Marketing Lecture Notes PDF

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Lecture Notes covering each lecture from January 20 2017 till April 30 2018 along with all definitions, examples, problems, and questions....

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1 Marketing 301 Lecture Notes Feb 1 2017 Marketing Lecture Feb 1 2017  Observation = Truth + Systematic Error + Random Error o Systematic error (also known as bias) – an error of fixed amount that occurs consistently/regularly o Random Error – factors that occur randomly and impact an observation/measurement o We can see that it is ideal when Systematic Error = 0 and Random Error = 0, because then, what is observed is entirely and exclusively the TRUTH. o VALID – when both Systematic Error = 0 and Random Error = 0  When Observation = Truth(+0+0)  When one measures what one intends to measure o Reliable – when Systematic Error = 0  When Observation = Truth(+0) + Random Error  Decisions and Outcomes o When outcomes are CERTAIN for various CHOICES, DECISIONS are easy to make., decision making is harder. o Decision making is harder due to uncertainty. o INFORMATION can be used to reduce UNCERTAINTY. Through Marketing Research  Purpose of Marketing Research o It is a process for obtaining information that can reduce uncertainty, and in turn, support marketing Decision Making. o When one is uncertain about what to decide, marketing research is conducted to obtain information that will help reduce it. o When there is certainty, there is no value in marketing research. o Obtaining Information and Sources of Error  Many ways to obtain information  Surveys/questionnaires  Observation  Experiments  Mathematical Modeling & Simulations  Some Marketing Research Processes that can be sources of error:  Problem Formulation  Sampling  Data Collection (including how people respond)  Data Management/Manipulation (such as storage or retrieval)  Data Analysis & Interpretation  Top 5 Marketing Challenge o Goal: uncover a novel and fascinating customer insight that will capture the attention of relevant stakeholder

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Feb. 8 2017 Master Marketing Session 2 (Wednesdays @ 11:30 am)  Prefossor Glennon’s 4 Ps: Plan, Practice, Prepare, Positive!  In Marketing when you’re managing a brand, you should ask “What if?”, and be prepared for the worst while hoping for the best.  BCG Growth Share Matrix  Top 5 Marketing Challenge o Connect with Professor Glennon on:  Twitter: mglen86  LinkedIn: matthew-glennon-3283bb79 o Create a unique and interesting question that elicits at least 5 unique responses.  Must relate to issues bigger than UMass  Must be a single question  Top 5 Questions: o If you could play any one sport professionally, which one would it be?  Soccer  Basketball  Volleyball  Football  Ice Hockey  Cricket o What is the average number of hours you sleep per night?  1-2  3-4  5-6  7-8  9-10  11-12 o Which sauce, if any, do you like the most with your sub at subway?  None  Ketchup  Chipotle Southwest  Honey Mustard  Hot Sauce  Mayo o On average, how long do you spend in the shower?  0-5 minutes  5-10 minutes  10-15 minutes  15-20 minutes  25+ minutes

3 o Which place out of these would you choose as a spring break getaway, given that they all cost the same?  Cancun, Mexico  Miami, Florida  Barcelona, Spain  San Diego, California  Punta Cana, Dominican Republic Marketing Lecture February 8 2017  Viral Content Examples o Hotmail o Cats  Viral Infrastructure o People/Consumers/”Sharers”  Types of people/consumers  Network strength & value: # of connections, influence o Media and Mechanisms for reaching & sharing o Seeding, Scaling, and Managing o Content o Sharing Rationale  Content: The Gurus, Berger & Milkman o POSITIVITY of the content o EXCITEMENT generated o EVOKING EMOTIONS > No emotion o AROUSAL – the greater the intensity of an emotion, the more likely sharing. o SOCIAL CURRENCY – makes sharers look smart & in the know. o MEMORY-INDUCING TRIGGER – sights, sounds, words that immediately remind us of something. o STORY QUALITY – the more compelling & worth sharing, the better. o PRACTICAL – providing good advice, tips, knowledge, etc.  Content: A Simpler Model o SHAREABILITY UTILITY & LIKEABILITY  Shareability:  Likeability:  Content: A Valuable Industry Perspective o “The 10 Things That Make Content Go Viral”  evoke high arousal  engage positive emotions  newsworthy hook  simple to share  easily understood  creates connection/empathy/relatability  can be consumed quickly

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 creates value or contributes to a goal when shared Reasons for Sharing o “Why Some Videos Go Viral”  Opinion seeking – want to see what others think  Conversation starting  Social utility – others finding value in the content  Social Good – for a good cause  Zeitgeist – current trend or event  Kudos authority – want to demonstrate knowledge  Kudos Coolhunter – want to be the first to tell others Viral Math o Number of People REACHED by someone who shares content o Number of Reached People who SHARE content o Cycle Time – amount of time between receiving content and sharing the content  (Number of People Reached) (^# of cycles + 1) – 1 / (Number of People Reached – 1) Mistakes o “4 Mistakes Marketers Make When Trying to Go Viral”  Trying to go viral IMMEDIATELY – test messages with target market  Making SHARING THE GOAL – provide purpose, sharing for the sake of sharing is typically insufficient  Thinking you’re DONE AFTER PUBLISHING – keep the story alive  NOT DEVELOPING RELATIONSHIPS with those who share or might share content – get to know people well online and offline. The Internet of Things o “Things”  Things can be viewed as technology devices that are connected to, and can receive or transmit data via the Internet  E.G: computers, laptops, servers, smartphones, tablets, etc. o Internet of Things (IoT)  IoT devices enable more of the physical and natural world to be integrated into, and to become accessible via the Internet. o Key Distinctions Between Web-Based & IoT-Based Environments  See picture taken on phone o Important Aspects of Intimate Data  Indimate Data:  Real-time, and recordable  Accessible via affordable o Intimacy and Marketing  Issues  Humanness  Data ownership  Access and control

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 Privacy and security  Relationship marketing  Data storage and management Marketing Opportunities  Healthcare and well-being  Homy systems automation  Data and privacy management  Insurance and financial engagement Key Skills  Technology and analytics  Real-time network minded  Respect for human condition  Design, planning, and systems

February 15 2017 Marketing Lecture February 15 2017  Permission Marketing o Strangers  Friends  Loyal Customers o “treating people with RESPECT is the best way to earn their attention” – Seth Godin o “Attention becomes an important asset, something to be valued, not wasted.” – Seth Godin  Interruption Marketing o Another method for getting attention  Examples:  Commercials  Telemarketers  Pop-up ads  Billboards/outdoor ads o Many consumers neither enjoy nor react positively o Consumers find solutions for being interrupted  Inbound Marketing o Based on the premise of permission marketing o EDUCATION – consumers search for and desire helpful information when solving problems. o RELATIONSHIP oriented approach. Consumers find value in relationships o TRUSTED SOURCES of information. Those who provide information that is in the consumer’s best interest o Stages, Processes, and Mechanisms/Tools  Process: Attract, Convert, Close, Delight  Stage: Strangers  Visitors  Leads  Customers  Promoters  Mechanisms/Tools: Blogs/Social Media  Forms/Calls-to-action  Email/Signals/Workflows  Events/Social inbox/smart content

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o Permission and Inbound Marketing  Helpful information  Consumer information preferences – providing information through a variety of online vehicles  Buying Process – from information search to information evaluation to preference formation to choice to purchase  Relationship building  Hubspot – based in Cambridge, is the premier Inbound Marketing Company in the World Customer Lifetime Value o First Initial Purchase + Purchases during time period 2 … + Purchase during time period n o Acquisition and retention o Transaction Approach Example o Customer lifetime value and the notions of acquisition and retention can lead to increased profitability

February 22 2017 Marketing Lecture Feb. 22 2017  Consumer Purchase Decision Process o Situational Influences  Purchase Task  Social Surroundings  Physical Surroundings  Temporal Effects  Antecedent states o Motivation o Perception: What each individual sees or perceives or understands  Selective Perception  Selective Exposure  Selective Comprehension  Selective Retension o Subliminal Perception  Psychological Influences on Consumer Behavior o Attitude Formation  Attitude  Attitude Change o Change beliefs about a brand’s attributes o Change perceived importance of attributes o Add new product attributes  Values  Beliefs  Socioculturural Influences on Consumer Behavior

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o Family Decision-Making  Styles  Spouse-Dominant  Joint  Family Member Roles  Information Gatherer  Influencer  Decision Maker  Purchaser  User o Social Class  Upper Class  Middle Class  Working/Lower Class o Culture and Subculture  Hispanic Buying Patterns  African American Buying Patterns  Asian American Buying Patterns The Nature and Size of Organizational Markets o Business Marketing o Organizational Buyers  Industrial Markets (Industrial Firms)  Reseller Markets (Resellers)  Wholesalers  Retailers  Government Markets (Government Units) Characteristics of Organizational Buying o Characteristics of Business Markets  Fewer Markets  Larger buyer  Geographically Concentrated  Derived Demand  Second Order Fluctuations  Inelastic Demand

March 1 2017 Mastering Marketing Notes  CRM o Customer Relationship Management systems are either cloud based and/or software based programs that according to Salesforce.com: “At its simplest, a CRM system allows businesses to manage business relationships and the data and information associated with them.”

8 o The adoption of a CRM program can manage both internal and external communications. Marketing Lecture  Ch. 4: Ethical and Social Responsibility in Marketing o Obesity in America o Typical Criticisms of Marketing  Institutional Level  False ants  Materialism  Too few social goods  Cultural pollution  Planned  Obsolescence  Firm Level  High prices  Deceptive practices  High-pressure selling  Harmful or unsafe products  Poor service to Vulnerable Consumers o Laws  Laws are society’s values and standards that are enforceable in the courts. o Nature and Significance of Marketing ethics  Ethical-Legal Framework  Ethical-Illegal  Unethical-Illegal  Ethical-Legal  Unethical-Legal  Suppose a known toxin is present in a product and is mentioned on the label. Is this ethical? Is this legal?  It seems legal but some might consider it unethical.  Suppose a milk based alcoholic beverage is bottled in a cow shaped container. Ethical? Legal?  Legal but not ethical.  Suppose a bank advertises in a teen magazine about opening credit accounts with promises of financial freedom. Ethical? Legal?  Legal but not ethical o Ethical Marketing Behavior: Business Culture and Industry Practices  Ethics of Exchange  Caveat Emptor  Caveat Venditor  The Right to Choose  Slotting Allowances/Fees

9 The Right to be Heard  Do Not Call Registry o Social Responsibility in Marketing: Three Layers of Social Responsibility  Social Responsibility  Profit Responsibility o Owners o Stockholders  Stakeholder Responsibility o Suppliers o Distributors o Employees o Consumers  Societal Responsibility o Public interest groups o Ecological environment o General public 

March 8 2017 Mastering Marketing  Midterm 1 Exam Review o Annie’s Mustard Slide  One thing that explains why they’re twice as expensive. o Cause Marketing (in the textbook)  Example of young girl selling cookies and donations went to the troops. o Salesforce  Two Biggest players in CRM – Who are they (in the slides) o ERP System  One thing ERP was not so great at, which led to the development of CRM.  Multiple choice question on this on the exam o Be familiar with the BCG growth share matrix (on his slides)  Apple Watch  Where would it go on the BCG index?  Is it a rising star? A dog? Cash cow? Etc.?  APPLE WATCH IS THE RISING STAR  Ipods  Not being developed anymore, the market is shrinking.  Where would that go on the BCG index?  IPOD IS THE DOG  Mac  Is the CASH COW o Whole Foods o Grocery Stores that don’t have cashiers anymore o NFL Turndown Commercial.

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The company is GNC. GNC had their commercial pulled from SuperBowl Sunday and they were concerned that GNC sells products that has bad substances for their players, so NFL pulled it in the last minute GNC spent 5 million dollars to built this commercial and the NFL pulled it

If I wanted to put someone’s name on SalesForce, can I just put the name in?  No. you need to have the account information. You can’t just add someone by putting their name. o Beats by Dr. Dre over Tao Tronics o Michael Phelps March 22 2017 Mastering Marketing (Wednesdays 11:30 am)  The Power of Brand and Pricing o Marketing Lens – Examples o Bringing Important Concepts to Life! Brand and BCG Growth-Share Matrix o Features and Benefits, Pricing o Case Study o Sales Simulation – Salesforce Exercise o The Power of Brand  Brand is what companies build to set expectations for customers  Brands work to build trust with customers and to reduce risk in a world that is filled with risks.  The power of a brand is determined by customers, what they think. We do all we can as marketers with the Marketing Mix to influence this perception.  Brand Premium is what customers are willing to pay more for mustard, more for the Dre Beats, and why some will pay $300 to attend a concert by Mariah Carey o Brand Protection  When consumers get less than they expect, in their minds, perceptions change and the Brand is damaged. Net Result – the value customers associate with product has been lowered. Brand Equity can work the opposite way too.  As companies evolve, they realize there is only so much you can do with plants, people and equipment to raise margins. It is changing the perception customers have in your product and service that has the most impact on their bottom line o Real Life Example of Power of Brand and BCG Growth-Share Matrix o Pricing, Important Role of Marketing

11 Ezgo makes a wallet that most people have never seen marketed before. But it was a better way to carry around credit cards and was only $25 with a 4/5 star rating. o How does EZGO Market it? Life Easier and Enjoyable?  Lightweight: in addition to creating a minimalistic wallet that fulfills day to day needs, it is also lightweight.  It is usually in stock with 1 day shipping o Marketing = Perceived Benefit Specialist  This example goes to the heart of the lecture before Spring Break. Perhaps this company could’ve spent more time with focus groups or conducted a survey to uncover benefits of their product  It is a marketers job to understand what customers are doing with their product  Increase Perceived Benefits and increase Value!  Successful marketing allows for Price increase. Even a slight price increase can have very significant impact on profit margins.  Value = Perceived Benefit/Price o Pricing  There are few topics like pricing that will effect every single part of an organization. Decisions on price points will impact operations, customer service, sales people, technical and financial. o Novice to Marketing  When you begin the study of marketing, you realize that price lining is a strategy. Set different levels of pricing so that customers can make valuations – as price gets higher they associate higher quality.  Companies sometimes use prestige pricing. Rolex for example, the higher pricing is a strategy to create the elite category. Lowering Price would hurt sales as consumers would equate a decline in quality and/or exclusiveness  Energizer learned the hard way – when they lowered price it hurt their sales o Price Lining from Brooke Brothers o Salesforce Exercise  Zipcode: 01071  Company Line: 5082211351  Email:  Million dollar contract, 3 years Marketing Lecture (Mahar)  What about Price? What of Price? What is Price? o Prices can be variable o Prices can be CRAZY o Prices can be misleading. o Everything has a price 

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Price by usage Price/pay per laugh – facial recognition. They can tell when you’re laughing. Name your own price Good-Better-Best (Versioning) Pricing Small change in Price Big Change in Profit Pricing Realities  Easy to set  Challenging to effectively set  Can have a huge impact  Can be fun Crazy Question: What Is The Price?  What does a consumer pay to:  Purchase a product?  Obtain a product?  Use a product?  Own a product?  Dispose of a product?  Total price: (or cost, depending on one’s perspective) – Be aware of the price to purchase, to obtain, to use, to own, to dispose of, etc. What does one get for the Price?  BENEFITS, and, remember, VALUE = BENEFITS/PRICE (price is a consumer cost) A Key Principle and Bounds on Price  Lower Bound on Price: in the long run, it is the product cost. (howevery, in the short run, one might choose to price below cost.)  Upper Bound on Price: The total worth of the Perceived Benefits of a product  Thus, in the long run, price falls in the range of Product Cost to Perceived Benefits Setting Price: Factors/Considerations  Company – objectives, costs, resources, brand, market share, etc.  Consumer – demand, segments, perceptions of value and important product features, place in life cycle, brand loyalty, price sensitivity.  Competition –  Context/Environment – Setting Price: A pricing Process Overview  1. Set pricing objectives  maximize profits, revenue, unit sales, customer satisfaction, customer acquisition, customer retention, etc.  2. Estimate demand  price elasticity (of demand): percentage change in demand resulting from a percentage change in price.

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o Elastic (price sensitive): when absolute value is greater than 1; % change in demand is GREATER than % change in price o Inelastic o Unit Elastic 3. Determine/Understand costs and relationship among costs, units sold, and profit 4. Select a pricing approach/method and associated strategy  Margin = Markup Amount = Price – Unit Cost  Price = Unit Cost + Margin 5. Set price/price policy/tactics  Single/Fixed Pricing  Dynamic/Flexible Pricing  “Value”/Everyday low pricing (EDLP)

March 29 2017 Mastering Marketing (11:30-12:45)  Value = Perceived Benefit/Price  6 Reasons why Harry’s didn’t raise prices on their New Razor o 1. They were Gillette users first so they get it Marketing Lecture  Internet of Things o Internet of Things devices enable more of the physical and natural world to be integrated into, and to become accessible, via the Internet.  Seeing the World Differently & Helping Others To See It o What People See  People see what they EXPECT to see  EXPECTATIONs are formed/biased by  Beliefs  Experiences  History  Context o Seeing the World Differently o How to Think, and See the World, Differently  Observing – taking it all in, storing it away, keeping access to it  Questioning – asking questions, particularly those starting with WHY  Associating – connecting the dots of seemingly unrelated items  Networking – follow your nose to meet different people who might be helpful  Experimenting – test, fail, learn.  Problem Solving – Identifying needs and problems that consumers want solved  Changing the Status Quo

14  Willing To Take Risks  Failing, Learning, and Keeping At It o The Essence of Effective Positioning  Clarity in Purpose, “job” performed, problem solved.  Comes to mind first, quickly, and exclusively o...