Session 1 - TP - Blackboard

8/8/2019 Session 1 - TP - Blackboard

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Marketing 5210Session 1

Tony Palcheck Lake Forest Graduate School of Management

August 23, 2010


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Marketing 5210Session 1 - Agenda

1.Introductions2.Course Description

3.The Kotler bible4.Voorn text5.Grading6.Expectations

7.What is Marketing?8.Developing Marketing Strategies and Plans


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Marketing 5210Course Description Week by Week

Week # Topic

1. Introduction to Marketing2. Market Research and Analysis

Customer research

Competitor research

3. Marketing Strategy4. Product Positioning and Differentiation5. Product and Service Strategy6. Channel and Distribution Strategy7. Integrated Marketing Communications

Advertising, PR, Direct Mail, Sponsorship, Events8. Pricing Strategy9. Global Marketing and Ethics presentation preparation10.Presentations


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Marketing 5210The Marketing Pyramid

Market Research and Analysis (Weeks 1+2)

Marketing Strategy and Tactics

CreatingValue (Weeks 4,5,8)Product Positioning

DifferentiationProduct and Service Strategy

Pricing Strategy

CommunicatingValue (Week 7)

Integrated MarketingCommunications

Advertising, PR, DirectMail, Sponsorships, Events

DeliveringValue (Week 6)

Channel andDistribution Strategy

Execution

Customer researchMarket Structure andLandscape Analysis

Competitor research


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The Kotler Bible, the additionalreadings and Voorn Text

1. The Kotler Book is THE best marketing book out there

2. It IS long and takes time to read

3. While I wont cover everything in the book, I will generally follow

it

4. Some of it is repetitive

5. Voorns information will help you structure your marketing plan

6. The readings are a bit old, but the information is timeless


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Assignments Due

Kotler chapter Articles Case Studies

1 1,2 Several ----

2 3,4,5 (skim 6, 11) Several Eastman Kodak Funtime Film

1 paragraph Connectionsprospectus

3 8 (skim 6,7) Several Colgate - Palmolive 1 page prospectus of Marketing

Plan4 9,10 Several Land Rover Land Rover case analysis

5 12,13

Several Black and Decker

6 15 (skim 16) Several Autobytel Autobytel case analysis

7 17,18 (skim 19) Several Heineken

8 14 Several The pricing predicament Connections paper

9 21,22 (skim20) Several -----

10 ---- ----- 30 page Marketing plan

Week Readings Papers Due


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The Marketing Plan AssignmentSchedule your time wisely!

Week TASK TASK

Week 1 FORM TEAMSBRAINSTORMING IDEAS FOR A PRODUCT OR SERVICE

Week 2 FINALIZE PRODUCT/SERVICE SELECTION (WITHINSTRUCTOR APPROVAL)

BEGIN PROJECT PLANNING AND DIVISION OF LABOR

Week 3 CONDUCT SECONDARY RESEARCH ASSESS THE INDUSTRY/MARKET AND ENVIRONMENTALFACTORS

Week 4 CONSTRUCT SURVEYCONDUCT PRIMARY RESEARCH

IDENTIFY CUSTOMER SEGMENTS AND ANALYZECONSUMER BEHAVIOR

Week 5 CONDUCT PRIMARY RESEARCHANALYZE SURVEY RESULTSANALYZE THE COMPETITION

SELECT SEGMENTS TO BE TARGETEDDEVELOP POSITIONING STRATEGY

Week 6 FORMULATE PROJECT OBJECTIVESDETERMINE YOUR COMPETITIVE ADVANTAGE & VALUEPROPOSITION

FINALIZE POSITIONING STATEMENTDEVELOP POSITIONING MAPS

Week 7 DEVELOP FOR PRODUCT AND CHANNEL STRATEGIES ANDACTION PLANS

Week 8 DEVELOP INTEGRATED COMMUNICATIONS AND PRICINGSTRATEGIES AND ACTION PLANS

FOR SERVICES, ALSO DEVELOP STRATEGIES AND ACTIONPLANS FOR PEOPLE, PROCESSES, AND THE PHYSICALENVIRONMENT

Week 9 DEVELOP FINANCIAL STATEMENTSDETERMINE CONTROLS AND CONTINGENCIES

FINALIZE PRESENTATION AND PLAN DOCUMENT (WHICHMUST INCLUDE DETAILED NARRATIVES DESCRIBING &SUPPORTING YOUR MARKETING MIX ACTION PLANS)

Week 10 PRESENT PLAN TO PANEL OF MARKETING EXPERTS


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Grading

% of Grade Assignment to be Graded

20% Class Participation

30% Case Studies 2 at 15% each

15% Connections Assignment

35% Marketing Plan

Letter Grade Numeric RangeA 100 95.0A- < 95.0 92.0B+ < 92.0 89.0

B < 89.0 86.0B- < 86.0 83.0C+ < 83.0 80.0

Letter Grade Numeric RangeC < 80.0 77.0C- < 77.0 74.0D+ < 74.0 71.0

D < 71.0 68.0D- < 68.0- 65.0F < 65.0 0


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Expectations

1. The course is hard

2. There is a ton of reading

3. I know you have jobs, families, lives

4. You must contribute to your team and the class

5. You need to be in class to do that and earn your grade


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To pass this course

To pass this course, you must be able to:

1. Understand marketing in a global environment and its integrative role inorganizations.

2. Assess the marketing environment as a foundation for marketing strategydevelopment.

3. Construct an effective marketing strategy based on competitive advantagesand sound market positioning.

4. Develop tactical marketing mix components that drive an overall marketingprogram, including integrated, marketing communications.

5. Identify, evaluate, and formulate solutions to marketing problems utilizingcritical thinking skills.

6. Integrate marketing decisions into a real-world marketing plan for a productor service.

7.

1.


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Why does a Business Existand where does Marketing Fit in?

Times

Minus

Times

Divided by

This is why businesses exist!


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Why does a Business Existand where does Marketing Fit in?

Minus

Times

Times

These numbers these marketing decisionsAre driven by


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Expectations

1. Why are you here? Why did you want to get your MBA?

Why did you choose Lake Forest?

2. What do you want out of the class?

A good grade

Learning

3. What could I do to make this the best course you have

taken at Lake Forest?4. What could I do to ensure you are getting the best value

for your investment of time and money?


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Outline

1.What is Marketing?2.What gets marketed?3.Marketing is a core part of any business

All functions in a business

All products

4.Strategy development Strategic Marketing framework The Marketing plan

5.Understanding the macro environment6.Assessment tools7.The 3Cs and 4 Ps


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The Point of Marketing?

The aim of marketing is to know and understand the customer so well, the product or service fits himand sells itself. Peter Drucker

Were obviously going to spend a lot in marketing because we think the product sells itself JimAllchin, Microsoft

In the factory we make cosmetics; in the drugstore we sell hope - Charles Revlon

The point of marketing, is to make selling unnecessary - unknown

The most important thing we do is market the product. We've come around to saying that Nike is amarketing-oriented company, and the product is our most important marketing tool - Phil Knight,CEO Nike

Yes, I sell people things they don't need. I can't, however, sell them something they don't want. -

John OToole

Selling focuses on the needs of the seller; marketing focuses on the needs of the buyer. -Theodore Levitt, Harvard

Marketing is far too important to leave to the marketing department - David Packard, HP

The purpose of marketing is to sell more stuff to more people more often for more money in order tomake more profits - Sergio Zyman, Coca Cola


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What is Marketing?

1. Marketing is the process of planning and executing the conception,pricing, promotion and distribution of ideas, goods and servicesto create exchanges that satisfy individual and organizationobjectives. - American Marketing Association

2. Marketing is the art of creating, satisfying (and retaining) customers

at a profit.Peter Drucker3. Marketing views the entire business process as consisting of a tightly

integrated effort to discover, create, arouse and satisfy customerneeds. -Ted Levitt in Marketing Myopia

4. The marketing concept holds that the key to achieving organizational

goals consists in determining the needs and wants of targetmarkets and delivering the desired satisfactions more effectivelyand efficiently than competitors. Phil Kotler


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5 Core Business Processesthat all require marketing support

Core Process Description Marketing Job TitleMarket Sensing Gather and disseminate marketing

intelligenceMarket research

Product Development R&D, engineering, product

management to launch a newproduct

Product management,

Market management,Promotions

Customer acquisition Defining the target and prospectingfor customers

Product marketing,Telemarketing, Sales

Customer relationship

management

Developing the relationships to

understand their needs and sell themproducts

Sales

Fulfillment management The exchange of product for money Customer service, Marketresearch


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What Gets Marketed?

Goods

Services

Events Experiences

People

Places

Properties

OrganizationsIdeas

Information

Is fast food a product or a service?


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5 types of Needs

Type of Need Description Example

Stated What we say Inexpensive car

Real What we mean Low operating costs, notjust initial cost

Unstated What we expect Great service, in addition tolow price

Delight What the seller can do

above and beyond

Throw in the warranty and

navigation system

Secret How we want to beperceived

Smart, savvy customer

How can a marketing person pick up on all those needs?


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HolisticMarketing

MarketingSellingProductProduction

The Evolution of Marketing in an Organization

Volume orientedLow costMass distribution

Feature/performanceoriented

Better mousetrapmentality

Push mentalitySell what you

can

Shorter termthinking

Customer centricview

Some

customizationKnowledge of

competitors

Everyone in thecompany is involvedin marketing

Customer dialoguesEmbraces channel

partnersWin-win-win

Where is your company today?

The continuum of organization philosophies on marketing


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The Strategy Development Process

BusinessMission

External andInternal

environmentassessment

Goalformulation

StrategyformulationProgram

formulation

Feedback& Control

Implementation


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Strategic Marketing Framework

Research the Market Environment Economic, Demographic, Psychographic,Social, Regulatory, Political, Growth rate,Market Trends

The 3 Cs, or maybe 4ConsumersCustomersCompetitors

Company Internal research

External research

SWOT

STP

SegmentationTargetingPositioning

ProductPricePlacePromotion

The 4 Ps

Strategic Decisionsi.e. What to do?

Tactical Decisionsi.e. How to do it?

Service operations have 3 more Ps

PeopleProcessPhysical Environment


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5 Elements of the Marketing Plan

Situational analysis Demographics - Customer research Political - Competitor analysis Social - Market research

Strategy formulation Segments to pursue - Positioning of product

Product differentiation - Anticipate competitive response 4Ps in principle for each target market

Planning, Organizing, Budgeting Funding issues - Selling the story to management Staffing issues - 4Ps in great detail

Marketing Implementation Mobilizing resources - Coordinating channel members Engaging customers - Coordinating ads, IMC, etc.

Assessing Performance Feedback from customers - Fine-tuning

Feedback from channels - Innovating Internal situation - Address questions of effectiveness and efficiency


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Judging Your Marketing Plan inWeek 10

Environmental Macro SWOT Competitors Market Position

Market Research

Primary Secondary Strategy

Objectives Segmentation Targeting Positioning Sustainability

Tactics (4Ps) Product/Service Channels Promotion Pricing Alignment Specificity

Financials

Control and Contingencies

Minimal Emerging Competent Exemplary


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The Macro Environment

The digital age informationeverywhere

The global market

Deregulation,privatization

Intense Competition

Product and serviceconvergence digital

and other Clutter and saturation -

advertising andmarketing

Shifts in retailing

ExternalInformation and

technology give themmore buying powerand greater productintelligence

Multiple ways to buy

Incredible array ofavailable good andservices

Have the means tocommunicate backand share informationwith other consumers

ConsumersBetter market

research tools

More communicationschannels

More distributionoutlets

Specialization

Greater talent

Ability to customizeproducts andsolutions

Companies

D fi M k t t j t


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Define a Market, not just aProduct

Company Product Definition Market Definition (serving acustomer need)

Missouri PacificRailroad

Railroad People and goods mover

Xerox Copying Equipment Improve office productivity

Standard Oil Sell gas Supply energy

Columbia Pictures Make Movies Market entertainment

Encyclopedia

Brittanica

Sell Encyclopedias Distribute information

YOUR COMPANY ?? ??


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Product IssuesThe 3 Cs

Positioning =Differentiation+ Segmentation

CompetitorsCompany

Standardized Customized

Customer

Cost and Complexity

Degree of Customization

Breadth of product line

Few ManyCost and Complexity

Constant conflict


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Tools for Assessing Growth Opportunities

Current Products New Products

CurrentMarket

Market-penetrationstrategy

Productdevelopmentstrategy

New

Markets

Market

developmentstrategy

Diversification

strategy

High

Low

HighLow

Probability of Success

Attra

ctiv

enessof

Market

Assessing the Attractiveness ofan Opportunity

High

Low

HighLow

Probability of Occurrence

Assessing athreat

S

eriousn

ess

Planning for Growth


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Market Selection Segmentation,Targeting, Positioning

What markets should we serve? Most important decision Define your strengths and weaknesses vs. environment and

competitorsWhat form should the product take? How value-added? Do we compete on price? May compete with customers or upset suppliers

What should the product do for the user? What is the cluster of benefits Differential advantageFor whom is the product most important? Would like to select that segment Market research is necessary

Some basic questions to ask


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The 4 Ps

Marketing is satisfying the needs of the customersby means of the product and the whole cluster ofthings associated with creating, delivering, andfinally consuming it. - Theodore Levitt, Harvard

Th 4 P


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The 4 Ps(the whole cluster of things)

The 4Ps do not exist in isolation, they are highly interdependent

ProductVarietyQualityDesignFeaturesBrand namePackagingSizesServicesWarranties

PriceListDiscounts,

coupons,rebates

Payment periodCredit Terms

PlaceChannelsCoverageLocationsInventoryDistribution

PromotionSalesAdvertisingPRDirect MarketingSponsorships

Productmanagement

Design, R&D

EngineeringManufacturingLogisticsSupply chainQA

FinanceCredit

Strategy andPlanning

TrafficWarehousing

AdvertisingPR

SalesDistributorsTechnical service

De

cisionstobe

made

Departments

thatma

ke

them


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Generic Strategies

Your company had better be able to say either1.They have cost leadership

2.They have performance (value) leadership3.They are the best in serving a specific segment of the

market

or you may need to start looking foryour next company


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Distribution Considerations

Channel structure depends on: the nature of the goods in question

the buying process used to acquire them the firms strategy and internal capabilities

Logistics, physical distribution are other important consideration

The channel decision is often the longest term decision you will makein marketing strategy

Indirect Direct

Exclusive

Selective

Intensive


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Pricing Issues

Pricing Philosophies

SkimScorched

Earth

Methods used to set prices:

1.Cost-based - simplest method, but can undermine profitability

2.Competition-based- may represent lower limit even more than cost-based,ignores product differentiation

3.Value-based - most sophisticated method, requires deep customer knowledge

Pricing itself conveys a message about the product

P i V l


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Price vs. ValueUnderstanding the real costs

Purchase Price + Time Lost in Transacting

+ Time Lost in Correcting Errors

+

Quality Variation +

Returns, Rejections +

Risk of Non-performance +

Cost of Ownership, Maintenance, Tech Service Needs

= Total Cost

Purchase price is only one component, not the whole enchilada!

Promotion Tactics


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Promotion TacticsPush vs. Pull

Push Trade promotion, spiffs Deals Special commissions for

distributors

Short term focus Price-oriented Volume-oriented

Sometimes tactics are driven by short-term problems/needs.Industrial marketers tend to rely too much on push

sales incentives are built around itshort term focus is a problem generally

PullAdvertisementsDemand creationFocus on customers customerLong term channel equity

Value-orientedProfit-oriented


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Communication Alternatives

HIGH

LOW

COST

National Account Management

Personal Selling with demo center

Trade shows

Industrial Stores

Telemarketing with catalog

Telemarketing

Catalog selling

Direct mail

Media ads in trade publications


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Trends

Trends


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Top 10 Marketing Trends

Maturity of markets in all developed countries

Slower growth, rising productivity overcapacity in many industries Must create demand growth, not just manage it as in the past

Must develop products and services customers didnt realize they needed and now cant dowithout

Parity products, parity price too many choices!

Must find new ways continually to augment and enhance

Uniqueness is critical, otherwise you just get back to parity

Customization by customer Rising customer expectations

Time pressure, time poverty

We sell to people not just companies

Lower prices are almost always expected Decline in marketing productivity

Sales forces are getting more important in creating, sustaining and communicating value. Alsogetting more costly

Purchasing staffs have been reduced. Customers are harder to reach

Must be easy to deal with. Reduction of vendor bases

500 TV channels coming, special interest magazines, DVRs as filter

Self-sufficiency fallacy (vertical integration in mainly a thing of the past)

Focus on core competencies and differential advantages; things done uniquely well

Farm out everything else, some fairly critical, but not central to mission

Switch fixed costs to variable wherever possible

More demands are being put on vendors, but less time to see them


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Top 10 Marketing Trends

Market fragmentation

Segments of one, not just large homogeneous clusters

Requires mass customization response

Customer Relationship Management is critical

Sales people must become consultants, value-merchants Acceleration of technology

Shorter product life cycles, shorter lead times

Power shift to retailers and to others closest to the actual customer

Helps competitors get better, faster

General speed-up of systems Rapid loss of competitive advantage

Third world suppliers often, patents are irrelevant

Info is freely available and cheaper to access

Core competencies become obsolete - must find new ones continually

Increasing Government regulation

Affects all developed countries

Industrialization as nuisance

Globalization

Standardization of quality, specs, ISO-9000, etc.

Standardization of pricing within limits

Fast info flow


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Changes in the Retail Environment

Wholesalers are an endangered species as retailers partner directly with manufacturers

Electronic channels continue to evolve

Share of mind competition continues to heat up: Down Up Network TV Cable TV Movies Videos

Newspapers Computer services Supermarkets Alternative formats

Private label will continue to grow, as the store becomes a brand to a great extent. Era ofexpansion is ending this is the era of market share battles.

Conventional retail formats are losing share to new ones: Category killers, supercenters,electronic shopping

Key is to operate on lower gross margins, lower operating expenses, less inventory, andfaster turns.

Boundaryless supply chains from production line to checkout line are evolving, driven inlarge part by the Internet.

Consumers are demanding more choice, consistency, convenience, and service for lesstime, money, effort, and risk


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Women wield market power

Consumers spend $3.5 Trillion annually and women control or influence: 83% of all purchase decisions 90% of new vehicle purchases 46% of mens wear 66% of home computers 82% of supermarket purchases

70% of appliance choices

Also keep in mind: Women handle 75% of family finances Home ownership by women has increased 25% in fifteen years Women represent 40% of business travelers, up from 1% in 1970 43% of persons with assets over $500,000 are women Less than 25% of new mothers quit working Women own 53% of all stock

Source: N.W. Ayers


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To Summarize

Marketing, done effectively, is more of an operating philosophy ofbusiness than merely a functional area and could/should toucheach other functional area.

The elements of the marketing plan include

Situational analysis

Strategy formulation

Planning, Organizing, Budgeting

Marketing Implementation

Assessing Performance

The rate of change in the world is accelerating on every dimension,and it is critical that our approach to customers changes as well


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Summary

Strategic Marketing Framework 5 Elements of the Marketing Plan

The 3 Cs The 4 Ps


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Assignments Due

Kotler chapter Articles Case Studies

1 1,2 Several ----

2 3,4,5 (skim 6, 11) Several Eastman Kodak Funtime Film

1 paragraph Connectionsprospectus

3 8 (skim 6,7) Several Colgate - Palmolive 1 page prospectus of Marketing Plan4 9,10 Several Land Rover Land Rover case analysis

5 12,13 Several Black and Decker

6 15 (skim 16) Several Autobytel Autobytel case analysis

7 17,18 (skim 19) Several Heineken

8 14 Several The pricing predicament Connections paper

9 21,22 (skim20) Several -----

10 ---- ----- 30 page Marketing plan

Week Readings Papers Due

Session 1 - TP - Blackboard

Documents

Transcript of Session 1 - TP - Blackboard