MARKETING STRATEGY
O.C. FERRELL • MICHAEL D. HARTLINE
1
Marketing in the
New Economy
Challenges and Opportunities
In the New Economy
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Power Shift to Customers
Massive Increase in Product Selection
Changing Value Propositions
Shifting Demand Patterns
New Sources of Competitive Advantage
Privacy, Security, and Ethical Concerns
1-2
Discussion Question
• The fact that customers have more power is
one of the major shifts taking place in the
new economy. In what ways have you
personally experienced this shift in power?
Is this shift uniform across all industries and
markets? How so?
1-3
The Children’s Online
Privacy Protection Act (COPPA)
• Protects the privacy of children under 13
• Five Privacy Criteria:
– Placement of Notice
– Full Disclosure
– Parental Control
– Reasonable Necessity
– Security
Exhibit 1.1
1-4
Basic Marketing Concepts
• Marketing (AMA definition):
– “…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 objectives.”
1-5
Basic Marketing Concepts
• Market:
– A collection of buyers and sellers
• Marketspace:
– Electronic marketplaces that are not bound by time or
space
• Metamarket:
– A cluster of closely related goods and services that
center around a specific consumption activity
• Metamediary:
– Provides a single access point where buyers can locate
and contact many different sellers in the metamarket
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Common Metamarkets and Participants
Exhibit 1.2
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Example of a Metamediary
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What is Exchange?
• Exchange:
– Process of obtaining something of value by offering
something in return
• Five Conditions for Exchange:
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(1) There must be at least two parties to the exchange.
(2) Each party has something of value to the other party.
(3) Each party must be capable of communication and delivery.
(4) Each party must be free to accept or reject the exchange.
(5) Each party believes it is desirable to exchange with the
other party.
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What is a Product?
• Product:
– Something that can be acquired via exchange
to satisfy a need or a want.
• Examples:
-Goods
-Services
-Ideas
-Information
-Digital Products
-People
-Places
-Experiences and Events
-Real or Financial Property
-Organizations
1-10
The Concept of Utility
• Utility:
– Ability of a product to satisfy a customer’s
desires.
• Four Types of Utility:
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(1) Form Utility
(2) Time Utility
(3) Place Utility
(4) Possession Utility
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Discussion Question
• Through exchange, marketing creates four
different types of utility for customers. Is it
possible to excel in all four types of utility?
Explain why or why not and give examples.
1-12
Major Marketing Activities
and Decisions (1 of 4)
• Strategic Planning
– Strategy
– Tactical Planning
• Research and Analysis
– Internal Analysis
– Competitive Intelligence
– Environmental Scanning
– Situation Analysis
1-13
Major Marketing Activities
and Decisions (2 of 4)
• Developing Goals and Objectives
– SWOT Analysis
• Developing and Maintaining Customer
Relationships
– Transactional Marketing
– Relationship Marketing
• Marketing Strategy Decisions
– Competitive Advantage
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Characteristics of Transactional
and Relationship Marketing
Exhibit 1.3
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Major Marketing Activities
and Decisions (3 of 4)
• Market Segmentation and Target Marketing
– Market Segmentation
– Target Markets
• Product Decisions
– Product Positioning
• Pricing Decisions
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Leads to revenue and profit
Directly connected to customer demand
Easy to change
Major quality cue for customers
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Major Marketing Activities
and Decisions (4 of 4)
• Distribution and Supply Chain Decisions
– Distribution and Supply Chain Management
– Supply Chain
• Promotion Decisions
– Integrated Marketing Communications (IMC)
• Implementation and Control
– Marketing Implementation
• Social Responsibility and Ethics
– Social Responsibility
– Marketing Ethics
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Corporate Culture Matters
1-18
Taking On the Challenges of
Marketing Strategy (1 of 2)
• Unending Change
– Customers change, competitors change, and marketing
organizations change
• Evolution of Marketing and Business Practices in
Society
• Increasing Demands of Customers
• Overall Decline in Brand Loyalty of Customers
• Increasing Price Sensitivity Among Customers
• Increasing Customer Cynicism about Business and
Marketing Activities
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Discussion Question
• How concerned are you about privacy and
security in the new economy? How have
businesses responded to these concerns?
Which is safer and more secure: online
transactions or face-to-face transactions?
Explain.
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American Customer Satisfaction Index
Exhibit 1.4
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Taking On the Challenges of
Marketing Strategy (2 of 2)
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Competing in Mature Markets
Little Real Differentiation Among Product Offerings
Increasing Expansion into Foreign Markets
Increasing Numbers and Strength of Foreign
Competitors
• Aggressive Cost-Cutting Measures in Order to Increase
Competitiveness
• Increasing Cooperation with Supply-Chain Partners and
Competitors
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Marketing Strategy in Action
• Increasing expansion into
foreign markets is
becoming a necessity to
compete in the global
marketplace.
• What kinds of
opportunities and threats
are presented by the
increasing global nature
of the marketplace?
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