MAR 3023 Exam 1- Hopkins

What is the aim of marketing?

-To make selling unnecessary

-To know and understand customers so well the product or service fits them and sells itself

Hopkins view of marketing.

-Marketing is the answer to the question of why you buy a product

-Marketing is the foundation of every business

What is the key foundation of marketing?

The product

What are the 4 P's?

-Product

-Price

-Place

-Promotion

Great marketers...

1. Develop products that people want or need

2. Price them at a level that maximizes profits

3. Distribute them to where consumers are

"Game changer" products

-iPhone

-Tablet

-Kindle

-Spanx

-Red Box

Companies that do little, if any, advertising

-Siracha

-LuLu Lemon

-Krispy Kreme

Most decorated mass produced light beer from the U.S.?

Old Milwaukee

Simple Trade Era

-(Pre-1860's)

-Products were made by hand, grown or traded in small quantities

-Lasted up until the Industrial Revolution

Production Era

-(Pre-1920's)

-"As long as it's black"

-Inward focus

-Technical development

-Seller's market (no competitors)

-Demand exceeded supply

Sales Era

-(1920's)

-Sell what we make

-"Changing their minds"

-Aggressive promotion (vacuum cleaners)

-Short term profit maximization

The Marketing Era

-(1940's-1990's)

-Customers became central focus of the organization

-Development of marketing departments

-Make what we sell

Relationship Marketing Era

-1990s-2010

-long-term relationships and customer retention

-Repeat customers--> over 2x revenue as new customers

-Engaged customers generate 1.7x more rev

-SkyMiles cards, perk cards, member cards, American Girl, etc.

Societal Marketing Era

-1960s-present

-Green Marketing

-Society and customer's best interest

Customer Centric Marketing

Developing collaborative relationships with customers based on focusing on their individual needs and concerns

-has not always been this way. customer hasn't always been right

Relationship Marketing

-Establishing long term mutuals satisfying, buyer seller relationships

-Disney, Charmin, Chick-fil-a

Customer Relationship Management

Using information about customers to develop and sustain desirable customer relationships

Green Marketing

Creating meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment

Products include...

1. Goods

2. Services

3. Ideas

Place/Distribution

-Make products available in quantities desired

-Minimize costs: inventory, transportation and storage

-Retail (airport mall)

Promotion

-Advertising, public relations, personal selling, promotions, street teams/Guerilla Marketing (money in class window), viral marketing

Pricing

-Determines the value of the exchange

-Value product more than you value the money in your pocket

Popular Macro-Marketing Strategies

-Creating (value& relationships)

-Segmenting markets

-Identifying opportunities

How to create value

-Reduce Costs (Costs aren't always financial)

-Increase benefits (Small banks that serve coffee, offer babysitting and 24 hr check in at Sheraton)

Segmenting Customers

-Coke has many different products for their many different types of customers (diet, zero, diet cherry)

-Best Buy "angel" vs "devil" customers

Market Opportunity

-Where circumstance and timing meet to create strategic windows

-ebay first mover in C-to-C marketing

-Recession & Wal-Mart

-Starbucks was an opportunity for McDonalds

Gladwell

Wrote lots of books on marketing

Warren Buffet

-Third wealthiest person in the world

-Lives very modestly

-Pledged 99% of wealth to charity

-"It takes 20 years to build a reputation, and five minutes to ruin it."

Berkshire Hathaway

-A conglomerate holding company with a diverse portfolio of business

-Based in Omaha

-Best known for insurance

-Started out as a textile company that Buffet took over

Pepsi

-Created by Caleb Bradham to be sold in his drug store in NC

-Originally called "Brad's Drink"

-Named after the digestive enzyme "pepsin"

-Coke could've bought Pepsi 3x and hasn't

-Owns Mtn. Dew, 7Up, Frito Lay, Tropicana, etc.

Mondelez International

-trident

-Wheat Thins

-Newtons

-Ritz

Unilever

-Slim-Fast

-Breyers

-St. Ives

-Skippy

Nestle

-Chocolate

-Fancy Feast& Purina

LVMH

-Louis Vuiton Monet Hennessy

-Marc Jacobs

-Fendi

Core Compentencies

-Things a firm does well

-Competitive advantage=opportunity+competency

SWOT Analysis

Strength

Weakness

Opportunity

Threat

Strategic Business Unit

A division or unity within a larger parent company

Market Share

The percentage of a market that actually buys a specific product

Empowerment

Giving employees the power to act immediately, decisively, and without fear in order to attain satisfaction & delight

-Nordstrom, USAA

Internal Marketing

-Empowerment is key

-Chick-fil-A

Environmental Forces

-Competitive

-Political

-Technological

-Sociocultural

-Legal and Regulatory

-Economic

Types of Competitors

-Brand competitors

-Product competitors

-Generic competitors

-Total budget competitors

Monopoly

When an organization has no competitors so that it is the sole source of supply

Oligopoly

-When a few sellers control supply

-Usually due to entry barriers

-Price matching is common

Monopolistic

-When firms in competitive industries attempt to differentiate a product

-A "normal" market

Pure Competition

-Exists when there are a large number of sellers with similar products and low barriers to entry

-Farmers market & ebay

The Business Cycle

-Prosperity (2006)

-Recession (2007-2010)

-Recovery (2011-2013)

Technological Forces

-8 track to iPod

-Competitors must keep up

Political Forces

-Top Corporate donors (UPS, AT&T, Pfizer)

Puffery

-making product seem better than it is

Legal & Regulatory Forces

-Can change how often someone buys

-Pizza Puffery Debate & revised flying laws impacting lighter sales

Federal Trade Commission

-Most heavily influences marketing activities

-Large portion of its resources spent on curbing false advertising and misleading pricing

Sociocultural Forces

-Demographic and diversity characterics

-Consumerism

-Cultural values

U.S. Demographic Profile

-Advertise to more popular demographics (Hispanics)

Cultural Values

-US values (directness, individuality, informality, equality, work oriented, environmental)

Consumerism

-The efforts of independent individuals, groups, and organizations to protect the rights of consumers

-Marketing critics think consumers are being exploited in the marketplace

Subliminal Perception

-1957

-James Vicary

-Quickly flashing messages on a movie screen influences people to buy food/drinks

-Lied about results

Ralph Nader

-Well known consumer advocate

-"The father of consumerism"

-Fought for consumer safety, environmentalism and balance of wealth

-Ran for president 1996&2000 as the green party candidate. Still puts his name in the race

Social Responsibility

Is an organizations obligation to maximize it's positive impact and minimize its negative impact on society

-Can generate positive publicity

-Promotes goodwill

-Attracts potential customers and employees

-Generates indirect long term benefits such as greater employee commitment and improved business performance

Marketing citizenship

-Accomplished when a firm fulfills he economic, legal, ethical and philanthropic social responsibilities expected by stakeholders

Pryamid of Corporate Social Responsibility

TOP- philanthropic

-ethical

-legal

BASE- economic

Economic Responsibility

-All companies have an economic responsibility to be profitable so they can provide a return on investment to their owners and investors, create jobs for the community and contribute goods and services to the economy

Legal Responsibility

Marketers are expected to follow all laws and regulations designed to keep U.S. companies' actions within the range of acceptable conduct and fair competition

Ethical Responsibility

Principles and standards defining acceptable conduct in marketing as determined by the public, government regulators, private-interest groups, consumers, industry and the organization

Philanthropic Responsibilities

-Not required of a company but they promote human welfare or goodwill

Cause-related marketing

-The practice of linking products to a particular social cause on an ongoing or SHORT-TERM basis

Strategic philanthropy

-The synergistic use of organizational core competencies and resources to address key stakeholders' interests and achieve both organizational and social benefits

-Long term

Elon Musk

-Founder of Tesla Motors, Space X, and Solar City

-Open-sources his company's intellectual property

-Next project: 700 mph Solar-Powered Hyper Loop Train