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Transcript of 1 Introduction to Marketing Professor Andrés Musalem Marketing Management Fuqua School of Business...
1
Introduction to Marketing
Professor Andrés MusalemMarketing Management
Fuqua School of Business
Introduction What’s
Marketing? Three C’s
Customer Company Competition
Four P’s Product Promotion Price Placement
Summary
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Let’s start with a simple word association task…
MARKETING
In-class exercise:
Write down the first WORD that comes to mind
Does Marketing Matter?
Does Marketing Matter?
Background:
Santiago, Chile
Ph.D., Wharton
Ind. Engineering
How long?
MBA, U. of Chile
Find x:
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Research: Quantitative Marketing
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Teaching Interests:
Market Research Pricing Marketing Management GATE (global academic travel experience):
South America Marketing Practicum:
Hobbies:
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Agenda
Teaching Philosophy Course overview Ford Ka Marketing management
Analysis (The 3 C’s) Planning (The 4 P’s)
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Teaching Philosophy
Lesson first, Problem second versus
Problem first, Lesson second
“Experience is a hard teacher because she gives the test first, the lesson afterward.”
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Course OverviewGoals:
1. Have fun & get you to learn.
2. Frameworks: Marketing Situation Analysis:
Company, Customer, and Competition Marketing Planning and Implementation:
Price, Promotion, Place, Product
3. Tools: Perceptions, Preferences, Customer Lifetime Value,
Economic Value, Brand Associations, Diffusion of new products.
4. Skills: Case analysis Group effectiveness Idea Communication
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Course Overview Syllabus
Class format Lectures and cases.
Grading Cases, participation, final exam Graded assignments: weekend following discussion.
Course Materials: Required: Cases and some articles (see syllabus) Optional: Textbook, press articles in course pack.
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Study Teams
Action: Name a representative who will be responsible
for submitting assignments.
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Team Member Name
Effort level Effectiveness
Total 100% 100%
Peer Evaluation
Your Name: ___________________________________________Team number : ______________________________________________In the chart below, write in the name of each team member, including
yourself. Estimate the relative effort level and the amount that each team member contributed to the effectiveness. The first column should indicate relative effort and work level while the second column indicates the degree to which each individual contributed to the success of your team.
Your estimates can range from 0% to 100% but should sum to 100%.
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Honor Code
We take it very seriously It benefits students
Best cases, problems Equal playing field Coordination with other classes
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You may not get information on cases from Fuqua students in other classes or study
groups Students or resources at other schools Electronic means
You may not give the information to others at Duke or elsewhere
Your support is critical for this policy
Honor Code
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Administrative Issues:
Platform: Announcements Assignment submission Handouts and other materials
Seating Chart
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Roadmap for the rest of course
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Frameworks:
Marketing Situation Analysis• Company, Customer, and Competition (3C’s)
Marketing Planning• Price, Promotion, Place, Product (4P’s)
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Who are the customers?
Why do they buy (Value Proposition)? Economic value to the customer: Cost-Benefit Understanding customer psychology: Intangibles What are they sensitive to (e.g., price, features, etc.)
How many?
Lifetime value, loyalty, customer satisfaction.
Frameworks: 3 C’s - Customers
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Customer Analysis: RFID
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Customer Analysis: RFID
Sorensen Associates: RFID
technology to track shoppers path inside grocery stores. (PathTracker®)
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Frameworks: 3C’s - Company
Company Strategy: Mission, Objectives Portfolio Analysis:
Identify SBU’s Evaluate SBU’s: for example, BCG, GE matrices.
Portfolio Design: Build a pipeline of SBU’s at different stages Portfolio growth: expand new/existing
products/markets.?
Market Growth Rate
Relative Market Share
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Identify Competitors Industry Analysis (5 Forces) Strengths Weaknesses - Opportunities
Threats: SW: Company versus Competitors OT: Industry
Competitive reactions
Frameworks: 3C’s - Competition
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Southwest Effect: Competitive Reactions
1. Increase in passengers per day each way (PDEW )
2. Drop in average fare3. Effects on surrounding airports (lower
demand)
BWI-SDF Fares and PDEW
0
50
100
150
200
250
300
350
1993 1994 1995 1996 1997
Fares
PDEW
Source: Southwest Airlines: An In-Depth Review
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How might the 3 C’s vary by country?
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Combining the 3 C’s
Wal*Mart quits Germany (85 stores, $2.55 billion, 2006):
Customers? Competition?
Company?
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Integration4P’s 3C’s
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Integration:
3C’s 4P’sWhat’s the right
price for Angiomax?
How should Ford promote the adoption of the Ford
Ka?
Should Starbucks invest in
improving its customer service?
Should Team Sameer use a
traditional promotional approach?
Should XM air ads? Should
Unilever launch a new product for
the low income
segment in Brazil?
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4P’s: Marketing Planning -
Price, Promotion, Place, Product
4P’s: Marketing Planning -
Product, Price, Place, Promotion
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Define the product Core benefit—essence Basic, Expected, Augmented and Potential Product First Mover Advantage
Frameworks: 4P’s - Product
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Price is the only P that captures valueÞ Small changes in price lead to major profit impact
The issues What is the value to customers of the benefits the
product provides? How much does it cost to deliver these benefits? How much do or will customers have to pay to get these
same or substitute benefits elsewhere (i.e., from competitors)?
Frameworks: 4P’s – Pricing
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Importance of Pricing(Price leverage for selected firms)*
Creates operating profit improvement of:
28.7%
26%
16.7%
6.4%
*From Dolan and Simon (1996)
1% improvement in price at
17.5%
Philips
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Channels exist when they are more efficient than direct distribution:
Channel decisions/issues: Channel depth Channel breadth Channel conflict/coordination
M
M
M
C
C
CD
Manufacturer
Consumers
Manufacturer StoreRetailer
Frameworks: 4P’s – Place
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Frameworks: 4P’s - Promotion The promotional plan: Target market Objectives Message Media Mix Budget Measure the results Coordinate the process
Awareness Interest Desire Action
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Promotion and Brand Associations
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Profitability (A Reality Check)
Are assumptions realistic? Breakeven analysis
Can we sell breakeven volume at given price?
How are other company businesses affected (cannibalization)?