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MAR 301 textbook notes
Essentials of Marketing (MAR 301)
Syracuse University
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MAR 301: Textbook Notes
Chapter 1: Marketing: Creating and Capturing Customer Value Marketing Defined: ● Marketing is managing profitable customer relationships ● Marketing today is not only about telling and selling but also about customer needs ● Marketing mix- set of tools that work together and satisfy needs and develop consumer relationships ● Marketing- process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return ● Relationships- firms place value in product, people, place value through money, word of mouth, continuous exchange, relationship ● The Marketing Process:
Understanding the Marketplace and Customer needs and wants: 1. Customer Needs, Wants and Demands ● Human Needs- states of felt deprivation (includes physical, social and individual needs) 1. Physical needs- clothing, warmth 2. Social needs- belonging and affection 3. Individual needs- knowledge and self expression ● Wants- is the form of human needs that are shaped by culture and individual personality (ex. An American needs food but wants a bog mac) ● Demands- when backed by buying power wants become demands ● Great marketers go to lengths to understand consumer wants and needs 2. Market Offerings- Product, Services and Experiences ● Market offerings- some combination of products, services, information, or experiences offered to a market to satisfy a need or a want ● Not limited to physical things but also services and can include persons, places, organizations, information and ideas ● Ex. Stop texts, stop the wrecks ● Marketing myopia- the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products ● Marketers must be smart when putting the level of expectations, some take it to the next level and create brand experiences (ex. Visiting Disney resort) 3. Customer Value and Satisfaction
● When choosing from all different brands customers form expectations and values of customers and then after using it determine if they are satisfied and then re buy it ● Have to set expectations just right so they are pleased by don’t expect too much 4. Exchanges and Relationships ● Exchange- the act of obtaining a desired object by offering something in return ● Marketing consists of actions taken to create, maintain and grow desirable exchange relationships with a target audience involving a product, service, idea or other object 5. Market ● Markets- the set of actual and potential buyers of a good or service ● Marketing relationships take work ● Costumers have a large say in the marketing process and have made it a two way process- Customer relationship management ● A modern marketing system: company and competitors reach customers, then buy products from the distributor, which are then sold at marketing intermediaries where the consumer buys the product and then determines where to rebuy the product
Designing a Customer Driven Marketing Strategy ● Once they completely understand the consumer they can create a marketing management plan ● Marketing management- the art and science of choosing target markets and building profitable relationships with them ● The marketing managers aim is to find, attract, keep and grow target consumers by creating, delivering and communicating superior customer value ● They must answer the two question: what customers will be serve and how best can we serve these customers
- Selecting Costumers to Serve ● Starts by dividing market into segments (market segmentation) ● Then selects the segments it will go after with by target marketing ● Marketing management is customer management and demand management ● Choose how to serve a small section the best and not everyone
- Choosing a Value Proposition
Preparing an Integrated Marketing Plan and Program ● The marketing mix is broken down into the 4 P’s: Price, place, promotion, product
Building Customer Relationships 1. Customer Relationship Management ● Perhaps the most important concept of the marketing mix ● Customer relationship management- the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction ● Relationship building blocks- key is to create superior value for customers 1. Customer Perceived value- the customers evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers 2. Customer Satisfaction- the extent to which a customers perceived performance matches a buyers expectations 3. Customer relationship level and tools 2. Engaging Customers ● Customer Marketing engagement- making the brand a meaningful part of consumers conversations and lives by fostering direct and continuous consumer involvement by shaping brand conversations, experiences and community ● Due to social media large focus on what consumers are saying and want- makes it more personal ● Customer managed relationships- in which customers connect with companies and each other to try and create their own ● Key is to better engage consumers with meaningful conversations 3. Consumer generated marketing- brand exchanges created by consumers themselves- both invited and uninvited- by which consumers are playing an increasing role in creating their brand experiences and those of other customers ● Ex. Pepsi’s having consumers have a role in advertising “crash the Super bowl” 4. Partner Relationship Management ● Partner relationship management- working closely with others inside and out the company to jointly bring more value to customers ● Today is a more connected world and every part of the company needs to jointly bring value to consumers
Capturing Value from Customers ● The final step in the marketing mix is to actually create value from consumers and gain something in return from having the first 4 steps be about creating superior customer value ● Goal is to create long term relationships with consumers 1. Creating Customer Loyalty and retention ● Customer Lifetime value- the value of the entire stream of purchases a customer makes over lifetime of patronage ● Need to have extremely satisfied costumers to create return value and a positive conversation 2. Growing Share of Customer ● Share of customer- the point of the customers purchasing that a company gets in its product category
● Ex. Airlines want to increase the share of travel 3. Building Customer Equity ● Customer Equity- the total combined customer lifetime values of all of the companies customers ● Ex. Cadillac customers have extreme high costumer equity 4. Building the right relationships with the right customers ● Companies can rate customers based on profitability:
- Butterflies- potentially profitable but not loyal
- True Friends-profitable and loyal
- Barnacles- highly loyal but not profitable
- Strangers- not profitable and loyal
The Changing Market Landscape 1. The digital age: Online, Media and social marketing ● Digital and social media marketing- using digital marketing tools such as web sites, social media, mobile apps and ads, online video, emails, and blogs that engage consumers anywhere and at any time via their digital devices ● Social media marketing: ads have direct links to websites and ads that on websites such as Google and Facebook have huge worldwide audiences ● Mobile marketing: fastest growing device, people are now using it to shop and look at product information through apps 2. The changing Economic Environment ● After the 2008 recession the economy was hit hard and peoples spending habits changed drastically ● People are finding happiness through older means, saving, thrift shops ● Ex. Target expect more, payless less, Wal-Mart “lowest prices” ● Companies are also looking how they fit into the global space ● Sustainability and environmentalism has never been so important as it is today 3. The Growth for non for profit 4. Rapid Globalization 5. Sustainable marketing
- Executive summary: overview of everything
- Current Marketing situation: current place
- Threats and opportunity analysis: SWOT, things happening in marketing environment that we should look out for or take advantage of
- Objectives and issues: giliad makes a pill that prevents HIV, only people that make this- targets single people which is a huge market (example objective- bring in market share)
- Marketing strategy: plan, logic, outlines how to complete it
- Action program: actual channel to use
- Budget
- Controls: things that are agreed upon upfront to measure success and progress
Chapter 2: Company and Marketing Strategy 1. Company wide strategic planning ● Strategic planning- the process of developing and maintaining a strategic fit between the organizations goals and capabilities and its changing marketing opportunity 2. Defining a market oriented strategy ● Mission statement- a statement of the organizations purpose- what it wants to accomplish in the larger environment ● Mission statements should be market oriented and satisfy customer needs ● Ex. Chipotles mission statement is to sell food with integrity 3. Setting Company’s objectives and Goals ● Mission needs to be turned into specific objectives and goals ● Ex. Heinz 4. Designing the business portfolio ● Business portfolio- The collection of businesses and products that the company owns ● The best portfolio is one that fits the companies strengths and weaknesses ● Business portfolio planning involves two steps: analyzing current and future projects 5. Analyzing the Current Business Portfolio ● Portfolio analysis- the process by which management evaluates the products and business that make up the company ● Strategic business unites (SBUs)- key businesses that make up a company ● After determining SBU’s the company then assess the attractiveness of each ● This assessment is based off of market and how it appears in the market ● The Boston Consulting Group Approach: ● Growth share matrix- a portfolio planning method that evaluates a company’s SBU’s in terms of market growth and relative market share ● 4 types of businesses according to the matrix: 1. Stars- high growth and market share 2. Cash Cows- low growth, high share 3. Question Marks- low share, high growth 4. Dogs- low growth and share ● Problems include that it only focuses on the current and not future
Developing strategies for growth and downsizing ● The companies objective should be to manage profitability ● Product/ Market expansion grid- a portfolio planning tool for identifying company growth opportunities through market penetration, market development, product development or diversification ● Market penetration- company growth by increasing sales of current products to current segments without changing the product ● Market development- company growth by identifying and developing new market segments for current company products ● Product development- company growth by offering modified or new products to current market segments ● Diversification- company growth through starting up or acquiring business outside the companies current products and markets ● Companies must not only develop strategies for expanding company but also for downsizing it
Planning Marketing: Partnering to Build Customer Relationships ● All sections of company must come together to create a profitable relationship with costumers ● Marketing provides a guiding philosophy the marketing concept that displays the objectives and strategies ● Second marketing provides input to strategic planners by helping to identify active market opportunities ● Next they strategize on how to meet objectives
Partnering with other company departments ● Value chain- the series of internal departments that carry out value creating activities to design, produce, market, deliver and support a firms products- effectively sell products ● Departments must work together but in reality there are often many challenges that these companies face ● Yet marketers must get all departments to think consumer
Partnering with others in the Marketing system ● Value delivery network- the network made up of the company, its suppliers, its distributors and ultimately, its consumers who partner with each other to improve the importance of the entire system
Marketing strategy and the marketing mix ● Marketing strategy- marketing logic by which the company hopes to create customer value and achieve profitable customer relationships ● The company decides which companies it will serve (segmentation and targeting) and how (differentiation and positioning) ● Divides the market and then splits it into smaller sections deciding who they are going to serve the best way ● Guided by strategy the company determines the marketing mix or the four P’s
Managing the marketing effort ● Management needs to also be a focus ● Management has a four step process that includes analysis, planning, implementation and control ● SWOT analysis- an overall evaluation of the companies strengths, weaknesses, opportunities and threats
● Through marketing planning the company decides what it wants to do with each of business unit, it involves choosing the best strategies to ● Marketing strategy- consists of specific strategies for target markets, positioning, the marketing mix and marketing expenditure levels
- Marketing Planning
- Marketing implementation
● Marketing implementation- turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives 16. Marketing Department Organization ● CMO: Chief marketing officer controls the companies entire marketing department ● Functional organization- a way that a marketing department can be organized where different marketing activities are handled by a functionalist specialist such as a marketing research manager, customer service manger... ● Geographic organization- sales and marketing people are assigned to specific countries or locations ● Product management organization- companies with many different products to handle ● Market or customer management organization ● Market or customer management organization 17. Marketing control ● Marketing control- measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are achieved ● Operating Control- involves checking ongoing performance against annual plans and taking corrective action when necessary ● Strategic Control- involves looking at whether the companies basic strategies are well matched to its opportunities 18. Measuring and managing Return on Investment ● Marketing return on investment- the net return of a marketing investment divided by the cost of the marketing investment ● Marketing Dashboard- meaningful sets of marketing performance measures in a single display used to monitor strategic marketing performance
Government- marketers often consult with lawyers to ensure things such as product safety and truth in advertising
Citizen action- companies decision may be questioned by citizen groups like environmental and minority groups
Local publics-neighborhood residents and community leaders
General public- company needs to be concerned with the general publics attitude to products and services
Internal public- workers, managers, volunteers and board of directors ● Customers: most important in the microenvironment the point of the value delivery network is too serve target customers and create value for them
The Macro environment ● The demographic environment ● Demography: the study of human populations in terms of size, density, location, age, gender, race occupation and other statistics ● The changing age structure of the population 1. Baby boomers- the 78 million people that were born that were born in the years following WWII until 1968. These people who are now headed to early retirement are the biggest spenders in the economy 2. Generation x- the 49 million people born between 1965 and 1976 in the birth dearth following the baby boom. These people prefer experience rather than products and quality over quantity, high purchasing power and the most educated group over baby boomers 3. Millennial- the 83 million children of the baby boomers born between 1977 and 2000. Straddled with more debt post recession but very used to technology 4. Generation Z- people born after 2000 who make up teens, tweens and teen markets. They are able to use their parent’s money and form the markets of tomorrow. Markets target them for example justice and just for kids channel on Netflix. Todays teens demand a more personal and authentic connection with brands 5. Generational Marketing- marketers need to form more precise age specific groups within each group for example defining people by their birth date may be less effective than by interests ● The typical us family is changing
● People are leaving the cities and moving to suburbs ● More people telecommute due to technological improvements ● Americans are more educated and professional than ever ● 1 in 8 people or 13% of people living in the US were born in a different country ● Companies are now also trying to target minorities such as African Americans, LGBT and people wit disabilities 3. The Economic Environment ● Economic Environment- economic factors that affect consumer purchasing power and spending patterns ● Marketers must pay close attention to trend in their markets but also across the world ● Types of Economies in Countries:
Industrial economies- rich markets for many different kinds of goods
Subsistence economies- they consume most of their agricultural and industrial output and offer few market opportunities
Developing economies- offer outstanding marketing opportunities for the right kinds of products ● Consumer have now adopted a back to basics mentality to spending because before the recession they were spending uncontrollably and were hit hard by the recession ● Value marketing (buy less but with more value) has become a watch word with many marketers ● Marketers should pay attention to income distribution as well as income levels- this has created a tiered market with specific store targeting income groups
The natural environment ● Natural environment- the physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities ● Three issues dictate companies and their fear for the natural environment: growing shortages of raw materials, increased pollution, increased government invention ● Environment sustainability- developing strategies and practices that that create a world economy that the planet can support indefinitely
The technological environment ● Forces that create new technologies, creating new product and market opportunities ● Companies that do not keep up with technology find their products outdated
The Political and Social Environment ● Political environment- laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society ● Their needs to be regulation so therefore the government create public policy to guide commerce- set of laws
Protect companies
Protect consumers
Protect the interests of society ● Beyond written law businesses are also governed by social codes ● Almost every area of marketing includes social responsibility
Marketing Information and Consumer Insights ● To create value for customers and relationships they must first find insights into what the consumers want ● To gain good consumer insights marketers must manage information for numerous sources ● Customers are now generating tons of information on social media sites ● Customer insights- fresh understandings of customers and the market place derived from marketing information that become the basis for creating customer value and relationships ● Customer insights teams- headed by the VP is marketing and their job is to tell the stories behind the data ● Marketing information system (MIS)- people and procedures dedicated to assessing information needs, developing the needed information and helping decision makers to use the information to generate and validate customer and market insights
Assessing Marketing Information Needs ● The MIS normally just serves the marketing department but the information may also be sent to external suppliers such as suppliers, resellers and marketing services agencies ● A good MIS balances the information users like to have with what they really need to have ● This program can become very costly
Developing Marketing Information ● Marketers can obtain the needed information from: 1. Internal Data- electronic collections of consumer and market information obtained from data sources within the companies network (ex. Accounting keeps detailed recordings of sales and costs, operations reports production) Usually more cheap but often has more issues with it, some areas may be lacking. 2. Competitive Marketing Intelligence- the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment. This can help marketers gain insights into how consumers talk about and connect with their brands. They
also monitor online and social media traffic. Many companies have even appointed chief listening officers who are in charge of shifting through customers conversations online 3. Marketing research- the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization. This gives marketers insights into customer motivations, behavior and satisfaction. Some large firms have their own information where other buys this information. The marketing research process has 4 steps: a) Define the problem and research objectives b) Developing the research plan c) Implementing the research plan d) Interpreting and reporting the findings
Defining the Problem and Research Objectives ● Hardest step in the process ● The manager may know something is wrong without knowing the specific causes ● Exploratory research- marketing research to gather preliminary information that will help define problems and suggest hypotheses ● Descriptive research- marketing research to better describe marketing problems, situations, or markets such as market potential for a product or the demographics and attitudes of costumers ● Causal research- marketing research to test hypotheses about cause and affect relationships ● The statement of the problems and research objectives guides the entire process
Developing the research plan ● Once the problem is defined they must determine the exact information needed and, develop a plan for gathering it effectively and present the plan to management ● The research should be presented in a written proposal- this should cover the management problems discovered, the research objectives, the information to be obtained and how the results will help managements decision and include estimated research costs ● Secondary data- information that already exists somewhere having been collected for another purpose ● Primary data- information collected for the specific purpose at hand
Gathering Secondary Data ● Companies internal database is a good starting point ● Or you can buy data from a base ex. Experian Simmons ● Commercial online databases- marketing research can conduct their own searches of secondary data sources (ProQuest, lexis nexus
Online focus groups- gathering a small amount of people online with a trainer mediator to chat about a specific product, service, or organization and gain qualitative insights about consumer attitudes and behaviors
Behavioral Targeting- using online consumer tracking data to target advertisements and marketing offers to specific consumers
Online tracking and targeting ● Sampling plan- a segment of the population selected for marketing research to represent the population as a whole. Ideally the sample should be representative of the whole population. The researcher usually has to decide who, how many and how should they be selected. They use probability samples to choose which means that each person has a likely chance of being chosen for the study ● Research instruments
Questionnaires- most common because they are very easy and flexible to use. Open ended questions are very helpful in surveys to fins what people are thinking. Researchers have to pay attention to wording and order of questions for avoids bias.
Mechanical instruments- these are used to monitor consumer behavior (ex. Neilson meters attached people meters to the television networks). Other marketers are using neuromarketing to understand how consumers are responding to feel and respond
Implementing the research plan ● The marketer then puts the research plan into action. This involves collecting, processing and analyzing the information ● When research is done by an outside company the marketers must watch over to make sure they are producing and interacting with clients appropriately
Interpreting and reporting the findings ● Marketers must now interpret the information and report to management ● Interpreting should not only be left to the researchers it is also the managers job because they now the most about the issue at hand ● Researchers and managers must work together closely
Analyzing and using marketing information ● Managers may need help analyzing the information ● This may include advanced statistical analysis to comprehend the information ● Once analyzed it must be sent to the right decision makers
Customer relationship Management ● Customer relationship management (CRM)- managing detailed information about individual consumers and carefully managing customer touch points to maximize consumer loyalty ● Most good companies gather information at every customer touch point possible- these touch points include customer purchases, sales force contacts, service and support calls, online site visits, satisfaction surveys, credit card and payment interactions, market research studies ● CRM consists of sophisticated software’s and analytical tools from companies ● CRM analysis develop data warehouses and data mining techniques to find insights in consumer data
● To give employees real time access to consumer data and increase purchases have to use company intranet ● An extranet is a private network that uses Internet technology and the public telecommunication system to securely share part of a business's information or operations with suppliers, vendors, partners, customers, or other businesses. An extranet can be viewed as part of a company's intranet that is extended to users outside the company. 11. Other marketing information considerations
- Marketing Research in small businesses and non for profits ● Many small businesses believe they cannot complete the same type of research as large companies but they can in fact apply the same techniques ● US small business administrations often offer small business help when researching ● Secondary data collections can be used for many small businesses
- International Marketing Research ● International business researchers often practice the same things as domestic marketers but they face more problems since dealing with a diverse set of markets ● Many international places cannot find secondary data so they often have to do their own primary data
- Public policy and Ethics in marketing research ● Many people feel that marketers are intruding on privacy when looking at consumer insights ● Paradox: internet shoppers want to receive personalized customized data but they don’t want it to be an intrusion of privacy
Competitive marketing intelligence- Systematic collection and analysis of information about consumers, competitors and developments in the marketing environment
Techniques: - Observing consumers - Quizzing the companies own employees - Benchmarking competitors products - Researching on the internet - Monitoring social media buss Advantages: 1. Gain insights about consumer opinions and their association with the brand 2. Gain early warnings of competitors strategies, new product launches, or changing markets and potential competitive strengths and weaknesses 3. Help firms to protect their own information Disadvantages: 1. May involve ethical issues- spying (track stat blog, access to websites)
Chapter 5: Understanding Consumer and Business Buying Behavior 1. Consumer markets and consumer buyer behavior
MAR 301 textbook notes
Course: Essentials of Marketing (MAR 301)
University: Syracuse University
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