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TRANSCRIPT
1Defining Marketing for the 21st
Century
1
Chapter Questions
Why is marketing important? What is the scope of marketing? What are some fundamental marketing
concepts? How has marketing management changed? What are the tasks necessary for successful
marketing management?
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What is Marketing?
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Marketing is an organizational function and a set of processes for creating,
communicating, and delivering value to customers and for managing
customer relationships in ways that benefit the organization and its
stakeholders.
What is Marketing Management?
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Marketing management is theart and science
of choosing target markets and getting, keeping, and growing
customers throughcreating, delivering, and communicating
superior customer value.
What is Marketed?
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• Goods
• Services
• Events
• Experiences
• Persons
What is Marketed?
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• Places
• Properties
• Organizations
• Information
• Ideas
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Demand States
Negative Nonexistent Latent Declining
Irregular Unwholesome Full Overfull
Figure 1.1 Structure of Flows in Modern Exchange Economy
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Figure 1.2 A Simple Marketing System
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Key Customer Markets
Consumer markets Business markets Global markets Nonprofit/Government markets
Core Concepts
Needs, wants, and demands
Target markets, positioning, segmentation
Offerings and brands
Value and satisfaction
Marketing channels Supply chain Competition Marketing
environment Marketing planning
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Types of Needs
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Stated
Real
Unstated
Delight
Secret
Target Markets, Positioning & Segmentation
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Offerings and Brands
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Value and Satisfaction
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Marketing Channels
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Communication
Distribution
Service
Marketing Environment
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Demographic Economic
Socio-cultural
NaturalTechnological
Political-legal
Major Societal Forces
Network information technology
Globalization Deregulation Privatization Heightened competition
Industry convergence Retail transformation Disintermediation Consumer buying power Consumer participation Consumer resistance
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Company Orientations
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Production
Product
Selling
Marketing
Holistic Marketing
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Relationship Marketing
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Customers
Employees
Marketing Partners
Financial Community
Integrated Marketing
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Internal Marketing
Internal marketing is the task of hiring, training, and motivating able employees
who want to serve customers well.
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Performance Marketing
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Financial Accountability
Social Responsibility Marketing
Types of Corporate Social Initiatives
Corporate social marketing Cause marketing Cause-related marketing Corporate philanthropy Corporate community involvement Socially responsible business practices
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The Marketing Mix
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The New Four Ps
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Processes
People
Programs
Performance
Marketing Management Tasks
Develop market strategies and plans Capture marketing insights Connect with customers Build strong brands Shape market offerings Deliver value Communicate value Create long-term growth
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For Review
Why is marketing important? What is the scope of marketing? What are some fundamental marketing
concepts? How has marketing management changed? What are the tasks necessary for successful
marketing management?
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2Developing Marketing
Strategies and Plans
1
Chapter Questions
How does marketing affect customer value? How is strategic planning carried out at
different levels of the organization? What does a marketing plan include?
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Phases of Value Creation and Delivery
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Choosing the value
Providing the value
Communicating the value
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What is the Value Chain?
The value chain is a tool for identifying was to create more customer value because every firm is a synthesis of primary and support activities performed to design,
produce, market, deliver, and support its product.
Core Business Processes
Market-sensing process New-offering realization process Customer acquisition process Customer relationship management process Fulfillment management process
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Characteristics of Core Competencies
A source of competitive advantage Applications in a wide variety of markets Difficult to imitate
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Maximizing Core Competencies
(Re)define the business concept (Re)shaping the business scope (Re)positioning the company’s brand identity
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What is Holistic Marketing?
Holistic marketing sees itself as integrating the value exploration, value creation, and
value delivery activities with the purpose of building long-term, mutually satisfying
relationships and co-prosperity among key stakeholders.
Questions to Address in Holistic Marketing
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What value opportunities are available?
How can we create new value offerings efficiently?
How can we delivery the new offerings efficiently?
Figure 2.1 The Strategic Planning, Implementation, and Control Processes
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Table 2.1 Master Marketers
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What is a Marketing Plan?
A marketing plan is the central instrument for
directing and coordinating the marketing effort.
It operates at a strategic and tactical level.
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Levels of a Marketing Plan
Strategic Target marketing
decisions Value proposition Analysis of
marketing opportunities
Tactical Product features Promotion Merchandising Pricing Sales channels Service
Corporate Headquarters’ Planning Activities
Define the corporate mission Establish strategic business units (SBUs) Assign resources to each SBU Assess growth opportunities
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Good Mission Statements
Focus on a limited number of goals Stress major policies and values Define major competitive spheres Take a long-term view Short, memorable, meaningful
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Table 2.2 Major Competitive Spheres
Industry Products Competence Market segment Vertical channels Geographic
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Product Orientation vs. Market Orientation
Company Product Market
Missouri-Pacific Railroad
We run a railroad We are a people-and-goods mover
Xerox We make copying equipment
We improve office productivity
Standard Oil We sell gasoline We supply energy
Columbia Pictures We make movies We entertain people
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Dimensions Define a Business
Customer Groups
Customer Needs
Technology
Characteristics of SBUs
It is a single business or collection of related businesses
It has its own set of competitors It has a leader responsible for strategic
planning and profitability
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Figure 2.2 The Strategic Planning Gap
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What is Corporate Culture?
Corporate culture is the shared experiences, stories, beliefs,
and norms that characterize an organization.
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Figure 2.3 The Business Unit Strategic Planning Process
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SWOT Analysis
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Strengths
Weaknesses
Opportunities
Threats
Market Opportunity Analysis (MOA)
Can the benefits involved in the opportunity be articulated convincingly to a defined target market?
Can the target market be located and reached with cost-effective media and trade channels?
Does the company possess or have access to the critical capabilities and resources needed to deliver the customer benefits?
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Market Opportunity Analysis (MOA)
Can the company deliver the benefits better than any actual or potential competitors?
Will the financial rate of return meet or exceed the company’s required threshold for investment?
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Figure 2.4 Opportunity and Threat Matrices
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Goal Formulation and MBO
Unit’s objectives must be hierarchical Objectives should be quantitative Goals should be realistic Objectives must be consistent
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Porter’s Generic Strategies
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Overall cost leadership
Differentiation
Focus
Categories of Marketing Alliances
Product or service alliance Promotional alliance Logistics alliances Pricing collaborations
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McKinsey’s Elements of Success
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Strategy
Structure
SystemsStyle
Shared values
Staff
Skills
Marketing Plan Contents
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Executive summary Table of contents Situation analysis Marketing strategy Financial projections Implementation controls
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Evaluating a Marketing Plan
Is the plan simple? Is the plan specific? Is the plan realistic? Is the plan complete?
For Review
How does marketing affect customer value? How is strategic planning carried out at
different levels of the organization? What does a marketing plan include?
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3Collecting
Information and Forecasting
Demand
1
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Chapter Questions What are the components of a modern
marketing information system? What are useful internal records? What makes up a marketing intelligence
system? What are some influential macro
environment developments? How can companies accurately measure
and forecast demand?
What is a Marketing Information System?
A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.
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Case Study: MEDC
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Table 3.2 Information Needs Probes What decisions do you regularly make? What information do you need to make these
decisions? What information do you regularly get? What studies do you periodically request? What information would you want that you are not
getting now? What are the four most helpful improvements that
could be made in the present marketing information system?
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Internal Records and Marketing Intelligence
Order-to-payment cycle Sales information system Databases, warehousing, data mining Marketing intelligence system
Database Management
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What is a Marketing Intelligence System?
A marketing intelligence system is a set of procedures and sources that managers use to obtain everyday information about developments in the marketing environment.
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Steps to Quality Marketing Intelligence
Train sales force to scan for new developments Motivate channel members to share intelligence Hire external experts to collect intelligence Network externally Utilize a customer advisory panel Utilize government data sources Purchase information
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Sources of Competitive Information
Independent customer goods and service review forums
Distributor or sales agent feedback sites Combination sites offering customer reviews
and expert opinions Customer complaint sites Public blogs
Needs and Trends
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Fad
Trend
Megatrend
Major Forces in the Environment
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Demographic
Economic
Socio-cultural
Natural
Technological
Political-legal
Population and Demographics
Population growth Population age mix Ethnic markets Educational groups Household patterns
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Perspective on the Global Demographic Environment
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Economic Environment
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Consumer Psychology
Income Distribution
Income, Savings, Debt, Credit
Economic Environment and Consumer Psychology
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Income Distribution
Subsistence economies Raw-material-exporting economies Industrializing economies Industrial economies
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Social-Cultural Environment
Views of themselves Views of others Views of organizations Views of society Views of nature Views of the universe
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Table 3.4 Most Popular American Leisure Activities Reading TV Watching Spending time with
family Going to movies Fishing
Computer activities Gardening Renting movies Walking Exercise
Socio-Cultural Influences
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Natural Environment
Shortage of raw materials Increased energy costs Anti-pollution pressures Governmental protections
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Keys to Avoiding Green Marketing Myopia Consumer Value Positioning Calibration of Consumer Knowledge Credibility of Product Claims
Consumer Environmental Segments
Genuine Greens Not Me Greens Go-with-the-Flow Greens Dream Greens Business First Greens Mean Greens
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Technological Environment
Pace of change Opportunities for innovation Varying R&D budgets Increased regulation of change
The Political-Legal Environment
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Business Legislation
Growth of Special Interest Groups
Forecasting and Demand Measurement
How can we measure market demand? Potential market Available market Target market Penetrated market
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A Vocabulary for Demand Measurement
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Market Demand
Market Forecast
Market Potential
Company Demand
Company Sales Forecast
Company Sales Potential
Market Demand Functions
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Estimating Current Demand: Total Market Potential
Calculations Multiple potential
number of buyers by average quantity each purchases times price
Chain-ratio method
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Estimating Current Demand: Area Market Potential
Market-Buildup
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Estimating Current Demand: Area Market Potential
Multiple-Factor Index
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Estimating Future Demand
Survey of Buyers’ Intentions Composite of Sales Force Opinions Expert Opinion Past-Sales Analysis Market-Test Method
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For Review
What are the components of a modern marketing information system?
What are useful internal records? What makes up a marketing intelligence
system? What are some influential macroenvironment
developments? How can companies accurately measure and
forecast demand?
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4Conducting Marketing Research
1
Chapter Questions
What constitutes good marketing research? What are the best metrics for measuring
marketing productivity? How can marketers assess their return on
investment of marketing expenditures?
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Venus Razor
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What is Marketing Research?
Marketing research is the systematic design, collection, analysis, and reporting of data
and findings relevant to a specific marketing situation facing the company.
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Types of Marketing Research Firms
Syndicated
Custom
Specialty-line
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The Marketing Research Process
Define the problem Develop research plan Collect information Analyze information Present findings Make decision
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Step 1: Define the Problem
Define the problem Specify decision alternatives State research objectives
Types of Research
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Exploratory
Descriptive
Causal
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Step 2: Develop the Research Plan
Data sources Research approach Research instruments Sampling plan Contact methods
Data sources
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Research Approaches
Observational and ethnographic Focus group Survey Behavioral Experimental
Focus Groups
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Research Instruments
Questionnaires Qualitative Measures Technological Devices
Qualitative Techniques
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Word Associations
Visualization
Projective Techniques
Laddering
Questionnaire Do’s and Don’ts
Ensure questions are free of bias
Make questions simple Make questions specific Avoid jargon Avoid sophisticated
words Avoid ambiguous words
Avoid negatives Avoid hypotheticals Avoid words that could
be misheard Use response bands Use mutually exclusive
categories Allow for “other” in fixed
response questions
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Question Types - Dichotomous
In arranging this trip, did you contact American Airlines?
Yes No
Question Types – Multiple Choice
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With whom are you traveling on this trip?
No one
Spouse
Spouse and children
Children only
Business associates/friends/relatives
An organized tour group
Question Types – Likert Scale
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Indicate your level of agreement with the following statement: Small airlines generally give better service than large ones.
Strongly disagree
Disagree
Neither agree nor disagree
Agree
Strongly agree
Question Types – Semantic Differential
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American Airlines
Large ………………………………...…….Small
Experienced………………….….Inexperienced
Modern……………………….…..Old-fashioned
Question Types – Importance Scale
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Airline food service is _____ to me.
Extremely important
Very important
Somewhat important
Not very important
Not at all important
Question Types – Rating Scale
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American Airlines’ food service is _____.
Excellent
Very good
Good
Fair
Poor
Question Types –Intention to Buy Scale
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How likely are you to purchase tickets on American Airlines if in-flight Internet access were available?
Definitely buy
Probably buy
Not sure
Probably not buy
Definitely not buy
Question Types –Intention to Buy Scale
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How likely are you to purchase tickets on American Airlines if in-flight Internet access were available?
Definitely buy
Probably buy
Not sure
Probably not buy
Definitely not buy
Question Types –Completely Unstructured
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What is your opinion of American Airlines?
Question Types –Word Association
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What is the first word that comes to your mind when you hear the following?
Airline ________________________
American _____________________
Travel ________________________
Question Types –Sentence Completion
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When I choose an airline, the most important consideration in my decision is: ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.
Question Types –Story Completion
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“I flew American a few days ago. I noticed that the exterior and interior of the plane had very bright colors. This aroused in me the following thoughts and feelings.” Now complete the story. _______________________________________________________________________________________________________________________________________________________________________________
Technological Devices
Galvanometers Tachistoscope Eye cameras Audiometers GPS
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Sampling Plan
Sampling unit: Who is to be surveyed? Sample size: How many people should be
surveyed? Sampling procedure: How should the
respondents be chosen?
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Contact Methods
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Pros and Cons of Online ResearchAdvantages Inexpensive Fast Accuracy of data Versatility
Disadvantages Small samples Skewed samples Technological
problems Inconsistencies
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What is a Marketing Decision Support System (MDSS)?
A marketing decision support system is a coordinated collection of data, systems, tools, and techniques with supporting hardware and software by which an organization gathers and interprets relevant information from business and environment and turns it into a basis for marketing action.
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Barriers Limiting the Use of Marketing Research
A narrow conception of the research Uneven caliber of researchers Poor framing of the problem Late and occasionally erroneous findings Personality and presentational differences
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Market Research Can Fail
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Table 4.3 Characteristics of Good Marketing Research
Scientific method Research creativity Multiple methods Interdependence Value and cost of information Healthy skepticism Ethical marketing
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What are Marketing Metrics?
Marketing metrics are the set of measures that helps marketers quantify, compare, and
interpret marketing performance.
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Table 4.4 Marketing MetricsExternal Awareness Market share Relative price Number of complaints Customer satisfaction Distribution Total number of
customers Loyalty
Internal Awareness of goals Commitment to goals Active support Resource adequacy Staffing levels Desire to learn Willingness to change Freedom to fail Autonomy
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What is Marketing-Mix Modeling?
Marketing-mix models analyze data from a variety of sources, such as retailer scanner
data, company shipment data, pricing, media, and promotion spending data, to understand more precisely the effects of
specific marketing activities.
Figure 4.2 Marketing Measurement Pathway
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Figure 4.3 Marketing Dashboard
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Table 4.4 Sample Customer-Performance Scorecard Measures
% of new customers to average # % of lost customers to average # % of win-back customers to average # % of customers in various levels of satisfaction % of customers who would repurchase % of target market members with brand recall % of customers who say brand is most preferred
For Review
What constitutes good marketing research? What are the best metrics for measuring
marketing productivity? How can marketers assess their return on
investment of marketing expenditures?
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140140
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5Creating Long-Term Loyalty Relationships
1
Chapter Questions
What are customer value, satisfaction, and loyalty, and how can companies deliver them?
What is the lifetime value of customers and how can marketers maximize it?
How can companies attract and retain customers and cultivate strong customer relationships?
What are the pros and cons of database marketing?
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Harrah’s Builds Relationships
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Figure 5.1 Customer-Orientations
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Dell Reestablished Its Commitment to Value
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What is Customer Perceived Value?
Customer perceived value is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.
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Figure 5.2 Determinants of Customer Perceived Value
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Image benefit Psychological cost
Personal benefit Energy cost
Services benefit Time cost
Product benefit Monetary cost
Total customer benefit Total customer cost
Caterpillar Maximizes Customer Value
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Steps in a Customer Value Analysis
Identify major attributes and benefits that customers value
Assess the qualitative importance of different attributes and benefits
Assess the company’s and competitor’s performances on the different customer values against rated importance
Examine ratings of specific segments Monitor customer values over time
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What is Loyalty?
Loyalty is a deeply held commitment to re-buy or re-patronize a preferred product or
service in the future despite situational influences and marketing efforts having the
potential to cause switching behavior.
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Top Brands in Customer Loyalty
Apple iPhone Clairol Samsung Mary Kay Grey Goose Clinique Avis Wal-Mart
Google Amazon Bing J.Crew AT&T Wireless Discover Card Verizon Wireless Cheerios
Establishing Value
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Measuring Satisfaction
Periodic surveys Customer loss rate Mystery shoppers Monitor competitive performance
Managing Customers
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What is Quality?
Quality is the totality of features andcharacteristics of a product or
service that bear on its ability to satisfy
stated or implied needs.
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Maximizing Customer Lifetime Value
Customer Profitability
Customer Equity
Lifetime Value
Figure 5.3 Customer-Product Profitability Analysis
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Estimating Lifetime Value
Annual customer revenue: $500 Average number of loyal years: 20 Company profit margin: 10 Customer lifetime value: $1000
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What is Customer Relationship Management?
CRM is the process of carefully managing detailed information about individual
customers and all customer touch points to maximize customer loyalty.
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Framework for CRM
Identify prospects and customers Differentiate customers by needs and value to
company Interact to improve knowledge Customize for each customer
Amy’s Maximized Word of Mouth
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Attracting and Retaining Customers
Reduce the rate of defection Increase longevity Enhance share of wallet Terminate low-profit customers Focus more effort on high-profit customers
Figure 5.4 The Marketing Funnel
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Loyalty Programs
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Database Key Concepts
Customer database Database marketing Mailing list
Business database Data warehouse Data mining
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Using the Database
To identify prospects To target offers To deepen loyalty To reactivate customers To avoid mistakes
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Don’t Build a Database When
The product is a once-in-a-lifetime purchase Customers do not show loyalty The unit sale is very small The cost of gathering information is too high
For Review
What are customer value, satisfaction, and loyalty, and how can companies deliver them?
What is the lifetime value of customers and how can marketers maximize it?
How can companies attract and retain customers and cultivate strong customer relationships?
What are the pros and cons of database marketing?
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