ashton set

population of the world? US?

world: 7.9 billion US: 334 million

marketing in 3 words

satisfying customers' needs

marketing in 23 words

"The aim of marketing is to make selling superfluous. The aim is to know and understand customers so well that products sell themselves." ~ Peter Drucker

marketing in 5 boxes (in order)

CREATE VALUE AND BUILD RELATIONSHIPS:

1. understand the marketplace and customer needs and wants

2. design a customer value-driven marketing strategy

3. construct an integrated marketing program that delivers superior value

4. engage customers, build profitable relationships, and create customer delight ⬇️CAPTURES VALUE:

5. capture value from customers to create profits and customer equity

marketing

The process by which companies engage customers, build strong relationships, and create customer value in order to capture value from customers in return

needs

States of felt deprivation

• Physical needs—food, clothing, warmth, and safety

• Social needs—belonging and affection

• Individual needs—knowledge and self-expression

wants

Form taken by human needs when shaped by culture and individual personality (& marketing!)

demands

Human wants that are backed by buying power

market offering

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 and experiences produced

value and satisfaction info

Customers form expectations about the value and satisfaction of market offerings.

• Satisfied customers buy again

• Dissatisfied customers switch to competitors

satisfaction

feelings of pleasure or disappointment resulting from comparing a product's perceived performance in relation to expectations

exchange

the act of obtaining a desired object by offering something in return

relationships

Marketing consists of creating, maintaining, and growing desirable exchange ____

• Strong ones are built by consistently delivering superior customer value

marketing management

Choosing target markets and building profitable relationships

marketing management = ...

Marketing Management = Demand Management (and Customer Management)

value proposition

set of benefits or values it promises to deliver to consumers to satisfy their needs

marketing management orientations

• Production concept

• Product concept

• Selling concept

• Marketing concept

• Societal marketing concept

Production concept (INSIDE OUT)

available/affordable

product concept (INSIDE OUT)

quality/performance/features

selling concept (INSIDE OUT)

large-scaling selling/promo

marketing concept (OUTSIDE IN)

needs and wants of customer

Societal marketing concept (OUTSIDE IN)

needs/wants + society

shared value excerpt info

"They are concerned not just with short-term economic gains but with the well-being of their customers, the depletion of natural resources needed by their businesses, the welfare of key suppliers, and the economic well-being of the communities in which they operate."

selling and marketing concepts contrasted

selling concept: inside-out view that focuses on existing products and heavy selling; the aim is to sell what the company makes rather than making what the customer wants

marketing concept: outside-in view that focuses on satisfying customer needs as a path to profits; "we don't have a marketing department, we have a customer department"

marketing vs societal marketing concepts

marketing concept: outside-in view that focuses on satisfying customer needs as a path to profits; "we don't have a marketing department, we have a customer department"

societal marketing concept: outside-in view that focuses on doing good benefits community and company; more about bringing unity to society and human welfare

CRM

customer relationship management The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction

transactional marketing vs relationship marketing

transactional: acquire relationship: acquire and retain

4 bonds/attachments to build a relationship

-UTILITARIAN (ex:punch cards) -AFFECTIVE (ex: acts of kindness like holiday cards from companies) -SYMBOLIC (ex: portion of proceeds goes to a cause you happen to care about) -OBLIGATORY (ex: feel like have to go bc they know your name)

consumer-generated marketing

(a form of customer-engagement marketing)

• Brand exchanges created by consumers

• Consumers play an increasing role in shaping their own brand experiences and those of other consumers. • Occurs through:

• Uninvited: Consumer-to-consumer exchanges

• Invited: Consumers invited by companies ▪ New product and service ideas ▪ Active role in shaping ads

CLV

customer lifetime value

value of the entire stream of purchases a customer makes over a lifetime of patronage

Stew Leonard and CLV

STEW LEONARD who operates a highly profitable five-store supermarket in Connecticut and New York, once said that he sees $50,000 flying out of his store every time he sees a sulking customer. Why? Because his average customer spends about $100 a week, shops 50 weeks a year, and remains in the area for about 10 years. If this customer has an unhappy experience and switches to another supermarket, Stew Leonard's has lost $50,000 in lifetime revenue (CLV). The loss can be much great if the disappointed customer shares the bad experience with other customers and causes them to defect.

customer equity

Total combined customer lifetime values of all of the company's customers (CLV1+CLV2+CLV3...)

• Measures the future value of the company's customer base • Increases when the loyalty of the firm's profitable customers increases • Better measure of a firm's performance than current sales or market share

(know 4 customer relationship groups)

steps in strategic planning (in order) (incl which is corporate level)

CORPORATE LEVEL:

1. defining the company mission, THEN...

2. setting company objectives and goals, THEN...

3. designing the business portfolio

BUSINESS UNIT, PRODUCT, AND MARKET LEVEL: planning marketing and other functional strategies

strategic planning

Defining the company's mission and setting detailed supporting objectives and goals for each level of management

Setting a hierarchy of objectives:

• Business objectives

• Marketing objectives

Mission statement

-Market-oriented, realistic, specific -Motivating, consistent with market environment

Product-oriented

Statement focused on products

Ex: "we sell tools and home repair and improvement items"

Market-oriented

Statement focused on mission statement

Ex: "We empower consumers to achieve the homes of their dreams."

Business portfolio

• Collection of businesses and products that make up the company • Steps in business portfolio planning:

• Analyze the firm's current business portfolio

• Develop strategies to shape the future portfolio

portfolio analysis

• Management's evaluation of the products and businesses that make up the company (page 43)

• Identify the strategic business units (SBUs)

• Assess SBUs' attractiveness and decide on the level of support BU deserves • Direct resources toward more profitable businesses and phase down or drop its weaker ones

SBU

Strategic business units

a company division, a product line within a division, or sometimes a single product or brand

BCG

Evaluates a company's SBUs in terms of market growth rate and relative market share

(know BCG Growth-Share Matrix)

(know product/market expansion grid)

value chain

Series of internal departments that carry out value-creating activities

(value delivery network)

(composed of the company, its suppliers, its distributors, and its customers)

Value Chain =/≠ Value Delivery Network?

Value Chain ≠ Value Delivery Network value chain: internal value delivery network: broader

marketing strategy

The marketing logic by which the company hopes to create customer value and achieve profitable customer relationships

marketing segmentation

Dividing market into distinct groups with different needs/characteristics/behaviors

market segment

A group of consumers who respond in a similar way to a given set of marketing efforts

market targeting

Evaluating each segment; select which to enter

differentiation

Differentiating the market offering to create superior customer value

positioning

Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

Marketing mix

The set of tactical marketing tools—product, price, place, and promotion—that the firm blends to produce the response it wants in the target market

Marketing Mix (4 P's)

Product, Price, Place, Promotion

4 P's: product

the goods-and-services combination the company offers to the target market

4 P's: price

the amount of money customers must pay to obtain the product

4 P's: place

includes company activities that make the product available to target consumers

4 P's: promotion

refers to activities that communicate the merits of the product and persuade target customers to buy it

5 functions associated with the management of marketing

1. analysis

2. planning 3/4) implementation/ organization

3. control

(read pg 54 on 5 functions associated with the management of marketing)

S.W.O.T. stands for ___

strengths, weaknesses, opportunities, threats

marketing return on investment (ROI)

Net return from a marketing investment divided by the costs of the marketing investment • Assessed using:

• Standard marketing performance measures, such as... brand awareness, sales, market share

• Customer-centered measures, such as... CLV, customer equity, customer engagement

Hard to measure! CLV, customer equity, customer engagement

results in improved customer value, engagement, and satisfaction

marketing environment

The actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers

two key marketing environments

Microenvironment: Actors close to the company that affect its ability to serve its customers

Macroenvironment: Larger societal forces that affect the microenvironment

company

• Interrelated groups in a company form the internal environment • Departments share the responsibility for understanding customer needs and creating customer value

value chain

suppliers

Provide the resources needed by the company to produce its goods and services

problems seriously affect marketing - Supply shortages or delays - Labor strikes - Price trends of key inputs

value delivery network

intermediaries

help the company to promote, sell, and distribute its products to final buyers

• Resellers (wholesalers and Retailers)

• Physical distribution firms

• Marketing services agencies

• Financial intermediaries

value delivery network

competitors

Marketers must gain strategic advantage by positioning products strongly against competitors. No single strategy is best for all companies

publics (all)

any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives

• Financial (funding?)

• Media (news, opinions)

• Government (new laws)

• Citizen action (environmental groups, etc.)

• Local (neighborhoods, community organizations)

• General (general image by the public)

• Internal (workers, managers, volunteers, board)

customers

those who buy products

Five types of customer markets

• Consumer markets (final consumption)

• Business markets (further processing or production)

• Reseller markets (resell for profit)

• Government markets (public services)

• International markets (includes consumers, producers, resellers, and government)

demographics

human populations in terms of size, density, location, age, gender, race, occupation, and other statistics

marketers analyze: Geographic population shifts Changing age and family structures Educational characteristics Population diversity

4 key demographic trends

Geographic population shifts Changing age and family structures Educational characteristics Population diversity

5 largest generational groups and which is wealthiest? best with tech?

• Baby Boomers (wealthiest generation)

• Generation X (most educated generation)

• Millennials (or Generation Y)

• Generation Z (iGen, or Centennials): (utter fluency with technology, most racially and ethnically diverse)

• Generation Alpha (Will be the most formally educated ever, most tech-supplied, and globally the wealthiest generation ever)

How is the American family changing?

• 128 million households (less than ½ contain married couple, down from 76% in 1940)

• 18% are married with children under 18 (compared to 1970's figure of ~40%)

• 30% married without children

• 8% single parents

• 35% nonfamily households

• More are divorcing/separating, marry later, or marrying without having children

• 33% have never been married (up from 23% in 1950)

• 10% interracial or interethnic marriages

• 21% of married, same-sex couples are raising children (has increased 75% since 2000).

• More working women (38% 1970 to 59% today)

Are geographic shifts occurring? Changes in education? Diversity?

geographic shifts occurring (ex: South and West growing) Better educated increasing diversity: -By 2060, Hispanics 28%, Black Americans 15%, Asian American 9%

factors associated with the economic environment

Economic factors affect consumer purchasing power and spending (inflation, unemployment, interest rates, growth or recession)

• Changes in consumer spending ▪ Great Recession of 2008-9 caused a 'back to basics,' buying less and looking for greater value. Value Marketing! ▪ Back to basics sensibility

• Differences in income distribution ▪ Rich richer, shrinking middle class, poor poorer

What is the political environment?

Forces that influence or limit various organizations and individuals in a society

• Laws, government agencies, and pressure groups

3 reasons gov regulation is enacted

Legislation regulating business is intended to protect:

• companies from each other

• consumers from unfair business practices

• the interests of society against unrestrained business behavior

Did P&G do ethnographic research?

yes, but they called it "Living it!" and discussed brands like Ariel Ultra (Mexican laundry detergent)

ethnographic research

form of observational research that involves sending trained observers to watch and interact with consumers in their "natural environments"

Is it easy to gain consumer insights? How do we do it, and why?

no, it's tricky research studies (not just methods with lots of error such as focus groups talking more about what they should do) it is required to gain customer and market insights

MIS def and 3 key words

Consists of people and procedures to...

• Assess information needs

• Develop the needed information

• Help decision makers use the information

All to.... generate and validate actionable customer and market insights

assess, develop, use