Transcript Marketing January 8th

Marketing: Managing
Profitable Customer
Relationships
c
Amazon
Strong sales, no
profits
Customer-driven
to its core
Each customer’s
experience is
unique
Provides great
selection, good
value, discovery
as well as
convenience
A true online
community
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What is Marketing?
Marketing is managing profitable
customer relationships
 Attracting new customers
 Retaining and growing current
customers
“Marketing” is NOT synonymous
with “sales” or “advertising”
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What is Marketing?
Kotler’s social definition:
“Marketing is a social and
managerial process by which
individuals and groups obtain
what they need and want through
creating and exchanging products
and value with others.”
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What Can Be
Marketed?
Goods
Services
Places
Ideas
Events
Persons
Properties
Organizations
Information
Experiences
What is being
marketed in this ad?
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Figure 1-1:
Core Marketing Concepts
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Discussion Question
Resellers are a primary
market for Nike’s
products.
Describe the exchange
process between Nike
and resellers.
Think beyond the obvious.
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Figure 1-2:
Elements of a
Modern Marketing System
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Marketing Management
Marketing management is “the
art and science of choosing
target markets and building
profitable relationships with
them.”
 Creating, delivering and
communicating superior
customer value is key.
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Marketing Management
Customer Management:
 Marketers select customers that
can be served well and profitably.
Demand Management:
 Marketers must deal with different
demand states, ranging from no
demand to too much demand.
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Marketing Management
Demarketing:
Commuter
Connections
promotes the use
of mass transit
and carpooling as
an alternative to
driving alone.
Commuter
Connections
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Marketing Management
Production
Concept
Management
Orientations
Selling
Concept
Product
Concept
Marketing
Concept
Societal
Marketing
Concept
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Figure 1-3:
The Selling and Marketing
Concepts Contrasted
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Figure 1-4:
Considerations Underlying the
Societal Marketing Concept
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CRM
Customer relationship
management (also called CRM)
is defined as:
“the overall process of building
and maintaining profitable
customer relationships by
delivering superior customer
value and satisfaction.”
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CRM
It costs 5 to 10 times MORE to
attract a new customer than it
does to keep a current
customer satisfied.
Marketers must be
concerned with the
lifetime value of the
customer.
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CRM
Key Concepts
Attracting,
retaining and
growing
customers
Building
relationships and
customer equity
Customer value and
satisfaction
 Perceptions are key
 Created by meeting/
exceeding expectations
Loyalty and retention
 Many benefits of loyalty
 Increases as satisfaction
levels increase
 Delighting consumers
should be the goal
Growing customer share
 Cross-selling
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CRM
Key Concepts
Attracting,
retaining and
growing
customers
Building
relationships and
customer equity
Customer equity
 Total combined
customer lifetime
values of all
customers
 Measures firm’s
performance, but in
a manner that looks
to the future
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CRM
Key Concepts
Attracting,
retaining and
growing
customers
Building
relationships and
customer equity
Customer relationship
levels and tools
 Target market typically
dictates type of
relationship
Basic relationships
 Full relationships

 Customer loyalty and
retention programs
Adding financial
benefits
 Adding social benefits
 Adding structural ties

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Marketing Challenges
Technological advances, rapid
globalization, and continuing
social and economic shifts are
causing marketplace changes.
Major marketing developments
can be grouped under the theme
of Connecting.
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Figure 1-6:
Today’s Marketing Connections
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Connecting with
Values . . .
The Body Shop
Visit the “Our Values” and “About Us” sections of
The Body Shop’s web site.
How might the values espoused by the company
influence the manner in which the Body Shop . . .
The Body Shop
•
•
•
•
Chooses their strategic partners?
Advertises fragrances to consumers?
Develops new products?
How might these decisions in turn
impact “the bottom line”?
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Reconnecting with Teens
Modernizing the Girl Scouts
The Problem:
Campfires and cookies weren’t
cutting it with today’s teens.
Scouting was perceived as
NOT cool and primarily for
younger kids.
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Modernizing the Girl Scouts
The Solution
Goal: Adapt the
curriculum to the needs
of teens
Changed the “Product”:
Added activities related
to technology and
adventure sports:
rock-climbing, surfing,
martial arts
Goal: Promote a
cooler image for the
Girl Scouts
Campaign Theme:
“Join Troop 2002”
Target Market:
Diverse -- Girls of all
ages and all races
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Modernizing the Girl Scouts
The Solution
TV Ad Execution:
Japanimation style
visuals and throbbing
electronica music were
used to make scouting
seem “hip”.
Taglines: “Campfire
songs, the remix”; “Be
part of a girl band”.
TV Vehicles: MTV,
VH1, Animal Planet,
Nickelodeon (in TN,
KY, and AL regions).
Other Media Used:
Stylized posters sent
to schools, churches,
community centers;
interactive media.
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Company and Marketing
Strategy
c
Walt Disney
Known for films,
animation, theme
parks and customer
orientation
Parks offer a variety
of attractions as well
as cleanliness, order,
and warmth
Satisfying the
customer is
everyone’s job
Disney has grown
via diversification
Sales and net
income have fallen
Discussion: How Can Disney Recover?
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Disney companies
ABC
16 cable networks
 ESPN, Disney Channel, Toon Disney,
SoapNET, A&E, the History Channel,
Lifetime Television, E! Entertainment
4 TV production companies
8 movie production companies
 Walt Disney, Touchstone Pictures,
Hollywood Pictures, Miramax Films
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More Disney companies
5 magazine publishing groups
5 music labels
19 Internet groups
Disney Interactive
The Disney Store
Disney Cruise Lines
Two sports Franchises
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Strategic Planning
Strategic planning is defined as:
 “The process of developing and
maintaining a strategic fit between
the organization’s goals and
capabilities and its
changing marketing
opportunities.”
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BusinessNow
Nervewire Video Clip
Click the picture above to play video
Consultants may
offer valuable
services and
expertise during
the strategic
planning process.
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Figure 2-1:
Steps in the
Strategic Planning Process
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Strategic Planning
Mission statements should . . .
 serve as a guide for what the
organization wants to accomplish.
 be “market-oriented” rather than
“product-oriented”.
 be neither too narrow, nor too broad.
 fit with the market environment.
 be motivating.
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Strategic Planning
Mission statements guide the
development of objectives and
goals.
 Objectives are developed at each
level in the organization hierarchy.
 Strategies are developed to
accomplish these objectives.
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Discussion Question
Google.com is one of
the leading Internet
search engines.
Construct a marketoriented mission
statement that fits
this business.
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Strategic Planning
Business portfolio:
“the collection of businesses
and products that make
up the company.”
 Designing the business
portfolio is a key step in
the strategic planning
process.
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Strategic Planning
Portfolio Design
Step 1:
Analyze the
current business
portfolio
Step 2:
Shape the future
business
portfolio
Identify strategic
business units (SBUs)
Assess each SBU:
 The BCG growthshare matrix
classifies SBUs
into one of four
categories using:
 Market
growth rate
 The SBU’s relative
market share within
the market.
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Figure 2-2:
Growth-Share Matrix
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Strategic Planning
Portfolio Design
Step 1:
Analyze the
current business
portfolio
Step 2:
Shape the future
business
portfolio
Determine the future
role of each SBU and
choose the
appropriate resource
allocation strategy:




Build
Hold
Harvest
Divest
SBUs change
positions over time
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Strategic Planning
Matrix approaches to formal
planning share many problems:
 Difficult, time-consuming,
and costly to implement.
 Focus only on current
businesses.
 Too strongly emphasize
market share growth or
growth via diversification.
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Strategic Planning
Designing the business
portfolio also involves:
 Developing strategies for growth
by identifying, evaluating, and
selecting promising new market
opportunities.
 Developing strategies for
downsizing the business portfolio.
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Figure 2-3:
Product / Market
Expansion Grid
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Marketing plays a key role in
the strategic planning process.
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Planning Marketing
Marketers must
practice Customer
Relationship
Management
(CRM) and Partner
Relationship
Management.
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Planning Marketing
Partner Relationship Management
 Partnering with other departments
in the company
 Partnering with other firms in the
marketing system
Partner Relationship Management
helps to build a superior value
delivery-network.
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Figure 2-4:
The Marketing Process
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The Marketing Process
Key Elements
Analyzing marketing
opportunities
Selecting target
markets
Developing the
marketing mix
Managing the
marketing effort
The strategic planning
and business portfolio
analysis processes
help to identify and
evaluate marketing
opportunities.
The purpose of the
marketing process is
to help the firm plan
how to capitalize on
these opportunities.
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The Marketing Process
Key Elements
Analyzing marketing
opportunities
Selecting target
markets
Developing the
marketing mix
Managing the
marketing effort
The segmentation
process divides the
total market into
market segments.
Target marketing
chooses which
segment(s) are
pursued.
Market positioning
for the product is
then determined.
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Positioning
Market positioning
is not restricted to
physical goods.
Identify the “competing
products” of relevance
to the Marble Collegiate
Church.
What clear, distinctive,
and desirable place in
the consumer’s mind
does the ad at left
attempt to create?
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Figure 2-5:
The Marketing Mix
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The Marketing Process
Key Elements
Analyzing marketing
opportunities
Selecting target
markets
Developing the
marketing mix
Managing the
marketing effort
Marketing analysis
 Provides information
helpful in planning,
implementation, and
control
Marketing planning
 Strategies and tactics
Marketing
implementation
 Turns plans into action
Marketing control
 Operating control
 Strategic control
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Figure 2-6:
Managing the
Marketing Effort
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Marketing in the
Digital Age
CharlescSchwab
Invented discount
brokerage category
First U.S. major player to
go online
Initially offered twotiered trading system
to protect profits / stop
cannibalization
Later became first true
click-and-mortar fullservice brokerage
Now world’s largest
e-commerce site
85% online trades; 21%
of trade volume; Strong
stock return
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Music Down loaders
Napster today
KaZaA
eDonkey
Bit Torrent
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Down Load for a fee
MusicNet site
 AOL/TimeWarner, Berlesman, Emi, and
Real Networks
Pressplay site
 Universal, Sony
MusicNow site
Rhapsody (listen.com) site
iTunes site
 Apple
Monthly fees and a per song charge
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Figure 3-1:
Forces Shaping the
Internet Age
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Major Forces Shaping the
Digital Age
Customization and Customerization
 Information businesses are at
the heart of the New Economy

Has enhanced marketer’s
ability to customize
and “customerize”
product offerings
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Marketing Strategy in the
Digital Age
E-business:
 uses
electronic
means and
platforms to
conduct
business.
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Marketing Strategy in the
Digital Age
Buyer Benefits of E-Commerce:
 Convenience
 Easy and private
 Greater product access/selection
 Access to comparative information
 Interactive and immediate
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Marketing Strategy in the
Digital Age
Seller Benefits of E-Commerce:
 Relationship building
 Reduced costs
 Increased speed and
efficiency
 Flexibility
 Global access
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Figure 3-3:
Types of E-Marketers
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Conducting E-Commerce
Dot.coms failed for many reasons
 Lack of planning and research
 Overemphasis
on acquisition
 Poor web site
design and
distribution
problems
 Low margins
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Conducting E-Commerce
Click-and-Mortar Companies
 Channel conflict was initially a concern
 E-commerce often
created new buyers,
rather than
cannibalizing
existing ones
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Conducting E-Commerce
Click-and-Mortar Companies
 Many firms now enjoy greater
success than their click-only
competition

Trusted brand names, greater
financial resources, larger
customer base, industry
knowledge and strong supplier
relationships were key advantages
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Figure 3-4:
Setting Up For
E-Marketing
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Conducting E-Commerce
E-Marketing
Creating web sites
Placing online ads
and promotions
Creating or using
web communities
Using E-mail and
webcasting
Corporate web sites
 Build goodwill and
relationships;
generate excitement
Marketing web sites
 Engage consumers
and attempt to
influence purchase
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Conducting E-Commerce
E-Marketing
Creating web sites
Placing online ads
and promotions
Creating or using
web communities
Using E-mail and
webcasting
Online forms of ads
and promotions





Banner ads/tickers
Skyscrapers
Interstitials
Browser ads
Content
sponsorships
 Microsites
 Viral marketing
Future of online ads
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BusinessNow
Findwhat.com Video Clip
Findwhat.com is a
search engine
company. Paid
search is a key
revenue tool.
Click the picture above to play video
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BMWFilms.Com
Viral Marketing . . .
Creating a Marketing Event
The Problem:
BMW’s market research revealed
that the brand was not appealing to
younger luxury car buyers. Also,
competition was increasing.
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BMWfilms.com
The Solution
Objectives:
 Make BMW cool and
relevant to 25-44 yearold buyers new to the
luxury-car market
without alienating
existing customers
 Capture qualified
buyers and ultimately
increase sales
Target Market:
 Doesn’t watch a lot of
TV; tends to resent
marketing
 Thinks of technology
as their friend
 85% of this group use
the Web to research
cars before visiting
dealerships
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BMWfilms.com
The Solution
BMWfilms.com Instead
of using traditional TV
advertising, BMW
launched five short
Internet films in April
2001, featuring edgy
stars, action-oriented
plots, and famous
directors.
Web Promotion: Three
months prior to the
premiere, Internetmovie rumor sites,
chat rooms, and fan
sites were seeded
with information.
These efforts formed
the core of viral
marketing campaign.
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BMWfilms.com
The Solution
Off-line PR
Strategy:
 PR firm pitched the
films as reviewable
movies to Time,
Entertainment
Weekly, NY Times,
and generated
reviews in the film
section.
Off-line Ad
Strategy:
 BMW ran 15-second
teasers resembling
movie trailers on
A&E, Bravo, &
Independent Film
Channel with tag,
“Now playing at
BMWfilms.com”
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BMWfilms.com
The Results
As of March 2002,
over 11 million
people had logged
onto the BMWfilms
web site.
Traditional buyers
(median age 32, HH
income $88,000)
were majority of
those requesting
more information.
85% perception increase
among film viewers vs.
nonviewers
Planned dealer visits for
target market film
viewers rose 550%
12.5% sales increase in
2001 despite no major
product launches; 3series increase of 37% in
4 months that films ran.
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Conducting E-Commerce
E-Marketing
Creating web sites
Placing online ads
and promotions
Creating or using
web communities
Using E-mail and
webcasting
Web communities
allow members with
special interests to
exchange views
 Social communities
 Work-related
communities
Marketers find welldefined demographics
and shared interests
useful when marketing
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Conducting E-Commerce
E-Marketing
Creating web sites
Placing online ads
and promotions
Creating or using
web communities
Using E-mail and
webcasting
E-mail marketing
 Key tool for B2B and
B2C marketing
 Clutter is a problem
 Enriched forms of
e-mail attempt to
break through clutter
Webcasting
 Auto downloading of
customized content
to recipients’ PCs
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Is this the Future
of E-mail?
E-mail is the golden child of
web marketing due to its:
•
•
•
•
low cost per contact
quick response time
response tracking ability
response rates
Enriched e-mail executions
(see ad at left) are on the rise.
What are the drawbacks of
using the enriched e-mail format
for your marketing messages?
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Promise and Challenges of
E-Commerce
The Promise
 The future
of B2B
E-commerce
is bright
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Promise and Challenges of
E-Commerce
The Promise
 A few click-only companies may
succeed
 Most companies will integrate
online marketing into the overall
marketing mix, rather than treat it
as a separate component.
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Promise and Challenges of
E-Commerce
Challenges: The Web’s Darker Side
 Few B2C companies
are profitable:
Limited exposure,
and skewed
demographics
 Navigating the
web is often
problematic

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Promise and Challenges of
E-Commerce
Challenges: The Web’s Darker Side




Online privacy and security concerns
Internet fraud
The digital divide
Access by
vulnerable or
unauthorized
groups
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My Space.com:
A web site designed for people to…
* Chat online
* Post profiles
* Meet people
* Business networking
* Matchmaking
* Find lost friends
* Connect with family
OR…
“One stop shopping for pedophiles”
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My Space Or My Stalker?
Center for Missing and exploited children reported more
than 2,600 incidents last year of adults using the internet to
entice children.
Robert Wise used myspace to look for sex, and found
a 14 year old female. He is now charged with sexual
assault.
Majalie Cajuste is grieving the murder of her
daughter Judy, who reportedly told friends she met a
man in his 20’s through myspace.com.
In California 15 year old Kayla Reed was active on
myspace until the day she disappeared.
26 year old Jeffrey Neil Perters was arrested last
month for sexually assaulting a myspace user.
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Found on MySpace.Com
“Drink a 40, smoke a bowl, sex is good, life is
great we are the class of 2008”
-Perfect target for a predator!
A survey is conducted that asks for responses on
issues like drinking, drug use and skinny dipping.
Kids younger then 14 lying about their age.
Explicit photos
Detailed information: Address, Phone numbers,
school schedules, drug and alcohol use, virginity
etc.
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Joanna
“Wanting something I can’t
have”
Female
25 years old
Union county, New Jersey
United States
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