POLS 1500 Lecture Notes - Lecture 5: Customer Experience, Customer Relationship Management, Social Media Marketing
15 May 2018
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Saturday, February 3, 2018
Marketing Notes!
By Philip Grant!
-Chapter 1 Objectives!
Define marketing and identify the requirements for successful marketing to occur.!
Marketing is the activity for creating, communicating, delivering, and exchanging offerings that benefit the organization, its stakeholders, and society at large. For marketing to
occur, it is necessary to have (a) two or more parties with unmet needs, (b) a desire and ability to satisfy them, (c) communication between the parties, and (d) something to
exchange.!
LO2#
Understand the breadth and depth of marketing.!
Marketing affects every person and organization. Both for-profit and non-profit organizations perform marketing activities. They market products, services, ideas, and
experiences that benefit consumers, organizations, and countries.!
LO3#
Explain how marketing discovers and satisfies consumer needs and wants.!
The first objective in marketing is discovering the needs of prospective consumers. The second objective in marketing is satisfying the needs of targeted consumers. Because
an organization cannot satisfy all consumer needs, it must concentrate its efforts on certain needs of a specific group of potential consumers or target market—one or more
specific groups of potential consumers toward which an organization directs its marketing program. Having selected its target market, the organization then takes action to
satisfy the customers’ needs by developing a unique marketing program to appeal to that market.!
LO4#
Distinguish between marketing mix elements and environmental forces.!
Four elements in a marketing program designed to satisfy customer needs are product, price, promotion, and place. These elements are called the marketing mix—the four Ps
—or the controllable variables because they are under the general control of the marketing department within an organization. Designing an effective marketing mix also
conveys to potential buyers a clear customer value proposition, which is a cluster of benefits that an organization promises customers to satisfy their needs. Environmental
forces, also called uncontrollable variables, are largely beyond the organization’s control. These include social, economic, technological, competitive, and regulatory forces.!
LO5#
Describe how a market orientation focuses on creating customer value, satisfaction, and customer relationships.!
Organizations with a market orientation focus their efforts on (a) continuously collecting information about customers’ needs and competitors’ capabilities, (b) sharing this
information throughout the organization, and (c) using the information to create value, ensure customer satisfaction, and develop customer relationships. Organizations with a
market orientation engage in customer relationship management (CRM)—the process of building and developing long-term relationships with customers by delivering
customer value and satisfaction. Organizations engaging CRM understand the importance of the customer lifetime value (CLV)—the profits generated by the customer’s
purchase of an organization’s product or service over the customer’s lifetime. The concept of eCRM—a web-centric, personalized approach to managing long-term customer
relationships electronically, which includes interactive marketing—is changing the way buyers and sellers interact. Interactive marketing technology now allows for a level of
customer interaction, individualization, and customer relationship management process to be carried out on a scale never before available.!
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LO6#
Explain why some organizations have transitioned from the market orientation era to the customer experience management era.!
Companies have found that CRM is necessary but not sufficient in building effective relationships with customers. Accordingly, many companies have transitioned from the
market orientation era to the customer experience management (CEM) era—managing the customers’ interactions with the organization at all levels and at all touchpoints so
that the customer has a positive impression of the organization, is satisfied with the experience, and will remain loyal to the organization. This shift also requires a new type of
organization called a customer-centric marketing organization (CCMO); some Canadian companies have already made this transition and are enjoying marketing success.!
LO7#
Understand the emergence of the social media marketing era.!
The social media marketing era is ushering in a major structural change in our economy. Social media marketing has two distinct dimensions: (a) consumer-generated online-
marketing efforts to promote brands and companies for which they are fans (or conversely, negatively promoting brands and companies for which they are non-fans), and (b)
the use by marketers of online tools and platforms such as Facebook, LinkedIn, Google+, Twitter, and YouTube to promote their brands or organizations. Some suggest that
social media marketing is creating a new form of economy called socialnomics where consumers will no longer search for products or services, but rather will find them via
social media. To survive in this new social media world, organizations must understand, navigate, and adapt to this new landscape.!
LO8#
Understand the meaning of ethics and social responsibility and how they relate to the individual, organizations, and society.!
Marketing managers must balance consumer, organizational, and societal interests. This involves issues of ethics and social responsibility. Ethics are the moral principles and
values that govern the actions and decisions of an individual or group. Ethics serve as guidelines on how to act correctly and justly. Social responsibility means that individuals
and organizations are part of a larger society and are accountable to that society for their actions. Some marketing experts stress the societal marketing concept, the view that
an organization should discover and satisfy the needs of its consumers in a way that also provides for society’s well-being, which includes sustainable business practices and
green marketing.!
-Chapter 2 Objectives!
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Saturday, February 3, 2018
$$Describe two kinds of organizations that exist and the three levels of strategy in them.!
An organization is a legal entity of people who share a common mission. There are two kinds. One is a business firm that is a privately owned organization that serves its
customers in order to earn a profit so that it can survive. The other is a non-profit organization that is a non-governmental organization that serves its customers but does not
have profit as a goal. Most large business firms and non-profit organizations are divided into three levels of strategy: (a) the corporate level, where top management directs
overall strategy for the entire organization; (b) the strategic business unit level, where managers set a more specific strategic direction for their businesses to set value-creating
opportunities; and (c) the functional level, where groups of specialists actually create value for the organization.!
LO2#
Describe how core values, mission, organizational culture, business, and goals are important in organizations.!
Organizations exist to accomplish something for someone. To give organizations direction and focus, they continuously assess their core values, mission, organizational
culture, business, and goals. Today’s organizations specify their foundation, set a direction, and formulate strategies—“why,” “what,” and “how” factors, respectively. Core
values are the organization’s fundamental, passionate, and enduring principles that guide its conduct over time—what Enron forgot when it lost sight of its responsibilities to
its stakeholders. The organization’s mission is a statement of its function in society, often identifying its customers, markets, products, and technologies. Organizational culture
is a set of values, ideas, attitudes, and norms of behaviour that is learned and shared among the members of an organization. To answer the question, “What business are we
in?” an organization defines its “business”—the clear, broad, underlying industry category or market sector of its offering. Finally, the organization’s goals (or objectives) are
statements of an accomplishment of a task to be achieved, often by a specific time.!
LO3#
Discuss how an organization assesses where it is now and where it seeks to be.!
Managers of an organization ask two key questions to set a strategic direction. The first question, “Where are we now?” requires an organization to (a) re-evaluate its
competencies to ensure that its special capabilities still provide a competitive advantage; (b) assess its present and prospective customers to ensure they have a satisfying
customer experience, the central goal of marketing today; and (c) analyze its current and potential competitors from a global perspective to determine whether it needs to
redefine its business.!
The second question, “Where do we want to go?” requires an organization to set a specific direction and allocate resources to move it in that direction. Business portfolio
analysis and market–product analysis are two useful techniques to do this.!
LO4#
Explain why managers are tracking strategic performance with marketing analytics, marketing dashboards, and marketing metrics.!
Marketing managers can track strategic performance with the use of marketing analytics or big data. Marketing analytics or big data enables data-driven decisions, which can
be gleaned from a marketing dashboard—the visual computer display of the essential information related to achieving a marketing objective. This information consists of key
performance measures of a product category, such as sales or market share, and is known as a marketing metric, which is a measure of the quantitative value or trend of a
marketing activity or result. Most organizations tie their marketing metrics to the quantitative objectives established in their marketing plan, which is a road map for the
marketing activities of an organization for a specified future time period, such as one year or five years.!
$$Page 49#
LO5#
Explain the three steps of the planning phase of the strategic marketing process.!
An organization uses the strategic marketing process to allocate its marketing mix resources to reach its target markets. This process is divided into three phases: planning,
implementation, and evaluation. The planning phase consists of three steps: (a) a situation (SWOT) analysis, which involves taking stock of where the firm or product has been
recently, where it is now, and where it is headed, an assessment that focuses on the organization’s internal strengths and weaknesses, as well as external opportunities and
threats; (b) a market–product focus through market segmentation and goal setting, which in part requires creating points of difference—those characteristics of a product that
make it superior to competitive substitutes; and (c) a marketing program that specifies the budget and activities (marketing strategies and tactics) for each marketing mix
element.!
LO6#
Describe the elements of the implementation and evaluation phases of the strategic marketing process.!
The implementation phase of the strategic marketing process carries out the marketing plan that emerges from the planning phase. It has four key elements: (a) obtaining
resources; (b) designing the marketing organization to perform product management, marketing research, sales, and advertising and promotion activities; (c) developing
schedules to identify the tasks that need to be done, the time that is allocated to each one, the people responsible for each task, and the deadline for each task’s
accomplishment; and (d) executing the marketing strategies, which are the means by which marketing goals are to be achieved, and their associated marketing tactics, which
are the detailed day-to-day operational decisions essential to the overall success of a firm’s marketing strategies!
The evaluation phase of the strategic marketing process seeks to keep the marketing program moving in the direction that was established in the marketing plan. This requires
the marketing manager to compare the results from the marketing program with the marketing plan’s goals to (a) identify deviations and (b) take corrective actions to exploit
positive deviations or correct negative ones.!
-Chapter 3 Objectives!
$$Explain how environmental scanning provides information about social, economic, technological, competitive, and regulatory forces.!
Many businesses operate in environments where important forces change. Environmental scanning is the process of acquiring information about these changes to allow
marketers to identify and interpret trends. There are five environmental forces that businesses must monitor: social, economic, technological, competitive, and regulatory. By
identifying trends related to each of these forces, businesses can develop and maintain successful marketing programs. Several trends that most businesses are monitoring
include the growing diversity of the Canadian population, the increasing use of electronic information and communication technologies, and new legislation related to
consumer privacy.!
&2
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LO2#
Describe how social forces, such as demographics, and cultural and economic forces, such as macroeconomic conditions and consumer income, affect marketing.!
Demographic information helps describe the world population; the Canadian population; generational cohorts, such as baby boomers, Generation X, and Generation Y; the
structure of the Canadian family; and ethnic diversity. Ethnic diversity, for example, has led to ethnic marketing programs in Canada. Cultural trends in Canada indicate that
many individuals are suffering from time poverty and are more interested in health and fitness. Still, obesity persists and is a public health problem. Economic forces include
the strong relationship between consumers’ expectations about the economy and their spending habits.!
LO3#
Describe how technological changes are impacting marketers and customers.!
New technologies have dramatically changed marketing practices and have altered the way consumers shop and what they buy. Today, technologies have advanced to allow
computer chips to be placed in almost anything and to be connected to a network almost anywhere. This network of products embedded with connectivity-enabled
electronics has come to be known as the Internet of Things (IoT). The information generated by the Internet of Things has led to an explosion in interest in advanced analytics
that can predict consumer preferences and behaviour.!
LO4#
Discuss the forms of competition that exist in a market, key components of competition, and the impact of small businesses as competitors.!
There are four forms of competition: pure competition, monopolistic competition, oligopoly, and monopoly. The key components of competition include the likelihood of new
competitors, the power of buyers and suppliers, and the presence of competitors and possible substitutes. While large companies are often used as examples of marketplace
competitors, there are over two million small- and medium-sized enterprises in Canada that have a significant impact on the economy and the competitive landscape. Also,
traditional marketers must now contend with new pure-play online competition.!
LO5#
Explain the major legislation that ensures competition and protects consumers in Canada.!
Regulation exists to protect competition and consumers. The key legislation in Canada that ensures a competitive marketplace and consumer protection is the Competition
Act. Self-regulation through such organizations as the Canadian Marketing Association and the Better Business Bureau provides an alternative to federal and provincial
regulations.!
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-Chapter 4 Objectives!
$$Explain the differences between legal and ethical behaviour in marketing.!
A good starting point for understanding the nature and significance of ethics is the distinction between legality and ethicality of marketing decisions. Whereas ethics deal with
personal moral principles and values, laws are society’s values and standards that are enforceable in the courts. This distinction can lead to the rationalization that if a
behaviour is within reasonable ethical and legal limits, then it is not really illegal or unethical. Judgment plays a large role in defining ethical and legal boundaries in marketing.
Ethical dilemmas arise when acts or situations are not clearly ethical and legal or unethical and illegal.!
LO2#
Identify factors that influence ethical and unethical behaviour in marketing.!
Four factors influence ethical marketing behaviour. First, societal culture and norms serve as socializing forces that dictate what is morally right and just. Second, business
culture and industry practices affect ethical conduct both in the exchange relationships between buyers and sellers and the competitive behaviour among sellers. Third,
corporate culture and expectations are often defined by corporate ethics codes and the ethical behaviour of top management and co-workers. Finally, an individual’s personal
moral philosophy, such as moral idealism or utilitarianism, will dictate ethical choices. Ultimately, ethical behaviour rests with the individual, but the consequences affect many.!
LO3#
Describe the different concepts of social responsibility.!
Social responsibility means that individuals and organizations are part of a larger society and are accountable to that society for their actions. In a corporate behaviour context,
social responsibility is called corporate social responsibility (CSR). There are three concepts of social responsibility. First, profit responsibility holds that companies have a
simple duty: to maximize profits for their owners or shareholders. Second, stakeholder responsibility focuses on the obligations an organization has to those who can effect
the achievement of its objectives. Those constituencies include consumers, employees, suppliers, and distributors. Finally, societal responsibility focuses on obligations that
organizations have to the preservation of the ecological environment and the general public, including placing an emphasis on the triple-bottom-line and engaging in green
marketing and sustainable development activities. Companies are placing greater emphasis on sustainable marketing as well as other societally responsible activities and are
reaping the rewards of positive word of mouth from their consumers and favourable financial performance. However, they must do more to make consumers aware of their
corporate social responsibility initiatives.!
LO4#
Recognize unethical and socially irresponsible consumer behaviour.!
Consumers, like marketers, have an obligation to act ethically and responsibly in the exchange process and in the use and disposition of products. Unfortunately, consumer
behaviour is sometimes spotty on both counts. Unethical consumer behaviour includes filing warranty claims after the claim period; misredeeming coupons; pirating music,
movies, and software from the Internet; and submitting phony insurance claims, among other behaviours. Consumer purchase, use, and disposition of environmentally
sensitive products relate to consumer social responsibility. Even though consumers are sensitive to ecological issues, they may be unwilling to sacrifice convictions and pay
potentially higher prices to protect the environment, and may lack the knowledge to make informed decisions dealing with the purchase, use, and disposition of products.
Greater consumer education about environmentally conscious behaviour is required.!
-Chapter 5 Objectives!
&3
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Document Summary
De ne marketing and identify the requirements for successful marketing to occur. Marketing is the activity for creating, communicating, delivering, and exchanging o erings that bene t the organization, its stakeholders, and society at large. For marketing to occur, it is necessary to have (a) two or more parties with unmet needs, (b) a desire and ability to satisfy them, (c) communication between the parties, and (d) something to exchange. Both for-pro t and non-pro t organizations perform marketing activities. They market products, services, ideas, and experiences that bene t consumers, organizations, and countries. Explain how marketing discovers and satis es consumer needs and wants. The rst objective in marketing is discovering the needs of prospective consumers. The second objective in marketing is satisfying the needs of targeted consumers. Having selected its target market, the organization then takes action to satisfy the customers" needs by developing a unique marketing program to appeal to that market.
