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80 Cards in this Set
- Front
- Back
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challenges and opportunities faced by marketers in the new economy;
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The “Red Queen” effect.
Power Shift to Customers web, information, access Massive Increase in Product Selection & substitutes Competition increases selection; web makes it accessible Changing Value Propositions; speed, efficiency of Net Shifting Demand Patterns; e.g. recording industry New Sources of Competitive Advantage; eg. alliances Privacy, Security, and Ethical Concerns |
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the marketing concept
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Identify a customer need; develop an offering that satisfies it, in a way that meets organizational objectives
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• What is an exchange?
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Process of obtaining something of value by offering something in return
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metamarket
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A cluster of closely related goods and services that center around a specific consumption activity: auto market, real estate.
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metamediary
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Provides a single access point where buyers can locate and contact many different sellers in the metamarket eg Edmunds.com; Realtor.com
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Value proposition
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a marketplace offering that fairly and accurately sums up the value that will be realized if the product or service is purchased— i.e., what the customer gets out of the deal
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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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Delta Paradigm
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the only constant is change
“All is flux, nothing stays still” Leads to blurring and overlap of content and implementation |
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What is improvisation
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simultaneous planning and implementation.
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• What is a market orientation
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response to market intelligence
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A Market-Oriented Organization
Shifts its focus |
From products to the requirements of market segments
From transactions to relationships From competition to collaboration |
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Mission Statement is important because it tells us:
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Who we are.
Who our customers are. Core competencies & competitive advantages. Our operating philosophy—including: Concerns and interests re. employees, our community, society in general & our environment. |
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Corporate Strategy
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What industries to enter; what units to acquire and divest
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• What causes marketing plans to fail?
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Communication
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A good marketing plan outline is:
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Comprehensive
Flexible Consistent Logical |
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Data:
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A collection of numbers or facts that have the potential to inform
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Information
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Data that has been transformed or combined with other data in a manner that makes it useful to decision makers
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4 types of competition
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(1) Brand competitors
Similar features and benefits (2) Product competitors Same class, different features (3) Generic competitors Different product, satisfies same need (4) Total budget competitors Competes for same financial resources |
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• How has the Internet affected the information gathering portion of situation analysis?
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easier to research
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I. Review of Current Objectives, Strategy and Performance
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Strategy must be consistent with mission, goals, objectives
Important input to later stages in the process Poor or declining performance may be the result of: (1) Goals or objectives that are inconsistent with customer or external environments (2) Flawed marketing strategy (3) Poor implementation (4) Changes in the customer or external environment beyond the control of the firm |
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II. Resources
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Financial resources tend to get most attention
But human and experiential resources are critical Key relationships with customers, suppliers & other stakeholders Labor shortages are expected to be a major problem in the coming years |
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III. Organizational Culture and Structure
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Culture enables, constrains, strategic possibilities
Marketing department may need to market itself! Culture and structure are relatively stable but can be affected by mergers |
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Competitive Advantage
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ability of the firm to provide customers a benefit the competition can’t
Can arise from capabilities: organizational skills, knowledge and routines. Things we know and/or do. For sustainable competitive advantage, capabilities must be valuable, rare, inimitable, not substitutable |
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Three strategic areas where capabilities are key (competitive advantage)
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(1) Operational Excellence: Efficiency, lower costs
Walmart, Dell (2) Product Leadership: technology, R&D Intel, HP (3) Customer Intimacy: close customer relations Amazon, Saturn |
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Other Common Sources of Competitive Advantage
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Relational Advantages
Legal Advantages Organizational Advantages Human Resources Advantages Product Advantages Pricing Advantages Promotion Advantages Distribution Advantages |
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Weaknesses
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Minimize/Avoid
Convert to Strength |
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Threats
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Minimize/Avoid
Convert to Opportunity |
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Strengths and Opportunities
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Match
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Four major directions for strategic efforts:
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Aggressive (many internal strengths / many external opportunities)
Diversification (many internal strengths / many external threats) Turnaround (many internal weaknesses / many external opportunities) Defensive (many internal weaknesses / many external threats) |
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Quality:
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product superiority relative to some internal standard, or relative to competition
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Delivering Superior Quality (four issues)
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Understand customers’ expectations, needs, and wants
Translate customer research into specifications for quality Deliver on specifications Promise only what can be delivered |
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Core, supplemental, and symbolic combine
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to define customer benefits
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Value:
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a subjective evaluation of benefits vs. costs
CUSTOMERS define quality and value |
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Simple Perceived Value Equation
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Customer Benefits/Customer Costs
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Complex Perceived Value Equation
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(Core Product Quality + Supplemental Product Quality + Experiential Quality)/(Monetary Costs + Non-monetary Costs)
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Value includes
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benefits and costs from customer’s whole interaction with the firm and product
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Satisfaction:
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whether the overall experience meets expectations.
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Satisfaction deals with
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overall, global expectations.
Includes: core, supplemental, experiential quality; every interaction with firm; purchase, use, and disposition of product |
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Quality, in contrast to Satisfaction
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is assessed attribute-by-attribute
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Loyalty has two components:
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commitment (attitudinal); repeat purchase (behavioral)
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How to get customer Satisfaction to result in Customer Retention
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Satisfaction is necessary for loyalty
Understand what can go wrong Focus on controllable issues Manage customer expectations Offer satisfaction guarantees Make it easy for customers to complain Create loyalty programs Make customer satisfaction measurement an ongoing priority |
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Customer Relationship Management (CRM):
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“A holistic process of identifying, attracting, differentiating, and retaining customers.”
Very important in the current marketing environment. Offensive and defensive strategy |
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CRM Stakeholders:
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Employees
Supply Chain Partners Lateral Partners Customers |
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CRM's major shift in marketing thought:
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from mass marketing to individualized marketing
Change of focus from acquiring new customers to retaining existing ones $82 online customer acquisition cost |
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Goal of CRM:
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build long-term relationship, 1:1
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CRM Benefits
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Loyal customers buy more. (CRM Increases Sales)
CRM is cost effective (CRM Saves $) Word-of-mouth |
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CRM is cost effective (CRM Saves $) :
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Less expensive to retain one customer than to acquire one
Less expensive to sell more products to one customer than to sell the same amount to 2 customers Reduced promotion costs Reduced customer service costs (they know what they are doing) |
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Loyal customers buy more. (CRM Increases Sales)
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1997 survey by Binary Compass Enterprises: new users at a merchant site spent an average of $127 per purchase, while repeat users spent almost twice as much, with an average of $251.
www.amazon.com - Cross-sells by offering music, videos, and toys to its book customers CDNow - E-mails special offers to its customers to repeat business with them. |
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Word-of-mouth:
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Loyal/Satisfied customers recommend Web sites, stores, and products to their friends.
= The heart of CRM. Positive word of mouth can attract many new customers, but negative word of mouth can drive them away. Each dissatisfied customer tells 10 people about the unhappy experience, BUT “If you have an unhappy customer on the Internet, he doesn’t tell his six friends, he tells his 6,000 friends” (through e-mail, newsgroups, chat, and personal Web pages). |
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Mass Marketing Advantages
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1. Efficiency:
Economies of scale Pricing power/volume discounts with suppliers Mass communication efficiencies Distribution efficiencies 2. Works best when market’s needs are homogeneous |
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Mass Marketing Disadvantages:
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Is everyone really the same?
What products are really still mass-marketed? |
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Traditional Approaches to Market Segmentation
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Mass Marketing
Differential Marketing |
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Mass Marketing Strategy
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Single Marketing Mix to Total Market
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Differential Marketing: Multisegment Strategy
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More than one Marketing Mix to More than one Market Segment
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Differential Marketing Mulstisegment Advantage:
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covers more customers; Better meets needs
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Differential Marketing MultiSegment Disadvantage
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Expensive & complicated; lost economies.
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Differentiated Marketing: Market Concentration Strategy
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Single Marketing mix focused on one Market segment
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Differentiated Marketing: Market Concentration Strategy Advantages:
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Get to know that segment really well.
Offer multiple products to single group of customers. |
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Differentiated Marketing: Market Concentration Strategy Disadvantages
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Potentially limits growth
Potentially higher risk as all eggs are in one basket |
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Niche Marketing Strategy
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One Marketing Mix focused on a small niche in the market
Pick a small, well defined market sub-segment Be sure to intimately know the needs of target customers Big frog in a small pond: high market share can make you influential, profitable. Niche must be big enough for growth, small enough so that larger rivals will stay away. |
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Niche Marketing Strategy Disadvantages
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if you are successful, you grow the niche—then face competition
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3 differentiated marketing Strategies
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Multisegment
Market Concentration Niche Market |
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Bases for Segmenting Consumer Markets
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Behavioral Segmentation
Demographic Segmentation Geographic Segmentation Psychographic Segmentation |
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Behavioral Segmentation
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Segments based on actual behavior or product usage
Perhaps most powerful tool, because it has close ties to needs, wants, how customers actually use product. But: difficult to actually identify members for targeting. E.g. How do you reach heavy users? |
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Demographic Segmentation
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Segments based on demographic factors (e.g., gender, age, income, education, etc.)
Trick is to discover needs that are universal for particular demographics Commonly used; segments easy to identify But: motives, values, needs, wants may have little to do with demographics. |
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Psychographic Segmentation
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Segments based on state-of-mind issues (e.g., motives, attitudes, opinions, values, lifestyles, interests, personality, etc.) E.g. VALS
Taps motivations; But: difficult to measure. Should use other segmentation bases to reach |
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Geographic Segmentation
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Segments based on geographic location
Geodemographics match geographic area with other segmentation bases Easy to measure But: most useful when combined with other bases |
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Positioning
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perception customer has of your product relative to its competition. Could be based on real or perceived differences.
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Positioning strategies
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Position based on almost any factor of importance to your customer:
product class; benefits; attributes; price; relative to your other products, competition |
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Positioning Options
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Strengthen the Current Position.
Keep raising the bar. Repositioning. E.g. Cadillac (working) Oldsmobile (didn’t) Reposition the Competition. Budweiser vs. Miller (see next slide) |
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Bizrate
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Website that shows the powershift to constomers, with own research and information and options for purchasing
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Marketing Concept
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Identify a customer need and develop an offering that satisfies it in a way that meets org's objectives
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Why do markers need to be prepared for improvisation?
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B/c in today's business world, we must be flexible and able to improvise plans
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What causes marketing to fail?
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poor communication
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Internal Environment elements
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Review objectives
Availability of resources organizational culture |
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External environment
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competition
economic growth political/legal technology sociological |
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B2B economic and Political...
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they are embedded w/in each other
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supplemental products are..
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the additional services we give customers, such as a warranty or quality
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role of supplemental products
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important contribution to value and quality
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Nonmonetary costs in customer assessment of value
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poor quality, time spent not working
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