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NOTESHELLSSEGMENT 1 : INTRODUCTION AND OVERVIEW(Related chapter in text: 1)LEARNING OBJECTIVES Define marketing and be able to distinguish it from selling, advertising, and public relations. a. Marketing- profitable creation of customer value i. b. Understand the concept of customer value and its ce...

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NOTESHELLS

SEGMENT 1 : INTRODUCTION AND OVERVIEW (Related chapter in text: 1) LEARNING OBJECTIVES

1. Define marketing and be able to distinguish it from selling, advertising, and public relations. a. Marketing- profitable creation of customer value i. b.

2. Understand the concept of customer value and its centrality to marketing. a. Customer value is what the customer gets out of it i. Value, satisfaction, utility=perceived benefits/price ii. Types of utility: 1. Time: how quickly the desired outcome happens 2. Place: location convenience, doing things to create a certain ambiance within the business (atmospherics) 3. Form: the way things come and how it changes the usefulness of the product. Ex: tidepods, prepopped popcorn. its attractiveness 4. Possession: how easy it is to possess the product. Ex: being able to buy a house through credit. Rentals.

3. Understand how marketing creates value through the exchange process. a. Allowing exchange to happen through bartering or money b. People market by telling the consumer what they get out of it. Ex: donate blood and get a free movie ticket. i. Doing what we can to win over the hearts of consumers c. Marketing managers facilitate the exchange of value

4. Define marketing mix, marketing program, and “S.T.P.” marketing. a. Marketing mix- The 4 P’s (Product, Price, Promotion, Place). Controllable factors used by marketing managers. i. Where marketing and advertising start to diverse ii. Product- design to better help the consumer iii. Price- giving fair value for what it is. People look at the equation and feel like they’re getting the most bang for their buck iv. Place- where we sell it and how we orchestrate physical environment. b. Marketing Program- plan that integrates marketing mix to provide product, service, or idea to prospective customers 2

i. Represents decisions that we’ve made with our mix c. Market share- ratio of total sales revenue to our sales i. Sometimes measured in unit sales rather than sales revenue ii. Key indicator of successful marketing program 5. Describe the production, sales, marketing, and market orientations.

MARKETING (2007 A.M.A.): Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

SOME OTHER DEFINITIONS OF MARKETING “The purpose of a business is to create and retain customers.” “Marketing is the profitable creation of customer value.”

CUSTOMER VALUE: 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.

VALUE = PERCEIVED BENEFITS / PRICE

SOME SYNONYMS FOR VALUE:  UTILITY  SATISFACTION

TYPES OF UTILITY: TIME- how quickly the desired outcome happens

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PLACE- location convenience, doing things to create a certain ambiance within the business (atmospherics)

FORM- the way things come and how it changes the usefulness of the

POSSESSION- how easy it is to possess the product. Ex: being able to buy a house through credit. Rentals

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MARKETING CREATES CUSTOMER VALUE THROUGH THE PROCESS OF EXCHANGE.

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MARKETING MANAGEMENT FACILITATES THE EXCHANGE OF VALUE. MARKETING MIX: Controllable factors of Product, Price, Promotion, and Place (the 4 P's) used by marketing managers.

Product        

Variety Quality Design Features Brand name Packaging Services Warranties

    

List price Discounts Allowances Payment period Credit terms

    

Channels Locations Inventory Transportation Atmospherics

Price

Place

Promotion      

Sales promotion Advertising Sales force Public relations Direct Marketing E-commerce

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MARKETING PROGRAM: A plan that integrates the marketing mix to provide a product, service, or idea to prospective customers. MARKET SHARE: Ratio of the firm’s sales revenues to total industry sales revenues (including the firm’s) Sometimes measured in unit sales rather than sales revenues A key indicator of a successful marketing program

EXAMPLE Mop & Brooms Industry Sales: $440 million Brands Swiffer Pledge Grab It Quickie Libman Rubbermaid All Others

Sales Revenues $83 million $51 million $35 million $18 million $17 million $236 million

Market Share 18.9% 11.6% 8.0% 4.1% 3.9%

“S.T.P.” Marketing 

Segmentation



Targeting



Positioning Segments- different wants and needs of consumers Targeting- selecting the segments we want to serve -tailoring product based on the segment statistics Positioning- how we put ourselves in consumers’ minds -how we want consumers to perceive us

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Both internally focused 1. Prod- company is mostly devoted to production (efficiently, effectively) a. A lot of demand, little competition b. Usually newer companies, doesn’t last long 2. Sales- focused on selling a. Advertising, retailers, sales promotions

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Externally focused 1. Marketing- research the market, learn about consumers a. Product formed from market research b. Only marketing department 2. Market- same as above, but entire firm considers consumer rather than just marketing department a. Ex. siemens

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SEGMENT 2 : THE MARKETING ENVIRONMENT (Related chapter in text : 3) LEARNING OBJECTIVES 

Understand the importance of the environment within which marketing occurs.



Describe the levels, characteristics and sectors of the marketing macro- and microenvironment.



Describe key forces and trends in the social, economic, technological, regulatory and natural sectors of the macro-environment.



Describe the components and importance of strategic environmental scanning.

MARKETING ENVIRONMENT: 

CONSTRAINING-who has control over the environment  Are we going to adapt or modify? o Adapting is key to success in many industries 

Tide has made many changes from powder to liquid to pods to adapt to their environment  Toy companies such as Lego have moved from wooden toys to plastic blocks to adapt to changing environment  Speed is important o Threat/opportunity is a mindset  Important (as a leader) to view changes as an opportunity rather than a threat  Ex. The introduction of selling via internet. Some companies viewed as threat while others said it’s okay, we can have a store, a website, and a catalog 

MULTI-LEVEL o Macro



CURRENT/FUTURE

CONSTRAINT 

CONTROL

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

-

ADAPT

-

MODIFY

THREAT OR OPPORTUNITY

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LEVELS 

MACRO-broadest environmental influences o Demographics, economy. Etc.



MICRO- relevant to particular regions, industries, etc. o Not important to everyone, more immediate consequence to our particular industry/area. o Ex. Not using gasoline powered automobiles would be important to manufacturers but not so much restaurant chains



INTERNAL- other parts of org other than marketing

MACRO  SOCIAL  ECONOMIC  TECHNOLOGICAL  REGULATORY  NATURAL

SOCIAL  CULTURAL 

DEMOGRAPHIC

CULTURAL 

CORE SET OF BELIEFS & VALUES o Individualism- place a lot of value on individual success, achievement, etc. Individual achievement is highly valued in U.S.  Personalization of products  Enhances customer relationships o Time orientation- U.S. is more oriented on present/future  Past  Present-immediate gratification  Future-going to school to better your future o Materialism- belief that more stuff will make you happier o Youthfulness- desire for youthful appearance and youthfulness in general  Botox, exercise, things to make people feel young

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

MICRO-CULTURES- own set of beliefs and values within culture o Ethnicity



DIVERSITY!

DEMOGRAPHIC



AGE DISTRIBUTION o Greying of america



GEOGRAPHIC TRENDS o Population is generally moving toward the southwest and the coast



HOUSEHOLD COMPOSITION-dramatically changed since the 1960’s o Less stay at home moms o Gay marriage o Blended families o Marriage less prominent/important o Nonmarital births o Single person household holds majority in US o Older people are living with parents (multigenerational households)

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ECONOMIC Inflation erodes purchasing power TREND IN GROSS DOMESTIC PRODUCT (GDP-value of all goods and services peoduced in US, basic measure of our economy) TRENDS IN CONSUMER INCOME --NOMINAL INCOME --“REAL” INCOME TREND IN INCOME INEQUALITY Worker pay from 1980 to 2010 has gone up 11% CEO pay has gone up 1000% 90% have increased at a lower rate than the GDP 9% have kept up with GDP Income shift from lower to upper classes Approaching similar distribution to that in 1920 Genie index- measure inequality Inequality is causing slower growth in our economy Reaching large proportions

TREND IN CONSUMER EXPECTATIONS How people feel about the economy affects their spending trends Typically measured with large scale --INDEX OF CONSUMER CONFIDENCE Half Americans expect a major recession soon

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TECHNOLOGICAL 

TELEVISION o Smart TV- about 200mil users which reverses the trend of seeing a TV as a necessity. o The use of tv is declining and internet is increasing.



COMPUTER/INTERNET o By 2014, 87% of Americans use the internet



SMARTPHONE/MOBILE o Evolution of phones is a game changer o Changes how we interact o 98% of mobile phone users use internet o 3/5 users are always connected to internet o 46% of users say mobile phones are things they cant live without o Increase in car accidents may be related to increase in smartphone users o Increase in U.S. advertising spending for mobile and decrease in newspaper, billboards, etc. o Greeting card industry has decreased heavily o Heavy increase in music industry and getting by on a lot less revenue

KEY ISSUES IN TECH ENVIRONMENT

RATE OF CHANGE -very rapid change can kill a business if they don’t catch it in time. Ex. Kodak MEDIA FRAGMENTATION -in 78, over 98% of homes were tuned into CBS, ABC, or NBC and by 08 there were less than 30% and continues to decrease -increasingly doing more things as we have the tv going (twitter, fb, etc.)

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Internet of things -smart watches, smart glasses, alexa, etc. -Capturing data is a real growth industry -marketing is much more complex but also offers greater opportunities

REGULATORY 

PROTECTING COMPETITION (read about other acts in book) o Sherman anti-trust act- protect against monopoly power o Federal trade commission (FTC)- primary regulatory body for advertising  Ex. sketchers weightloss shoes  Corrective advertising- advertising made to correct misleading ads. FTC sometimes require companies to do so (ex. cigarettes)



PROTECTING CONSUMERS o Lanham Act- protects trademarks. Prevents copying packaging so they don’t look too similar to mislead customers o Food and Drug Admin- responsible for safety of food and drugs and advertising for them. Ex. falsely claiming food to be natural o Consumer Product Safety Commission- responsible for product safety both made in US and imported into us



POLITICAL PRESSURE

- CONSUMERISM-anti consumption. Keep an eye on products, industry, etc. -expose bad parts of businesses - MEDIA-exposing using media ex. supersize me, displaying nutrition facts reducing consumption

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NATURAL 

ENERGY o Petroleum demand has increased and we’re globally producing more than we need o Energy use is down in American homes o Decrease in price for solar/wind power o Use of renewable energy has increased and coal has decreased o Biggest source of US emissions is transportation  Trying to change with electric cars  More investments in tesla than ford



GLOBAL WARMING/CLIMATE CHANGE o Companies see climate change hitting their bottom line in the next 5 years o Heavy increase in disasters due to weather from 90s to 07 o Last July was the hottest month ever recorded o 2016 is the hottest on record and 2019 is the second hottest o Oceans increase in temperature and king tides o Ocean may increase by 3 ft by 2100



GREEN MARKETING/SUSTAINABILITY o Green marketing- trying to conduct marketing in a way that is least detrimental to the environment and maybe even help the environment o 85% of US companies have active sustainability initiatives  Apple- “To ask less of the planet, we ask more of ourselves”  100% of apple uses renewable energy by 2019 o Packaging is main cause of plastic accumulating in ecosystem o Aquafina is attempting to can their water o Lego is trying to substitute petroleum for a plant based plastic  50bil bricks a year o Reusable packaging from pantene o Greenhouse gas emissions are primary cause of global warming o California measures businesses carbon footprint and gives them credit to contribute to their business o Cap and trade approach – if your business cant figure out ho to reduce carbon footprint, you can take credits to plant trees and what not o Greenwashing- overstating/misleading consumers about how ecofriendly your company is. Increase consumer base o

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MICRO-ENVIRONMENT o California consumer privacy act (CCPA)- regulations on how to protect consumer data o Cali banned plastic bags 

CUSTOMERS o Companies constantly track whats going on in consumer market place o Snack food sales has heavily increased due to eating preferences o



COMPETITORS o Important to keep up with competition o Amazon purchases from its competitors to measure time, quality, etc. to make sure theres no immediate threat so no competitors can gain an edge o Economic espionage- ex. marketing department secretary conspired with pepsi to steal cokes trade secrets and sell them to pepsi



STAKEHOLDERS- any group/individual who is affected by what the company does o



SUPPLIERS o appl



CHANNELS-how we get the product to market o Hasbro sold 40% of their product to Toys R us so they dropped in sales when they closed

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INTERNAL ENVIRONMENT – within the firm but external to marketing department 

TOP MANAGEMENT-in order to have a good marketing orientation, you need top management on board o 80% CEOs believe marketers are too disconnected from financial realities o 75% believe marketers misuse and misunderstand the terms results, ROI, and performance o Harder to push initiateves when top isn’t on board



PERSONNEL- those who implement marketing approach o all employees need to understand the marketing approach for it to work



OTHER DEPARTMENTS o Finance, HR, etc all have to cooperate in order to succeed in marketing approach

STRATEGIC ENVIRONMENTAL SCANNING – organize the effort to keep track of the environment. Constant process 

SECTORS o Identify sectors in macroenvironment, microenvironment, and internally that you want to keep track of



ACTORS-key orgs/people within those sectors o Key competitors in micro, key legislatures in regulatory, etc



SOURCES-where we get the info o Forbes, business week, emarketer.com, etc



INTERPRETATION- taking time to think about and absorb the info o Someone has to be responsible for making sense of this info

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SEGMENT 3 : ETHICS AND SOCIAL RESPONSIBILITY (Related chapter in text : 4) LEARNING OBJECTIVES  Appreciate the nature and significance of ethics in marketing.  Understand the differences between unethical and illegal behavior.  Describe two alternative personal moral philosophies and the forces that shape them.  Describe different views of corporate social responsibility.  Know the components of the social audit.

“Marketing Ethics” is NOT an oxymoron ! ETHICS : moral principles and values that govern actions and decisions LAWS : societal standards and values that are enforceable in a court of law CLASSIFYING MARKETING DECISIONS

Ethical

setting lower prices with competitors for lower income people. Illegal because colluding

Unethical

False advertising

Epipen prices shooting up from $90 to $600

Illegal

Legal

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REASONS FOR INCREASED ATTENTION TO ETHICS 

Diverse societal value systems



Increased public scrutiny



Expectations have risen  People expect more from companies



Ethical conduct perceived dropping

PERSONAL MORAL PHILOSOPHY AND ETHICAL BEHAVIOR  Moral Idealism: Individual rights and responsibilities are universal, regardless of outcome.  Taking the high road  Ex. when tylonal had poisonings associated with it so Johnson and Johnson pulled every bottle of tylonal from all stores, discovered cause, and reintroduced brand with better packaging. “we don’t want the possibility of any more death no matter who caused it”  CVS pulled tobacco from their stock because it’s the right thing to do even if they lost income  Utilitarianism: Emphasis on the “greatest good for the greatest number” (a cost/benefit tradeoff).  Balance positive and negative impact.  Ex. increased number of child poisoning with tide pods. Instead of pulling product from market, they changed packaging with only an 18% decrease of poisoning which isn’t enough

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CORPORATE SOCIAL RESPONSIBILITY 

Profit Responsibility- primary responsibility of a firm  Lately there’s been more than just profit



Stakeholder Responsibility  Wholefoods measures success by how much they add value to their stakeholders  Microsoft pledging $500 mil for affordable housing



Societal Responsibility

-

“green” marketing

-

cause marketing- tie marketing practices to some sort of a social cause - ex. American express donating 1 cent for every card transaction and 1 dollar for every new credit card opening to refurbishing the statue of liberty - doing well by doing good - Dove campaign for real beauty- stop promoting unrealistic beauty standards - Dove sales increased by 60% - CVS is not changing models with photoshop

Pure philanthropy- donating without tying to a marketing campaign

Social Entrepreneurship- purpose of organization is for a social cause -

Toms buy one pair of shoes, give one

Pinkwashing- when a company overstates what they’re doing for a cause

THE SOCIAL AUDIT- recognition of the fact that when companies engage in cause marketing, they should be evaluating that just like they do with any other part of compnay 

Recognition of responsibility- hey we need to do more than just make money  Doing more than adding value to shareholders  Ex. whirlpool deciding they wanted to help after hurricane Katrina

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

Identification of “Mission”- identify where to focus efforts  Whirlpool aids in hurricane relief.