is Yum-o! The Family Cookbook), a monthly lifestyle magazine, three Food Network shows, a daytime talk show, and assorted licensing deals that have stamped her name on kitchen essentials from knives to her own “E.V.O.O.” (extra virgin olive oil). ▪ Her brands “begin with food and move quickly on to the emotional, social, and cultural benefits that food gives us.” Ray’s persona—and hence her brand—is a “celebration of why food matters.” Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Place Marketing Consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular places. Copyright ©© Copyright 2013 Pearson 2016 Education, Pearson Inc. Publishing Inc. Education, as Prentice Hall Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Demand States ▪ Negative ▪ Irregular ▪ Nonexistent ▪ Unwholesome ▪ Latent ▪ Full ▪ Declining ▪ Overfull Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Eight demand states are possible: 1. Negative demand — Consumers dislike the product and may even pay to avoid it. The marketing task is to analyze the reasons for this dislike and to find out whether a marketing program consisting of product redesign, lower prices, and more positive promotion could change the customers’ belief and attitude. Ex: negative attitude toward meat products by vegetarians Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› 2. Nonexistent demand—Consumers may be unaware of or uninterested in the product. The marketing task is to find ways to connect the benefits of the product with the persons’ natural needs & interests If the product is of no value in of itself, then associate the product with something that is of value.. Recycling garbage (e.g., plastic and metal containers) can be linked to the importance of cleaning up the environment. Donating old newspapers to the Boy Scouts instead of throwing them out in the garbage can be linked to the importance of helping this organization to raise money. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  3. Latent demand—Consumers may share a strong need that cannot be satisfied by an existing product. The marketing task is to measure the size of the potential market and develop effective goods and services that would satisfy the demand. This is the best demand state that a marketer can face, since a guaranteed market exists, if only the marketer could create the required product. Ex: Creating a cancer- curing drug or a safe cigarette, parking solutions. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  4. Declining demand—Consumers begin to buy the product less frequently or not at all. The marketer must analyze the causes of market decline and determine whether demand can be restimulated by finding new target markets, changing the product’s features or developing more effective communication. The marketing task is to reverse the declining demand through creative remarketing of the product. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  5. Irregular demand—Consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis. The marketing task, called synchromarketing , is to find ways to alter the time pattern of demand through flexible pricing , promotion & other incentives. 6. Full demand—Consumers are adequately buying all products put into the marketplace. The marketing task is to maintain the current level of demand in the face of changing consumer satisfaction to make sure it is doing a good job. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  7. Overfull demand— More consumers would like to buy the product than can be satisfied. The marketing task called demarketing, requires finding ways to reduce the demand temporarily or permanently. De- marketing does not aim to destroy demand but only reduce its level, temporarily or permanently. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  8. Unwholesome demand—Consumers may be attracted to products that have undesirable social consequences. The marketing task is to help people give up the habit by using such tools as fear communications, price hikes, and reduced availability. In each case, marketers must identify the underlying cause(s) of the demand state and determine a plan of action to shift demand to a more desired state. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  A Simple Marketing System The relationship between the industry and the market Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  A Simple Marketing System Sellers and buyers are connected by four flows. Sellers send goods and services and communications such as ads and direct mail to the market; In return they receive money and information such as customer attitudes and sales data. The inner loop shows an exchange of money for goods & services; the outer loop shows an exchange of information. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Key Customer Markets ▪ Consumer markets ▪ Business markets ▪ Global markets ▪ Nonprofit/Government markets Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Consumer Markets: Companies selling mass consumer goods and services spend a great deal of time establishing a strong brand image by developing a superior product and packaging, ensuring its availability, and backing it with engaging communications and reliable service. Business Markets: Companies selling business goods and services often face well-informed professional buyers skilled at evaluating competitive offerings. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Global Markets: Companies in the global marketplace must decide which countries to enter; how to enter each (as an exporter, joint venture partner, contract manufacturer, or solo manufacturer); how to adapt product and service features to each country; how to price products in different countries; and how to design communications for different cultures. They face different requirements for buying and disposing of property; cultural, language, legal and political differences; and currency fluctuations.  Nonprofit and Governmental Markets: Companies selling to nonprofit organizations with limited purchasing power such as churches, universities, charitable organizations, and government agencies need to price carefully. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Core Concepts ▪ Needs, wants, and ▪ Marketing channels demands ▪ Supply chain ▪ Target markets, ▪ Competition positioning, ▪ Marketing segmentation environment ▪ Offerings and ▪ Marketing planning brands ▪ Value and satisfaction Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  In the marketing process, companies work to understand consumers, create customer value, and build strong customer relationships. The steps are: 1. Understand the marketplace and customer needs & wants. 2. Design a customer- driven marketing strategy. 3. Construct a marketing program that delivers superior value. 4. Build profitable relationships and create customer delight. 5. Capture value from customers to create profits & customer quality. In the final step, companies harvest the rewards of capturing value from consumers in the form of sales, profits, & long-term customer equity. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Need Want Demand Copyright ©© Copyright 2013 Pearson 2016 Education, Pearson Inc. Publishing Inc. Education, as Prentice Hall Publishing as Prentice Hall 1-‹#› Needs Are states of felt deprivation. They include physical, social, and individual needs. These needs are not created by marketers; they are a basic part of the human makeup. Wants Are the form needs take as they are shaped by culture and individual personality. An American needs food but wants a Big Mac. When backed by buying power, wants become Demands. The best marketing companies go to great lengths to learn and understand their customers’ needs, wants, and demands. (Southwest Airlines as Prentice Halltop Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education, Inc. Publishing management) 1-‹#›  Types of Needs Stated Real Unstated Delight Secret Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  We can distinguish five types of needs: 1.Stated needs (A customer wants an inexpensive car.) 2.Real needs (The customer wants a car whose operating cost, not initial price, is low.) 3.Unstated needs (The customer expects good service from the dealer.) 4.Delight needs (The customer would like the dealer to include an onboard GPS navigation system.) 5.Secret needs (The customer wants friends to see him or her as a savvy consumer.)  Target Markets, Positioning & Segmentation Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Selecting customers Segmentation Targeting Market segmentation refers to dividing the markets into Target segments of customers. marketing refers to choosing which segments to go after. Copyright ©© Copyright 2013 Pearson 2016 Education, Pearson Inc. Publishing Inc. Education, as Prentice Hall Publishing as Prentice Hall 1-‹#›  Not everyone likes the same cereal, restaurant, college, or movie. Therefore, marketers start by dividing the market into segments. They identify and profile distinct groups of buyers who might prefer or require varying product and service mixes by examining demographic, psychographic, and behavioral differences among buyers. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  After identifying market segments, the marketer decides which present the greatest opportunities — which are its target markets. For each, the firm develops a market offering that it positions in the minds of the target buyers as delivering some central benefit(s). Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Product Positioning Product Positioning To-Do List: Conduct a market segmentation. Define your target market. Identify the product attributes. Data collection from the target market (customers and potential customers) on the identified product attributes. Determine the product's share of heart and mind (of the total potential mindshare). Being 'first' in the market usually is a significant benefit in mindshare. Place your product in the right 'space' (e.g. luxury market; economy market; high value, low volume; health; snack; etc.). If position is a graph, determine what your product's ideal position on that graph might be (e.g. nutritious, high cost snack). Determine what you need to do to reach that position in the minds of your market. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Does your positioning strategy focus on, and align with, your product differentiation strategy? Is your product or service unique, better, economical, profitable (for the market), or Does it have other distinctive criteria that will differentiate it from the many other products and services available? Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Offerings and Brands Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Market offerings Needs and wants are fulfilled through market offerings—some combination of products, services, information, or experiences offered to a market to satisfy a need or want. Market offerings are not just physical products, but also services—activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything. Market offerings include other entities, such as persons, organizations, and ideas. UNCF “ A mind is a terrible Thing to Waste”. 350000 Copyright ©© Copyright 2013 Pearson 2016 Education, Pearson Inc. Publishing Inc. Education, as Prentice Hall Publishing as Prentice Hall 1-‹#›  A brand is an offering from a known source. A brand name such as McDonald’s carries many associations in people’s minds that make up its image: hamburgers, cleanliness, convenience, courteous service, Value, and golden arches (QSCV). Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Value and Satisfaction The buyer chooses the offerings he or she perceives to deliver the most value, the tangible & intangible benefits and costs to him/her. Value, a central marketing concept, is primarily a combination of quality, service, & price (QSP), called the customer value harmony. Value perceptions increase with QUALITY AND SEREVICES but decrease with PRICE Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Value Copyright ©© Copyright 2013 Pearson 2016 Education, Pearson Inc. Publishing Inc. Education, as Prentice Hall Publishing as Prentice Hall 1-‹#›  Value The key to building lasting customer relationships is to create: superior customer value and satisfaction. Customer Value: the customer’s evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers Customers often do not judge values and costs “accurately” or “objectively.” Copyright ©© Copyright 2013 Pearson 2016 Education, Pearson Inc. Publishing Inc. Education, as Prentice Hall Publishing as Prentice Hall 1-‹#›  Customer Satisfaction Customer satisfaction depends on the product’s perceived performance relative to a buyer’s expectations. If the product’s performance falls short of expectations, the customer is dissatisfied. If performance matches expectations, the customer is satisfied. If performance exceeds expectations, the customer is highly satisfied or delighted. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Customer Satisfaction SATISFACTION Promise what you can deliver, then deliver more than your promise Performance Expected level DISSATISFACTION Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall  The power of customer delight Packbots Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Capturing Value from Customers Copyright ©© Copyright 2013 Pearson 2016 Education, Pearson Inc. Publishing Inc. Education, as Prentice Hall Publishing as Prentice Hall 1-‹#›  Marketing Channels Communication Distribution Service Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  To reach a target market, the marketer uses 3 kinds of marketing channels. Communication channels deliver and receive messages from target buyers and include newspapers, magazines, radio, television, mail, telephone, billboards, posters, fliers, CDs, audiotapes, and the Internet. Beyond these, firms communicate through the look of their retail stores and Web sites and other media. Marketers are increasingly adding dialogue channels such as e-mail, blogs, and toll-free numbers to familiar monologue channels such as ads. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  The marketer uses distribution channels to display, sell, or deliver the physical product or service(s) to the buyer or user. These channels may be direct via the Internet, mail, or mobile phone or telephone, or indirect with distributors, wholesalers, retailers, and agents as intermediaries. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  To carry out transactions with potential buyers, the marketer also uses service channels that include warehouses, transportation companies, banks, and insurance companies. Marketers clearly face a design challenge in choosing the best mix of communication, distribution, and service channels for their offerings. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Marketing Environment THE TASK ENVIRONMENT Suppliers Company Distributers Dealers Competitors Customers The task environment includes the actors engaged in producing, distributing, and promoting the offering. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  THE TASK ENVIRONMENT Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› In the supplier group are material suppliers and service suppliers, such as marketing research agencies, advertising agencies, banking and insurance companies, transportation companies, and telecommunications companies. Distributors and dealers include agents, brokers, manufacturer representatives, and others who facilitate finding and selling to customers. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Marketing Environment The broad environment Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  The broad environment consists of six components: demographic environment, economic, social-cultural, natural, technological, & political-legal environment. Marketers must pay close attention to the trends and developments in these and adjust their marketing strategies as needed. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Management orientations Over time five alternative concepts have developed under which organizations design and carry out their marketing strategies. PRODUCTION PRODUCT SELLING MARKETING SOCIETAL CONCEPT CONCEPT CONCEPT CONCEPT CONCEPT Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall  Production Concept Consumers will favor products that are available and affordable Management should focus on improving production and distribution efficiency. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall  Product Concept Consumers will favor products that offer the most in quality, performance, and innovative features Under this concept, marketing strategy focuses on making continuous product improvements. Copyright Copyright© 2013© Pearson 2016Education, Pearson Inc.Education, Publishing as Prentice Inc. Hall Publishing as Prentice Hall 1-‹#›  Marketing myopia Marketing myopia occurs when a company becomes so focused on their own products that they lose sight of underlying customer needs. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall  Selling Concept Consumers will not buy enough without a large scale selling and promotion effort The concept is typically practiced with unsought goods and services—those that buyers do not normally think of buying, such as insurance or blood donations, encyclopedia. These industries must be good at tracking down prospects and selling them on product benefits. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Marketing Concept Under the marketing concept, customer focus & value are the paths to sales & profits. Instead of a product centered “make and sell” philosophy, the marketing concept is a customer – centered “Sense and respond” philosophy. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Marketing Concept The job is not to find the right customers for your product BUT to find the right products for your customers. Customer-driven marketing is about understanding customer needs and creating products and services that meet both existing and hidden needs. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Marketing Management Orientations Societal Production Product Selling Marketing Marketing concept Concept concept Concept Concept Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Societal Marketing Concept Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Societal Marketing Concept The societal marketing concept questions whether the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare. The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer’s and the society’s well being. Fast food restaurants Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Marketing in Action The Societal Marketing Concept Johnson & Johnson’s credo stresses putting people before profits—the societal marketing concept in action. Visit The Body Shop’s Web site for another example of firm which practices the societal marketing concept. Copyright © 2016 Pearson Education,  Holistic Marketing Holistic marketing concept is based on development, design, and implementation of marketing programs, processes, and activities that recognize their breadth and interdependencies. Holistic marketing recognizes that "everything matters" with marketing  The Ten Deadly Sins of Marketing 1. Your company is not sufficiently market focused and customer driven. 2. Your company does not fully understand its target customers. 3. Your company needs to better define and monitor its competitors. 4. Your company is not good at finding new opportunities. 5. Your company has a deficient marketing planning process. 6. Your company needs to tighten product and service policies. 7. Your company's brand-building and communication skills are weak. 8. Your company is not well organized to carry on effective and efficient marketing. 9. Your company has not made maximum use of technology. 10.Your company has not properly managed its relationships with stakeholders. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  The Ten Commandments of marketing 1. “The company segments the market, chooses the best segments, and develops a strong position in each chosen segment. 2. The company maps its customers’ needs, perceptions, preferences, and behavior and motivates its stakeholders to obsess about servicing and satisfying the customers. 3. The company knows its major competitors and their strengths and weaknesses. 4. The company builds partners out of its stakeholders and generously rewards them. 5. The company develops systems for identifying opportunities, ranking them, and choosing the best ones. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  The Ten Commandments of marketing 6. The company manages a marketing planning system that leads to understanding long-term and short-term plans. 7. The company exercises strong control over its product and service mix. 8. The company builds strong brands by using the most cost- effective communication and promotion tools. 9. The company builds marketing leadership and a team spirit among its various departments. 10. The company constantly adds technology that gives it a competitive advantage in the marketplace.”* Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Relationship Levels BASIC RELATIONSHIP FULL PARTNERSHIP Copyright ©© Copyright 2013 Pearson 2016 Education, Pearson Inc. Publishing Inc. Education, as Prentice Hall Publishing as Prentice Hall 1-‹#›  Relationship Levels Basic Relationships : are often used by a company with many low-margin customers. For example, Procter & Gamble does not phone or call on all of its Tide consumers to get to know them personally. Instead, P&G creates relationships through brand-building advertising, sales promotions, and its Web site. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Relationship Levels Full Partnerships: are used in markets with few customers and high margins, sellers want to create full partnerships with key customers. For example, P&G customer teams work closely with Wal-Mart, Carrefour, Safeway, and other large retailers. Some companies sponsor club marketing programs that offer members special benefits and create member communities. (For example, Harley-Davidson sponsors the Harley Owners Group [H.O.G.].) Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Partner relationship management Copyright ©© Copyright 2013 Pearson 2016 Education, Pearson Inc. Publishing Inc. Education, as Prentice Hall Publishing as Prentice Hall 1-‹#›  Partner relationship management Partner relationship management involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers. (Coca Cola/ MacDonald's) Copyright ©© Copyright 2013 Pearson 2016 Education, Pearson Inc. Publishing Inc. Education, as Prentice Hall Publishing as Prentice Hall 1-‹#› Partner relationship management INSIDE OUTSIDE “Customer Development Team” Copyright ©© Copyright 2013 Pearson 2016 Education, Pearson Inc. Publishing Inc. Education, as Prentice Hall Publishing as Prentice Hall 1-‹#›  Partner relationship management Partners Inside the Company Today, firms are linking all departments in the cause of creating customer value. Rather than assigning only sales and marketing people to customers, they are forming cross- functional customer teams. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Partner relationship management Marketing Partners Outside the Firm Marketing channels consist of distributors, retailers, and others who connect the company to its buyers. The supply chain describes a longer channel, stretching from raw materials to components to final products that are carried to final buyers. Through supply chain management, many companies today are strengthening their connections with partners all along the supply chain. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Internal Marketing Internal marketing is the task of hiring, training, and motivating able employees who want to serve customers well. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Performance Marketing Financial Social Responsibility Accountability Marketing Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Performance marketing requires understanding the financial and nonfinancial returns to business and society from marketing activities and programs. Top marketers are increasingly going beyond sales revenue to examine the marketing scorecard (How well is your marketing working for you? ) and interpret what is happening to: 1. Market share, 2. Customer loss rate, 3. Customer satisfaction, 4. Product quality, and other measures. They are also considering the legal, ethical, social, and environmental effects of marketing activities and programs. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Types of Corporate Social Initiatives ▪ Corporate community involvement ▪ Corporate social marketing ▪ Cause-related marketing ▪ Corporate philanthropy ▪ Socially responsible business practices ▪ Cause marketing Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Cause Related Marketing (DO WELL BY DOING GOOD) Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  McCarthy classified various marketing activities into marketing-mix tools of four broad kinds, which he called the four Ps of marketing: product, price, place, and promotion. The marketing variables under each P are shown in Figure 1.4. Given the breadth, complexity, and richness of marketing, clearly these four Ps are not the whole story anymore. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  The Marketing Mix Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Figure 4.1 Marketing Mix Conversion Marketing Mix 4Ps Focus 4Cs Product Consumer Price Cost Place Convenience Promotion Communication Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  The 4 As of Marketing Important consumer values ▪ Acceptability (exceeds customer expectations) ▪ Affordability (economic, psychological) ▪ Accessibility (availability, convenience) ▪ Awareness (informed, persuaded, reminded) Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-117 Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  The New Four Ps If we update them to reflect the holistic marketing concept, we arrive at a more People representative set that encompasses modern Processes marketing realities: Programs Performance Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  People reflects, in part, internal marketing and the fact that employees are critical to marketing success. Processes reflects all the creativity, discipline, and structure brought to marketing management. Programs reflects all the firm’s consumer- directed activities. It encompasses the old four Ps as well as a range of other marketing actions. Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  We define Performance as in holistic marketing, to capture the range of possible outcome measures that have financial and nonfinancial implications: (profitability as well as brand and customer equity), and implications beyond the company itself (social responsibility, legal, ethical, & community related). Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#› Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  Marketing Management Tasks ▪ Develop market strategies and plans ▪ Capture marketing insights ▪ Connect with customers ▪ Build strong brands ▪ Shape market offerings ▪ Deliver value ▪ Communicate value ▪ Create long-term growth Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›  For Review ▪ Why is marketing important? ▪ What is the scope of marketing? ▪ What are some fundamental marketing concepts? ▪ How has marketing management changed? ▪ What are the tasks necessary for successful marketing management? Copyright © 2016 Pearson Education, Inc. Publishing as Prentice Hall 1-‹#›