Module 1 - Marketing in a Changing World: Creating Customer Value and Satisfaction services, information, or experience offered to a market to satisfy a need or want. Marketing - Process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. Marketing myopia -The mistake of paying more attention to the specific products a company offers than to the benefits and experience produced by these products. - More simply: Marketing is the delivery of customer satisfaction at a profit. Marketing Mix - a set of marketing tools that work together to engage customers, satisfy customer needs, and build customer relationships. Understanding the Marketplace and Customer needs Needs - state of felt deprivation for basic items such as food and clothing and complex needs such as for belonging. i.e. I am thirsty Wants - form that a human need takes as shaped by culture and individual personality. i.e. I want a Coca-Cola. Demands - human wants backed by buying power. i.e. I have money to buy a Coca-Cola. Market Offerings - Some combinations of products Customer Value and Satisfaction Customer Value - benefit that the customer gains from owning and using a product compared to the cost of obtaining the product. Customer Satisfaction depends on the product’s perceived performance in delivering value relative to a buyer’s expectations. Linked to Quality and Total Quality Management (TQM). Exchange and Relationships Exchange - the act of obtaining a desired object from someone by offering something in return. Relationship - building long-term relationships with consumers, distributors, dealers, and suppliers. Markets - buyers who share a particular need or want that can be satisfied by a company’s products or services. - - a market is the set of actual and potential buyers of a product or service. Marketing means managing markets to bring out profitable customer relationships. Customer Value-Driven Marketing Strategy Marketing management - The art and science of choosing target markets and building profitable relationships with them. The marketing managers aim to engage, keep, and grow target customers by creating, delivering, and communicating superior customer value. available and highly affordable. - Improve production and distribution Product - Consumers favor products that offer the most quality, performance, and innovative features. Selling - Consumers will buy products only if the company promotes/sells these products. Marketing - Focuses on needs/ wants of target markets & delivering satisfaction better than competitors. Social Marketing - Focuses on needs/ wants of target markets & delivering superior value. Selecting Customers to Serve - market segmentation and target marketing. - Society’s well-being Choosing a Value Proposition differentiation and positioning. - The idea that a company's marketing decisions should consider consumers’ wants, the company's requirements, consumers’ long-run interests, and society’s long-run interests. Value Proposition - A promise made by a brand to the audiences with whom it wants to build relationships. It is a factor that makes it different and or better than the others out there, making a brand stand out from the rest in a market. Marketing Management Philosophies Production - Consumers favor products that are Societal Marketing concept Preparing an Integrated Marketing Plan and Program Managing Customer Relationships and Capturing Customer Value 1. Understanding the marketplace and customer needs. 2. Designing a customer value-driven marketing strategy 3. Constructing a marketing program 4. Engaging customers and managing profitable customer relationship 5. Capturing value in return in the form of sales, market share, and profits Engaging Customers and Managing Profitable Customer Relationship Customer Relationship Management Relationship Building Blocks: Customer Value and Satisfaction Customer-perceived value The customer’s evaluation of the difference between all the benefits and all the costs of a marketing offers relative to those of competing offers Customer satisfaction - The extent to which a product’s perceived performance matches a buyer's expectation Customer Relationship Levels Tools ● ● Basic relationships Full partnership Customer Engagement and Today’s Digital and Social Media Customer-engagement marketing - Making the brand a Meaningful part of a consumers’ conversation and lives by fostering direct and continuous customer involvement in shaping brand conversations, experience, and community. Consumer-generated marketing - Brand exchanges created by consumers themselves-both invited and uninvited-by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers. Partner relationship management - Working closely with partners in other company departments and outside the company to jointly bring greater value to customers. Capturing Value from Customer Customer lifetime value The value of the entire stream of purchases a customer makes over a lifetime of patronage. Share of customer - The portion of the customers purchasing that a company gets in its product categories. Customer equity - The total combined customer lifetime value Of all the company's customers. Strangers — strangers are those who have no loyalty and therefore no profitability. Barnacles - are loyal customers but they are not profitable. Butterflies - are profitable customers but they are not loyal. True friends - are your loyal customers and they are profitable customers. The Changing Marketing Landscape Digital and social media marketing - Using digital marketing tools such as website, social media, mobile app and ads, online video, email, and blogs to engage consumers anywhere, at any time, via their digital devices. The Changing Economic Environment membership funds and support. Rapid Globalization the world has become more and more accessible to one another and the effects of globalization can be felt now more than ever. Sustainable Marketing The call for more environmental and social responsibility. Module 2 - Strategic Planning and the Marketing Process Strategic Planning Process Strategic Planning involves developing an overall company strategy for long-run survival and growth. People are finding happiness in old-fashioned virtues — those who were fond of thrift, live selling, we're in its very cheap where you can save money, do-it-yourself projects, there are also those pages that promote self-improvement, hard work, faith, and community. This process involves: Mindless to mindful consumption. Designing a Business Portfolio: Collection of businesses and products that make up the company. Growth of Not-for-Profit Marketing The nation’s not-for-profits face stiff competition for support and membership. Sound marketing can help them attract Defining a Mission: Statement of an organization’s purpose; should be market-oriented. Setting Company Objectives: Supporting goals and objectives to guide the entire company. Planning Functional Strategies: Detailed planning for each department designed to accomplish strategic objectives. Designing the Business Portfolio Marketing’s Role in Strategic Planning The best portfolio is the one that best fits the company’s strengths and weaknesses to the opportunities in the environment. Process of Selecting Target Consumers The company must: - analyze its current business portfolio or Strategic Business Units (SBU’s) - decide which SBU’s should receive more, less, or no investment - develop growth strategies for adding new products or businesses to the portfolio Product/ Market Expansion Grid Market Penetration: increase sales to present customers with current products. How? Cut prices, increase advertising, get products into more stores. Market Development: develop new markets with current products. How? Identify new demographic or geographic markets. Product Development: offering modified or new products to current customers. How? New styles, flavors, colors, or modified products. Diversification: new products for new markets. How? Startup or buy new businesses. Market Segmentation: determining distinct groups of buyers (segments) with different needs. Market Targeting: evaluating and selecting which target segments to enter. Market Positioning: products distinctive and desirable place in the minds of target segments compared to competing products. Marketing Strategies for Competitive Advantage - Market-Leader Market Challenger Market-Follower Market-Nicher Marketing Mix - The Four P’s Product “Goods-and-service” combination that a company offers a target market. Price - Amount of money that consumers have to pay to obtain the product. Place - Company activities that make the product available. Promotion - Activities that persuade target customers to buy the product. Module 3 - Analyzing the Marketing Environment Marketing Environment - Customers - five types of markets that purchase a company’s goods and services. - All the actors and forces influencing the company’s ability to transact business effectively with its target market. - Competitors - those who serve a target Includes: services. – Microenvironment - forces close to the company that affect its ability to serve its customers. - Publics - any group that perceives itself having an interest in a company’s ability to achieve its objectives. – Macroenvironment - larger societal forces that affect the whole microenvironment. market with similar products and Types of Consumer Markets ● ● ● ● ● ● International Markets Consumer Markets Company Government Markets Business Markets ResellerMarkets The Company’s Macroenvironment The Company’s Microenvironment - Company’s Internal Environment- functional areas such as top management, finance, and manufacturing, etc. - Demographic - monitors population in terms of age, sex, race, occupation, location and other statistics. - Economic - factors that affect consumer buying power and patterns. - Suppliers - provide the resources needed to produce goods and services. - Natural - natural resources needed as inputs by marketers or that are affected by marketing activities. - Marketing Intermediaries - help the company to promote, sell, and distribute its goods to final buyers. - Technological - forces that create new technologies, creating new product and market opportunities. - Political - laws, agencies and groups that influence and limit organizations and individuals in a given society. - Cultural - institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors. Key U.S. Demographic Trends Changing Age Structure Population is getting older Changing Family Structure Marrying later, fewer children, working women, and nonfamily households Geographic Shifts - Moving to the Sunbelt and suburbs (MSA’s) Increased Education Increased college attendance and white-collar workers Growing Ethnic and Racial Diversity - 72% Caucasian, 13% African-American,11% Hispanic & 3% Asian Economic Environment Key Economic Concerns for Marketers ● ● ● ● ● Changes in Income Economic Development Inflation and Recession Changing Consumer Spending Patterns Natural Environment Factors affecting the Natural Environment ● ● ● ● Shortages of Raw Materials Increased Pollution Governmental Intervention Cost of Energy Technological Environment - New technologies create new markets and opportunities. However, every new technology replaces on older technology. - Marketers should watch the technological environment closely. Political Environment Key Trends in the Political Environment ● ● ● Increased legislation Changing Government Agency Greater Concern for Ethics Cultural Environment Cultural Values of Society ● ● ● ● ● ● Of Of Of Of Of Of the universe Oneself Others Organizations Society Nature Responding to the Marketing Environment Environmental Management Perspective – Taking a proactive approach to managing the microenvironment and the macroenvironment to affect changes that are favorable for the company. How? Hire lobbyists , run “advertorials”, file law suits and complaints, and form agreements. Module 4 - Consumer Markets and Consumer Buyer Behavior Consumer Buying Behavior - refers to the buying behavior of final consumers (individuals & households) who buy goods and services for personal consumption. Characteristics Affecting Consumer Behavior ● ● ● ● Culture Social Personal Psychological Factors Affecting Consumer Behavior: Culture ● ● ● Most basic cause of a person's wants and behavior. Values Perceptions Subculture ● Groups of people with shared value systems based on common life ● ● ● experiences. Hispanic Consumers African American Consumers Asian American Consumers Mature Consumers Social Class ● ● ● ● ● People within a social class tend to exhibit similar buying behavior. Occupation Income Education Wealth Factors Affecting Consumer Behavior: Social Social Factors ● ● ● Roles and Status Family ○ Husband, wife, kids ○ Influencer, buyer, user Groups ○ Membership ○ Reference Factors Affecting Consumer Behavior: Personal Lifestyle Identification ● ● ● Interests Opinions Activities Personal Influences ● ● ● ● Personal Concept Occupation Economic Situation Age and Family Life Cycle Factors Affecting Consumer Behavior: Psychological ● ● ● ● Motivation Beliefs and Attitudes Perception Learning Maslow’s Hierarchy of Needs ● ● ● ● ● Self Actualization (Self-development) Esteem Needs (self-esteem, status) Social Needs (sense of belonging, love) Safety Needs (security, protection) Physiological Needs (hunger, thirst) The Buyer Decision Process ● ● ● ● ● The Buyer Decision Process Step 1. Need Recognition Need Recognition Difference between an actual state and a desired state Internal Stimuli ● ● ● Types of Buying Decisions ● ● ● ● Complex Buying Behavior - High Involvement & Significant differences between brands Dissonance Reducing Buying Behavior - High Involvement & Few differences between brands Habitual Buying Behavior - Low Involvement & Few differences between brands Variety Seeking Buying Behavior - Low Involvement & Significant differences between brands Need Recognition Information Search Evaluation of Alternatives Purchase Decision Postpurchase Behavior Hunger Thirst A person’s normal needs External Stimuli ● ● ● ● TV advertising Magazine ad Radio slogan Stimuli in the environment The Buyer Decision Process Step 2. Information Search Personal Sources ● ● Family, friends, neighbors Most influential source of information Commercial Sources ● ● Advertising, salespeople Receives most information from these sources Public Sources ● ● Mass Media Consumer-rating groups The Buyer Decision Process Step 5. Postpurchase Behavior ● Experiential Sources ● ● ● Handling the product Examining the product Using the product ● The Buyer Decision Process Step 3. Evaluation of Alternatives ● ● ● ● ● Product Attributes Evaluation of Quality, Price, & Features Degree of Importance Which attributes matter most to me? Brand Beliefs - What do I believe about each available brand? Total Product Satisfaction - Based on what I’m looking for, how satisfied would I be with each product? Evaluation Procedures - Choosing a product (and brand) based on one or more attributes The Buyer Decision Process Step 4. Purchase Decision Purchase Intention - Desire to buy the most preferred brand ● ● Attitudes of others Unexpected situational factors Consumer’s Expectations of Product’s Performance Product’s Perceived Performance ○ Satisfied Customer ○ Dissatisfied Customer ^Cognitive Dissonance Stages in the Adoption Process ● ● ● ● ● Adoption Trial Evaluation Interest Awareness Adoption of Innovations Percentage of Adopters Influences on the Rate of Adoption of New Products Product Characteristics Communicability - Can results be easily observed or described to others? Relative Advantage - Is the innovation superior to existing products? Divisibility - Can the innovation be used on a trial basis? Complexity - Is the innovation difficult to understand or use? ● ● Buyer and seller are more dependent on each other Build close long-term relationships with customers Compatibility - Does the innovation fit the values and experience of the target market? Module 5 - Business Markets and Business Buyer Behavior The Business Market - all the organizations that buy goods and services to use in the production of other products and services that are sold, rented, or supplied to others. - Business markets involve many more dollars and items do consumer markets. Market Structure and Demand ● ● ● ● ● Fewer, larger buyers Geographically concentrated Demand derived from consumers Inelastic demand Fluctuating demand Nature of the Buying Unit ● ● More buyers More professional purchasing effort Business Buying Situations Involved Decision Making ● ● ● Participants in the Business Buying Process: The Buying Center ● ● ● ● ● ● More complex decisions Process is more formalized Gatekeepers Users Deciders Buyers Influencers Major Influences on Business Buying ● ● Types of Decisions & the Decision Process ● Straight Rebuy Modified Rebuy New Task Buying ● Buyers Individual - Age, Education, Job Position, Personality & Risk Attitudes Interpersonal Authority, Status, Empathy & Persuasiveness ● ● Organizational Objectives, Policies, Procedures,Structure, & Systems Environmental Economic, Technological, Political, Competitive & Cultural Stages in the Business Buying Process ● ● ● ● ● ● ● ● Performance Review Order Routine Specification Supplier Selection Proposal Solicitation Supplier Search Product Specification General Need Description Problem Recognition Institutional and Government Markets
