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Understanding

Marketing Management

and Decision Making

Learning Objectives and Agenda

Illustrate case method, course frameworks and

marketing planning through Universal Press Pricing

Dilemma Case

How to read and analyze marketing cases

Course Overview

Objectives and critical thinking

Administration

Role of marketing in the firm

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© Alexander Chernev

Universal Press Pricing Dilemma

Case

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How to Read and Analyze

Marketing Cases

Case Learning

Individual Preparation: Working alone “How to” reading provides a start

Over time, develop your own approach

Class discussion: Working in the meeting Focus on Alternatives Analysis Recommendation

Learn from others’ points of view

Communicate, evaluate, defend, update your own point of view

Individual versus Class Learning Different in emphasis and complement each other

Both demand disciplined, critical thinking

Class learning depends on collective individual preparation

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“How to Analyze a Case” Reading:

Guidelines for Class Preparations

Situation

• What is the situation?

• Quickly develop an overall sense of the case setting and context (“story”)

• What type of case is this?

• Problems

• Decisions

• Evaluations

• Rules

• First and last sections often important

Questions

• What do I need to know about this situation?

• Quickly assess possible decision options and criteria for choosing amongst options

Hypothesis

• What’s my hypothesis

• Initial analysis about

• Underlying problems

• Various options

• My criteria for evaluating options

• What evidence exists?

Proof & Action

• Deeper analysis

• What evidence do I have that supports my hypothesis? What other evidence do I need?

• How would I implement?

Alternatives

• What is the greatest weakness of my hypothesis? What is the strongest alternative to it?

How to Analyze a Marketing Case

with Marketing Frameworks Situation

• Most of our cases pose decisions regarding marketplace actions

Questions

• What are the options for changing how we compete in this market?

• Typical criteria

• Short-term profits

• Long-term profits (indicators: market share, profit margins, impact on brand equity)

• Internal consistency

Hypothesis

• 3 Cs analysis helps structure criteria, organize evidence, suggest need for further evidence:

• What can the Company do? What resources does it have?

• What can Competitors do? What resources do they have?

• What do Customers want?

• Initial plan for marketing strategy and 4Ps

Proof & Action

• Deeper analysis of your preferred options in terms of marketing strategy (chosen target and desired position)

• More details about implementation with 4Ps

• What specific Product?

• Promoted how?

• In what Place?

• At what Price?

Alternatives

• What is the best case of your chosen alternative? Of non-chosen alternatives?

• What is the worst case of your chosen alternative? Of non-chosen alternatives?

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Course Overview

What is Marketing?

The purpose of business is to create a customer. The

business enterprise has two – and only two – basic

functions: marketing and innovation. Marketing and

innovation produce results; all the rest are costs.

Marketing is the distinguishing, unique function of the

business.

Peter Drucker

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Marketing is Dead

That is – traditional marketing is dead:

People don’t pay attention

CEOs don’t trust CMOs

Traditional marketing and sale have trouble in social media

Instead:

Focus on community marketing

Influencers

Help influencers build social capital

Get them involved

The Modern Concept of Marketing

Webster Jr, F. E., & Lusch, R. F. (2013). Elevating marketing: marketing is dead! Long live

marketing!. Journal of the Academy of Marketing Science, 1-11.

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Background and Objectives

Marketing is about creating value for customers and

other stakeholders

This course will help you learn the process and the

principles

Analyze marketing opportunities (3C’s)

Customers, competitors and company

Design marketing strategies and programs (4P’s)

Product, pricing, promotion and place

Why Use Cases?

Cases simulate marketing decision-making

Think with foresight about your first job

Take responsibility for recommendations and decisions

Build critical thinking skills for long-term success

Meeting Analogy: Case discussions simulate business meetings

and should be approached as such:

A disciplined approach is necessary

Use a shared frame of reference relying only on data available (no time

machines)

Seek to surface and integrate disparate viewpoints

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Marketing Requires Critical Thinking

Under Ambiguity

“The answer” Rarely one, clear, right answer

But wrong answers outnumber right ones

How do we handle this? Critical, Disciplined Thinking: For each alternative:

What are the possible outcomes?

How likely is each outcome?

What is the potential impact of each outcome?

Different assessments of likelihood and impact = different preferred answers

Force yourself to consider contrary views: What are the downsides of the preferred alternative?

What are the upsides of other alternatives?

Determine best- and worst-case scenarios for each alternative

Classroom Norms: Case Learning

Promptness

Courtesy: even more critical during case discussion, but courtesy ≠ agreement

Preparedness: individual preparation determines group learning

How to participate in a case discussion: Plan to start and end on time

Your phone should be away

Be ready to be called on for your recommendation at any time

Cold-calling replicates the real world

Raising your hand does not guarantee that you will be called on

Everyone adds value

Tone: Challenging but constructive

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Criteria for Choosing Cases

Modern case-writing is about 50 years old

Some cases are classics; most are not

3 criteria for choosing cases

Cases involving decisions that you will face

Cases illustrating generalizable principles supported by

state-of-the-art knowledge

Classic cases

Topical cases

Constraints imposed by NUGSB’s short terms

Course Administration: Materials

Reading materials

Coursepack has cases and most reading

Will post some optional readings to course forum

Use course forum for your examples and broader

questions

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Course Administration: Deliverables

During Term

Final exam

Will review and provide study guide on last class session

Will post examples from last year

Getting the Most from This Course

Most important: Prepare the case for the day

2nd most important: Come to class prepared

3rd: Contribute

4th: If you’re struggling, ask for help

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Role of Marketing in the Firm

Role of Marketing Function in a Firm

Marketing is the link to the marketplace--dealing with customers

and competitors

The marketplace should drive all decisions

“The Marketplace is the driving force behind everything that we do.” ---

Lou Gerstner (former CEO, chairman of IBM)

One of the two central functions of a business—Peter Drucker

To be successful: Identify customer needs and satisfy them--and

do so better than competitors (more effectively or more

efficiently or both)

Acquiring customers and retaining customers

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Marketing Decision Making Process

Company-Customer-Competitor Analysis

Strategic Decisions

Segmentation-Targeting-Positioning

Marketing Mix Decisions

Product-Price-Promotions-Place

Figure 2.2 Forces shaping marketing’s role Source: W. Frederick, A. Malter and S. Ganesan (2005) The decline and dispersion of the marketing competence, MIT Sloan Management Review, 46(4), 35–43. Copyright © 2005

Massachusetts Institute of Technology. All rights reserved. Reproduced with permission

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BUT… Isn’t the objective of a business to

Maximize Maximize profit?

Maximize Maximize shareholder wealth?

Solve big social problems?

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Contemporary marketing

management skills

Managing the implementation of information-

communication technology

Managing networks, relationships, interactions

Information handling and management

Understanding and managing change

Analytical and creative skills

Break-Even Analysis

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Break-Even Analysis

Helps us understand how costs and profits change

with volume

Why is this important in company and competitor

analysis?

Consider two examples Company F: FC=$1,000,000; VC= $5/unit; SP=$25/unit

Company V: FC=$200,000; VC= $21/unit; SP=$25/unit

BEV for F:

BEV for V:

Analysis for Company F

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

FC

TC

Revenue

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Analysis for Company V

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

FC

TC

Revenue

Summary and Lessons

Marketing is the central function of the firm, and

key to profitability

UP Pricing Dilemma case illustrates marketing

analysis

Case takeaways

Critical thinking skills

Value ≠ price

Perception = Reality

Manage value, not price