Transcript BA635-2005 - University of Alaska system

Current Marketing
Issues Seminar
BA635
Dr. Ed Forrest
E
Telephone:
(Office) 786-4161
(Cell) 854-8784
Email:
[email protected]
W3site:
http://faculty.cbpp.uaa.alaska.edu/afef/
3
Tonight:
Deconstruct the Title:
“Current
Marketing Issues
Seminar ”
What is
Marketing?
5
Get people to buy things they don’t need…
With money they don’t have…
To impress people they don’t like.
6
Marketing’s
Significance
Personnel Significance
Marketing Impacts You - Everyday of Your Life
• Everything you try,
•
buy, vote for, drive, eat,
wear– is “marketed”
Let alone- $.50 Cents of
Every Dollar you spend
goes to “marketing”
costs
Economic Significance
• The Economy-JOBS-
1/4 -1/3
of the
Work-force perform
marketing functions
Marketing Aligns
Production & Consumption
Production Sector
Discrepancies
of Quantity
Discrepancies
of Assortment
Separations:
Marketing
addresses
discrepancies
&
separations
in Space,
Time &
Ownership
Consumption Sector
Significance of Marketing
Improves quality of life
by/thru… providing variety
of goods & services
For example- What
would life be like
without the….
The Traveling Head Rest
Or the Traveling Head Holder
The
PortoWipe
The Total-Surround Umbrella
Accu-Drop Glasses
And How About
the “ButterMarker”
Or The Attachable
Noodle- Cooler
And last but
not least—
The Mr.
Mom Baby
Feeder!
Everybody is a Marketer:
 Everybody
promotes
themselves….
 Packages
themselves …..
 Everybody
has
their price……
20
& Always been Marketers
Innate
sense of
exchange
 1,000’s of
years…
bartered &
traded
“branded”
goods &
services

21
“The Dawn of Marketing”
The Evolution of “Marketing”
From a clearly defined
“Function & Process”
…to an
“All Encompassing
Philosophy”
Classic Functional Definition
All activities performed in
between:
The Point of Production
&
The Point of Consumption
st
1
Formal Definition ~1919
*Marketing and Merchandising by
Ralph Butler & John Swinney,
 Marketing
defined
as ‘the manner in
which the product
is disposed of,
the way in which
it is distributed…,
through various
channels of
trade.”
24
•Book distinguishes
marketing from
merchandising,
•w/ marketing being
something
manufacturers do
•& merchandising
being the domain of
jobbers; retailers.
Marketing Defined -1935 -
“The performance
of business
activities that direct
the flow of goods &
services from
producers to
consumers.”
Marketing Definedas a Process- 1985
"The process of planning &
executing the conception,
pricing, promotion &
distribution of ideas, goods
& services to create
exchange & satisfy
individual & organizational
objectives"
The Latest Official
AMA Definition (circa 2004)
 ..an organizational
function &
a set of processes
creating,
communicating &
delivering value to customers

for
 & for
managing customer
relationships in ways that
benefit the organization & its
stakeholders
Why the changed
focus?
What happened
between 1985
& 2004 that
made the AMA
change the
definition of
marketing?
The AMA Rationale: “Technology &
marketing been changing quite rapidly over last five to 10
years…
Marketing should
be customercentric -- not
brand-centric"

30
The 1985 definition was not encompassing
enough. The new definition more clearly
infuses the customer into marketing."
Management Reorientation:
The Marketing Concept
Focus on
Consumer
– Not
product
Long –Term
Relationships
Not Shortterm Sales
Marketing > Function
=An Orientation ”
“Marketing
is so basic
that it cannot be
considered a
separate function on a
par w/others such as manufacturing or
personnel…
Marketing > Function
=An Orientation
“Marketing is…
…the whole business
seen from the point of
view of its final result,
-from the customers’
point of view.”
Marketing Process > Complex & All Encompassing
Strategic
Planning
Situation Analysis
•Company
•Consumers
Marketing Strategy
P’s
The Marketing Mix:
Growth &
Competitive
Product Place
Strategies
•Competitors
Target
Market
Price Promotion
G
N
•Conditions
C
Service
TGT
• PEST
Positioning
Strategy
D
E
WM
F
Marketing’s new definition
reflects a broadened focus -
Was focused on short term profitable transactions…
–

Was focused on capturing new customers….
–

Now use integrated strategy w/ all points of contact
Was segmented on geo/demographic variables
–

Now focus on keeping existing customers
Was focused on mass- media advertising......
–

Now look at customers' lifetime value
Now use all relevant variables, especially behavioral
variables -- usage rate & loyalty
Performance was measured by financial metrics…
–
Now also measured strategic & customer-satisfaction
metrics
Changed focus--resulted in
restructuring:
 Company
–
Now organized by customer segment
 The
–
marketing department did the marketing…
Now everyone does some marketing
 Company
–
was the unit of analysis.........
Now whole value chain is unit of analysis
 Had
–
was organized by product units.....
individual / hierarchical work structures…
Now cross functional teams
Must Change Your focus & objectives:
From:
Average Consumer
Customer Anonymity
Standard Mktg. Mix
Mass Production
Mass Distribution
Mass Advertising
Mass Promotion
One-Way Comm.
Economies of Scale
Share of Market
All Customers
Customer Attraction
To:
Individual Customer
Customer Relationship
Customized Market Offering
Customized Production
Individualized Distribution
Individualized Message
Individualized Incentives
Interactive Communication
Economies of Scope
Share of Customer
Profitable Customers
Customer Retention
Changing Structure of Economy:
From Product to Service based
Agriculture
Services
Industry
Time, per Capita Income
Waves of Change..
80
70
60
Services
Percent
50
Industry
40
Agriculture
30
20
10
0
1820
1840
1860
1880
1900
1920
Year
1940
1960
1980
The Economist, 1996
2000
In the olden days- … Marketing
was defined “categorically”
according to the “tangibility”of the
entity you were selling:
Pure
tangible
good; no
service
Milk
Hybrid:
equal part
Tangible
goods with goods and
service
some
services
Computer
Meal at
& Warranty Restaurant
Major
service
with
minor
good
Hair
Styling
Pure
service;
no tangible
good
Legal
Advice
Product - Service Spectrum
Salt
 Soft Drinks
 Detergents
 Automobiles
 CosmeticsFast-food
 Outlets
Tangible
Pure
Good

Hybrid
Tangible
Good
Tangible
Dominant
w/
Services

Fast-food
Outlets

Major
Intangible
Pure
Service
Dominant
w/ Goods Service

Advertising
Agencies
Airlines
Investment
Management
Consulting



Teaching
Intangibility
Services cannot
be experienced
before
purchase
Variability
Quality of
services depends
on who provides
them & when,
where, & how
Inseparability
Services cannot
be separated
from their
providers
Perish-ability
Services cannot
be stored for
later sale or use
Re: service marketing –
for decades this has been the thinkingSeparate Products
from Services
Key Point- Product-service differentiation
is result of industrial age-2nd wave
thinking
1.Only have meaning from a
manufacturing
perspective… and
2.Suggest inappropriate
marketing strategies
A shift in perspective
Instead of focusing on
product – service
differences
…Focus on consumer
commonalities
…in “consuming &
evaluating” that which is
purchased
Re- Variabilty:
 Customizaton not standardization is the goal
Re-Inseparability:
 “Customer-ization” not isolation = goal
Re-Perishability:
 Services can be/are inventoried (ie-knowledge in
databases & experts head) AND Inventory management
not maximization is objective; Everything is perishable—if
not in substance certainly in style…
Re: Intangibility:
 its not the product that people are buying. It’s the
functions served & benefits rendered- as it is w/
services
Marketing
Next StepID the issues…
-On Any Given DayOne can find Issues of:
As it is
Product Quality
Service Quality
Consumer
Confidence/Satisfaction
Value/Pricing Practices
Free/Fair trade
Globalization
Advertising (volume,
veracity, political-correctness)
What the issues are-Depends on Your Perspective:
MarketerIssues = factors
that affect sales
• ConsumerIssue = factors
that affect one’s
sensibilities
Marketing Issues- as delineated
by an old UAA Syllabus…
Marketing performance
The Creation of Customer
Satisfaction & Value
Buyer Behavior
Relationship Marketing
Inter-firm Relationships in
Marketing
Services Marketing & Service
Quality
Competition & Strategy
Marketing and Information
Technology
Marketing Globally
Ethics and Legal Issues in Marketing
More Issues / Other Syllabi
Bad Marketing Ideas
Future Markets
Marketing High
Technology
Product By Design
The Next Big Market
Generational Divide
Asian-American
Consumers
Why Service Stinks
ReMarketing Old Brands
Kamikaze Pricing
The Old Pillars of New
Retailing
Global Marketing In The
New Millennium
Segmenting Global
Markets
The Nation as Brand
Michael Porter’s Big Ideas
Marketing Myopia
Could of used a text…
Issues Addressed:
 Does Marketing Have Appropriate Boundaries– on what &
how it “sells”?
 Is the practice of Multilevel Marketing -pyramid schemeslegitimate?
 Is Relationship Marketing a Tenable Concept?
 Is Mass Customization the Wave of the Future?
 Are Outrageous Prices Inhibiting Consumer Access to
Life-Sustaining Drugs?
 Will E-Commerce Eliminate Traditional Intermediaries?
 Is Communications Technology “Death of the
Salesman”?
 The New Marketing Paradigm Shift: Are Consumers
Dominating the Balance of Power in the Marketplace?
Fact is--these & most issues…
Are
RE-CURRENT
issuesthat Ebb & Flow
w/ socioeconomic
events
We could- examine
these issues 1 by 1…
Boring!
Too Simple
& Just too
Superficial
“Yes… you seem to
be suffering from
a marketing issue”
Examining
only
symptoms
--not
diagnosing
the cause
Ergothe Real
Question is….
Ergothe Real
Question is….
Marketing’s “utility”/value derived
from its Facilitation of Exchange!
Willing
to sell
Temporal Utility
Spatial Utility
Transactional Utility
Marketing
Willing
to buy
Key Point:
Keep Marketing in Perspective
Anything/Everything
one does to facilitate
exchange
Whatever impacts
Why- What- Where- When- How
Exchange occurs…
is (or becomes) an Issue…
Marketing Issues
in
Perspective
Marketing - part of Business
& Business - part of Society
Marketing
Business
Society
“Societal
Change”
creates
“issues” for
Business…
which creates
“issues” for
Marketing
Thus- in order to
identify- anticipate- understand
Marketing Issues
in particular
One needs to
identify-anticipateunderstand
Societal Change
in general
Society Defined:
A group of humans broadly
distinguished by:
mutual interests,
participation in characteristic
relationships,
shared institutions, &
a common culture
In the final analysis marketing
strategy is formulated to address…
THUS-
Patterns
of/changes to:
human interests,
relationships,
institutions &
culture…
…become
marketing issues
Hence- our search for marketing
issues begins w/ examination of…
& what better
time to study
Societal Change
…We are living
thru one of the
great periods of
societal
change in the
history of
humankind…
We’re in midst - next great Paradigm Shift…
… in the way we
live, communicate, work, produce & consume…
"In a time of change, it is
learners who inherit the
future.
--The learned find
themselves well equipped to
live in a world that no longer
exists." — Eric Hoffer
Re-imagine!: Business
Excellence in a
Disruptive Age
tompeters.com
“ -- that shift will accelerate
as technological change
accelerates…”
“It's all so strange and
different that I don't even
know what a superlative
for it would be…”
Our Place in Time
2011
In Context of: Human Evolution &
Technological Development
YEARS AGO
Hominid Age
2,000,000
Homo Sapiens
100,000 yrs
Tribal Age
25,000 yrs
Agricultural Age
10,000 yrs
Scientific Age
380 yrs
(1500-1770)
Industrial Age
180 yrs
(1770-1950)
Information Age
70 yrs
(1950-to date)
There is–
Something Curious Going On…
- observed time intervals between
significant techno-advances ….
3 million years ago
collective rock throwing; early stone use
1.5 million years ago lever, wedge, inclined plane
500,000 years ago
control of fire
50,000 years ago
bow and arrow; fine tools
5,000 years ago
wheel and axle; sail
500 years ago
printing press with movable type; rifle
60 years ago
commercial digital computers
15 years ago
commercial internet
Not only is “progress”
Exponential
it is
Predictable
Transistor Doublings (2 years)
DRAM Miniaturization =
5.4 years
Processor Performance
(MIP Speed doubles every 1.8 years)
price/performance doubles every 12-18 months
Brad DeLong (2003) noted that memory density… predictably
outgrows microprocessor density…..which predictably outgrows
wired bandwidth….. which predictably outgrows wireless.
Expect: 1st: New Storage Apps, 2nd: New Processing Apps, 3rd: New
Communications Apps, 4th: New Wireless Apps
@ Given Rate of Evolution
What can we predict?
Hominid Age
2,000,000
Homo Sapiens
100,000 yrs
Tribal Age
25,000 yrs
Agricultural Age
10,000 yrs
Scientific Age
380 yrs (1500-1770)
Industrial Age
180 yrs (1770-1950)
Information Age
70 yrs (1950-2020)
Symbiotic Age
30 yrs (2020-2050)
Singularity
≈ 2050
@ Given Rate of Evolution
What can we predict?
In 30 year cycle (~1990-2020):
Net Evolution 1.0 -3.0
Next 20 Year Cycle ~2020-40):
advanced Robotic & adaptive AI;
broadband interfaces between the
human brain and machine
Then 10 Year Cycle (~2040-50):
culminating in the SINGULARITY!
The Symbiotic Age
From GUI to LUI
A time when computers
“speak our language”
A time when our
technologies are very
responsive to our needs
& desires
A time when humans &
machines are intimately
connected & always
improving each other
The Knowledge Navigator
The Knowledge Navigator
“The future’s
already here.
--It’s just not
evenly
distributed
yet.”
― William Gibson
In the long run, we become seamless w/ our machines
“Technology is becoming organic.
Nature is becoming technologic.”
Personality Capture
& Transhumanity
Robo Sapiens
AIST and Kawada’s HRP-2
“Huey and Louey”
The Symbiotic Age
A time when we will
begin to feel “naked”
without our computer
“clothes.” (youtubes)
UCT in Everything you wearwashable garments
w/ miniaturized inear speakers /solar
cells to provide
energy
technology woven
into fabric
components allowing
many functions to
be almost `built in' to
our bodies, creating a
`second skin‘
RFID- everywhere & in everything
SmartCode making
0.25mm chips
target
cost 5-10 cents
..w/
15-20 feet
range
Manufacturing
capacity
10+ billion a year
UCT Enhanced Jewelry
embed functional
technology into
jewelry & body
accessories -- rings,
necklaces, earrings,
glasses and watches.
-for body adornment for more intimate &
discreet
communication,
information
gathering &
entertainment.
Integration of Information &
intelligent technologies
RFID
Sematic Web
Face/object
recognition
Mobile
Communicat
ions
TeraFlop
Databases
CRM
Analytics
Future-integrated-seamless world
of sensing & sharing
Intelligent & Interactive
environment…
On your way to the
store (that is if you
still go to stores)
The i-board will
recognize you &
based on your past
purchase profile –
make you an offer
(based on datamined calculations)
that you can’t
refuse
No longer just movie magic…
Predicting a diverse future: Directions
and issues in the marketing of services
European Journal of Marketing ; Bradford; 2002; Angus Laing
“Driven by
technological
developments,
deregulation, and
globalization
- the service sector in
post-industrial
economies is facing
unprecedented
change”
Exact nature of Future Changesdepends on Business Sector




Network Information Services: banking,
credit card, insurance, telecom
Retail
Hospitality: travel, restaurants, lodging,
leisure, hotels
Labor & Expertise:
– Business Support: administrationprocesses, consulting, customer
service
– Personal & Professional: medical,
legal, financial, technical assistance
UCT
Enhanced
SelfService
Increasingly
Outsourced
Increasingly
Virtualized
The
Law of Accelerating Returns
explains why
TECHNOLOGY & EVOLUTIONARY
processes
progress in an exponential
fashion
Years Ago
Billions
Physical
Generations Ago
Technological
100,000
Speech
750
Agriculture
500
Writing
12
Big Bang (MEST)
11.5
Milky Way (Atoms)
8
Sun (Energy)
400
Libraries
4.5
Earth (Molecules)
40
Universities
3.5
Bacteria (Cell)
24
Printing
2.5
Sponge (Body)
16
Accurate Clocks
0.7
Clams (Nerves)
5
Telephone
0.5
Trilobites (Brains)
4
Radio
0.2
Bees (Swarms)
3
Television
0.100
Mammals
2
Computer
0.002
Humans, Tools & Clans
Co-evolution
1
Internet
0
AI & Nano-tech
Law of Acceleration