ch 01 an overview of strategic mktg - webster - sp1 2012

Class Starts When Movie Ends

Individual IntroductionsFill out this info on 3x5 card

1. Introduce the person next to you2. Earlier college & degree3. Current and/or Previous employer &

responsibilities4. Something memorial about them5. What do you want to learn this

semester?

Classroom Policies

• Food, Drink, Tables & Chairs• Breaks – Class Ends at 9:45• Computers & Smart Phones• Attendance / Weekly Assignments /

Late Policy • Class Participation / Self-Evaluation

Form• Syllabus Review

• Team Assignments• Point Distribution• Reading Assignments & Cases / Strategic Cases• “Inbound Marketing Project”

• Student Questions

Assignment Week 2

2–4

READ Chapters 3 & 4 Opening Case - The Ethics & Social

Responsibility of Sports Marketing Video Case - Organic Valley Strategic Case - Timberland

TESTS Multiple Choice - Chapters 3 & 4

PULL MARKETING Watch the:

Video Demo Introduction, the 10-DAY Big Picture and - the first 5 DAYs of the Video Action Guide.

Just watch. It takes about 2.5 hours, time well invested. You will see that the approach is solid, that it makes sense. You are building a business. Understand the roadmap first.

1- An Overview

of Strategic Marketing

Marketing 5000

Review of Basic Marketing Concepts

2–6

Review of Chapter 1 Test

2–7

1-8

Opening CaseChapter 1 – Vizio

Target MarketSWOT

Internal - Strengths & WeaknessesExternal – Opportunities & Threats

Positioning (in consumer’s mind)

Marketing MixProductPromotionPricePlace

1-9© 2012 South-Western, a part of Cengage Learning


Target MarketConsumers seeking “affordable” HDTV

1-10


SWOTInternal Strengths

Follows “Marketing Concept” Smart individual Entrepreneurial attitude Full-featured product Resources to deliver low-cost product Congruent distribution strategy with Costco Ability to attract resources

Internal Weaknesses Rate of growth – organizational structure? ??

1-11


SWOTExternal Opportunities

Federal mandate to upgrade TV to Digital Growth in affluent home-theater enthusiasts Competitor HDTV were expensive Costco’s customers desire quality products at

reasonable prices Costco’s desire to establish itself as a destination

for affordable, high-quality consumer electronicsExternal Threats

Established competitors with substantial resources

Years before federal mandate takes effect Component costs

1-12



Great viewing experience at consumer-friendly prices, distributed through a well-respected retailer (Costco “halo effect”).

1-13


Marketing MixProduct

Full-featured Digital products (TV, DVD, related items)

PromotionAdvertisingSports sponsorships

PriceLess than competitors with comparable quality

PlaceCostco – initiallyMass retailers

1-14


Key to their success William Wang - “First you must learn about your

customers – what they like and dislike. The customer is always first.”

Marketing Challenges and Opportunities

in Today’s EconomyPower Shift to CustomersMassive Increase in Product SelectionAudience and Media FragmentationChanging Value PropositionsShifting Demand PatternsPrivacy, Security, and Ethical

ConcernsUnclear Legal Jurisdiction

Everything is Amazing but Nobody’s Happy

“Welcome to Commodity Hell”

Commoditization – ”The curse of mature markets”Products lack real differentiationCustomers see all products as offering similar

benefitsPrice is the only means of differentiation that

matters to consumers = low profit marginsResults from:

Slowing innovationExtensive product assortmentCompetitors arise from many directionsExcess supplyFrugal consumersInformation online empowering consumers


Results in:Unattractive ROIVulnerability to entry of new competitors

Airline industry, telephone service, hotels, packaged goods, autos, retailers

Decreasing ability to fund innovationLow-price leaders can do well

Southwest Airlines, WalmartBrand-builders can separate themselves

Apple, Best Buy, Coca-Cola, Chick-fil-AStarbucks

“Third place” to hang out - more than coffeeThen came McDonald’s & over-expansion


Getting out of Commodity HellLow-cost provider

TXIUnique Positioning

ClubCorpInnovation & Marketing Strategy

Have products, processes, brands or experiences that stand apart

10 Most Innovative - Apple, Google, Toyota, Microsoft, Nintendo, IBM, H-P*, RIM*, Nokia*, Walmart

In summary: Give consumers a compelling reason to buy your products

Why Study Marketing?

Marketing is important to our society25 to 33 percent of all U.S. civilian workers

perform marketing activities. 50% of total cost of a productConsumers need to understand costs and

benefits of marketing activitiesYou either work in Marketing or

your work is affected by Marketing“Do lunch or be lunch.”

“Marketing is the Basis for any Business”

Peter Drucker“Every organization has two—and only these two—

basic functions: Marketing and Innovation.”

Drucker believed that “marketing” and “selling” are completely different. “The aim of marketing is to make selling superfluous,”

Drucker wrote. “The aim of marketing is to know and understand the customer so well that the product or service sells itself.”

Drucker also taught that every product only lives for so long before becoming obsolete. That’s where innovation—”change that creates a new

dimension of performance”—comes in.

What is Marketing?According to P.T. Barnum

If the circus is coming to town and you paint a sign saying "Circus Coming to the Fairground Saturday," that's advertising.

If you put the sign on the back of an elephant and walk it into town, that's promotion.

If the elephant walks through the mayor's flower bed, that's publicity.

And if you get the mayor to laugh about it, that's public relations.

If the town's citizens go to the circus, you show them the many entertainment booths, explain how much fun they'll have spending money at the booths, answer their questions and ultimately, they spend a lot at the circus, that's sales. ” 22

© 2012 South-Western, a part of Cengage Learning 1-23

Marketing DefinedThe process of

creating, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying exchanges with customers and develop and maintain favorable relationships with stakeholders in a dynamic environment.

Goal of Marketing?To connect the organization to its Customers


Structure of Strategic Marketing


Who is the Focus of Marketing?

Customers

The purchasers of organizations’ products

Are the focal point of all marketing activities

Target Market

A specific group of customers on whom an organization focuses its marketing efforts

Organization / Product / MarketAlignment

Organization / Product / MarketAlignment

Marketing StrategyA plan of action for identifying and analyzing a target market and

developing a marketing mix to meet the needs of that market.


The Marketing Mix Variables

Marketers combine and balance four elements when determining how to satisfy customers’ needs for a product

Product

Price

Distribution

Promotion


What is the Need for Promotion?According to Benson P. Shapiro, Business School Professor

“If you have a significantly and demonstrably superior product or service, it really is quite meaningful. However, if you don't put it into language that gives a promise of something better, people won't try it.”


Discussion Question

What kind-of marketing approach did Maxwell House take?


Stakeholders

Constituents who have a “stake,” or claim, in some aspect of a company’s products, operations, markets, industry and outcomes

BP was implicated in the largestoil spill in history• Who were affected stakeholders?

• What has BP done to repair stakeholder relations?

• What else can it do?


Marketing Environment


Marketing Environment

An organization has no control over these forces

The six forces that affect the Marketing Mix:1. Economic forces

2. Political forces

3. Legal and regulatory forces

4. Technological forces

5. Socio-cultural forces

6. Competitive forces

The marketing environment is dynamic


The Marketing Concept

Commitment that the entire organization will provide products in ways that satisfy customers’ needs while achieving its goals

Customer Benefits

Customer Costs

Value = –

Traditional vs. Market-Oriented Organizational Structures

1-35

Video Case1.2 – Method

Target MarketSWOT

Internal - Strengths & WeaknessesExternal – Opportunities & Threats


Marketing MixProductPromotionPricePlace

Case Questions

Video Case 1.1How has Method implemented its

Marketing Concept?

Although Method products are chemical-free and made with natural, safe ingredients, they have not gone the marketing route of other organic companies. Method distributes its products through mass market

chains such as Target and Lowe’s. Method appeals to a broader target audience, those

people who want effective, affordable products in attractive packaging—yet at the same time it is demonstrating to this larger audience how well green products can work.

Method hopes to hook people with their great products, and then educate them about the importance of buying all-natural.

The company has embraced the marketing concept and its target market is increasingly receptive to a green marketing strategy.

Video Case 1.1Why is Method successful in a highly

competitive industry?

1. Method has been able to differentiate itself through its standout packaging, great scents, and eco-friendly products at affordable prices.

2. As with any successful company, Method has also had to be highly innovative. 1. Ahead of the curve in developing new kinds of

cleaning products – Developed triple-concentrated laundry detergent long before major companies began doing so.

2. Evaluates competitive products on the market already and continually works on making their own brand’s versions more eco-friendly - Dryer sheets and the Omop.

Video Case 1.1Does the success of Method provide insight

about the future of green marketing?Clever marketing and competitive pricing may, in

the long run, be one of the best ways to help the environment.

It is also important to reach a mass audience - not enough to merely appeal to the small group of hardcore environmentalists.

Today’s Market:Almost a fifth of the market prefers organic or green

products and is willing to pay higher prices. Another 40% of the market is willing to buy green products

if they are convenient and almost similar in price to conventional products.

Method offers products to both of these segments of the market by giving them green products with prices only slightly higher than conventional ones.

2-39

In many organizations, marketing is not given a place of importance in the organizational hierarchy. Why do you think this happens? What are the consequences for a firm that gives

little importance to marketing relative to other business functions?

Discussion QuestionDiscussion Question

End of Chapter Questions

1. What is marketing? How did you define the term before you read this chapter?

The text defines marketing as the process of creating, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment.


2. What is the focus of all marketing activities? Why?

Customers are the focal point of all marketing activities because they are the purchasers of the products which organizations develop, promote, distribute, and price.


3. What are the four variables of the marketing mix? Why are these elements known as variables?

The marketing mix is the combination of activities that are planned, organized, implemented, and controlled to meet the needs of customers within the target market. These activities are product, distribution, promotion, and price. They are called variables because marketing managers decide what type of each element to use and to what degree.


5. What are the forces in the marketing environment? How much control does a marketing manager have over these forces?

The marketing environment, which surrounds both customers and the marketing mix, includes competitive, economic, political, legal and regulatory, technological, and socio-cultural forces. Marketers have little control of these environmental forces, but they must be aware of them, adapt to them, and capitalize on the opportunities they provide.


7. How can an organization implement the marketing concept?

To implement the marketing concept, a marketing organization must first establish an information system to discover customers’ real needs and then use the information to create satisfying products. The organization must also coordinate all its activities.


8. What is customer relationship management? Why is it so important to “manage” this relationship?

Customer relationship management focuses on using information about customers to create marketing strategies which develop and sustain desirable customer relationships. “Managing” customer relationships is important to marketers because it can foster customer loyalty and thereby increase long-term profitability. A loyal lifelong customer can be worth a considerable sum of money, so the loss of such customers can result in lower profits.


9. What is value? How can marketers use the marketing mix to enhance customers’ perception of value?

The text defines value as a customer’s subjective assessment of benefits relative to costs in determining the worth of a product. Examples of ways marketers can modify their marketing mixes to enhance perceptions of value include offering product features or enhancements which provide desirable consumer benefits, using promotion to create positive image or prestigious characteristics which consumers consider in value assessment, pricing products according to how consumer use, and offering convenient distribution outlets.

End of Chapter Questions10. What types of activities are involved in

the marketing management process?Marketing management is the process of planning,

organizing, implementing, and controlling marketing activities to facilitate effective and efficient exchanges. Planning is the systematic process for assessing

opportunities and resources, determining marketing objectives, and strategizing implementation and control.

The organization of marketing activities requires the development of marketing unit internal structures.

Implementation requires coordinating marketing activities, motivating marketing personnel, and effectively communicating within the marketing unit.

The marketing control process includes the establishment of performance standards, comparison of actual performance with established standards, and reduction of the gap between desired and actual performance.

End of Chapter Questions 11. Why is marketing important in our society? Why

should you study marketing?Marketing provides employment for many people

and helps sell products. This, in turn, generates profits essential to the survival of individual businesses as well as to the health and ultimate survival of the global economy. Many organizations other than businesses use marketing

activities and approximately 25 to 33 percent of all U.S. civilian workers perform marketing activities.

Marketing costs consume a sizable portion of buyers’ dollars, and knowledge about how money is used helps consumers understand products costs. The study of marketing activities also enables consumers to

weigh the costs and benefits of marketing activities and to evaluate laws, regulations, and industry guidelines intended to stop unfair, misleading, and unethical marketing practices.

ch 01 an overview of strategic mktg - webster - sp1 2012

Business

pull marketing

study marketing

vizio marketing mix

product consumers

vizio positioningin

review of chapter

vizio target market

empowering consumers