Marketing 571 Complete Slide Set Fall 2009

Welcome

Who the hell are you?

Why do clean restrooms matter?

Why are there 36 varieties of spaghetti sauce?

Lets take a Survey !

He was born here...

Who the hell is Larry?

*disclaimer: I wasn’t really born here, but there are no good pictures of Rochester, NY

raised here...

*disclaimer: I did have a home, I wasn’t raised on the streets

Went to school here...

Carnegie Mellon University & Tepper School of Business

Went to work and live here...

Management Science Associates (consulting)

Where he cheered for...

and...

and tried to ignore...

Then he went overseas to here...

(Geneva Switzerland)

then here...

Then he had his own internet startup

I’m gonna be rich!

...in 1999...

Then he worked in offshore outsourcing...

Development is cheaper offshore!

Until he got outsourced...

Hey, wait!

Marketing is cheaper offshore too!

Then he moved here …

but it felt like here …

Started a marketing consulting firm …

Adopted a best friend...

The dog, not the beer. Beer is 2nd best friend.

and started teaching at UOP...

That’s who I am.

Who the hell are you?

• How should I address you?

• Where are you from?

• Where do you work?

• What are you great at?

Class Policies

• Miss one class – lose (5) participation points

• Second missed class – auto-drop

• Learning teams, APA format

• Late penalty 10% per day

• Syllabus posted in forums is guiding document

classic air (wk1)7

product offering (wk2)5

classic air sol’n (wk3)23

channel & pricing (wk4)5

communications (wk5)10

launch plan (wk6)20

participation30

What are we going to learn?

How to identify markets & consumers

How to segment markets

How & why consumers buy

Developing new products

Marketing across channels

How internet marketing works

How to write a marketing plan

How to think like a marketer

Why Marketing?

discussHow is marketing management

both an art and a science?

Learning team formation

www.surveymonkey.com

1. Register one account per team

2. Develop online survey

3. Post link to survey in LT forum

4. Answer other groups surveys

The “Brand Ladder”

TopicScanning the

Macro Environment

Social Economic Technology Competitive Regulatory

Green Marketing

Technological Obsolescence

Regulator y forces

interactdescribe your business in

one sentence

Topicmarketing

myopia

Define your business by customer needs,

not products

We make movies

We provide entertainment

interactdescribe your business in

one sentence

TopicMarketing

Research

• What do you want to know?

• Who do you ask?

“Spaceman From Pluto”

“3000”

“Would I lie to You?”

“Eight Arms to Hold You”

Research: The 5 Steps

Problem

Definition

Research

Collection

Present

Findings

Action

Primary vs. Secondary

discussCan you think of a

product with negative demand?

discussWhy are the production concept, the

product concept, and the selling concept of limited use for the

conduct of business operations today?

What can I use at work tomorrow?

Twitter for research

Twistori

Visible Tweets

quoteI have only made this letter longer because I have not had

the time to make it shorter

Blaise Pascal, (1623-1662) Lettres provinciales.

interactresearch crowdsourcing

post to @mba570+message

discussGood? Bad?

good and bad?

TopicCreating compelling

presentations

debateDoes Marketing Create Needs

or Satisfy Needs?

interactThe 4P’s

10987654321

PromotionA: PriceB:

PublicityC: PlaceD:

Which one is not part of the 4Pʼs marketing mix model?

PublicityC:

Product is the fourth P

Publicity is considered to be a component of promotion

Welcome

Administrative Issues

• Week 1 paper grading

• Week 5 field trip

• Questions?

Concept Review

He was born here...

Who the hell is Larry?

discussHow is marketing management

both an art and a science?

Social Economic Technology Competitive Regulatory

Define your business by customer needs,

not products

TopicMarketing

Research

“There is no perfect pickle”

• What do you want to know?

• Who do you ask?

“Spaceman From Pluto”

“3000”

“Would I lie to You?”

“Eight Arms to Hold You”

Problem Recognition

Information Search

Alternative Evaluation

Purchase Decision

Post-purchase Behavior

The Consumer Decision Process

Problem Recognition

Information Search

Purchase Decision

“I want a car, but I have no money”

How to steal a car

Problem Recognition

Information Search

Purchase Decision

Problem Recognition

Information Search

Purchase Decision

Problem Recognition

Information Search

Purchase Decision

Problem Recognition

Information Search

Purchase Decision

Secondary Internet Research

TopicThe rational

Consumer

The Rational Consumer

TopicDifferent Views

on choice

discussDifferent Views

on choice

Topicmarket

segmentation

How do we service customers with varied needs?

(Pat?)

(who the hell is this?)

Behavior

Segmentation gone wrong

Segmentation

• Consumer segmentation

• Demographics, psychographics, behavioral

• Benefits segmentation & needs-based segmentation

• Business segmentation

• Company size, industry, geography

• Profitability of segments: 80 – 20 rule

iBook iMac

PowerBook Power Mac G5

Business

Desktop Portable

interactCreate market segments for your company in groups

Illustrate segments on board

TopicPerceptual

mapping

ask Barney. . .

Perceptual Mapping?

Start with companiesconsumersproducts

Position on x-y graph

classy

practical

sportyconservative

wasteful

fuel efficient

largesmall

Try other dimensions

Single

Family

MatureYouth

interactCreate perceptual map for Classic Airlines

TopicPresentation skills

workshop(part I)

Top 12 Presentation Resources

interactDraw a stick figure on the white board

Informal Drawings Work Too

Welcome

Concept Review

the stor y so far.. .

Chapter one

Malcolm Gladwell

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Marketing 571 October / November 2009

consumers have varied tastes

marketing myopia

“The rational consumer*”

Chapter two

Clotaire Rapaille

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the reptile brain

consumer decision process

irrational consumers

“Remarkable marketing”

Chapter three

Seth Godin

speak to who’s listening

the “otaku”

segmentation

“Channel your efforts”

Chapter four

Chris Anderson

marketing channels

the long tail

merchandising

Channel Strategies

Channel LevelsThe producer and the final customer are part of every channel. We will use the num-ber of intermediary levels to designate the length of a channel. Figure 13.3a illustratesseveral consumer-goods marketing channels of different lengths, while Figure 13.3billustrates industrial marketing channels.

A zero-level channel (also called a direct-marketing channel) consists of a pro-ducer selling directly to final customers through door-to-door sales, Internet selling,mail order, telemarketing, TV selling, and other methods. A one-level channel con-tains one intermediary, such as a retailer. A two-level channel contains two interme-diaries; a three-level channel contains three intermediaries. From the producer’sperspective, obtaining information about end users and exercising control becomesmore difficult as the number of channel levels increases.

Channels normally describe a forward movement of products. One can also talkabout reverse-flow channels, which bring products back for reuse (such as refillable bot-tles), refurbishing items for resale, recycling products, or disposal of products andpackaging. Several intermediaries play a role in these channels, including manufactur-ers’ redemption centers, community groups, traditional intermediaries such as soft-drink intermediaries, trash-collection specialists, recycling centers, trash-recyclingbrokers, and central-processing warehousing.8 Noranda is a recycling partner forHewlett-Packard, which encourages consumers and small businesses to recycle theirold computers through a low-cost recycle-by-mail program. Using this reverse-flowchannel, nearly 2 million tons of computer equipment arrive every month at the com-pany’s recycling center in California.9

244 Part V Delivering Value

(a) Consumer marketing channels

RetailerRetailerRetailer

WholesalerWholesaler

Jobber

0-level 1-level 2-level 3-level 0-level 1-level 2-level 3-level

Manufacturer Manufacturer Manufacturer Manufacturer

Consumer Consumer Consumer Consumer

(b) Industrial marketing channels

Manufacturer Manufacturer Manufacturer Manufacturer

Industrialdistributors

Industrialcustomer

Manufacturer'srepresentative

Manufacturer'ssales branch

FIGURE 13.3 Consumer and Industrial Marketing Channels

N:0-536-31467-5

CHANNEL-MANAGEMENT DECISIONS

After a firm has chosen a channel alternative, individual intermediaries must beselected, trained, motivated, and evaluated. Marketers must also be ready to modifychannel arrangements over time.

Selecting Channel MembersCompanies need to select their channel members carefully because to customers, thechannels are the company. Producers should determine what characteristics distin-guish the better intermediaries and examine the number of years in business, otherlines carried, growth and profit record, financial strength, cooperativeness, and ser-vice reputation of potential channel members. If the intermediaries are sales agents,producers should evaluate the number and character of other lines carried and the sizeand quality of the sales force. If the intermediaries want exclusive distribution, theproducer should evaluate locations, future growth potential, and type of clientele.

Training Channel MembersCompanies need to plan and implement careful training programs for their intermedi-aries. The fast-growing Culver’s restaurant chain requires its Midwestern franchiseesto work 60 hours in one of the 5 restaurants Culver owns and then work 12-hour days,6 days a week for 4 months at headquarters, learning every facet of how the companyoperates logistically and financially.17 Channel training is also a good competitive tool.Kyocera Mita arranged for J.D. Power and Associates to survey its customers and certify

248 Part V Delivering Value

Value-addedpartners

Telemarketing

Internet

LowLow High

Direct marketingchannels

"Indirect" channels

Direct saleschannels

Cost per Transaction

Retail stores

Distributors

Sales force

FIGURE 13.4 The Value-Adds Versus Costs of Different Channels

Source: Oxford Associates, adapted from Dr. Rowland T. Moriarty, Cubex Corp.

N:0-536-31467-5

Standardize or Adapt?

> TAPPING INTO GLOBAL MARKETS < CHAPTER 21 679

consumers saw expensive small-sized cans and did not realize that water needed to be added. Straight extension is tempting because it involves no additional R&Dexpense, manufacturing retooling, or promotional modification; but it can be costly inthe long run.

Product adaptation involves altering the product to meet local conditions or prefer-ences. There are several levels of adaptation.

! A company can produce a regional version of its product, such as a Western Europeanversion. Finnish cellular phone superstar Nokia customized its 6100 series phone forevery major market. Developers built in rudimentary voice recognition for Asia, wherekeyboards are a problem, and raised the ring volume so the phone could be heard oncrowded Asian streets.

The marketing concept holds that consumer needs vary and thatmarketing programs will be more effective when they are tailored toeach target group. This also applies to foreign markets. Yet in 1983,in a groundbreaking article in the Harvard Business Review, HarvardProfessor Theodore Levitt challenged this view and supplied the intel-lectual rationale for global standardization: “The world is becoming acommon marketplace in which people—no matter where they live—desire the same products and lifestyles.”

The development of the Web, the rapid spread of cable and satel-lite TV around the world, and the global linking of telecommunicationsnetworks have led to a convergence of lifestyles. The convergence ofneeds and wants has created global markets for standardized prod-ucts, particularly among the young middle class.

Levitt favors global corporations that try to sell the same productthe same way to all consumers. They focus on similarities acrossworld markets and “sensibly force suitably standardized products andservices on the entire globe.” These global marketers achieveeconomies through standardization of production, distribution, mar-keting, and management. They translate their efficiency into greatervalue for consumers by offering high-quality and more reliable prod-ucts at lower prices.

Coca-Cola, McDonald’s, Marlboro, Nike, the NBA, and Gillette areamong the companies that have successfully marketed global prod-ucts. Consider Gillette: Some 1.2 billion people use at least oneGillette product daily, according to the company’s estimates. Gilletteenjoys huge economies of scale by selling a few types of razor bladesin every single market.

Many companies have tried to launch their version of a worldproduct. Yet, most products require some adaptation. Toyota’s Corollawill exhibit some differences in styling. McDonald’s offers a ham andcheese “Croque McDo” in France, a variation of the French favoritecroque monsieur. Coca-Cola is sweeter or less carbonated in certaincountries. Rather than assuming that its domestic product can beintroduced “as is” in another country, the company should review the

following elements and determine which would add more revenuethan cost:

! Product features! Brand name! Labeling! Packaging! Colors! Advertising execution! Materials! Prices! Sales promotion! Advertising themes! Advertising media

Consumer behavior can dramatically differ across markets. Takeannual beverage consumption. One of the highest per capita con-sumers of carbonated soft drinks is the United States, with 203.9liters per capita consumption; Italy is among the lowest. But Italy isone of the highest per capita drinkers of bottled water with 164.4liters, whereas the United Kingdom is only 20 liters. When it comes tobeer, Ireland and the Czech Republic lead the pack, with over 150liters per capita, with France among the lowest at 35.9 liters.

Besides demand-side differences, other types of supply-side dif-ferences can also prevail. Levitt’s critics pointed out that flexiblemanufacturing techniques made it easier to produce many differentproduct versions, tailored to particular countries. One study showedthat companies made one or more marketing-mix adaptations in 80percent of their foreign products and that the average number ofadapted elements was four. So perhaps Levitt’s globalization dictumshould be rephrased. Global marketing, yes; global standardization,not necessarily.

Sources: Theodore Levitt, “The Globalization of Markets,” Harvard Business Review (May–June 1983): 92–102; Bernard Wysocki Jr., “The Global Mall: InDeveloping Nations, Many Youths Splurge, Mainly on U.S. Goods,” Wall Street Journal, June 26, 1997, p. A1; “What Makes a Company Great?” Fortune,October 26, 1998, pp. 218–226; David M. Szymanski, Sundar G. Bharadwaj, and P. Rajan Varadarajan, “Standardization versus Adaptation of InternationalMarketing Strategy: An Empirical Investigation,” Journal of Marketing (October 1993): 1–17; “Burgers and Fries a la Francaise,” The Economist, April 17,2004, pp. 60–61; Johny K. Johansson, “Global Marketing: Research on Foreign Entry, Local Marketing, Global Management,” in Handbook of Marketing,edited by Bart Weitz and Robin Wensley (London: Sage Publications, 2002), pp. 457–483.

GLOBAL STANDARDIZATION OR ADAPTATION?MARKETING INSIGHT

Dis intermediat ion

Consumer $110

Manufacturer $100

Importer $105

Wholesaler $115

Retailer $160

Consumer $200

D I S I N T E R M E D I AT I O N

The Long Tail

Ryukyu Long Tailed Giant Rat (Diplothrix legatus)

Bestsellers Custom

Local Book Stores

Bestsellers Custom

17M 15M

Distribution cost

The Strategy of Free

Welcome

Concept Review

the stor y so far.. .

Chapter one

Malcolm Gladwell

“The reptile brain”

Chapter two

Clotaire Rapaille

“Be Remarkable”

Chapter three

Seth Godin

“The Long Tail”

Chapter four

Chris Anderson

marketing channels

the long tail

merchandising

disintermediation

“Advertising is wasteful”

Chapter five

John Wanamaker

advertising

integrated marketing

presentation hints

ethics in marketing

Advertising

Advertising does not work

How Advertising Works

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Who was this commercial aimed at?

Outdoor advertising

Quiz Time

Multichannel marketingintegrated marketing communications

emailwebTVdirect mailradiomobile

What are marketing channels?

Chapter 15 Designing and Managing Integrated Marketing Communications 281

TABLE 15.1 Common Communication Platforms

Events/ Personal Direct Advertising Sales Promotion Experiences Public Relations Selling MarketingPrint and broadcast ads Contests, games, Sports Press kits Sales Catalogs

sweepstakes, lotteries presentationsPackaging—outer Entertainment Speeches Sales meetings MailingsPackaging—inserts Premiums and gifts Festivals Seminars Incentive Telemarketing

programsMotion pictures Sampling Arts Annual reports Samples Electronic

shoppingBrochures and booklets Fairs and trade shows Causes Charitable Fairs and TV shopping

donations trade showsPosters and leaflets Exhibits Factory tours Publications Fax mailDirectories Demonstrations Company Community relations E-mail

museumsReprints of ads Coupons Street activities Lobbying Voice mailBillboards Rebates Identity mediaDisplay signs Low-interest Company magazine

financingPoint-of-purchase EntertainmentdisplaysAudiovisual material Trade-in allowancesSymbols and logos Continuity programsVideotapes Tie-ins

SENDER Encoding Decoding

ResponseFeedback

RECEIVERMessage

FIGURE 15.2 Elements in the Communications Process

media. Four represent major communication functions—encoding, decoding, response, andfeedback. The last element in the system is noise (random and competing messages thatmay interfere with the intended communication).3

Micromodel of Consumer Responses Micromodels of marketing communica-tions concentrate on consumers’ specific responses to communications. Figure 15.3summarizes four classic response hierarchy models.

data$121

$194 $242

$502 $520

$1,050

webstore

catalogcatalog+internet

internet+retailcatalog+retail

catalog+retail + internet

Network TV22.8%

Cable TV22.7%

National Magazines17.1%

Local TV14.8% Internet

5.9%4.5% 2.5%

Network TVCable TVNational MagazinesLocal TVInternetLocal NewspapersHispanic TVSyndicated TVOther

source: Nielsen Online, AdAcross, Marketingcharts.com

Share of Ad Spending

Advertising Ethics

videoCereal Marketing, ABC News, October 2009

Ad Spending Salesleads to

warning: slide may contain instructor bias

Presentation hints

More Tips

• Look at online materials forum

• Slides support speakers

• Have hip-pocket slides

• Be prepared

• Use pictures, not clip art - www.compfight.com

• Have fun, create a story arc

• Look at online materials forum

• Slides support speakers

• Have hip-pocket slides

• Be prepared

• Use pictures, not clip art - www.compfight.com

• Have fun, create a story arc

This is an ugly slide

before

One more thing...

Welcome

Concept Review

Chapter one

Malcolm Gladwell

“The reptile brain”

Chapter two

Clotaire Rapaille

“Be Remarkable”

Chapter three

Seth Godin

“The Long Tail”

Chapter four

Chris Anderson

“Advertising is wasteful”

Chapter five

John Wanamaker

“Mmmm….Donuts”

Chapter six

Homer Simpson

public relations

ethics

Public Relations

How to get free advertising with a doughnut

Advertising Ethics

videoCereal Marketing, ABC News, October 2009

Ad Spending Salesleads to

warning: slide may contain instructor bias

Marketing 571 Complete Slide Set Fall 2009

Education

Transcript of Marketing 571 Complete Slide Set Fall 2009

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