Mark 201 Introduction to Marketing - Concordia University

MARK 201 INTRODUCTION TO MARKETING INSTRUCTOR: LEILA YOUSEFI CONCORDIA UNIVERSITY  WHAT IS MARKETING?  Marketing Is All Around You Most influential brands in Canada  Marketing is about Satisfying a need / improving the status quo...

MARK 201 INTRODUCTION TO MARKETING INSTRUCTOR: LEILA YOUSEFI CONCORDIA UNIVERSITY  WHAT IS MARKETING?  Marketing Is All Around You Most influential brands in Canada  Marketing is about Satisfying a need / improving the status quo => CREATING VALUE Great storytelling ✓ Clear core values ✓ Convincing narrative ✓ Excellent communication ▪ Great visuals & content Consistency ✓ Brand as a token of integrity and promise = reputation What is Marketing? Discovering and satisfying needs Creating value for customers Managing profitable customer relationships Building strong relationships to capture value from customers in return Marketing Management Definition: “The art of choosing target markets and building profitable relationships with them” Key Activities: Finding, attracting, keeping, and increasing number of customers by providing value. Objective increasing your customer base through value creation Goals of Marketing ▪ Customer Acquisition: ✓ Attracting new customers ▪ Customer Retention: ✓ Keeping and growing current customer base ❖ Ultimate goal of marketing is to have lifelong, profitable clients. New Trends in Marketing ▪ free accessible information ▪ online reviews ▪ price check ▪ more buying options ▪ more voice => Customer Has More Power Than Ever Before ▪ the right product ▪ at the right price + often is socially conscious  Marketing is both a process and a cycle Process: Process ✓ Identifying customer needs and developing products to satisfy those needs vs. Cycle Cycle: ✓ mutual value generation between buyer and seller The Marketing Process  UNDERSTANDING THE MARKETPLACE STEP 1 AND CUSTOMER NEEDS  Five core customer & marketplace concepts: Core 1. Needs, wants, and demands Concepts 2. 3. Market offerings Customer Value and satisfaction 4. Exchanges and relationships 5. Markets Needs, Wants & Demands Needs - Deprived of physical, social, individual basics ✓ I physically need water to survive Wants - Needs influenced by culture and personality ✓ I want clean, safe to drink, good tasting water Demand/Desire - Sum of wants and buying power ✓ I desire for Smartwater since it is vapor distilled with added electrolytes for taste Classify these item as a need, want, or Tylenol Spa treatments Need desire Romantic Partner vs. Want Identify the aspects Car Smartphone vs. of need, want, and desire in each of Internet Connection Desire those products Gaming Console Electric Scooter Maslow’s Hierarchy of Needs Motivational theory_ a five-tier model of human needs: Needs lower down must be satisfied before individuals can attend to needs higher up Market Offerings Includes products, services, information, or experiences offered to satisfy a need or want. ❑ Marketing Myopia: ▪ Paying more attention to the specific products than to the benefits & experiences produced by these products. ▪ Key Takeaway: ✓ Sell the benefit, not the tangible aspects of your product/service.  CUSTOMER VALUE & SATISFACTION ▪ Delivered Value > Customer Expectation => Satisfied customers Repeat purchase Tell others (WoM) ▪ Delivered Value < Customer Expectation => Dissatisfied customers Switch to competitors Disparage the product to others  Setting the right level of expectations: o Attract buyers without not disappoint them  Exchange Relationships Exchange is the outcome of marketing, but building relationships is a higher and more rewarding pursuit. How? ✓ Consistently delivering superior customer value Positive mutually beneficial exchange Strong relationships Win-win situations  A set of actual & potential buyers of a product or service; where common wants and needs of customers are satisfied through exchange. Markets  Components of Marketing System: Major Environmental Forces A Modern Marketing System  DESIGNING A CUSTOMER-DRIVEN STEP 2 MARKETING STRATEGY  To build profitable customer relationships through value creation. Processes: Marketing o Customer analysis Strategy o Market segmentation and targeting o Differentiation and positioning ❑ Marketing strategy guides all marketing mix decisions Segmentation and Targeting ❑ Market Segmentation: ✓ Dividing the market into groups of customers. ❑ Target Marketing: ✓ selecting which segment(s) to serve Best one should be mutually beneficial  Value Proposition The set of benefits or values promised to be delivered to consumers to satisfy their needs in a superior way. ▪ Purpose: ✓ To Differentiate and Position brands within the marketplace ❖ Perceived value should be greater than price paid. Inside-Out Outside-In  STP Marketing STP stands for: o Segmentation o Targeting o Positioning The insights gained from segmentation and targeting are used to craft a positioning strategy that resonates with the target audience and differentiates the brand in the marketplace. POSITIONING IN CAR INDUSTRY ▪ Perceptual map  CONSTRUCTING AN INTEGRATED STEP 3 MARKETING PLAN Integrated Marketing Plan Steps for preparing an Integrated Marketing Plan: Analyzing firm’s current situation transforming the marketing strategy into action (implementation) Marketing Plan = Marketing Mix = 4 P’s: ✓ Product ✓ Price ✓ Place (Distribution) ✓ Promotion Promotion  Marketing Mix Company Customer Brand Product Benefit Perception 4 P’s 4 C’s 4 A’s ❑ Product ❑ Customer Value ❑ Acceptability ❑ Price ❑ Cost ❑ Affordability ❑ Place ❑ Convenience ❑ Accessibility ❑ Promotion ❑ Communication ❑ Awareness = overall marketing strategy  BUILDING CUSTOMER STEP 4 RELATIONSHIPS  Customer Relationship Management CRM is about building & maintaining profitable relationships with customers by delivering superior value and satisfaction.  Customer-perceived value the evaluation by the customer of the difference between all the benefits and costs of a market offering relative to those of the competitors. ❖ A good CRM system should make the customer feel valued, understood, supported => fostering a strong & mutually beneficial relationship. Your marketing offering is better They get better than what they than your competitors would get from your competitors Customer Acquisition Vs. Customer Retention A "buy one get one free" coupon Offering a vast product range Customer A discount on the first month's bill of a Acquisition mobile service provider or Customer Amazon Prime membership benefits. Retention? Implementing a loyalty card program. the excellent customer service and reliable coverage  Customer satisfaction: Extent to which a product’s perceived performance matches a buyer’s Customer expectations. Satisfaction Customer delight: Companies aim to delight customers by promising only what they can deliver and then delivering more than they promise.  Delivery = Expectations Satisfaction Loyalty  Delivery > Expectations Delight Advocacy wow factor Satisfaction vs. Delight A customer orders a cappuccino at a coffee shop on her birthday. ▪ Customer Satisfaction: The cappuccino tastes good and is served at the right temperature. The customer is satisfied because the coffee shop met her expectations. ▪ Customer Delight: The barista makes the cappuccino well, decorates the top with a "Happy Birthday" message, and serves it with a complimentary piece of cake. The customer is delighted because the coffee shop exceeded their expectations by providing an unexpected, positive experience. Customer Relationship Tools Customer Relationship Tools: 1. Frequency Marketing Programs: Programs designed to reward customers who buy frequently or in large amounts. 2. Loyalty Rewards Programs: Programs designed to reward customers for repeated purchases or engagements with the brand. 3. Club Marketing Programs: Exclusive programs that offer special benefits to members who have signed up or joined the club. Customer Relationship Groups  ▪ Anna owns a boutique selling handmade jewelry & accessories. She has noticed different customer types over the years: 1. Sarah, a tourist, bought an expensive Example necklace once but hasn't returned since. 2. Emily, a local, is a regular customer who recommends the store to others. 3. Mike visited once for a last-minute gift but showed no further interest. 4. Laura visits frequently but usually buys small, inexpensive items.  Customer-engagement Marketing It aims to make the brand a meaningful part of consumers’ conversations & lives by fostering the following: ✓ Customer-managed Relationship: Empowering customers to take the lead in their interactions with the brand. ✓ Brand Advocacy: Encouraging and enabling customers to advocate for the brand, often through social media or word- of-mouth (WoM). ✓ Consumer-generated Marketing: Brand exchanges created by consumers both uninvited and invited ▪ Consumer-to-consumer exchanges: Facilitating conversations & interactions between consumers, either organically or through company-initiated platforms.  Partner Relationship Management This involves working closely with various partners, both inside and outside the firm, to jointly engage and bring more value to customers. o Partners inside the firm: collaboration among cross-functional teams within the organization to ensure alignment and synergy in delivering value to the customers. o Partners outside the firm: collaborating with external partners to ensure a seamless and efficient value chain that ultimately benefits the customers. ✓ Suppliers ✓ Distributors ✓ Retailers  CAPTURING VALUE FROM STEP 5 CUSTOMER  Customer Value ❑ Customer lifetime value: the value of the entire stream of purchases a customer makes over a lifetime of patronage. ❑ Share of Customer: portion of the customer’s purchasing that a company gets in its product categories. ❖ Maximizing Customer Value: ✓ Acquiring new customers ✓ Increasing the Share of existing customers: 1. Cross-selling: Selling related products to existing customers. ✓ Selling a mouse to a customer who bought a computer. 2. Up-selling: Selling higher-end products or services to existing customers. ✓ Selling a more expensive model of a product the customer was planning to buy.  Customer Equity ❑ Customer Equity: Total combined customer lifetime values of all of the company’s current and potential customers. A firm’s customer equity is a reflection of its future value and is a key indicator of the firm’s financial health. A high customer equity indicates a strong and loyal customer base, which is a key asset for the company. The ultimate aim of CRM is to produce high customer equity. ❑ Building Customer Equity: ❑ fostering long-term relationships and maximizing the financial value each customer provides. ❑ by maximizing the value derived from customers, keeping them engaged, satisfied, and loyal over time,  increasing the company's customer equity.  CLV of a Lexus customer = $600,000 CLV of a Starbucks customer = $14,000 How to calculate: Average customer spend 4 $ per purchase average customer purchase frequency is 3 times a week Customers stays with the company from age 18 to 38  Customer Lifetime Value (CLV) = (Average value of sale) x (# of times purchased) x (# of months/years a customer stays with your company = 4 * 3 * 52 * 20 ❑ Customer lifetime value will be around 12.5 thousand CAD. Customer Lifetime Value MANAGING MARKETING STRATEGY & MARKETING MIX Marketing Strategy & Marketing Mix Customer-Driven Marketing Strategy A winning marketing strategies formed by answering: 1. What customers will we serve? ✓ Identifying the Target Market 2. How can we best serve these customers? ✓ Crafting a Value Proposition that meets the needs and wants of that target market. This approach helps in building a customer- centric marketing strategy => leads to satisfied customers and business success. The entire marketing program should support the chosen positioning strategy.  Segmentation: Dividing a Targeting: Evaluating each market into segments of segment’s attractiveness and buyers according to needs, selecting which to pursue. characteristics, and behavior. Positioning: Attempting to Differentiation: Creating occupy a clear, distinctive unique and superior desirable place in the minds customer value. of target consumers Customer Value-Driven Marketing Strategy Managing Marketing Effort  SWOT analysis Matching the company's strengths to attractive opportunities in the environment Overcoming the weaknesses and minimizing the threats.  MARKETING PLAN A separate document detailing a firm’s entire product line up or single products ▪ consistent with the larger organizational strategic plan Marketing Plan Executive Current Marketing Objectives Marketing Action Budgets Controls Summary Situation: SWOT & Issues Strategy Programs Marketing Implementation ▪ Plans converted to actions by assigning: ▪ What ▪ Who ▪ Where ▪ When ▪ How  Marketing Control 1. Set specific marketing goals – SMART goals 2. Measure performance in the marketplace (ROI) 3. Evaluate performance (ROI) 4. Take corrective action to close the gaps between goals & performance  A SMART goal for Marketing Control could be: ✓ Specific: Increase the conversion rate of our online advertisements. ✓ Measurable: Achieve a 20% conversion rate. ✓ Achievable: By optimizing our ad content, targeting, and SMART landing pages based on customer feedback and data analytics. GOAL ✓ Relevant: Increasing the conversion rate will lead to higher sales and better ROI from our advertising budget. ✓ Time-bound: Achieve this goal in the next 3 months.  SMART goal: Increase the conversion rate of our online advertisements to 20% by optimizing our ad content, targeting, and landing pages in the next 3 months.  An example of a goal that does not match the SMART criteria could be: "Increase brand awareness.“ ▪ This goal is not SMART because: ▪ It is not Specific: It does not detail how brand SMART awareness will be increased or what 'increased brand awareness' would look like. ▪ It is not Measurable: There are no metrics attached to GOAL ▪ the goal that would allow a team to know if they were successful. It is not Achievable: There is no plan or strategy outlined that would make this goal attainable. ▪ It is not Relevant: Without more context, it's unclear why increasing brand awareness is important or how it connects to broader business goals. ▪ It is not Time-bound: There is no deadline or timeframe attached to the goal. Thank You