Marketing Notes - Professor Alexander Kull PDF

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Professor Alexander Kull...

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January 7 Chapter 2: Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, Relationships Engagement: - Make an account, leave reviews, post about it, like on social media… etc. Strategic Planning: developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities - First Step: What’s my purpose? (mission statement) - Cause related marketing… - Next: Set Objectives and Goals - Design business portfolio - Market Level: Plan Strategies Business Objectives: - Build profitable customer relationships - Invest in research - Improve profits Marketing objectives - Increase market share - Create local partnerships - Increase promotion Business portfolio: the collection of businesses and products that make up the company Portfolio analysis: a major activity in strategic planning whereby management evaluates the products and businesses that make up the company Strategic business units (SBU) can be - A company division - Product line within a division - Single product or brand Analyzing the Current Business Portfolio: - ID SBUs - Assess the attractiveness of SBUs - Decide how much each SBU deserves

BCG : (Boston Consulting Group) Growth-Share Matrix ** picture on slides - How big is the market share and how likely is it to grow - Best place to be is the star - Worst: dog * we must always look at both how the company is doing and also a brand Problems with matrix approach: - Difficult to measure - Time-consuming - Expensive - Focuses on the current, not the future - Doesn’t consider creating new markets Product/market expansion grid: looks at new products, existing products, new markets, and existing markets for company growth opportunities. ** picture on slides (need to know) - **market development: duplo - Starbucks: growth - Product development, diversification Partnering with Other Company Departments: - Value chain: a series of departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products Partnering outside in the Marketing System: - Value delivery network: made up of the company supplier, distributors, and ultimately customers who partner with each other to improve the performance of the entire system Marketing Strategy and the Marketing Mix ** on slides Marketing Strategy: marketing logic by which the company hopes to create customer value and achieve profitable customer relationships Market Segmentation: the division of a market into distinct groups of buyers who have different needs, characteristics Market Segment: Market Targeting: Market Positioning: Differentiation:

Positioning: Southwest markets towards ‘Love’

Managing Marketing effort: SWOT Analysis - Strengths and weaknesses are always internal - SWOT: Strengths, Weaknesses, Opportunities, Threats Marketing Return on Investment: - Net return from a marketing investment / cost of investment Micaela, Micha, Anna Interactivity: Applying the SWOT: Nutella: Strengths: - has the backing and resources of their larger company Ferrero Weaknesses: - They use palm oil and its very high in sugar Opportunities: - Extremely well known globally - Easily accessible Threats: - Shifts in tastes and preferences - more health conscious; competitive market Strategy: With the current shifts in preferences for healthier lifestyles, we suggest Nutella should consider creating a healthier alternative to their sugary hazelnut butter. This would be product development because they would be creating a new product while keeping the same market. Marketing Mix: Product: Healthier Nutella Price: Slightly higher than regular nutella due to high quality ingredients Promotion: Visual Advertising- on the product itself, TV ads, social media etc. Place: Supermarkets globally, cafes and restaurants that use Nutella already. Chapter 3: Analyzing the Marketing Environment Marketing environment: includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers

Microenvironment: consists of the actors close to the company that affect its ability to serve its customers - the company, suppliers, marketing intermediaries, customer markets, competitors, and publics Macro Environment: the larger societal forces that affect the microenvironment - demographic, economic, natural, technological, political, etc Microenvironment: suppliers - Provide the resources to produce goods and services - Treat as partners to provide customer value Marketing intermediaries: retailers… online platforms.. Help the company promote, sell, and distribute its goods to final buyers - Resellers, physical distribution firms, marketing services agencies, financial intermediaries Competitors: firms must gain a strategic advantage by positioning Publics: Customers: Macro Environment: Political… brands can no longer stay silent - Legislation regulates business to protect - Companies from each other - Consumers from unfair business practices - Interests of society - Increased emphasis on ethics - Socially responsible behavior - Cause-related marketing Demographic: involves the people who make up markets - Demography: the study of human populations… - Demographic trends include changing age and family structures… - *people who are more educated… don’t want to be told what to do.. And like an intellectual challenge, so when targeting the upper class or educational you have to encode your message more.. (situational) Economic - Affects purchasing power - Understanding the needs and wants of the economic atmosphere Technological - Most dramatic force in changing the marketplace - New products and opportunities

- Concern for the safety of new products Cultural - Institutions and other forces that affect a society’s basic values, perceptions, behaviors - Core beliefs and values are persistent and are passed on from parents to children and reinforced…. - Secondary beliefs and values Responding to the Marketing Environment Views: - Uncontrollable Quiz Hints: study slides, use textbook for inspiration for examples CH. 1 - Bold faced terms - 5 steps of marketing process CH. 2 - BCG matrix and application - Market expansion grid (9) - SWOT analysis CH. 3 - Demographics… Slide 12 and why it matters - Macro Environment… political and social (19, 20)

Chapter 4: January 8th Big Data: fresh, deep information based insights into customer needs and wants for creating customer value, engagement, and relationships -

Important to but difficult to obtain Better information and more effective use of existing information

Ex: cereal research for Pepsi showed common words searched: cereal, milk, allergy….. rising awareness of lactose allergy and not very much lactose free milk on the market

Companies are forming customer insights teams: ● Include all company functional areas ● Collect information from a wide variety of sources ● Use insights to create more value for their customers

Marketing Information Systems (MIS): the people dedicated to assessing information needs,.... - Good MIS: balancing the information users would like to have against what is feasible to offer Marketing obtain information from: - Internal data - Marketing intelligence - Marketing research Internal Databases: collections of consumer and market information obtained from data sources within the company network Competitive marketing intelligence: the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment. Marketing research: the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization - 4 Step Process: - Find the problem and research objectives - Develop the research plan - Implement the research plan - Interpreting and reporting the findings Exploratory Research: making observations and learn… because you don’t know what you don't know yet.. You need to find the question you want to ask (qualitative mostly) - People behave most naturally when they don’t know they are observed - Ethnographic research; netnographic research Descriptive Research: surveys, interviews… describing but no causality Causal Research: WHY something works or operates the way it does. - The only way you can establish causality is an experiment Developing the Research Plan - Management Problem - Research objectives - Information needed

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How the results will help Budget

Secondary data: information that already exists somewhere having been collected for another purpose - Advantages: lower cost, obtained quickly, cannot collect otherwise - Disadvantages: may not be relevant, accurate, current, impartial Primary data: information collected for the specific purpose at hand Focus Group Interviewing - Personal contact method - 6-10 people - Trained moderator - Challenges: - Expensive - Difficult to generalize - Not always honest Online Marketing Research: - Advantages: - Low cost - Speed - High response rates - Good for hard to reach groups Sampling Plan: Sample: a segment of the population selected for marketing research Golden # for a representative sample: 50-60 Questionnaires: - Most common - In person, by phone, or online - Flexible - Researchers must be careful with wording and ordering of questions - Closed-ended - Open-ended - Useful in exploratory research Implementing Research Plan: - Collecting the information - Processing the information - Analyzing the information

Interpreting/ Reporting Findings - Interpret findings and draw conclusions Customer relationship management (CRM): involves managing detailed information about individual customers and carefully managing customer touch points to maximize customer loyalty - Touch points Information distribution: involves making information available in a timely, user-friendly way - Can be facilitated by using either an intranet or an extranet Other Marketing Information Considerations - Marketing Research in Small Businesses and Nonprofit Organizations - International Market Research - Public Policy and Ethics

Chapter 8: Products, Services, and Brands: Building Customer Value What is a Product? - Anything that can be offered in a market… broadly includes services, events, persons, places, organizations, ideas… - Services: product that consists of activities, benefits, satisfactions… essentially intangible - Products and services are becoming more commoditized Consumer products are products and services bought by final consumers for personal consumption: • Convenience products are bought frequently, immediately, and with a minimum of comparison and buying effort (e.g., candy, fast food). • Shopping products are bought less often and compared carefully on suitability, quality, price, and style (e.g., cars, appliances). • Specialty products are those with unique characteristics or brand identification for which

buyers are willing to make a special purchase effort (e.g., medical services, designer clothes). • Unsought products are those that consumers neither know about nor normally think of buying (e.g., life insurance, blood donations) Product Mix: all the product lines… Services Marketing: - Intangibility - Inseparability: Services cannot be separated from their providers - Variability: Quality of services depends on who provides them and when, where, and how - Perishability: services cannot be stored for later use Service-profit chain: links service firm profits with employee and customer satisfaction and consists of 5 links: - Internal service quality - Satisfied and productive service employees - Greater service value - Satisfied and loyal customers healthy service profits and growth Quiz Hints CH 4 - Customer insights what they are and what they mean - Marketing research 8-13 especially 9 and 12 - Recognize the type of research that is done CH 8 -

What is a product; explain How broad the definition of product Levels of product Product line and product mix decisions

Interactivity 2: A brand I don’t like: 1. the Fox Restaurant Group 2. The Fox Restaurant Group is a group of restaurants from my hometown, Phoenix, Arizona. These restaurants have always had great food, a great atmosphere, and high relevance in my neighborhood. While slightly overpriced, they overall captured the crosssection between style and sustenance, which I appreciate. In the past year, the company has been making product changes. Such changes have damaged their brand, yet increase their financial gain. I first noticed this when I went to their Italian themed restaurant, North, and the bread which they previously served each table for free, was now a menu

item under appetizers for six dollars. This was shocking, and within the same visit, the portion size of my salad, which I have ordered countless times, was much smaller. I did some research after leaving the restaurant, and I found out that the entire restaurant group had been bought out by the Cheesecake Factory. 3. These small changes that will cut costs for the company will be evident to the restaurants’ loyal customers and hurt their brand, an elegant dining image. By reducing costs and lowering the quality, the restaurants will shift from their high-end image to a casual one trying to look fancy. New customers coming in with no expectations may not feel as offput as loyal customers; however, in the small, tight-knit community, these are most of their business. Overall, it seems to me as if the new management is sacrificing customer value for lower costs and higher profits. 4. If I could give them any advice, I would suggest some slight re-branding. They could revert to their higher quality ingredients and lower prices and recover. However, I don't think that meets the monetary goals of The Cheesecake Factory's plan in purchasing the company. I believe that if they are going to change the product to slightly lower quality, they should own it with their brand. Perhaps they could redo their menus or change some of the service styles to a casual self seated and order at a register.

Chapter 5: Consumer Markets and Buyer Behavior Consumer buyer behavior: the buying behavior of final consumers - individuals and households that buy goods and services for personal consumption Consumer markets: made up of all the individuals and households that buy or acquire goods and services for personal consumption The Model of Buyer Behavior: The environment > Buyer’s black box > Buyer responses The environment: - Marketing stimuli: the 4 Ps Buyer’s black box - Buyer’s characteristics - Buyer’s decision process - The idea that we don’t really know what is happening… we don’t know what they are thinking for sure, we only know what we do and the end result Marketing is allowing people to make decisions they otherwise wouldn’t make… or giving them all the information necessary to make the right decision

Characteristics Affecting Consumer Behavior: Cultural - Culture, subculture, social class Social - Groups and social networks, family, roles and status Personal (individual differences) - Age and life-cycle stage, economic situation, lifestyle, personality Psychological (overarching human psych) - Motivation, perception, learning, beliefs and attitudes Cultural Factors: - Culture: the set of basic values, perceptions, wants and behaviors learned by a member of society from family and other important institutions - Subcultures: groups of people within a culture with shared value systems based on common life experiences and situations - Social classes: society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors - Major american social classes: Upper, Middle, Working, Lower Groups and Social Networks: - Membership Groups: groups with direct influence and to which a person belongs - Aspirational Groups: groups an individual wishes to belong to - Reference Groups: form a comparison Social Factors: - Groups and social networks - Online, buzz marketing, virtual worlds, word of mouth - Family - Most important factor - Role and status Personal Factors: - Age and life-cycle stage - Nielsen’s PRIZM is a leading life-stage segmentation system: 66 segments, 11 life stage groups - Occupation - Economic - Lifestyle - Personality Brand personality traits: - Sincerity, Excitement, Competence, Sophistications, Ruggedness

Psychological Factors: - Motivation, Perception, Learning, Beliefs and attitudes - A motive: (or drive) is a need that is sufficiently pressing to direct the person to seek satisfaction of the need - Motivation research: qualitative research designed to probe consumers’ hidden, subconscious motivations - Perception: the process by which people select, organize, and interpret information to form a meaningful picture of the world - Perceptual processes: - Selective attention: the tendency for people to screen out most of the information to which they are exposed - Selective distortion: the tendency for people to interpret information in a way that will support what they already believe - Selective retention: the tendency to remember good points made about a brand they favor and forget good points about competing brands - Maslow’s Hierarchy of Needs: basic needs like hunger and thirst are satisfied first - Learning: the change in an individual’s behavior arising from experience and occurs through the interplay of - Drives, stimuli, cues, responses, reinforcement - A belief: a descriptive thought that a person has about something based on: knowledge, opinion, or faith - Attitude: describes a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea Types of Buying Decision Behavior : see 5.4 Cognitive dissonance: second guessing your choices… psychological tension: making a choice and wanting it to be right, but not being sure that it is Buyer decision process: Need recognition > Information Search > Evaluation of alternatives > Purchase decision > postpurchase behavior The adoption process: the mental process an individual goes through from first learning about an innovation to final regular use. Stages in the adoption process include: Awareness > interest > evaluation > trial > adoption Product Characteristics influence adoption rate: - Relative advantage,

Interactivity 3: I recently purchased a new suitcase. I already had a suitcase, but the one I had was old and worn and had random stickers all over it. I decided to purchase the new one based on the value that it offered me in the form of aesthetics, quality, and the pleasure of having a new item. These are personal and social factors. My economic situation impacted the quality of luggage, which I was able to purchase, and the style of bag I chose corresponds to my lifestyle. I think that the style of bag I chose also corresponds to the social group to which I belong as tastes and preferences tend to be consistent within groups. At the end of my decision process, I ended up with a TravelPro rolling suitcase in a lovely metallic beige color. When I found out I was going on SYE, I started thinking about how I was going to prepare for my trip to Italy. When I realized the only suitcase in my possession was the old worn one, I decided I needed to get a new suitcase. I did some research from a few different websites, and I ended up buying the one I have now. I chose this one because the value it offers me in looks and practicality matched the price very well compared to the other options. I didn't have any cognitive dissonance or buyers' remorse because this is an item that I do need, and I feel it will last me a long time.

Chapter 6: Business Markets and Buyer Behavior Business buyer behavior: the buying behavior of the organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others Business buying process: the process where business buyers determine which products and services are needed to purchase and then find, evaluate, and choose among alternative brands. Business Markets: - Fewer but larger buyers - Deri...