MARKETING 201 --MIDTERM NOTES

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MARKETING 201 –MIDTERM NOTES

Individuals and organisations obtain what they need and

want through creating and exchanging value.

Product is a tool to solve a problem. Don’t focus on existing

wants and lose sight of underlying customer needs

Smart marketers create brand experiences for customers

Customers form expectations about value and satisfaction

and buy accordingly; set right level of expectation

Not only sellers but also consumers carry out marketing

Not only customer relationship management but also

“customer managed relationships”

How can we influence the customer and how can they

influence us in return? How can they influence each other?

Winning marketing strategy:

1-To whom we serve?

2-How we can serve them?

Select customer to serve: divide market into segments. Not

as many customer as possible and increasing demand; can’t

serve them all. Select the ones you can serve well and

profitably.

Marketing Management: Customer management + demand

management

Higher levels of customer satisfaction lead to greater

customer loyalty.

Attempt is not maximising customer satisfaction. It is to

generate customer value profitably. Very delicate balance.

Customer relationship levels and tools:

–Frequency marketing program

–Club marketing programs

–Create member communities

Yesterday’s companies mostly focused on mass marketing

to broad segments of customers at arms lenght. By contrast,

todays companies are using online, mobile, social media to

refine their targeting and to engage customers more deeply

and interactively.

Internet+social media = newly empowered customers have

more information about brands. Thus, marketers are now

embracing not only customer relationship management but

also customer managed relationships

Companies must focus on marketing by attraction; creating

market offerings and messages that engage customers

rather than interrupt. You have to make relevant genuine

contributions to customers lives and conversations —

engagement marketing.

Consumers are playing an increasing role in shaping their

own brand experiences.

No matter what your job is in a company you must

understand marketing and be customer focused. Rather than

letting each department go in its own way, firms must link all

departments in the cause of creating customer value.

Marketers also must partner with suppliers, channel partners

and others outside the company. Distributers, retailers,

others who connect the company to its buyers (raw material

— final product) (supply chain management) — success at

delivering customer value depends on how chain performed

against competitors.

superior consumer value — high satisfaction— stay loyal and

buy more.

it is five times cheaper to keep an old customer than acquire

a new one . Losing one customer; losing entire steam of the

purchases.

customer delight creates an emotional relationship with a

brand, not just a rational preference. that relationship keeps

them coming back.

brand must have a story to tell; an authentic, engagement

worthy sense of purpose that goes beyond the products.

Then, rather than force feeding the brand to customers the

company must engage them on their own terms; letting them

shape and share their brand experiences.

you cannot build up a brand on your own. we have entered a

world where customers co–author your story.

building customer equity: not only create profitable

customers but also own them for your life to capture their

lifetime value and gain a greater share of their purchases.

don’t care about current sales and market share. customer

lifetime value and customer equity is the game.

right relationship with right customer: not all loyal customers

are good investment. some loyals are unprofitable and some

unroyal are profitable. each group requires different

relationship management strategy

• butterflies: stock market investers etc. potential profit, no

loyalty, little fit btw company’s offerings and their

needs. efforts to convert them into true friends are

rarely succesful so enjoy them for a little time

• true friends: profitable and loyal. strong fit between their

needs and company offerings. make continuous

relationship. nurture, retain, grow them and have

them tell others about your product.

• barnacles: are highly loyal but unprofitable. limited fit btw

their needs and company’s offerings. perhaps

most problematic customers. might improve

profitability by selling more, raising fees, reducing

service, if not profitable; fire them.

• strangers: low fit, low profitability; make money in each

transaction.

mobile marketing is the fastest growing digital marketing

platform.

smartphones are everpresent, always on, finely targeted,

highly personal. this makes them ideal for engaging

customers anytime, anywhere as they move through the

buying process.

key is to blend new and old marketing techniques to create a

smoothly integrated mix and strategy.

the changing economic environment: the great recession of

2008–2009 and its aftermath hit americans hard. after 2

decades of overspending they brought their consumption

back in line with their incomes and rethink their buying

priorities. in todays past recession era, incomes and

spending are again on the rise but sensible consumption

made a come back. despite the rebound, consumer continue

to buy less, put more in the bank, find happiness in old

fashioned ways. (diy, thrift, self improvement, faith,

community)

Globalisation: Almost every company large or small is

touched by global competition. Take a global, not local view

of industry, competitors and opportunities.

Corporate ethics and social responsibility became a hot topic

for almost every business

Caring Capitalism: setting themselves apart by being civic

minded and responsible. build social&environmental

responsiblity, in company value adn mission statement.

For any product that satisfies the same need there can be a

competitor.

Changing Market Environment: The digital age, growth of

non–profit marketing, rapid globalisation, sustainability.

Nike markets a way of of life, a genuine passion for sports, a

just do it attitude. They don’t just wear nikes, they experience

it.

Annual & Long Range Plans / Strategic planning:

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Annual&Long Range plans deal with current business and

how to keep it going but strategic planning adapts firm to

constantly changing environment and new opportunities.

An organisation exists to accomplish something and this

purpose should be clearly stated

Successful companies constantly ask these questions and

answer them carefully and completely

• what is our business

• who is our customer

• what do consumers value

• what should our business be

Mission statement of the company is the statement of the

organisations purpose, what it wants to accomplish in the

larger environment.

Analysing the current business portfolio:

1-identify the sbu’s (strategic business units)

• attractiveness of the sbu (growth rate)

• strength of sbu’s in market (market share) (boston

consulting group approach)

◦ stars: high share – high growth: need heavy

investment. eventually their growth will

slow and turn into cash cows

◦ cash cows: low growth–high share: need to hold

their share. they provide for other sbu’s

Downsizing:

• might have grown so fast

• entered areas where it lacks experience

• market environment might have changed

• some just age&die

Practice partner company relationships — form an effective

internal value chain that serves customers — form a superior

external value delivery network

the firm’s success not only depends on how well each

department works but also on how well the various

departments coordinate their activities

a company’s value chain is as strong as its weakest link

marketing department takes the consumers’ point of view.

marketing department actions can increase cost. other

departments may resist the marketing development efforts

and costs.

QSCV: quality service cleanliness and value

McDonald’s: franchises, suppliers, distributers….

Competition no longer takes place between individual

competitors, rather it takes place between the entire value

the goal of swot analysis is to match the company’s strenghts

to attractive opportunities in the environment while

eliminating or overcoming the weaknesses and threads

(internal external opportunities threads)

To head up such large marketing organisations, many

companies have now created a chief marketing

manager (CMO)

Marketing department organisation:

• Most common form is functional organisation. different

activities are headed by a functional specialist;

sales, advertising, marketing, research, customer

service, product.

• If company sells across the country or internationally,

often use a geographic organisation, it allows

salespeople to settle into a territory, get to know

the customers, work with a minimum travel time

and cost.

• Companies with many different products or brands often

create a product management organisation.

Product manager develops and implements a

complete strategy and program for a special

product or brand.

• For companies who sell one product line to markets and

customers who have different needs and

preferences; market/customer management

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