What is Marketing Creating Customer Value Building Customer
What is Marketing? Creating Customer Value & Building Customer Relationships 5 Core Marketing Dynamics External Marketing System Internal Business Planning Marketing Plan Process (For a specific business)
Simple Corporate Organizational Structure President /CEO P&G Vice President Finance Vice President Marketing (CFO) (CMO) Director Oral Director Paper Brand manager Charmin Brand Manager Bounty Brand Assistant Vice President Manufacturing Director Household Brand Manager Puffs Vice President Human Resources
Internal Business Planning Proctor & Gamble Defining the company mission Setting Company Objectives Designing the business portfolio What products & services are we going to sell? Individual Business Plan (Crest) Individual Business Plan
Company Mission A statement of the organization’s purpose – what it plans to accomplish in the larger environment. Specific Realistic Motivating Fit Market Environment Based on Distinct Competencies (Strengths)
Mission Statements Should Be: Market-Oriented Defines its business in terms of satisfying consumer needs.
Product-Oriented vs Market-Oriented Definition Company Amazon Charles Schwab Home Depot Product-Oriented We sell books, videos, CDs, toys and other products online. We are an investment firm We sell tools and home repair and improvement items. Market-Oriented We make the Internet buying experience fast, easy and enjoyable – We’re the place where you discover anything you want to buy online. We are the guardian of people’s financial dreams We empower customers to achieve the homes of their dreams.
Company Objectives A goal, what the company hope to accomplish over a specific period of time. Long Term 2 -5 years Short-Term <= 1 year Financial, Marketing, Technical, Manufacturing
Objectives Should Be “SMART” Specific Measurable Achievable Realistic Time-specific
OBJECTIVES “SMART” OBJECTIVES “NON-SMART” OBJECTIVE • Increase net profits on Oreo by 5% by year end 2009. Grow profits on Oreo • Increase advertising awareness of Coke to 85% among teens 13 -18 by March 2010. Make more consumers aware of Coke. • Reduce manfacturing costs on the i. Pod Nano by 10% by June 2011. Reduce manufacturing costs.
Business Portfolio • Collection of businesses and products that make up a company. Proctor & Gamble Detergent -Tide Paper - Bounty/Charmin Oral Care - Crest Shampoo - Pantene Beauty - Cover Girl Soap - Ivory Batteries – Duracell Razors – Gillette Diapers - Pampers Kraft Foods Pepsico, Inc. Cookies (Oreo) Crackers (Ritz) Peanuts (Planters) Coffee (Maxwell House) Powdered Drinks (Crystal Light) Desserts (Jello, Cool Whip) Lunch Meat (Oscar Mayer) Pizza (Di. Giorno) Candy (Cadbury) Pepsi Gatorade Lays Potato Chips Rold Gold Tropicana Quaker Oats Products Market Share and Market Growth Rate are often key factors in determining a company’s portfolio
Growth – Always an Objective but …. HOW? EXISTING Products NEW Products Existing Markets Market Penetration Product Development New Markets Market Development Diversification
Market Penetration Increase sales of current products to current target markets. v Increase the % of your target that purchases your product e. g. 50% of W 25 -54 to 60% v Increase the number of stores to make it easier to access products, Drive-through options.
New Product Development Create new products for current target market. • Breakfast sandwiches • Starbucks Ground Coffee in the Supermarket
Market Development Identify new markets for current products. v. Suburbs v. Global v. New Demographic Targets (Seniors)
Diversification Acquire a new business with new products serving new markets. v. Disney – Marvel v. Kraft - Cadbury
SWOT ANALYSIS INTERNAL EXTERNAL STRENGTHS Internal Capabilities that may help a company reach its objectives (e. g. Strong brand name, excellent products, distribution, loyal customers) WEAKNESSES Internal limitations that may interfere with a company’s ability to achieve its objectives (e. g. poor product quality, weak distribution, poor brand awareness) OPPORTUNITIES External factors that the company may be able to exploit to its advantage (e. g. use of social networking, growth in size of target market, environmental consciousness) THREATS Current and emerging external factors that may challenge the company’s performance (e. g. new competitors, laws, technologies) Positive Negative
MARKETING PROCESS Understand the market and customer needs/wants Research customers, market SWOT Analysis Design a customer-driven marketing strategy Select customers to serve: segmentation & targeting Develop a value proposition: Differentiationa Create a marketing plan that delivers superior value Product and service design Pricing – Create value Distribution (Place) Promotion CREATING CUSTOMER VALUE Create profitable customer relationships - Delight the Customer! $$$$$ Capture value from customer in return to create profits and build market share! $$$$$
Understanding the Market & Customers • Macro-environmental Forces – The larger • Micro-environmental Forces – The actors close forces in society that can affect (positively OR negatively) a company’s business (technological, demographic, economic, natural, political, cultural) to a company that affect its ability to serve its customers (suppliers, competition, marketing intermediaries, consumers).
External Marketing System Micro Environmental Forces (rectangles) & Macro-environmental Forces (oval) You are here Company Marketing Intermediaries Suppliers Competitors Retailer Wholesaler, etc. Macro -Environmental Forces Consumers
Macro-environmental Forces Technological Natural Demographic Political Economic Cultural
Technological Environment Forces that create new technologies creating new product and market opportunities. CHANGES RAPIDLY! MUST KEEP UP!
Technological Environment The Internet is the fastest growing and one of the most important tools marketers are using to create value and build interactive customer relationships Websites (Info & Purchase) Email Social Networking (Facebook, Twitter, etc. ) Weblogs Video sharing (You. Tube, - viral video) Spyware, Cookies
Demography is the study of human populations in terms of: • Size • Age • Gender • Race • Occupation • Marital Status • Income • Other “factual” statistics http: //www. census. gov/
U. S. Demographic Trends Changing Age of Population • “Baby Boomers” - Born 1946 -1964 – Nearly 25% of population (78 Million) – Account for 50% of consumer spending – Wealthiest generation in history • “Generation X” – Born 1965 -1976 - 49 million citizens “Birth Dearth” - Defined by shared experiences - Increased divorce rate; More employed Moms - Spend carefully; Face economic pressures
Stock Market Performance Has Impacted Consumers Spending Habits
U. S. Demographic Trends • “Millenials” (Gen Y/Echo Boomers) – - Born 1977 -2000; 83 million - Teens, Tweens, Young Adults - Utter fluency with technology - $733 billion in purchasing power - Ethnically diverse Personalization and product customization = key to success.
U. S. Demographic Trends Changing American Family Structure -22% Married w/ children -29% Married, no children -38% of population live alone or adults living together unmarried -11% - Single Parents -Significant Increase in Working Women (60%) Implications for Marketers?
U. S. Demographic Trends Better Educated 1980: 2007: Completed High School* Completed College* 69% 17% 87% 30% *Over age 25 More Professional Workforce - Between 2008 -2018 the # of professional workers is expected to by 17%; - Manufacturing workers is expected to 24%
U. S. Demographic Trends • Increasing Diversity -Growing Ethnic Populations By 2050 – Hispanics 24% of population from 16% today -Instead of a “one size fits all approach” marketers are targeting specific ethnic groups for their products/services. -Specific marketing efforts toward Hispanics, African Americans, Gay/Lesbian (6 -7% of pop. $712 billion in buying power, and people with disabilities.
Economic Environment Factors that affect consumer buying power and spending. - Changes In Income - Changes in Spending Habits Economic crisis has led to changed spending habits Value marketing is key to success
Stock Market Performance Has Impacted Consumers Spending Habits
Natural Environment Natural resources that are needed as inputs by marketers or are affected by marketing activities. ◦ Environmentally Friendly Activities ◦ Increased Pollution ◦ Increased government intervention ◦ Prices/shortages of Raw Materials
Political Environment Laws, government agencies and pressure groups that influence and limit various organizations and individuals in a given society. • Increasing Legislation • Increased Emphasis on Socially Responsible Actions • Cause Related Marketing
Marketing in Action Pepsi. Co is working to reduce its environmental footprint. Solar-panel field now generates three-quarters of the heat used in Frito-Lay’s Modesto, California, Sun. Chips plant.
Cultural Environment Institutions and other forces that affect a society’s values, attitudes, preferences and behaviors Expressed in people’s views of: § § § § Marriage Clothing Nature Organizations Music Social Activities Self vs Others
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