MGMA01H3 Study Guide - Midterm Guide: Geek Squad, Web 2.0, Loyalty Program

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Published on 19 Nov 2012
School
UTSC
Department
Management (MGM)
Course
MGMA01H3
MGTB04H3 Lecture 01 Midterm Review
1. Introduction to Marketing Chapter 1
marketing is a process of determining customer needs and wants and then developing a product to
satisfy them and still yield a satisfactory profit; it is externally focused. Value Creation Process
selling is producing a product and then trying to persuade customers to purchase it; it is internally
focused.
marketing mix a set of marketing tools that work together to satisfy customer needs and build lasting
customer relationships. product, price, place, promotion
needs are the basic human requirements; people need food, air, water, clothing, and shelter to survive.
People also have strong needs for creation, education, and entertainment.
Hobbies, travel education
Self-Actualization; self-
fulfillment, enriching experiences
U.S. Army—―Be all you can be.‖
Cars, furniture, cc, stores,
country clubs, liquors
Ego Needs; prestige, status,
accomplishment
Royal Salute Scotch—―What the rich give
the wealthy.‖
Clothing, grooming products,
clubs, drinks
Belongingness; love, friendship,
acceptance by others
Pepsi—―You’re in the Pepsi generation.‖
Insurance, alarm systems,
retirement, investments
Safety; security, shelter,
protection
Allstate Insurance—―You’re in good hands
with Allstate‖
Medicine, staple items, generics
Physiological; water, sleep, food
Quaker Oat Bran―It’s the right thing to do.‖
- the needs become wants when they are directed to specific objects that might satisfy the need
o shaped by culture and individual personality
o demands are wants for specific products backed by an ability to pay
any people want a Mercedes; only a few are willing and able to buy one
- fundamental difficulty #1: people do not really know their needs and desires
o is Apple what you really want?
- fundamental difficulty #2: who are the consumers?
- willingness to pay, ability to pay, decision power
share of customer is the portion of the customer’s purchasing that a company gets in its product
categories. (profits)
customer equity is the total combined customer lifetime values of all the company’s customers.
Customer Relationship Levels and Tools
- low-margin customers: P&G creates relationships through brand-building advertising, sales
promotions, and its website
- high-margin customers: sellers want to create full partnerships with key customers; P&G works with
Wal-Mart and other large retailers
- companies are developing customer loyalty and retention programs
o frequency marketing programs reward customers who buy frequently or in large amounts
(airlines offer frequent-flyer programs, hotels give room upgrades to frequent guests,
supermarkets give patronage discounts to ―very important customers‖)
o club marketing programs offer members special benefits and create member communities
- companies can do the following to build customer relationships:
o structural ties supply customers with special equipment or online linkages to help manage
orders, payroll, or inventory
o financial and social benefits saving money through plans and building networks
The Changing Nature of Customer Relationships
- yesterday’s big companies focused on mass marketing; few practice it now
- today’s companies are building deeper, more direct, and lasting relationships with selected customers
- selective relationship management: many companies now use customer profitability analysis to weed
out losing customers to target winning ones for pampering; create attractive offers and special
handling to capture and earn their loyalty
o Best Buy’s ―customer-centricity‖ strategy; embrace the angels while ditching the demons
o angels purchase without markdowns or rebates, while demons are bargain-hungry shoppers
o angels: digital photo centre, Geek Squad, computer assistance, RZ loyalty program
Barrys (high income men), Jills (suburban moms), Buzzes (male tech enthusiasts), Rays
(young family men on a budget), and small business owners
o demons: removed from marketing lists, reduced promotions and sales, 15% restocking fee
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MGTB04H3 Lecture 01 Midterm Review
- relating more deeply & interactively: communication tools such as social media; marketing by
attractioncreating market offerings and messages that involve consumers rather than interrupt them
o must build brand community through in-person events and other activities
o consumer-generated marketing marketing messages, ads, and other brand exchanges by
consumers themselvesboth invited and uninvited.
Partner Relationship Management
partner relationship management working closely with partners in other company departments and
outside the company to jointly bring greater value to customers.
- partners inside the company; every employee must be customer-focused
o P&G assigns ―Customer development teams‖ to each of its major retailer accounts
- partners outside the firm; building better relationships with suppliers, channel partners, competitors
The Changing Marketing Landscape
- the digital age: learn and track customers and to create G&S tailored to individual customer needs
o communicate in large groups or one-to-one; web videoconferencing
o create detailed customer databases and use them to target individual customers
o digital tech take marketing content to wherever they go and share it with friends
o Web 2.0 a more reasoned and balanced approach to marketing online
offers a fast-growing set of new Web tech for connecting with customers (i.e. through blogs,
vlogs, social media, video-sharing)
―click-only‖ dot-coms; ―brick-and-mortar‖ companies have become ―click-and-mortar‖
- rapid globalization: marketers are now connected globally with their customers and partners
o companies are buying more supplies and components abroad
o taking a global view of the company’s industry, competitors, and opportunities
- ethics & CSR: re-examining relationships with social values and responsibilities
o there is an unwritten contract between customers and brands they buy
o companies such as Patagonia, Ben & Jerry’s, and Timberland are practicing ―caring capitalism;‖
backing words with action
- the growth of not-for-profit marketing: in the past, most widely applied in the for-profit business sector
o the not-for-profits face competition for support and membership; sound marketing can help
o Ivey of UWO hired experience marketers to help accomplish missions; build better relationships
with key stakeholders, donors, volunteers, prospective students, and alumni
o government agencies have an increased interest in marketing to recruit for different services
2. Marketing Research Chapter 3,5
the marketing environment includes the actors and forces outside marketing that affect marketing
management’s ability to build and maintain successful relationships with customers.
- close to operators, marketing environment
- microenvironment consists of the actors close to the company.
o the company, suppliers, marketing intermediaries (retailers), competitors, public, customers
- macroenvironment consists of the larger, uncontrollable societal forces.
o demographic forces, economic forces, natural forces, tech forces, political forces, cultural forces
- Engel’s Law as family income rises, the % spent on food declines, the % spent on housing remains
about constant, and both the % spent on most other categories and to savings increases.
Marketing Information Systems (MIS) consists of people and procedures for assessing the info needs,
developing needed info, and helping decision makers use the info for customers
- internal databases: info collected from different sources within the company, and stored within the
org’s info system; accounting system, ops/production, sales reporting system, past research
o internal data is cheap, quick, and easy
o may not be in a usable form for the decision to be made; may be incomplete or inappropriate
- marketing intelligence: the systematic collection and analysis of publicly available information about
consumers, competitors, and developments in the marketplace
o real time engine processes customer comments and transforms them into actionable insights
- marketing research: the systematic design, collection, analysis, and reporting of data relevant to a
specific marketing situation; done by company personnel or contracted
o process: define the problem and objectives, develop plan for collecting info, implement plan and
analyze data, interpret and report findings
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Document Summary

Mgtb04h3 lecture 01 midterm review marketing is a process of determining customer needs and wants and then developing a product to satisfy them and still yield a satisfactory profit; it is externally focused. Product, price, place, promotion needs are the basic human requirements; people need food, air, water, clothing, and shelter to survive. People also have strong needs for creation, education, and entertainment. Physiological; water, sleep, food quaker oat bran it"s the right thing to do. Royal salute scotch what the rich give the wealthy. Customer relationship levels and tools low-margin customers: p&g creates relationships through brand-building advertising, sales promotions, and its website high-margin customers: sellers want to create full partnerships with key customers; p&g works with. Barrys (high income men), jills (suburban moms), buzzes (male tech enthusiasts), rays (young family men on a budget), and small business owners: demons: removed from marketing lists, reduced promotions and sales, 15% restocking fee.

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