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Comm 131 Notes - Full Year.pdf

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Department
Commerce
Course
COMM 131
Professor
Jacob Brower
Semester
Winter

Description
Customer Value and Marketing Planning 13-04-07 3:13 PM Intro • Marketing is managing profitable customer relationships o Needs, wants, demands o Market offerings o Myopia: paying attention to products not needs/wants/benefits/experiences Customer Driven Marketing Strategy/Customer Value • Segmentation followed by targeting • Customer and demand management • Value proposition: how it will differentiate and position itself in the market, set of benefits, values offered to satisfy needs • Marketing management concepts (get people to buy): o Production: favour affordable and available o Product: highest quality, performance, innovation o Selling: large-scale selling and promotion o Marketing: know needs and wants and delivering better than competitors o Societal marketing: consider consumer wants, company needs, consumer and society long run interests Integrated Marketing Plan and Program • Marketing mix: product, price, place, promotion Building Customer Relationships • Understand market and customer needs • Design customer driven marketing strategy • Constructing marketing programs • Building profitable customer relationships o Delivering superior value and satisfaction (customer based value based on benefits and costs, perceived performance vs. expectations, compared to others) o Basic to full relationships § Frequency marketing programs § Club marketing programs • Changing nature of customer relationships o Target fewer, more profitable o Attraction not intrusion o Customer managed relationships o Consumer generated marketing • Partner relationship management o Working with partners to bring greater customer value o Supply chain management Capturing Value from Customers • Creating customer loyalty and retention o Delighted customers (word of mouth spread from this) o Customer lifetime value • Growing share of customer o Portion of customer’s purchasing that company gets • Building customer equity o Total combined customer lifetime values of all company’s customers o Groups depend on fit of offerings and needs o High profit/short term: butterflies o Low profit/short term: strangers o High profit/long term: true friends o Low profit/long term: barnacles Marketing Planning: Defining Marketing’s Role • Marketing concept, input to strategic planners, strategies to reach objectives • Strategic planning: process of developing and maintaining a strategic fit between organizations goals and capabilities and its changing marketing opportunities • Defining market oriented mission o Mission statement/purpose defined in terms of customer needs and market oriented • Setting company objectives and goals o Turns mission into supporting objectives for each level of management • Business portfolio o Collection of businesses and products that make up company, analyze and shape future o Designing: analysis of portfolio and its strategic business units based on growth share matrix § High growth/market share: star (high invest to finance growth) § Low growth/high market share: cash cow (support for company) § High growth/low market share: question mark (high invest to keep steady) § Low growth/market share: dog (enough to maintain itself) § Build, hold, harvest, divest § Doesn’t take future into account, only current o Product/market expansion grid, growth/downsizing (Ansoff): § Existing product/market: market penetration (marketing mix improvements) § Existing product/new market: market development (reach new markets, new uses, directed marketing) § New product/existing market: product development (market new products to current customers) § New product/market: diversification (complete shift in marketing efforts) Partnering to Build Customer Relationships • Value delivery network o Value chain: series of internal departments that have value creating activities to design, produce, market, deliver, and support and firm’s product o Support within company, can mean poorer job in their terms o Increased competition based upon value delivery Marketing Strategy and Marketing Mix • Marketing strategy: marketing logic that company uses to create customer value and achieve profitable relationships • Customer driven strategy: o Segmentation: dividing market into distinct groups of buyers based on needs, characteristics, behaviours, may require separate products/marketing programs; group of customers who respond similarly o Targeting: process of evaluating each market segment’s attractiveness and selecting one or more to enter o Differentiation: creating a product that is different and gives consumers more value o Positioning: arranging for a product to occupy a clear, distinctive, and desirable place relative to competitors in mind of consumers • Marketing mix: set of controllable, tactical marketing tools that the firm blends to product the response wanted in target market o Product: goods and services combination offered o Price: amount of money customers pay o Place: activities to make the product available o Promotions: activities that communicate merit of product Managing Marketing Effort • Analysis: SWOT • Planning: decide on strategies to attain strategic objectives; target market, position, marketing mix, expenditure • Implementation: turns marketing strategies and plans into action to accomplish strategic objectives • Department organization: functional, geographic, product management, market/customer management organization to coordinate marketing efforts (strategies, plans) • Control: measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure objectives are achieved (operating, strategic) Measuring, Managing Marketing ROI • Marketing ROI: net return from a marketing investment divided by the cost of the investment • Tough to measure how much is attributable to investment • Marketing dashboard: performance measures to monitor strategic marketing performance Segmentation, Targeting, and Positioning 13-04-07 3:13 PM Segmentation • Buying behavior and benefits claimed as best • Geographic: region, country, population, terrain • Demographic: age and life cycle, gender, household income, ethnic and cultural group, job, education, etc • Psychographic: class, lifestyle, personality • Behavioural: occasion, benefits sought, user/loyalty status, use rate • Business markets: operating/personal characteristics, purchasing approaches, situational factors • International markets: geographic, economic, political and legal, cultural, intermarket based upon needs and behavior • Segments must be: measurable, accessible, substantial, differentiable, actionable Targeting • Evaluating market segments: size and growth, segment structural attractiveness (competitors, power of buyers), company objectives and resources • Selecting target market segments: a set of buyers sharing common needs or characteristics that the company decides to serve o Undifferentiated (mass): ignore market segment differences and go after whole market o Differentiated: target several market segments and design separate offers for each o Concentrated: goes after a large share of one or a few segments or niches o Micromarketing: tailoring products and marketing programs to needs and wants of specific individuals and local customer segments o Local: small group of people in same geographic location, shop at same store o Individual: tailoring products and marketing programs to the needs and preferences of individual consumers o Choosing a strategy: consider company resources, product variability, life cycle, market variability, competitor strategies • Socially responsible target marketing: issue of how and what is being marketed, not who it is targeted to Differentiation and Positioning • Product position: way the product is defined by consumers on important attributes, place it occupies in their mind relative to competitors; positioning maps help to show this • Choosing a strategy: serve needs, wants of well defined market o Identify value differences and competitive advantage (advantage over competitors gained by offering greater customer value): product, service, channels, people, image o Choosing the right competitive advantage: how many differences, which ones, unique selling proposition o Which differences to promote: important, distinctive, superior, communicable, preemptive, affordable, profitable o Overall strategy: value proposition defines strategy/position § More for more, more for same, more for less, same for less, less for less o Positioning statement: to (target segment and need) our (brand) is (concept) that (point of difference) o Concrete action required on positioning, must deliver Consumer Behaviour and Decision Making 13-04-07 3:13 PM Consumer Markets and Buying Behaviour • Consumer buying behaviour: the buying behaviour of final consumers that buy goods and services for personal consumption • Consumer market: all individuals and households that acquire goods and services for personal consumption • Characteristics affecting consumer behaviour o Cultural: culture, subculture, social class o Social: groups and social networks (opinion leaders), roles and status o Personal: age and life cycle stage, occupation, economic situation, lifestyle, personality and self-concept o Psychological: motivation, perception, learning, beliefs and attitudes • Buyer decision process: o Need recognition o Information search o Evaluation of alternatives o Purchase decision o Post-purchase behaviour (cognitive dissonance vs. delight) • Buyer decision process for new products: o Stages in adoption process § Awareness § Interest § Evaluation § Trial § Adoption o Individual differences in innovativeness § Innovators § Early adopters § Early majority § Late majority § Laggards o Influence of product characteristics on rate of adoption § Relative advantage § Compatibility § Complexity § Divisibility § Communicability Market Research 13-04-07 3:13 PM Marketing Info and Customer Insights • Assess info needs and develop the needed info • Customer insights: fresh understandings of customers and the marketplace derived from marketing info that becomes the basis for creating customer value and relationships • Marketing info systems: people and procedures for assessing info needs, developing the needed info, and helping decision makers to use the info to generate and validate actionable customer and market insights Assessing Marketing Info Needs • Balance the info on likes, needs, and feasibility • MIS: marketing environment à MIS (developing needed info) à marketing managers and other info users Developing Marketing Info • Internal data o Internal databases (electronic, within company) • Competitive marketing intelligence o Systematic collection and analysis of public info Marketing Research • Marketing research: systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization • Defining the problem and research objectives o Exploratory: primary info to define problem and suggest hypothesis o Descriptive: better describe marketing problems, situations, or markets o Casual: test hypothesis and cause-and-effect relationships • Developing the research plan o Outlines existing data and spells out specific research approaches, contact methods, sampling plans, and instruments to gather new data o Primary vs. secondary data • Gathering secondary data o Commercial online databases • Primary data collection o Research approaches § Observational: collecting relevant data by observing people, actions, situations; ethnographic research (trained observers in ‘natural habitat’) § Survey: asking questions about knowledge, attitudes, preferences, and buying behaviour § Experimental: selecting matches groups of subjects, giving them different treatments, controlled related factors, and checking for differences in group responses; focus group interviewing § Online: through internet surveys, online focus groups, web-based experiments, or tracking online behaviour o Sampling plan: selecting a sample segment of the population to represent the population as a whole § Probability (simple, stratified, cluster) § Non-probability (convenience, judgment, quota) o Research instruments § Questionnaire § Mechanical instruments • Implementing research plan o Collecting, processing, analyzing info, isolate important info • Interpreting and reporting findings o Interpret, conclude, organize, present relevant info; discuss Analyzing, Using Marketing Info • Customer relationship management (CRM): managing detailed info about individual customers and carefully managing customer touch points to maximize loyalty • Distributing and using marketing info o Distribute info, performance reports, intelligence updates, reports on results (company intranet, extranet) Other Marketing Info Considerations • Marketing research in small businesses and non-profits o Track changes, observation, surveys, convenience samples • International marketing research o Same steps as domestic, must include diversity of market (economic development, culture, customs, buying patterns) • Public policy and ethics in marketing research o Intrusions on consumer privacy o Misuse of research findings Products and Services 13-04-07 3:13 PM What is a Product? • Product: anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need • Service: activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in ownership • Products, services, and experiences o Part of market offering o Pure tangible good vs. pure service, combinations o Create and mange customer experiences to differentiate o Customers buy benefits • Organizations, persons, places, and ideas o Create, maintain, or change attitudes towards each • Levels of products and services o Core customer value: benefits sought o Actual product: features, design, packaging, quality level, brand name o Augmented product: after-sale service, warranty, product support, delivery and credit • Product and service classifications o Consumer products: product bought by final consumers for personal consumption § Convenience: frequent, immediate, minimum comparison/buying effort § Shopping: comparisons in process of selection and purpose § Specialty product: unique characteristics/brand identification for a significant group of buyers willing to make a special purchase effort § Unsought: either not known or not normally thought of o Industrial products: bought by individuals and organizations for further processing or conducting business § Materials and parts § Capital items § Supplies and services Product and Service Decisions • 1. Individual product 2. Product lines 3. Product mix • Individual product and service decisions o Product and service attributes § Quality (level, consistency) § Features (value) § Style and design (appearance, performance) o Packaging (hold, influence buying) o Labeling (identify, describe) o Product support services (satisfaction post-sale) • Product line decisions o Product line: group of products closely related because they function in a similar manner, sold to the same customer groups, marketed through same type of outlets, fall within same price range o Length: number of items in line § Filling: adding in present range § Stretching: lengthen range • Product mix decisions o Product mix: set of all product lines and items that a seller offers § Width: number of product lines § Length: total number of items within product lines § Depth: number of versions of each product in each line § Consistency: relation of product lines to one another Services Marketing • Develop and maintain profitable customer relationships • Nature and characteristics of a service o Intangibility: cannot be sensed before bought o Inseparability: produced, consumed same time o Variability: quality depends on who, when, where, how o Perishability: cannot be stored for later use • Marketing strategies for service firms o Service-profit chain: chain that links service firm profits with employee, customer satisfaction § Internal service quality § Satisfied and productive service employees § Greater service value § Satisfied and loyal customers § Healthy service profits and growth o Internal marketing: orienting and motivating customer- contact employees and supporting service people to work as a team to provide customer satisfaction o Interactive marketing: training service employees in interacting with customers to satisfy needs § Differentiation, quality, productivity • Managing service differentiation: delivery, image • Managing service quality: quality standards, harder to define/judge • Managing service productivity: employee training, quantity vs. quality, method of value creation New Product Development 13-04-07 3:13 PM New Product Development • New product development strategy o Obtained through acquisition or new product development o New ways to connect with consumers o Growth, innovation • New product development process o Idea generation: systematic search for new ideas: internal, external o Idea screening: spot good ideas and drop poor ones asap o Concept and development testing: alternate forms tested with potential consumers § Concept: detailed version of idea in consumer terms o Marketing strategy development: initial marketing strategy for new product based on concept; describes target market, planned value proposition § Part 1: sales, market share, and profit goals for first few years § Part 2: price, distribution, marketing budget § Part 3: long run sales, profit goals, marketing mix strategy o Business analysis: review of sales, costs, and profit projections for new product to find if they satisfy company objectives o Product development: developing concept into physical product to ensure idea can be turned into workable market offering o Test marketing: product and marketing program are tested in realistic market settings o Commercialization: full introduction of product into market • Managing new product development o Customer, cross-functional effort, team based, systematic effort o Sequential product development approach (simplifies, slow) Product Life Cycle • Product life cycle: the course of a product’s sales and profits over its lifetime o Product development: find and develop new idea, costs only o Intro: slow sales growth, high expenses (market pioneers) o Growth: rapid market acceptance, profit o Maturity: slowdown of sales growth, general acceptance, profit level or decline due to increased marketing outlays to defend against competition o Decline: sales fall, profits drop o Style (basic, distinctive mode of expression), fashion (currently accepted/popular style in given field), fad (temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity) Branding 13-04-07 3:13 PM What is a Brand? • Brand: name, term, sign, symbol, or design, or a combination that identifies the product or service of seller(s) and differentiates them from the competitors o Brand equity (trade names, status, value, personality, etc) o Identification for consumers • Brand meaning o Trademarks help to maintain attributes o Brand relationships: relationship, perceptions, feelings o Brand advocacy: willingly, voluntarily promote brands § Begins with trust, close to home § Makes customers, employees part of brand story § Deliver an experience that gets people talking § Outperform what customers care most • People as brands o Careful management of well known names Brand Characteristics • Representations o Logos o Brand personality: total of all attributes of a brand an the emotions it inspires in the mind of consumers o Status: social regard with respect to one another • Equity o Brand equity: dollar amount attributable to value of brand, based on all intangible quantities that create value; how much extra people are willing to pay for the brand o Differentiation, relevance, knowledge, esteem o Customer equity: value of customer relationships created Branding Strategy • Name selection o Type of product, easy to remember/recognize/pronounce (multiple languages), distinctive, extendable (not tied too close to one product), capable of protection (TM, ©, etc) o Unique, made up names work best usually • Positioning o Different levels based on how they are, strength of position o Low level: product attributes o Mid level: desirable benefit o High level: beliefs and values o Live the brand • Sponsorship o National/manufacturers brands versus private/store brands § National: sells under their own brand names § Private: stores buy from retailers, give it own name o Licensing: selling rights to apply brand name, logo, image to another manufacturer o Co-branding: two established brand names of different companies used on same product Brand Management • Development o Existing product/brand name: line extension o New product/existing brand name: brand extension o Existing product/new brand name: multibranding o New product/brand name: new brands • Communications o Experiences: brand experience maintains brands o Touchpoints: points of contact a consumer has with a brand o Entertainment: for of entertainment created with cooperation or financial support of a marketer • Ongoing management o Continually audit strengths and weaknesses of brand o Do we still excel at our branding strategy? o Continual alignment with consumers o Management of communications Channels 13-04-07 3:13 PM Marketing Channels and Supply Chain • Marketing channels: downward focus, where does product go • Supply chain: upward focus, where do materials come from • Value delivery network: network of participators in process (including customer) who ‘partner’ to improve performance of entire system in delivering customer value • Nature and importance of marketing channels o Marketing (distribution) channel: set of interdependent organizations that help make a product or service available for use or consumption by the consumer of business user o Channel dependence can influence marketing, production decisions; long term commitment o Competitive advantage • How channel members add value o Producers: create greater efficiency in making goods available o Intermediaries: provide goods for less work from producers/consumers; transform products made to products wanted (producers: narrow product assortment, large quantity; consumers: broad product assortment, small quantities) o Info gathering, distribution o Promotion o Contact o Matching (shaping offer to buyer’s needs) o Negotiation o Physical distribution o Financing o Risk taking • Channel levels o Channel level: layer of intermediaries that perform some work in bringing the product and its ownership closer to final buyer o Direct: marketing channel with no intermediary levels o Indirect: marketing channel with one or more intermediaries • Channel behaviour and organization o Behaviour § Understand and accept roles to contribute to channel, then personal success § Channel conflict: disagreement among marketing channel members on goals, roles, rewards o Vertical marketing systems: distribution channel structure where producers, wholesalers, and sellers act as a unified system; one owns, has contracts with, or so much power over the other members to cooperate § Conventional distribution channel: channel with one or more producer, wholesaler, and retailer, each separate who seek to maximize own profits, even at expense of entire system § Corporate: combines successive stages of production and distribution under single ownership § Contractual: independent firms at different levels or production and distribution join through contracts to obtain greater economies of scale or sale impacts than alone ú Franchise organization: channel member (franchiser) likes several stages of production- distribution process (manufacturer-sponsored retailer, manufacturer-sponsored wholesaler, service-firm sponsored) § Administered: coordinates successive stages of production and distribution through size and power of one party o Horizontal marketing systems: channel arrangement where two or more companies at one level join together to follow a new marketing opportunity o Multichannel distribution systems: single firm sets up two or more marketing channels to reach one or more customer segments o Changing channel organization § Disintermediation: cutting out marketing channel intermediaries by producers, or displacement of traditional resellers by radical new types of intermediaries • Channel design decisions o Analyzing customer needs: what adds most value to customer o Setting channel objectives: in terms of target level of customer service, dependent on nature of company, economic/legal conditions o Types and number of intermediaries: should fit with value proposition, company goals, etc § Intensive distribution: stocking as many outlets as possible § Exclusive distribution: limited number of dealers have exc
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