Marketing - creating customer value

Peter Zackariasson, Ph.D. University of Gothenburg

School of Business, Economics and Law peter.zackariasson@handels.gu.se

Schedule• Thursday - basic

marketing, group exercise

• Friday - B2B, social media and marketing, guest lecture: Peter Svensson, head of marketing (nelly.com)

• Saturday - case: Mutti

• ”the primary observable phenomenon for any theory of marketing is the hard practical fact of the market”(McInnes 1964, p.52)

• ”a theory of marketing explains how markets work”(Alderson 1965, p.23)

"Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” !

American Market Association (AMA) 2007

• first, there is no stable set of practices or ideas that we can unequivocally call ‘marketing’; what counts as ‘marketing’ depends on local contingencies and changes over time

• second, the processes of ‘producing’ markets are complex and many marketing efforts partake; hence, the outcome rarely takes on the shape intended as part of anyone effort

• third, ‘markets’ regularly take on a wide variety of forms; there is thus no single outcome of productive marketing work

”How do WE create value for

YOU?”

1970 - 14 000 employees in 140 countries 1973 - sold to Electrolux

Production capacity

Product orientation

Manufacturing

Aggressive sales

Consumer

Consumer need

Consumer orientation

Potential market possibilities

Marketing of product/service

Consumer

Customer orientation

TAKE 5 MINUTES AND THINK ABOUT WHAT PRODUCTS OR SERVICES YOUR COMPANY ARE SELLING, TO WHOM YOU SELL THIS, AND HOW.

PRESENT THE RESULTS TO YOUR COLLEAGUES AT THE TABLE, DISCUSS SIMILARITIES AND DIFFERENCES BETWEEN YOUR COMPANIES.

WHAT ABOUT YOUR COMPANY?!

AugmentetdProduct

Actual Product

Core Product

What are we selling?

Core Product?

Core Product?

Marketing Mix• Product Planning

• Pricing

• Branding

• Channels of Distribution

• Personal selling

• Advertising

• Promotions

• Packaging

• Display

• Servicing

• Physical handling

• Fact finding and analysis

• Product

• Price

• Place

• Promotion

!

• People

• Process

• Physical evidence

The world’s shortest market plan (Kelly Odell)

What Why When HowHow much Who

Product What products do you sell?

What need does it fill?

When do you need it?

How will the product fill the

need?

Product cost, volume to be

sold etc.

Customer segments to be

targeted?

Price What price will you sell for?

Why is that the right price?

How long will the price be valid?

How will the price develop

over time?

How much sales and margin will

be created?

Different prices for different segments?

PlaceHow will

products be distributed?

Why choose these channels?

When do customer choose

different channels?

How will we create of enter these channels?

What are the cost/benefits of these channels?

How do different segments use

different channels?

Pro-motion

What type of promotion to be

used?

Why choose these activities?

Timing: launch, lifecycle etc.

How will the promotion be

executed?

Cost/benefit of the promotion?

Target group for various

promotions?

DOES THIS MATRIX ADD KNOWLEDGE FOR YOU TO HANDLE YOUR COMPANY?

(HOW) DOES THIS CHANGE THE IMAGE YOUR HAVE DRAWN OF YOUR COMPANY?

Place to meet customers?

Price strategies

Product lifecycle

Market Penetration

Product Development

Market Development

Diversification

Existing Markets

New Markets

Existing Products

New Products

Brand Repositioning

Product - Service

Strength Weaknesses

Opportunities Threats

SWOT

BCG matrix

What about the customer?

Profile Demografy

Socioeconomic Geografic

Psykographic Lifestyle

Personality

Behaviour Benefits sought Buying occation Buying behaviour

Usage Perceived benefits

Market segmentation

Köpare

Beslutsfattare

Användare Påverkare

Gatekeeper

Initiativtagare

Decision maker

Customer

Consumer

Initiator

Influencer

Gatekeeper

Market communication

The communication process

After-sales service

CHOOSE A WELL KNOWN PRODUCT OR SERVICE THAT IS EASILY EXPLAINED TO ANYONE

AS IT HAPPENS, YOU ARE ON THE BOARD FOR THE COMPANY PRODUCING THAT PRODUCT!

BUT SADLY, IT’S NOT SELLING!!

WHAT TO DO?!

YOU HAVE 15 MINUTES TO YOUR DISPOSAL

GROUP ASSIGNMENT: BRAND REPOSITIONING

NOW, LEAVE THE CHALLENGE TO A CONSULTING COMPANY.

THE TASK AT HAND FOR THE CONSULTING COMPANY IS TO CREATE A MARKET PLAN FOR THE PRODUCT/SERVICE THAT WILL SAVE THE DAY!

BE CREATIVE AND BOLD!

USE AVAILABLE RESOURCES FOR YOUR 5 MINUTES PRESENTATION TO THE BOARD

GROUP ASSIGNMENT: BRAND REPOSITIONING

Rory Sutherland, TED.com

B2B marketing

Business markets involve far more money and items than do consumer markets.

Derived demand - business demand that ultimately comes [derives] from the demand for consumer goods

Inelastic demand - total demand for a product that is not much affected by the price changes, especially in the short

run

Business Buying Behaviour

The environment!!

Marketing stimuli!4 x P!!

Other stimuli!economic!political!cultural!

competitive

The buying organization!

!the buying centre!

buying decision process

Buying responses!!

product or service choice!supplier choice!order quantities!

delivery terms and times!service terms!

payment

Major types of buying situations

✤ straight rebut!

✤ modified rebut!

✤ new task!

!

✤ systems selling

Major influences on business buyers

Environmental!!

economic developments!supply conditions!

technological change!political and regulatory

developments!competitive

developments!culture and customs

Organizational!!

objectives!policies!

procedures!organizational structures!

systems

Interpersonal!!

authority!status!

empathy!persuasiveness

Individual!!

age!income!

education!job position!personality!

risk attitudes

The Business Buying Process

TAKE 5 MINUTES AND THINK ABOUT THE DIFFERENCES BETWEEN YOUR BUYING BEHAVIOR IN YOUR ORGANIZATION COMPARED TO YOUR BUYING BEHAVIOR IN PRIVATE.

PRESENT THE RESULTS TO YOUR COLLEAGUES AT THE TABLE, DISCUSS YOUR CONCLUSIONS.

WHAT ABOUT YOU?!

Module assignmentWritten reflection Use the course literature in acquiring knowledge about the subject of marketing The task is to use the knowledge communicated throughout the module to analyze your organization and its customer. This in order to construct a market communication campaign that reflect both your companies values and strategies, and the needs and wants of your customer. Format: 2000-3000 wordsMake explicit referencesDeadline: in May 10

MARKETING AND SOCIAL MEDIA

Peter Zackariasson, Ph.D. University of Gothenburg

From one to one, to many to many

Kaplan and Haenlein(2010)

Social presence / Media richnessLow Medium High

Self-presentation

/ self-disclosure

High BlogsSocial

networking sites (e.g., Facebook)

Virtual social worlds (e.g., Second Life)

LowCollaborate projects (e.g., Wikipedia)

Content communities

(e.g., YouTube)

Virtual game worlds (e.g., World of Warcraft)

Social media is everywhere through mobile technology

CONVERGING MEDIA

Henry Jenkins (2006)

ON CONVERGENCE – THE MATRIX

MovieVideo Game

Comics

TEN PIECES OF ADVICE

Using the media:

• Choose carefully

• Pick the application, or make your own

• Ensure activity alignment

• Media plan integration

• Access for all

Being social:

• Be active

• Be interesting

• Be humble

• Be unprofessional

• Be honest

The Worlds Largest Social Media, 750 million

2010 4,1 million Swedes logged in the last month 3,9 million Sweden back each week !61% 25+ years 51% male !13-17 18% 18-24 18% 25-34 22% 35-44 24% 45+ 19%

Six degrees of separation

Flickr

Downfall and user-created content

Ownership

What are your company’s strategy when it comes to social media?

• Take 5 minutes each and map out WHAT you are doing when it comes to social media and WHY.

• Communicate the results to the rest of your group. (15 minutes)

Where everybody knows your name...

The term third place was invented by sociologist Ray Oldenburg and first appeared in his 1990 book The Great Good Place, a celebration of the places where people can

regularly go to take it easy and commune with friends, neighbors, and just whoever shows up. The subtitle says it

all: "Cafes, Coffee Shops, Community Centers, Beauty Parlors, General Stores, Bars, Hangouts and How They Get

You Through the Day."

Third Place

"All great societies provide informal meeting places, like the Forum in ancient Rome or a contemporary English pub," explained Oldenburg, a faculty member at West Florida State University. "But since World War II, America has

ceased doing so. The neighborhood tavern hasn't followed the middle class out to the suburbs...Accordingly, for eight years, Oldenburg devoted himself to gathering the legend and lore of America's last remaining neighborhood taverns, ma-and-pa grocery stores and other examples of what he

calls "third places." The term derives from Oldenburg's gloss on a Freudian concept.

!...

Sigmund Freud held that emotional well-being depends upon having someone to love and work to do. Oldenburg argues that the great psychoanalyst made his mental-health list one item too short. Besides a mate and a job, Oldenburg said, we need a dependable place of refuge where, for a few

minutes a day, we can escape the demands of family and bosses. In that kind of psychological Eden, an easy-going

conviviality allows us to be temporarily amnesic to our woes and shortcomings. Oldenburg is convinced that many

problems of contemporary society — alienation in the workplace, soaring divorce rates, etc. — trace to America's

declining supply of such third places.”

Ron Grossman, "Hangouts," Chicago Tribune, February 4, 1990

Mazlow’s pyramid of needs

Word of mouse

Democracy, or anarchy of thousand monkeys?

Dog poop girl

Multi-Use Dungeon

Massively-Multiplayer Online Role-Playing Game (MMORPG)

GAMES AS ADVERTISING MEDIA

Reach

• 68 % of US household play video games

• Average gamer is 35 year

• 40 % are female (entertainment software association)

Frequency

• Video games are part if the mainstream media exposure

• Some genres has an average participation up to 23 hours/week

Media Impact

• Video games give opportunity to interact with advertising

• The medium is rich of opportunities to use sight and sound

ADVERTISING IN GAMES

“If you landed at exactly the right spot, a McDonald’s appeared. The astronaut would come out, walk over to the McDonald’s and order a Big Mac to go, walk back and take off again. If you crashed ON the McDonalds, it would print out “You clod! You’ve destroyed the only

McDonald’s on the Moon!”” !

(Adverlab about Lunar Lander (1973), interview on Gamer Limit)

Electronic Arts sport games

PRODUCT PLACEMENT AS PART OF GAMEPLAY

The Sims (Electronic Arts)

ALTERNATIVE REALITY GAMES

SERIOUS GAMES

September 12th (Watercooler Games)

Rives tells a story of mixed emoticons

GAMIFICATION

gamification involves the use of game mechanics in “non-game” contexts

thefuntheory.com

Gamified Bond promotion