MARK 3000 Marketing Ethics & Value-Driven Strategies

What is Marketing?

· Marketing is the activity, set of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have VALUE for customers, clients, partners, and society at large.

· Everything you do each day, all of your transactions, what you buy, where you go, what you read = are all marketing engagements

How do you create Value?

Marketing teams use social media, tv, ads, magazines and such

*Marketing does not equal Advertising

*Communicating of a message is Marketing

Another definition of Marketing:

Marketing Management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value"

Advertising:

· Not being defining the strategy behind your product or service

· Not focused on identifying the customer need/value proposition

· Advertising is the exercise of promoting a company and its product or service through paid, owned, and earned media channels

· Advertising is less about strategy

· Advertising is a step within the overall marketing process

5 aspects of Marketing

· 1. Marketing affects various stakeholders

· 2. Marketing is about satising customer needs and wants

· 2. Marketing entails an exchange

· 4. Marketing creates value through product, price, place, and promotion (4 Ps)

· 5. Marketing can be performed by BOTH individuals and organization

Marketing Entails an Exchange:

Communication and delivery -> Money and information

The Marketing Mix (The 4 Ps)

1. Product = Creating Value

2. Price = Capturing Value

3. Place = Delivering Value

4. Promotion = Communicating Value

The Marketing Mix:

· The controllable set of decisions or activities that the firm uses to respond to the wants or its target markets

Product

Creating Value

· The fundamental purpose of marketing is to create value by developing a variety of offerings to satisfy Goods, Services, and Ideas

Price

Capturing Value

· Price is everything a buyer gives up in exchange for the product or service

· Markets must determine the price of the product carefully on the basis of the buyers belief about its value

Place

Delivering the Value Proposition

· Place represents all the marketing processes necessary to get the product to the right customer when that customer wants it

· Place more commonly deals specifically with retailing and marketing channel management, also known as supply chain management

Promotion

Communicating the Value Proposition

· Even the best products and services will go unsold if marketers cannot communicate their value to customers

· Promotion is communication by a marketer that informs, persuades, and reminds potential buyers about a product to influence their buying decisions

· Enhances a products value

Marketing Impacts Various Stakeholders:

· Marketers affect many stakeholders. Customers represent one stakeholder group, but others include all those in the supply chain, employees, and society at large.

· Supply chain partners include manufacturers, agents, wholesalers, retailers, and so on.

· Companies market to employees with employment marketing, also known as internal marketing, to recruit and retain the best employees

Types of Stakeholders:

· Customers

· Supply chain partners

· Employees

· Industry

· Society

Marketing is about satisfying ____ and _____

Marketing is about satisfying NEEDS and WANTS

Marketing is about delivering ____ to the consumer.

Marketing is about delivering VALUE to the consumer.

Who can perform marketing?

Individuals and Organizations

Marketing Eras

Represent the changes over time from an amphasis on production to one based on value-based marketing

The production-oriented era

· took place around the turn of the 20th century, when most firms believed a good product would sell itself.

The sales-oriented era

happened when production and distribution techniques became more sophisticated and supply outpaced demand. Firms found an answer to overproduction by focusing on sales.

In the market-oriented era

the focus was on what customers wanted. It was during this period that firms discovered marketing.

Now, we are in the value-based era

· which maintains the market orientation but also includes a focus on giving greater value than the competition.

• Value reflects the relationship of benefits to costs

• Value-based marketing means implementing a marketing strategy according to what customers value.

Value-Based Marketing Era:

In a marketing context, customers see value as a fair return in goods and/or services for their hard-earned money and scarce time. A creative way to provide value to customers is to engage in value cocreation

Customer Relationship Management (CRM)

· a business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm's most valued customers.

How does Marketing Create Value and How Do Firms Become More Value Driven?

1. Build Relationships With Customers

2. Gather and Analyze Customer Data

3. Balance Benefits and Costs

4. Connect Using Technologies (ie. Social)

Value Stems From Four Main Activities:

1. Adding Value

2. Marketing Analytics

3. Social and Mobile Marketing

4. Ethical and Societal Dilemma

Value is

· is central to marketing

Value-oriented marketers...

· Value-oriented marketers constantly measure the benefits that customers perceive against the cost of their offerings.

Marketing Analytics:

· Companies collect massive amounts of data about how, when, why, where, and what people buy

How do firms become Value Driven?

· Marketing analytics (Netflix, Amazon, etc.)

· Analyze consumer information to balance product/service benefit with costs

· Building relationships with customers

o Lifetime profitability (e.g., Apple)

• CRM: Customer Relationship Management

o Set of strategies to build loyalty among a firm's most valuable customers

· Connecting with customers using Social and Mobile Media

Resolving Ethical and Societal Dilemmas:

1. Conscious Marketing

2. Socially Responsible Firms

3. Making socially responsible activities an integral component of corporate strategies

At a more macro level...

firms are making ethically based decisions that benefit society, while also considering all of their stakeholders.

What is a Marketing Strategy?

1. A firms target market

2. A related marketing mix (4 Ps)

3. The bases on which the firm plans to build a sustainable competitive advantage

· Try to be specific on the market, make your product hard to beat

Sustainable Competitive Advantage

· A sustainable competitive advantage is an advantage over the competition that is NOT easily copied and can be maintained over a long period of time. A competitive advantage acts like a wall that the firm has built around its position in a market

**Macro Strategies for Developing Customer Value

· Four strategies to create and deliver value and a sustainable competitive advantage:

1. Customer Excellence

2. Operational Excellence

3. Product Excellence

4. Locational Experience

· At the end of the day, you need to find a place to carve out in that particular category

1. Customer Excellence:

· Retaining loyal customers

· Providing outstanding customer service

· EX: Disney - it is known for the highest level of customer service

2. Operational Excellence

· In recent years, firms such as Walmart have achieved competitive advantage by utilizing operational excellence

· That is, by controlling price and how products are delivered to their stores, they have been able to offer customers low prices on a wide array of goods.

· This is made possible through the use of efficient operations and excellent relationships with suppliers

o Efficient Operations

o Strong Relationships with Suppliers

o Excellent Supply Chain Management

3. Product Excellence:

· Provide products with high perceived value and effective branding and positioning

· PRICE IS NOT a consideration

· EX: GUCCI, LV, Tiffany & Co

4. Location Excellence:

· Especially important for retilers and service providers

· Many say, "The three most important things in retailing are location, location, location."

· Competitive advantage based on location is not easily duplicated. Starbucks makes it difficult for competitors to enter a market and find good locations

Multiple Sources of Advantage:

· A single strategy (low prices or excellent service) is usually not enough to build a sustainable competitive advantage

· EX: Southwest Airlines

o Provides good service at a good value (on-time flights that are reasonably priced).

The Marketing Plan:

· A marketing plan should always be written down, yet many companies don't do it.

· There are multiple formats to use, varying from company to company

STEP ONE: Define the Business Mission:

· The mission statement, a broad description of a firm's objectives and the scope of activities it plans to undertake, attempts to answer two main questions:

1. What type of business do we do?

2. What do we need to do to accomplish our goals and objectives?

STEP TWO: Conduct a Situation Analysis (SWOT)

· A firm would perform a situation analysis using a SWOT Analysis that assess both the internal environment with regard to its Strengths and Weaknesses and the external environment in terms of its Opportunities and Threats

· SWOT Analysis:

o Internal strengths

o Internal weaknesses

o Externa opportunities

o External threats

STEP THREE: Identifying and Evaluating Opportunities Segmentation, Targeting, and Positioning (STP)

· The next step is to identify and evaluate opportunities for increasing sales and profits using STP (segmentation, targeting, and positioning)

· With STP, the firm first divides the marketplace into subgroups or segments, then determines which of those segments it should pursue or target, and finally decides how it should position its products and services to best meet the needs of those chosen targets

Market Positioning

· Choose which segments to pursue, then how to position within those segments.

· Define the marketing mix variables so target customers have a clear, distinctive, and desirable understanding of the product compared to competition.

STEP FOUR: Implement Marketing Mix (Four P's) and Allocate Resources

· In the fourth step of the planning process, marketers implement the actual marketing mix—product, price, promotion, and place—for each product and service on the basis of what they believe their target markets will value.

· At the same time, marketers make important decisions about how they will allocate their scarce resources to their various products and services

THE FOUR Ps:

1. Products and Value Creation

2. Price and Value Capture

3. Place and Value Delivery

4. Promotion and Value Communication

Product and Value Creation:

· Successful products and services are those that customers perceive as valuable enough to purchase.

· Firms attempt to develop products and services that customers perceive as valuable enough to buy.

Price and Value Capture:

· Price is what the customer is willing to pay for a product they perceive as good value - $75, $400, or $36,500!

Place and Value Delivery:

· The product must be readily accessible when and where the customer wants it.

· Getting the product to consumers at the exact moment they desire it is difficult.

Promotion and Value Communication:

· Integrated marketing communications (IMC) represents the fourth P, promotion. It encompasses a variety of communication disciplines—advertising, personal selling, sales promotion, public relations, direct marketing, and online marketing including social media—in combination to provide clarity, consistency, and maximum communicative impact.

STEP FIVE: Evaluating Performance Using Marketing Metrics:

· The final step in the planning process includes evaluating the results of the strategy and implementation program using marketing metrics.

· A metric is a measuring system that quantifies a trend, dynamic, or characteristic.

· Metrics are used to explain why things happened and also project the future

Marketing Plan Summary:

· The Planning Phase

Step 1: Business mission and objectives

Step 2: Situation analysis

· The Implementation Phase

Step 3: Identify opportunities Segmentation, targeting and positioning

Step 4: Implement marketing mix Product, price, place and promotion

· The Control Phase

Step 5: Evaluate performance using marketing metrics

· All of these result in the marketing strategy.

Portfolio Analysis

The process of looking at a company's products and services and categorizing thembased on how well they're performing and their competitiveness.There are multiple types / methods to conduct a portfolio analysis:• Technological portfolio• Hofer's Product - Market Evolution Matrix• GE Multifactor Portfolio Analysis• BCG Growth - Share MatrixEach of the above measure slightly different things, but the BCG Matrix is the best-known and used most often.

Portfolio Analysis Matrix:

Boston Consulting Group(BCG), requires that firmsclassify all their products orservices into a two-by-twomatrix.• Stars• Cash Cows• Question Marks• Dogs

Stars

(upper left quadrant) occur in high-growth markets and are highmarket share products. That is, stars often require a heavy resourceinvestment in such things as promotions and new production facilities tofuel their rapid growth.

Cash cows

(lower left quadrant) are in low-growth markets but are highmarket share products. Because these products have already receivedheavy investments to develop their high market share, they have excessresources that can be spun off to those products that need it.

Question marks

(upper right quadrant) appear in high-growth markets buthave relatively low market shares; thus, they are often the mostmanagerially intensive products in that they require significant resources tomaintain and potentially increase their market share.

Dogs

(lower right quadrant) are in low-growth markets and have relativelylow market shares. Although they may generate enough resources tosustain themselves, dogs are not destined for "stardom" and should bephased out unless they are needed to complement or boost the sales ofanother product or for competitive purposes.

Market Penetration

Sales encourage current users to consumemore of the current product mix, but they alsobring new customers to the business.Many strategies can be used to get currentconsumers to consume more of your product.

Diversification

A diversification strategy introduces a new product orservice to a market segment that currently is not served.This is the riskiest of the four strategies because the newmarket the consumer may reject your product/service andit's very costly to fund new ventures.

Growth Strategies - Summary

Market penetration (current market and current productsand services)

2. Product development (current market and new productsand services)

3. Market development (new market and current productsand services)

4. Diversification (new market and new products andservices).

Conscious Marketing

Conscious marketing entails a sense of purpose for the firm that is higher than simply making a profit by selling products and services.

Principles of Conscious Marketing

Principles:

1. Recognition of marketing's greater purpose.

2. Consideration of stakeholders and their interdependence.

3. The presence of conscious leadership, creating a corporate culture.

4. The understanding that decisions are ethically based.

Marketing's Greater Purpose

Corporate social responsibility describes the voluntary actions taken by a company toaddress the ethical, social, and environmental impacts of its business operations and theconcerns of its stakeholders.

Corporate Social Responsibility (CSR) as an Element of Conscious Marketing:

• Ethical Performance.

• Social Performance.

• Environmental Performance.

CSR Initiatives

Virtually all large and well-known companies engage in some form of CSR.

• Reducing carbon footprints

• Improving labor policies

• Participating in fairtrade

• Diversity, equity and inclusion

• Charitable global giving

What is Rainbow Washing?

Using rainbow colors in company logos, websites and social presences for the month of June (Pride Month), then returning to "business as usual" for the rest of the year without clearly investing in the LGBTQ+ community year-round

Key Conscious Marketing Stakeholders

The four key corporate social responsibility stakeholders are:

1. Employees (including their families)

2. Customers (current and potential)

3. Society (the community and environment)

4. Marketplace (partners and competitors).

Employees Basic responsibility:

• Ensure a safe working environment free of threats to their physical safety, health, or well-being.

• More firms today realize that happy employee families make happy and productive employees, so they are offering new benefits and options, such as on-site daycare or flextime

Customers (current and future)

Act quickly to shifts and trends to meet customer needs.

Conscious marketing focus:

• Increases awareness.

• Leads to better brand equity.

• Increases sales.

Marketplace

One firm in the industry can lead the way toward conscious marketing.Partners and competitors often have no choice but to follow.

Society

Broader society, a key stakeholder, demands that companies act responsibly, and companies cannot ignore this.

- A firm that fails to act responsibly causes damage to all the preceding stakeholders as well as to itself

Integrating Conscious Marketing Throughout the Firm: Leadership and Culture

· Planning Phase

· Implementation Phase

· Control Phase

Planning Phase

The mission or vision statements set the overall tone for Conscious Marketing. For General Electric, the complexity of its organization and the wealth of ethical issues it faces necessitated an entire booklet, "The Spirit and the Letter."

Conscious Leadership

In the implementation phase of the marketing strategy, when firms are identifying potential markets and ways to deliver the four Ps to them, firms must consider several pertinent issues.

Control Phase

During the control phase of the strategic marketing planning process, managers must be evaluated on their actions from a conscious marketing perspective.

- Any plan requires constant evaluation and revision, and this truism applies particularly tothe evaluation of ethical issues.

Marketing Ethics as a Conscious Marketing Principle

Marketing ethics is an integral component of a conscious marketing initiative.

- When a firm embraces conscious marketing, it implements programs that are socially responsible, and its employees act in an ethically responsible manner.

- The nature of ethical and unethical marketing decisions.

- It is often difficult to balance the needs and preferences of various stakeholders.

Ethics versus Social Responsibility

Although both fall under the conscious marketing umbrella, it is important to distinguish between ethical marketing practices and corporate social responsibility programs.

Ethical Decision-Making Framework: Stages in Framework

Stage 1: Identify Issues Stage 2: Gather Information and Identify Stakeholders

Stage 3: Brainstorm Alternatives

Stage 4: Choose a Course of Action

Step 1: Identify Issues

The first step is to identify the issue. In a marketing research firm, ethical issues might include:

•Data collection methods

• Hiding the true purpose of a study from respondents

•Using results to mislead or even harm the public

Step 2: Gather Information and Identify Stakeholders

In this step, the firm focuses on gathering facts that are important to the ethical issue, including all relevant legal information.

- To get a complete picture, the firm must identify all the individuals and groups that have a stake in how the issue is resolved

Step 3: Brainstorm and Evaluate Alternatives

All relevant parties should come together to brainstorm any alternative courses of action.

• The alternative solutions depend on the type of ethical issue and how the stakeholders are affected.

The Immediate Environment

· The consumer is the 'bulls-eye' of the environment.

· They are literally central to everything your brand should be focused on. EVERYTHING!

· The immediate environment includes the firm and its capabilities, competitors, corporate partners and the physical environment.

Company Capabilities

· In the immediate environment, the first factor that affects the consumer is the firm itself.

· Successful marketing firms focus on satisfying customer needs that match their core competencies

Competitors

· Competition also significantly affects consumers in the immediate environment.

· It is therefore critical that marketers understand their firm's competitors, including their strengths, weaknesses, and likely reactions to the marketing activities.

Corporate Partners

· Parties that work with the focal firm.

· Few firms operate in isolation.

Physical Environment

· Sustainable development: Includes land, water, air, and living organisms.

· Products and services are influenced by how they are used in the physical environment, and in turn they can also influence the physical environment.

· Examples:

Energy Trends.

• Greener Practices and Green Marketing.

• Greenwashing.

Understanding the Macro Marketing Environment

· The firm is influenced by the macroenvironment, which includes various impacts of culture; demographics, social, technology, economic, and political/legal factors.

· Whatever influences the firm, then influences consumers indirectly.

Culture

· Shared meanings, beliefs, morals, values, and customs of a group of people transmitted by words, literature, and institutions.

· Country Culture

• Subtler aspects can be difficult to navigate.

• Sometimes best answer is to establish universal appeal within specific identities of country culture.

· Regional Culture

• For national and global chains, particularly important to cater to regional preferences.

• McDonald's - slightly different variations of staple menu.

Five major groups are described in the text:

1. Gen α (also known as Generation Alpha)

2. Gen Z (also known as Digital Natives)

3. Gen Y (also called Millennials)

4. Gen X

5. Baby Boomers.

Income

· Purchasing power is tied to income.

· Marketing opportunities exist across the broad range of income distribution.

Income distribution in the United States has grown more polarized

Education

· Education is related to income, which determines spending power.

Ethnicity and Gender

Approximately 80% of all population growth in the next 20 years is expected to come fromminority communities

- Male/female roles have been shifting.

· Marketing has changed to reflect these shifts.

Social Trends

· Various social trends appear to be shaping consumer values in the United States and around the world, including a greater emphasis on sustainability, health and wellness considerations, and more efficient utilization and distribution of food

Economic Situation

Affects the way consumers buy products and services and spend money.

Monitor the economic situation in home country and abroad.

Major factors to monitor:•

Inflation.•

Foreign currency fluctuations.•

Interest rates.

Political/Legal Environment

· Comprises political parties, government organizations, and legislation and laws.

· Firms must understand and comply with legislation regarding:

• Fair competition.

• Consumer protection.

• Industry-specific regulation.

Responding to the Environment

· Implement strategies that respond to multiple environmental forces.

· Marketers that succeed are the ones that respond quickly, accurately, and sensitively to consumers.

Consumer Behavior:

· Marketers want to understand WHY and HOW consumers behave the way they do

· I want them to want me!!

· We want to know why they choose, use and dispose of brands they select

· Consumer decisions are based on emotional and analytical factors

o Sociology

o Psychology

o Chemistry

o Neuroscience