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MARKETING
- 3. INTRODUCTION TO MARKETING (Related chapter in text: 1)
- 4. Learning Objectives Marketing vs. selling, vs. advertising Customer value The exchange process Define marketing mix, marketing program, and “S.T.P.” marketing. Marketing orientation vs. production vs. sales orientations.
- 5. Learning Objectives Marketing vs. selling, vs. advertising Customer value The exchange process Define marketing mix, marketing program, and “S.T.P.” marketing. Marketing orientation vs. production vs. sales orientations.
- 6. Learning Objectives Marketing vs. selling, vs. advertising Customer value The exchange process Define marketing mix, marketing program, and “S.T.P.” marketing. Marketing orientation vs. production vs. sales orientations.
- 7. Learning Objectives Marketing vs. selling, vs. advertising Customer value The exchange process Define marketing mix, marketing program, and “S.T.P.” marketing. Marketing orientation vs. production vs. sales orientations.
- 8. Learning Objectives Marketing vs. selling, vs. advertising Customer value The exchange process Define marketing mix, marketing program, and “S.T.P.” marketing. Marketing orientation vs. production vs. sales orientations.
- 9. ADVERTISING AGE’S TOP 5 “MARKETERS OF THE CENTURY” 5. 4. 3. 2. 1.
- 12. ADVERTISING AGE’S TOP 5 “MARKETERS OF THE CENTURY” McD Coke World Coke Green Coke Generations Bud Waz Bud Waz II Bud Genius Coke Thirsty P&G
- 13. The activity of creating communicating, delivering, exchanging offerings that benefit the organization, its stakeholders, and society at large. Marketing
- 14. SOME OTHER DEFINITIONS OF MARKETING The purpose of a business is to create and retain customers. Marketing is the profitable creation of Customer Value .
- 15. The unique combination of benefits received by targeted buyers that includes quality, price, convenience, on-time delivery and both before-sale and after-sale service. Customer Value
- 22. The Exchange Process Exchange is the trade of things of value between buyer and seller so that each is better off after the trade. But, how can both be better off after the trade?
- 23. Utility # Units Diminishing Marginal Utility The Exchange Process
- 24. MARKETING MANAGEMENT FACILITATES THE EXCHANGE OF VALUE AND SATISFACTION OF CONSUMER NEEDS BY THE USE OF THE MARKETING MIX The Exchange Process
- 26. Place Promot ion Controllable factors (the 4 P’s) Marketing Mix Price Produc t
- 27. Variety Quality Design Features Brand name Packaging Services Warranties List Price Discounts Allowances Payment period Credit terms Channels Locations Inventory Transportation Atmospherics Sales promotion Advertising Salesforce Public relations DirectMarketing E-commerce Place Promot ion Price Produc t Marketing Mix
- 28. A marketing program is a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers. Marketing Program
- 29. MARKET SHARE Cereal Industry Sales $ Millions MARKET SHARE RAN K BRAND 1 General Mills $1,922.1 0 31.50% 2 Kellogg’s $1,909.8 9 31.30% 3 Post $872.57 14.30% 4 Private Label $518.66 8.50% 5 Quaker $390.52 6.40% 6 Malt-O-Meal $213.57 3.50% 7 Kashi $128.14 2.10% 8 Natures Path $18.31 0.30% 9 Atkins $18.31 0.30% 10 Barbara’s $18.31 0.30% Total top 10 $6,004.2 98.40% Total market dollars (millions) $6,101.90 Market share is the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself.
- 30. Slide 1-22 Marketing Manager’s Role Consu mer Environmental Forces
- 33. Slide 2-37 Price $140 S.T.P. Marketing (without lens) Price $8000
- 34. Customer Era Market Orientation Customer Relationship Management (CRM) Evolution of the Market Orientation
- 36. McD Coke World Coke Green Coke Generations Bud Waz Bud Waz II Bud Genius Coke Thirsty P&G ADVERTISING AGE’S TOP 5 “MARKETERS OF THE CENTURY”
- 37. McD Coke World Coke Green Coke Generations Bud Waz Bud Waz II Bud Genius Coke Thirsty P&G ADVERTISING AGE’S TOP 5 “MARKETERS OF THE CENTURY”
- 38. McD Coke World Coke Green Coke Generations Bud Waz Bud Waz II Bud Genius Coke Thirsty P&G ADVERTISING AGE’S TOP 5 “MARKETERS OF THE CENTURY”
- 39. ADVERTISING AGE’S TOP 5 “MARKETERS OF THE CENTURY” McD Coke World Coke Green Coke Generations Bud Waz Bud Waz II Bud Genius Coke Thirsty P&G
- 40. ADVERTISING AGE’S TOP 5 “MARKETERS OF THE CENTURY” McD Coke World Coke Green Coke Generations Bud Waz Bud Waz II Bud Genius Coke Thirsty P&G
- 41. ADVERTISING AGE’S TOP 5 “MARKETERS OF THE CENTURY” McD Coke World Coke Green Coke Generations Bud Waz Bud Waz II Bud Genius Coke Thirsty P&G
- 42. ADVERTISING AGE’S TOP 5 “MARKETERS OF THE CENTURY” McD Coke World Coke Green Coke Generations Bud Waz Bud Waz II Bud Genius Coke Thirsty P&G
- 43. ADVERTISING AGE’S TOP 5 “MARKETERS OF THE CENTURY” McD Coke World Coke Green Coke Generations Bud Waz Bud Waz II Bud Genius Coke Thirsty P&G
- 44. ADVERTISING AGE’S TOP 5 “MARKETERS OF THE CENTURY” McD Coke World Coke Green Coke Generations Bud Waz Bud Waz II Bud Genius Coke Thirsty P&G
- 45. ADVERTISING AGE’S TOP 5 “MARKETERS OF THE CENTURY” McD Coke World Coke Green Coke Generations Bud Waz Bud Waz II Bud Genius Coke Thirsty P&G
- 47. Cycle Diagram Text Text Text Text Text Cycle name Add Your Text
- 49. Progress Diagram Phase 1 Phase 2 Phase 3
- 50. Block Diagram TEXT TEXT TEXT TEXT TEXT TEXT TEXT TEXT
- 51. Table TEXT TEXT TEXT TEXT TEXT Title A Title B Title C Title D Title E Title F
- 55. Block Diagram TEXT TEXT TEXT TEXT TEXT TEXT TEXT TEXT
Editor's Notes
- Define marketing and be able to distinguish it from selling, advertising, and public relations. Understand the concept of customer value and its centrality to marketing. Understand how marketing creates value through the exchange process. lations. Define marketing mix, marketing program, and “S.T.P.” marketing. Describe the important ways in which a marketing orientation differs from production and sales orientations.
- Define marketing and be able to distinguish it from selling, advertising, and public relations. Understand the concept of customer value and its centrality to marketing. Understand how marketing creates value through the exchange process. lations. Define marketing mix, marketing program, and “S.T.P.” marketing. Describe the important ways in which a marketing orientation differs from production and sales orientations.
- Define marketing and be able to distinguish it from selling, advertising, and public relations. Understand the concept of customer value and its centrality to marketing. Understand how marketing creates value through the exchange process. lations. Define marketing mix, marketing program, and “S.T.P.” marketing. Describe the important ways in which a marketing orientation differs from production and sales orientations.
- Define marketing and be able to distinguish it from selling, advertising, and public relations. Understand the concept of customer value and its centrality to marketing. Understand how marketing creates value through the exchange process. lations. Define marketing mix, marketing program, and “S.T.P.” marketing. Describe the important ways in which a marketing orientation differs from production and sales orientations.
- Define marketing and be able to distinguish it from selling, advertising, and public relations. Understand the concept of customer value and its centrality to marketing. Understand how marketing creates value through the exchange process. lations. Define marketing mix, marketing program, and “S.T.P.” marketing. Describe the important ways in which a marketing orientation differs from production and sales orientations.
- at the Dawn of the new millineum -- Ad Age published list of top 5 marketers of the century Nominations from floor 5. NIke 4. Anheiser Bush - Bud 3. Coca- Cola 2. McDonalds 1. Proctor & Gamble Ask class to name P&G brands Next page shows their brands
- Here are some
- Here are some more We do not know them because of company, but we know their brands’ They use multiple branding strategy {BOARD} contrast with Family Branding Stratgy e.g., Nike, Cambells Thats why we all know the brand Nike, but many do not know P&G
- #1 P&G First P&G ad on Superbowl --{show ad} have not done it since -- too expensive $3M Why are they on the list? $60B sales #1 national advertiser birth of soap operas (2) Pioneered Brand Management Concept single person responsible for every aspect of brand’ now commonly used by many firms (3) First big mover on Internet (4) Strong commitment to consumer research Not all positive, got in trouble during mid to late 90s advertising eroded other companies took the lead let innovation process slide will not work -- cant just let brands go through product life cycle without having new innovations to take their place But got the message and started innovating again spin brush created a new product category bought from entrepreneur and put crest label on it now $5 Billion dollar product Lots of other new products white strips Swiffer They turned things around Morale of story -- even if you are on top, you can not just sit back. it is easy to fall #2 McDondald’s How many of you have ever been in a McDonalds? Get kids early with happy meals Targets tweens can go with friends Helps to build lifetime loyalty transformational advertising get consumers to engage in ad so that it transforms experience of using brand not just a cheap fast food lunch advertising makes it more than that -- transforms it into something bigger Advertising research lots of effort to make sure ads are appealing to audience Stumbled in 1980s! What went wrong social trends fat content supersize me movie lots of price promotion bad weapon to use lazy way to compete easy for competitor to copy franchisees could not make money -- many closed Last successful innovation for a long time was in ‘83 - Mcnuggets Started lagging in cleanliness and speed of delivery (service levels fell) CEO died from heart attack What have they done since to catch up? Hamburger U (to correct service issues) WiFi Adult menu items phased out supersize launched new ad campaign {show ad} Are you loving it? targets youthful market (18-24) I don;t care for it, but it is not aimed at me, I do not have to more recently introduced premium coffee (very successful -- partly due to recession) added smoothies adding these drinks and wifi to restaurants invites people to stay longer They are in much better shape now They have made a comeback but suffered lost touch with environment not as commited to service Like P&G, was in a great position but suffered when they became complacent Back on track now Coca Cola and Anheiseur Bush -- talk about together since interesting parallels Both successful for a long time carbonated beverages market leaders by a wide margin Coca Cola has largest brand equity of any brand in world! {board} Brand Equity = Value of firm - value of all stock, patents, equipment (i.e., all tangible assets). 60% of value of firm comes from non tangibles Very powerful, a result of years of positive associations with brand in advertising Brain research shows Pepsi causes greater activation of pleasure sensors in brain - i.e., people like the taste of Pepsi better Coke activates different areas of brain memory imagery over time family 2 most highly rated commercials of all time are from Coke Coke World --[Show AD} captured a lot of people’s attention fit in with the psyche of so many americans at the time was redone with different lyrics -- made it to top 40 built lots of positive associations (images) with brand Mean Joe Green [Show AD} Giant linebacker 70s rugged image but captured essence of what Coke is about These ads warm your heart this type of ad is what keeps Coke so near and dear to people’s hearts But like P&G and McDonalds have had some missteps 1985 - New Coke vs. old cole started to loose way after that cut back on ads figuring they were powerful ads lost effectiveness over next 20 years Generations Ad [Show AD} Lots of flops since then 80% of sales from International Market own fountain sales in us but loosing in pkg sales carbonated soft drinks on decline all together - fruit juices, sport drinks on the rise coke has the most eggs in the carb. bev market Poweraid took a long time to come to market recently purchased Vitamin Water kind of late so Coke is struggling Budweiser -- Happier story On top of its market and never really been challenged 1950s - first nationwide brewer in US 1957 - top market share Over 50% market share of domestic beer market How have they done this? Creative ads over a long period of time {show ad} Waz and Waz II {show ad} Genius They have had a whole series of very effective and entertaining ads Why couldn’t Coke do this? These ads say nothing about beer. They just build positive associations with the product. Bud has done it, Cole has floundered! Coke has not been able to find their way back to the creativity they had in the 70s Neither brand needs to explain what the product does. People know about the product! The brands just need to build positive associations!
- Marketing may seem easy, common sense! But even big companies can mess it up as we say in our previous lecture. This definition focuses on creation deliver exchange that benefits organization itself as well as customer
- The unique combination of benefits received by targeted buyers that includes quality, {is a high quality product -- does what it should do- Toro lawn mower starts when you pull the cord} price, {fair price} convenience {convenient to get} on-time delivery and both before-sale and after-sale service. {all of these things wrapped up together is what we call value}. {ask class} How many prefer Target to Walmart? Even though better price at Walmart - many people get better value at Target Of those how many still shop at Walmart sometimes? even those that like Target better, some still get better value from Walmart (later hours, more selection, better prices) The importance of these factors varies across consumers.
- There are 4 major types of utility that consumer look for. Time, place form and possession. Different consumers assign different amounts of importance to these, so not everyone is looking for the same thing. Lets look at examples of all 4 types of utility
- Time -- getting the product when you want it Wal Mart open 24 hours ATM Speed of delivery -- order delivery time Fed X Madden Football Game -- new one each year Over 50% of sales for the entire year come the first week it is on the shelves If you are a retailer, you better have it the first week, or you will lost out. Fast Food SAles 1970 $6B 2000 $110B 2013 $191B more than what we spend on higher education, new cards, movies and magazines combined! people want it fast
- Having the product available WHERE you want it McDonalds has lots more outlets than it competition -- more likely to be convenient than BK Why do people pay more for Beer at a hockey game then at the grocery store? They value it more there then they do at other places {Board} Atmospherics atmosphere
- Actual form the products is in Fruit - raw or juice Music Tape - ipad - about drawn to size -- the form evolved over time to be more reliable, and easier to carry
- Steps to help the consumer possess the product sooner rather than later Credit - can have now and pay later Mortage - can live in house 30 years before we finish paying for it. Social Danger -- If credit is too easy people get in over their heads. -- We have seen a lot of this in the last few years. So the lenders needed to be reigned in!
- Marketing is all about exchange --> goods (barter), money or credit --> {Board} Buyer Seller <-- product, idea. service <-- But how can both be better off after the trade?? Well that comes from an idea from economics called diminishing marginal utility. --> next slide
- Go through exercise 6 hb trade for 1 coke
- Marketers want consumer to feel good after the trade They want the consumer to get a good value How do they do this?? By the use of the marketing mix LEts take a look at a scene from the Godfather to see what we can learn
- Metaphor developed in 1920 by Neil Borden His company made cake mix. And just like a cake mix you need to have the right mix of these things to do marketing in an ideal way The 4 p’s represent the 4 key ares that marketers control. Let take a look at some of the dimensions of this in the next slide
- A marketing program creates a marketing mix that is well integrated. E.G. if you make a high quality product, the price, promotion and distribution ought to reflect that. Does not make sense to charge a low price for high quality product. Here is an example from Rollerblades for a product designed for people of various skill levels primarily wanting skates for fun and exercise. Not the most expensive, or the cheapest features in magazines associated with fitness fairly widespread distribution -- does not have to be sold only by highly specialized stores The mix fits together.
- A term we use a lot -- Market Share Define Example 1.9B / 6.1B = 31.5% (Gen. Mills). This is a key indicator of the successfulness of a marketing program. Note this is a fairly concentrated market, 98% of market share contained held by 10 firms, when there are hundreds of companies making cereall contrast with a fragmented market which would have the market share spread out among a greater proportion of the companies.
- The Marketing Managers role is outlined in this diagram Centermost is the consumer must start by understanding who the consumer is what he is looking for, etc.. The job is to set up the 4 p’s based on our knowledge of the consumer’’ But we do not do this in a vacuum. The environmental forces serve as a constraint on the way we design marketing mix eg if we make a product similar in quality to out competitor, we cannot charge a higher price and be successful If social factors, like greater health consciousness causes consumers to cut back on fast food, McDonalds must react with new menu items to mirror the changing trends If the new technology like touch pads are the way of the future, it makes sense for us to explore how to include it in our products Iphone was really the start of it -- technology got better, consumers like it since it mimics normal human motions. and now we have all types of devices using this technology. if the economy is soft (as we have seen in the recent recession) then it may not make sense to come out with lots of new refrigerators (as consumers curtail durable purchases in a sour economy). So the goal is to set those controllable factors, but we cannot do it in a vacuum. we need to understand the consumer and the environment And come up with a marketing mix that makes sense.
- As part of coming up with a marketing mix, we practice STP marking- segmentation, targeting and positioning are 3 interrelated concepts that make up the hallmark of marketing strategy lets start with segmentation <Next Slide>
- Segmentation We start by looking at the consumer market <click to bring in big picture> In the early days we tended to think of the marketplace as homogenious Back in the 1920s Henry Ford - Model T - any color you want as long as it was black treated everyone the same this does not work today From a far enough distance awat, all consumers look the same. So that was the way marketing was handled back then. Treat everyone the same. On closer inspection though... <click to bring in close up pictures> ...we see that not all consumers are the same. There are lots of different types of consumers out there. We need to understand who these consumers are what they want (types of products, features) where you can find them to communicate with them (tv, magazines, newspapers, webpages) For example, if we a music label and we handled classic rock and hip hop would the customers be the same for both types of music? old young liberal conservative white black urban suburban rich poor etc...... To do learn about these differences we need marketing research What do we do with that knowledge? <click to remove pictures> Targeting We create different types of products for different types of consumers We only serve some of the consumers, not all of them. We find those consumer in different places tv shows radio shows magazines newspapers magazines Positioning refers to how we communicate with the customer how we battle for the minds and attention of our consumers what message we tell them how we want them to perceive our product Apple imac -- easier to use than Windows based PC
- Here is an example of two cameras from the same company They appeal to very different types of consumers The entire marketing mix is different for the two types of cameras reflecting the segmentation that was done by Canon
- Finally, the last topic in this introduction is a discussion of the evolution of schools of thought about running a business. In early days of industrial revolution -- major focus of firm was production <CLICK TO BRING UP FORD PICTURE> learn how to produce products as efficiently as possible focus is on making stuff <CLICK TO REMOVE PICTURE> that works as long as demand > supply our focus is INWARD -- on our ability to produce. We don’t worry so much about selling -- the product sells itself companies not so efficient at making products yet so demand for them outstrips supply This orientation held up until about the 1920s when production techniques improved and supply started to outstrip demand Then came the sales era Now we got a lot of stuff in inventory, we need to figure out how to sell it But focus is really still inward as it is really the excess inventory that is causing us to put effort into selling Then in the 1950s, the marketing concept era began Marketing Concept -- satisfy customer needs and wants and make a profit major change in focus, the focus becomes the consumer and satisfying their needs we start with what the consumer wants and try to make it vs. make what we want then try to sell it <Click for marketing research picture> Marketing Research is key to doing this. identify consumer needs ---> develop product --> then sell “rather than making what we always make and then trying to sell it, find out what consumer wants and try to make it” <Click to remove marketing research picture> Now the focus is outward not inward The marketing concept era held out until the 1990s but was really extended then by the customer era. The major difference, prior to the 1990s it was really just the marketing department that was focused outward In the 90s that was extended to the entire organization, not just the Mkt. Depts