Success in Creating Value Revenue & Connections with Stakeholders Paper Marketing focuses on creating value, bringing in revenue, and generating a deep con
Success in Creating Value Revenue & Connections with Stakeholders Paper Marketing focuses on creating value, bringing in revenue, and generating a deep connection with constituent stakeholders. In addition, there are a number of quantitative and qualitative measures and metrics that can be used to determine and forecast the level of success for each of these goals.
In your opinion, what are the most important factors that lead to success in creating value, revenue and connections with stakeholders? Give examples either from the real world, from the textbook, from the lectures in class, or from the cases discussed during the course, of how best to accomplish each of these. Which measures/metrics do you believe are most important in measuring and forecasting marketing performance for each of these? Explain your reasoning behind your selections. If a brand wanted to target a group of consumers based on characteristics you believe are important, what recommendations would you suggest in terms of structuring a marketing strategy and set of tactics that will break through the clutter, connect with the target’s values and create a sustainable competitive advantage (feel free to suggest something bold here!).
Be sure to include specific terms and concepts from the textbook and lectures throughout your paper and discuss them in a way that shows you understand the meaning of the terms/concepts.
Double space, 12 pt. font, 1-inch margins1.
Cite any outside references beyond the textbook and/or class lectures
BE SURE to include terms and concepts from the TEXTBOOK CHAPTERS!!
Some key terms are attached below Marketing is intertwined with every aspect of the business.
Marketing is very powerful.
Marketing is at its best when it is visionary, well-crafted and iterative!
Why Marketing Is Important?
• In order to produce an accounting of revenue
• In order to optimize operations to maximize revenue
• In order to profit from revenue through finance
• You (or someone else) must first generate revenue
Marketing Defined
The AMA Managerial Definition
Marketing is an organizational function and a set of processes for creating, communicating,
and delivering value to customers and for managing customer relationships in ways that
benefit the organization and its stakeholders (directly, indirectly, in quantitative & qualitative
ways).
Philip Kotler’s Social Definition 菲利普科特勒的社会定义
Marketing is a societal process by which individuals and groups obtain what they need and
want through creating, offering, and freely exchanging products and services of value
with others.
What Marketers Do…
For the Firm
▪ Monitor markets
▪ Identify opportunities
▪ Propose the “vision”
▪ Propose value propositions
▪ Propose marketing programs
▪ Acquire customers
▪ Identify valued customers
▪ Develop & retain valued customers
▪ Represent the voice of the customer
▪ Be accountable for resources devoted to marketing
For the Customer
▪ Understand needs, wants, habits, choice/rejection process
▪ Anticipate future needs, wants, habits
▪ Translate analysis into value propositions that solve customer problems
▪ Help customers make choices
▪ Represent the voice of the firm
▪ Help customers be heard and respected
Marketing Math
1. What is the market segment size?
Market size up
2.
3.
4.
5.
6.
7.
How much is made per unit sold?
How many units must be sold?
How long will it take to payback?
What is the market share?
How much is a customer worth?
What is the cannibalization rate?
Net contribution
Break even
ROI
% volume or % $
Customer lifetime value
Gain x margin – Loss x margin
What Marketing Isn’t…
• Not just advertising
• Not just for “marketing” or “sales” managers
• Not just a cost center
• Not just about the 4 Ps (product, price, place, promotion)
Session 2
Marketing Definition
• At the core of marketing are 2 key concepts: Value and Exchange or transaction
• Marketing has two facets.
• It focuses on delivering value and benefits to customers using communication,
distribution, and pricing strategies to provide customers with the goods and
services they want.
• It involves building long-term, mutually rewarding relationships. It entails an
understanding that organizations have many connected stakeholder partners,
including employees, suppliers, stockholders, distributors, and others.
• Conditions for exchange:
• At least two parties must be involved
• Something of value must be present
• Parties are capable of communication and delivery
• Desire to deal with the other party exists
• Each party is free to accept or reject the offer
• An exchange may not take place even if all conditions are met. An agreement
between two parties is required before an exchange occurs.
• Marketing (for example, advertising, personal selling, sales promotion) can occur even
if an exchange does not take place.
•
Value = perception of what a product or service is worth to a customer versus the
possible alternatives
•
With the holistic marketing philosophy as a backdrop, we can identify a specific set
of tasks that make up successful marketing management and marketing leadership.
Marketing Management Philosophies
Orientation
Focus
Production
Internal capabilities of the firm
Sales
Aggressive sales techniques and the belief that high sales result in high profits
Market
Satisfying customer wants and needs while meeting organizational objectives
Societal
Satisfying customer wants and needs while enhancing individual and societal well-being
Production Orientation
• Management assesses its resources and asks questions regarding goods and services
• Does not consider if the goods and services produced by the firm meets the needs
of the marketplace
• Product-oriented firms can survive if:
• Competition is weak
• Demand exceeds supply
Sales Orientation
• Sales-oriented firms believe marketing is selling things and collecting money
• Usually used in complex, high involvement purchases
Market Orientation
• Focusing on customer wants and needs to distinguish products from competitors’
offerings
• Integrating all the organization’s activities to satisfy customer wants
• Achieving the organization’s long-term goals by satisfying customer wants and
needs legally and responsibly – not just about profit!
Societal Marketing Orientation
• Idea that an organization exists to:
• Satisfy customer wants
• Preserve or enhance individuals’ and society’s long-term best interests
• Acknowledges that some products that customers want may not be in their best
interests or of society as a whole
Customer Value Requirements
• Offer products that perform
• Earn trust
• Avoid unrealistic pricing
• Give the buyer facts
• Offer organization-wide commitment in service and after-sales support
• Co-create with customers
Customer value is the relationship between benefits and the sacrifice necessary to obtain
those benefits. It is not simply a matter of high quality or high price. Instead, the customer’s
perception of value is the product/service quality they expect and a price they are willing to
pay.
Achieving Marketing Orientation Includes
• Obtaining information about customers, competitors, and markets 获取各方信息
• Examining the information from a total business perspective 测试信息
• Determining how to deliver superior
customer value
• Implementing actions to provide value
to customers
Customer Satisfaction
• Customers’ evaluation of a good or service in terms of whether that good or service
has met their needs and expectations
Building Relationships
• Strategy that focuses on keeping and improving relationships with customers
= long term loyalty
• Successful relationship marketing strategies depend upon:
• Customer-oriented personnel
• Effective training programs
• Employees with the authority to make decisions and solve problems
• Teamwork
Customer Relationship Management (CRM)
• Company-wide business strategy designed to optimize profitability, revenue, and
customer satisfaction
• By focusing on highly defined and precise customer groups
Key Terms To Know From Chapter 1
• Marketing
• Exchange or transaction
• Customer value
•
•
•
•
•
•
•
•
Production orientation
Sales orientation
Market orientation
Societal marketing orientation
Customer relationship management (CRM)
Customer satisfaction
Relationship marketing
On-demand marketing
Class Session 3
Strategic Planning
• Creating and maintaining a fit between the organization’s objectives and resources
and the evolving market opportunities
• Addresses two questions:
• What is the organization’s main activity at a particular time?
• How will it reach its goals?
• The goal of strategic planning is long-run profitability and growth. Strategic decisions
require long-term commitments of resources.
• Strategic errors can threaten a firm’s survival, but a good plan can help protect and
grow the firm’s resources.
What is an SBU?
• A strategic business unit (SBU) is a subgroup of a single business or a collection of
related businesses within the larger organization.
Characteristics of Strategic Business Units
• Distinct mission and specific target market
• Control over its resources
• Its own competitors
• A single business or a collection of related businesses
• Plans independent of other SBUs in the total organization
Mission Statement
• Statement of a firm’s business based on the analysis of:
• Benefits sought by present and potential customers
• Existing and anticipated environmental conditions
• Suffers from marketing myopia if stated narrowly
• Marketing myopia: Defining a business in terms of goods and services rather
than the benefits customers seek
Ansoff’s Strategic Opportunity Matrix
• A method for developing alternatives is Ansoff’s strategic opportunity matrix, which
matches products with markets
•
•
•
•
Market penetration: Increase market share among existing customers
Market development: Attract new customers to existing products
Product development: A strategy entailing the creation of new products for
present markets
Diversification: A strategy of increasing sales by introducing new products
into new markets
The Innovation Matrix
• Critics of Ansoff’s matrix mention that the matrix does not reflect the reality of how
businesses grow—that modern businesses plan growth in a more fluid manner based
on current capabilities rather than the clear-cut sectors outlined by the opportunity
matrix.
• Core Innovation: These decisions implement changes that use existing assets to
provide added convenience to existing customers and potentially entice customers
from other brands. Packaging changes, such as Tide’s laundry detergent pods, fall
into this category.
• Adjacent Innovation: These decisions are designed to take company strengths into
new markets. This space uses existing abilities in new ways. For example, Botox, the
popular cosmetic drug, was originally developed to treat intestinal problems and to
treat crossed eyes. Leveraging the drug into cosmetic medicine has dramatically
increased the market for Botox.
• Transformational Innovation: These decisions result in brand-new markets,
products, and often new businesses. The company must rely on new, unfamiliar assets
to develop the type of breakthrough decisions that fall in this category.
The Boston Consulting Group Model
• The portfolio matrix classifies each SBU by its present or forecast growth and market
share.
• The measure of market share used in the portfolio approach is relative market share,
the ratio between the company’s share and the share of the largest competitor.
• The portfolio matrix breaks SBUs into four categories:
• Stars: A star is a fast-growing market leader.
• Cash cows: A cash cow is an SBU that generates more cash than it needs to
maintain its market share.
•
•
Problem children: A problem child, also called a question mark, shows
rapid growth but poor profit margins.
Dogs: A dog has low growth potential and a small market share.
Strategies Used to Allocate Future Resources
• After classifying the SBUs, a company must determine how to allocate resources to
each SBU.
• Build: If an SBU has the potential to be a star, building would be an
appropriate goal.
• Hold: If an SBU is a successful cash cow, a key goal would be to hold or
preserve market share.
• Harvest: This is an appropriate strategy for all SBUs except stars. The basic
goal is to increase short-term cash return without much concern for the longrun impact.
• Divest: Getting rid of SBUs with low shares of low-growth markets is often
appropriate. Problem children and dogs are suitable for this strategy.
Marketing Plan
• Planning
• Process of anticipating future events and determining strategies to achieve
organizational objectives in the future
•
Marketing planning
• Designing activities relating to marketing objectives and the changing
marketing environment
•
Marketing plan
• Written document that acts as a guidebook of marketing activities for the
marketing manager
•
Marketing planning is the basis for all marketing strategies and decisions. Issues
such as product lines, distribution channels, marketing communications, and pricing
are all delineated in the marketing plan.
Objectives of a Marketing Plan
• To provide clearly stated activities that help employees and managers understand
and work toward common goals
• To allow the examination of the marketing environment in conjunction with the inner
workings of the businesses
• To help marketing managers enter the marketplace with an awareness of problems
and opportunities
• Marketing plans are only as good as the information they contain and the effort,
creativity, and thought that went into their creation.
• Creation and implementation of a complete marketing plan will allow the
organization to achieve marketing objectives and succeed.
• Having a good marketing information system and a wealth of common intelligence
is critical to a thorough and accurate situation analysis.
Elements of a Marketing Plan
• Some elements are common to all marketing plans. These include the business
mission and objectives, performing a SWOT analysis, determining a target market,
and establishing a marketing mix.
• Other elements that may be included are budgets, implementation timetables,
required marketing research efforts, or elements of advanced strategic planning.
Marketing Objectives/Goals
• Statement of what is to be accomplished through marketing activities
• Should be:
• Realistic: Managers should develop objectives that have a chance of being
met.
• Measurable: Managers need to be able to quantitatively measure whether or
not an objective has been met.
• Time specific: By what time should the objective be met?
• Compared to a benchmark: The objective is to increase sales by 15 percent;
it is important to know the baseline against which the objective will be
measured.
• Statement of what is to be accomplished through marketing activities
• Should be:
• Realistic: Managers should develop objectives that have a chance of being
met.
• Measurable: Managers need to be able to quantitatively measure whether or
not an objective has been met.
• Time specific: By what time should the objective be met?
• Compared to a benchmark: The objective is to increase sales by 15 percent;
it is important to know the baseline against which the objective will be
measured.
• Communicate marketing management philosophy
• Provide directions for lower-level marketing managers to integrate and point
marketing efforts in a consistent direction
• Motivate employees
• Force executives to clarify their thinking
• Form a basis for control
•
•
Performance of a situation (SWOT) analysis helps firms identify their competitive
advantage.
• Strengths—Things the company does well
• Weaknesses—Things the company does not do well
• Opportunities—Conditions in the external environment that favor strengths
• Threats—Conditions in the external environment that do not relate to existing
strengths or favor areas of current weakness
Environmental scanning: Collection and interpretation of information about forces,
events, and relationships in the external environment that may affect the future of the
organization or the implementation of the marketing plan
PESTL
Competitive Advantage is a set of unique features of a company and its products that
are perceived by the target market as significant and superior to those of the
competition.
• Factor or factors that cause customers to patronize a firm and not the competition
• Types:
• Cost
• Product/service differentiation
• Niche
Cost Competitive Advantage
• Being the low-cost competitor in an industry while maintaining satisfactory profit
margins
• Sources of cost reduction:
• Experience curves, efficient labor, no-frills products, government subsidies,
product design, reengineering, production, innovations, and new methods of
service delivery
• Efficient labor: Labor costs can be an important component of total
costs in low-skill, labor-intensive industries.
• No-frills products: Removing frills and options from a product or
service can reduce costs.
• Government subsidies : Governments may provide grants and
interest-free loans to target industries
• Having a cost competitive advantage means being the low-cost competitor in an
industry while maintaining satisfactory profit margins. This enables a firm to deliver
superior customer value.
Cost competitive advantages are subject to continual erosion
• Product design: Cutting-edge design and reverse engineering can offset
costs.
• Reengineering: Fundamental rethinking and redesign of business processes
help achieve dramatic improvements in critical measures of performance.
• Product innovations: New technology and simplified production techniques
can reduce the average production costs.
• New methods of service delivery: Medical expenses have been lowered by
the use of outpatient surgery and walk-in clinics. Online-only magazines can
help save on material and shipping costs
Product/Service Differentiation Competitive Advantage tends to provide a longerlasting competitive advantage than cost competitive advantage. As a result, this strategy
is more attractive to many top managers.
• Provision of something unique and valuable to buyers beyond simply offering a lower
price than competitors
• Brand names
• Strong dealer network
• Product reliability
• Image
• Service
Mainstream vs. Niche Competitive Advantage
• Seeks to target and effectively serve a single segment of the market
• Used by small companies with limited resources
• May be used in a limited geographic market
• Effective for market segments with good growth potential but is not crucial to success
of competitors
Building Sustainable Competitive Advantage
• Advantage that cannot be copied by the competition
• Notion is that a successful firm will stake out a position unique in some manner from
its rivals
• Sources: Skills and assets of an organization
• Patents, copyrights, locations, equipment, technology, customer service, and
promotion
• A sustainable competitive advantage lasts only as long as the time it takes a
competitor to imitate the strategy and plans.
• Marketing managers should continually look for skills and assets that create and
sustain competitive advantage.
• A sustainable competitive advantage is a function of the speed with which
competitors can imitate a company’s strategy and plans. Imitation requires a
competitor to identify the leader’s competitive advantage, determine how it is
achieved, and learn how to duplicate it.
Target Market Strategy
• Marketing strategy: Produces mutually satisfying exchanges with target markets
• By selecting and describing one or more target markets and developing and
maintaining a marketing mix
• Segments based on groups with similar characteristics through market opportunity
analysis
• Selects one or more target markets
• Market opportunity analysis (MOA): The description and estimation of the size and
sales potential of market segments that are of interest to the firm and assesses key
competitors in these market segments
• Appeal to the entire market with one marketing mix
• Concentrate on one marketing segment
• Appeal to multiple market segments with multiple marketing mixes
The Marketing Mix = Tactical Plan
• Unique blend of product, place (distribution), promotion, and pricing strategies
• Designed to produce mutually satisfying exchanges with a target market
• Elements are often referred to as the four Ps
• The marketing manager can control each component of the marketing mix, but the
strategies for all four components must be blended to achieve optimal results.
• Product:
• The product is the starting point of the marketing mix. It is difficult to decide
on a promotion campaign, determine a price, or design a distribution strategy
until the product offering and product strategy are defined.
• The product is not only the physical unit but also its package, warranty, aftersale service, brand name, company image, value, and other factors.
•
Product involves tangible goods, ideas, or services
• Place:
• Physical distribution that includes storage and transportation
• Making pr…
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