Transcript Chapter 1

Orientation to a Market
Orientation
Deborah Cours, Ph.D.
Professor of Marketing
What do they sell?
 Revlon
 Disney
Theme Parks
 Wal-Mart
What is marketing anyway?

“In well-ordered states, storekeepers and salesmen
are commonly those who are weakest in bodily
strength and, therefore, of little use for any other
purpose.
--Plato

“Merchants are to be accounted vulgar; for they can
make no profit except by a certain amount of
falsehood.”
-- Cicero

“Advertising . . . is a meretricious endeavor in which
psychological appeals to “fear” and “shame” are
developed to bamboozle the public into purchasing
essentially worthless packaged goods at bloated
prices.”
--Thorstein Veblen
Other Perspectives . . .

Corporate leaders nationwide are discovering
that their most powerful competitive weapon is
marketing--the development, pricing,
distribution, and promotion of products.
--Newsweek

More than half of the polled executives at 250
corporations ranked marketing as the most
important element of strategy for the 1990’s.
--Yankelovitch, Skelly, and White
Marketing definitions. . .
“ . . . employing the firm’s resources so as to
maximize sustained growth in profits”
“. . . demand management or regulation”
“. . . the creation of customer value, better than
competition, at a surplus”
“ . . . the process of creating and delivering a
superior value to a large enough customer group,
and at a low enough cost relative to the price, to
produce adequate returns and growth”
What is Las Vegas Selling?
Creating a Unique Brand Identity for Las Vegas
Taking The “Only Vegas” Campaign in a
New Direction
Creating a Unique Brand Identity for Las Vegas
A Customer Focus
 Concentrate
on the needs of the buyer,
not the needs of the seller
What is a need?
Market-Based Decisions . . .
Market Pull
Company Pull
What the
market
indicates it
needs and
is willing to
pay for
Voice of
the Market
What the firm
is capable of
and willing to
provide to the
market
Require the effective and
efficient reconciliation of
any differences and result
in a
Market-Based
Firm
Voice of
the Firm
Source: Vincent P. Barabba and Gerald Zaltman, Hearing the Voice of the Market (Boston:
Harvard Business School Press, 1990), p. 52.
Market Oriented Vision / Missions
COMPANY
PRODUCT-ORIENTED
VISION/MISSION
STATEMENTS
Revlon
We make cosmetics.
Disney
We run theme parks.
Wal-Mart
We run discount stores.
MARKET-ORIENTED
VISION/MISSION
STATEMENTS
We sell lifestyle and self expression;
success and status;
memories, hopes and dreams.
We provide fantasies and
entertainment -- a place where
America still works the way it is
supposed to.
We offer products and services that
deliver value to middle Americans.
The Target Marketing Process
Identify markets with unfulfilled needs
Determining market segmentation
Selecting market to target
Positioning through marketing strategies
A Product for Every Segment
Beer is Beer? Not Really!
Popular
Imports
Domestic specialties
Premium
Light
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
The Marketing Segmentation Process
Find ways to group consumers
according to their needs.
Find ways to group marketing actions - usually the
products offered - available to the organization.
Develop a market/product grid to relate the market
segments to the firm’s products and actions.
Select the product segments toward which the firm
directs its marketing actions.
Take marketing actions to reach target segments.
Bases for Segmentation
Psychographic
Demographic
Customer
Characteristics
Socioeconomic
Geographic
Behavior
Usage
Outlets
Buying
Situation
Awareness
Benefits
Browns Highlight Extreme Fan
Home Depot Reaches Out to the Female Market
Hispanics Prefer Spanish Language Ads
Some Products Compete on Price –
Others Compete on Quality
Value Proposition
Value to
the
Target
Market
Benefits
to the
Target
Market
Price
to the
Target
Market
A clear and simple statement of the intended target
market, the benefits of the offering, and the price.
Volvo Station Wagon
 Benefits:
 Price:
Durability and safety
20 Percent premium
market: Safety-conscious “upscale”
families
 Target
Domino’s Pizza
 Benefits:
Fast delivery (within 30 minutes)
 Price:
15 percent premium
 Target
Market: convenience minded pizza
eaters
Southwest Airlines
 Benefits:
 Price:
 Target
“No Frills”
“Low”
Market: Budget minded leisure and
business travelers
Breakdowns in the Value Equation
Can Be Very Expensive

Encyclopedia Britannia



World’s most comprehensive and authoritative
encyclopedia


1990 sales of $650 million
by 1997, sales down by 80%
priced at $1,500 to $2,200 per set vs. others at
$50 to $70 on CD-ROM
Actual value proposition: assuaging parental
guilt

met by computer that just happens to have an
encyclopedia included
Simple Questions, Hard Answers

Who are our customers?

What important benefits do we provide them?

Are these benefits sustainable?
Key Principles of Marketing
Management
Successful marketing strategy entails
1. Designing products, services, and programs
that emphasize features which are both:


Important to customers, and . . .
Provide a sustainable differential advantage over
competitors
2. Allocating resources to our best
opportunities
Examples from
Marketing
A Study of Brand-Person
Relationships
From Fournier 1998
Jean: 59, married, middle-class, suburb, 3
grown children
“I like to be home! I like just being here. I
am comfortable, I guess…I like my things.
I just like it here.”
 “I think my mom treated me that way
because I stood for what she would never
have. before me she was so beautiful. The
party girl…So I spent most of my time
doing things for her, cleaning the house,
because at least that was something I
really knew how to do right”

 “What
do I do everyday? I cook. I
clean. My white clothes are white. You
can pick up a sheet of mine that is 10
years old and people think they are
brand new. I iron them.”
 “Why do I like this house so much? I
like to see my things that I like, that I
worked so hard for. It makes me feel
good.”
 “I like to have nice things. I like nice
things, I want to have the best. I
worked hard for what I have, I deserve
them.”
 “Pastene
tomatoes, I always buy those,
they are the best. They taste the best.
They make the best sauce. You can tell
the difference …Olive oil. Philip Berio is
the best. It has a better taste. It is the
best for cooking …I buy the best
vinegar. Progresso …Bounty paper
towels, they are the best...Jenn-Air, they
say that is the best…Frigidaire makes
the best refrigerator …Electrolux is the
best vacuum you can buy. It’s
expensive, yeah, but…”
“They say that Jif is better and natural is
better and blah, blah, blah. Well, Skippy is
the best peanut butter.”
 That there Shimmer Lights, that is MY
shampoo. No one else touches that. I paid a
lot for it. I’ll let anybody borrow anything
usually, but that one there is mine.”
 “There’s Jell-O pudding in there for the baby.
The cooked kind, not that instant crap.”
 “I like to use someone I know. If I need
electric work, I know an electrician.”

Karen: 39 years old, recently-divorced, 2
daughters (8 & 12), full-time employed
“If there is one thing I do, just ONE thing, I
will save my kids from feeling the same
way I do when they reach 40.”
 “Wherever am I going to find a man? I
never thought that I would be the one left
alone after the divorce. Never. I am turning
forty, and there aren’t that many available
men that age in general left anymore, let
alone good ones, and god forbid they live in
this small town.”

 “I
find that if you like something, then
you stick to it. That’s how I am. If I find
something in a restaurant that I liked, I
might go back and get that over and
over again, instead of trying something
else that might sound good. Why order
something else that may end up not
being as good as the one I know I liked
from before?”
 “I
don’t really know what all I buy. I am
thinking about it, and it seems I don’t
buy many brands. We do have, we
have very, especially during the school
year, our life is so buy that I come home
and make very simple meals. I don’t
spend a lot of time at the store.”
 “I have maybe 5 brands of detergent
that I will pick between. With 5 brands
that you like, something is always going
to be on sale. I used to always buy Tide,
to get the kid dirt out. But now, I’ll use
Tide, Cheer, Surf. Whatever is on sale.”
 “If
I go in there and Tide is on the aisle
display, you know, I will get that. Of if I
have a coupon. I am just not going to
go out of my way anymore to get that
brand over another. It is just not worth
the trouble.”
 “At work, I use a Gateway. I don’t really
care that it’s a Gateway, but we only
had the choice between an Apple and
the Gateway and I am definitely not an
Apple person.”

Mop and Glo? That was Daddy. I never
really did like that…Palmolive? That was Jim.
The Dove started with him…Mayonnaise? I
just bought the brand Jim told me.”
 “Well, we were using the Hellman’s because
that was the brand Jim wanted. He hated the
Miracle Whip. It seems people usually like
one and hate the other. anyway, I didn’t care
much, but now that I am alone we are back
with the Miracle Whip. No more Hellman’s.”
Vicki: 23 years old, Masters student,
recently moved out of parents’ house.
 “I
like my hometown. I keep my same
hairdresser there, and my doctor and
dentist are there. Tons of my friends from
high school are still there. I think I might
even go back there and live with my
parents for awhile when I graduate to save
money before I start my career. I would
like my own place eventually though.”

“It is time that I had a boyfriend. A serious
boyfriend, not just a boyfriend. I ‘m getting to
that age. I was going out with this guy for four
year. Four years! I still love him, and go to
see him sometimes. yeah, I am openly
looking, I go out with my girlfriends every
Thursday and Friday night cruising the bars
or whatever. But deep down, I’m hoping that
someday he may come back to me. I really
think he is the one. I am always scheming
about how to get him back.”
“Everyone knows what brand of toothpaste I
use. Just in discussing it, I mean, among
friends or whatever, people know that Vicki
uses Crest. That is just a given.”
 “Look in my shower here. Look! Seven
bottles of shampoo and six conditioners and I
use them all! Why? Because each one is
different. It depends on my mood and what
kind of a person I want to be.”
 I am in a big floral kick now. I mean, floral
sheets, comforter, bras, floral scented
shampoo and conditioner.”


This is the first box of tea bags that I have
ever bought on my own. That was a
dilemma! I bought Tetley. Those were the
kind that my mother had sent me. Next time
maybe I will buy something else, you know,
branch out on my own.”
 “I bought Dow scrubbing bubbles and that
works. The Lysol Tub and Tile was the one
mom used. I asked her if she ever used the
Dow, and she said she tried it a long time ago
and didn’t like it. But the Dow is “new and
improved” and I think it works great. Mom’s
just not up on it.