MARKETING 3401
MARKETING 3401 •
John Camp (September 2001) said the number one thing you must do to be successful for yourself or for a company is market yourselves—make people believe in you and like you. o No company will hire you unless you can sell yourself. You have to know how people perceive you and you must be effective. Personal branding your impact on people. o You have to know people. If you know people, they can say good things about you. They will reference you a lot—word of mouth. Networking; connections. o You need to be able to maintain contact. Stay in touch with people and follow up. This enables you to be able to keep your name or the name of your company ever present in someone’s mind. o How can you be more successful according to John Camp?
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To be able to be as successful as you want to be, you must have some special traits o Be creative this is what companies want. Figure out a way that you can change how an industry is or how a certain problem can be resolved. o Be aggressive being able to hear the word NO and rethink the situation and try again. You have to be able to continue to work through struggle. Overcome distractions and continue doing what you need to do. You need to be able to face failure and then regroup. o Be enthusiastic you have to be able to carry yourself and not weigh down a company. o Be smart you can work hard; You can learn and write, if you don’t know the answer you can use your creativity to figure out the answer. Two levels of smart—4.0 GPA smart and the people without a 4.0 who can learn and speak well and figure out the answer. o Be honest once honesty is violated and once they lose trust in you, it is over. Honesty can distinguish you from the competition.
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What makes you likeable? How do you sell yourself? o In order to be able to be used in an effective way—successful o There are three things that are critical to likeability: 38% of the emotional impact you have is judged based on your vocal delivery. • Vocal delivery is judged on the tone of voice that you have. • Tone is what defines you. • Two Killer B Tones: o Boredom—saying the same thing over and over again. o Bitterness—bitterness in simple words and sounds will get you fired. 55% of the emotional impact you have is judged according to your visual delivery. • Your ability for someone to see you, like you, and want to hire you. • Most critical element of visual delivery is facial expressions. • Default look 7% of the emotional impact you have is judged according to the verbal arrangement of the message.
o Likeability is the emotional impact you have when you are dealing with someone. They will be attracted to you and listen to you. •
Credibility is “are you believable?” o How people perceive you and your believability—if you don’t have it you lose customers and shareholders. o When it’s damaged, your ability to establish & maintain it is weakened. o Someone heard who you were before you came into the room and your credibility is positive. o Someone heard who you were and it wasn’t good, your credibility is negative. o Unknown/don’t know who you are.
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There are several factors that can influence credibility. Once you have credibility, you become more valuable to the company. o Trust/sincerity can your employees be trusted. A company wants you to be able to represent the company, and not exploit the company. Once these are compromised your credibility is weakened; shaky voice, good mind shows, good sincerity. Empathy in relationships (consider everyone affected). o Knowledge/expertise you have to be smart. Credibility is enhanced when you give credit to where you got your information. o Identification/association can you speak the language. Being able to hit the responsive cord, connect with your market, saying things that appeal to your market, getting that emotional response. Identify whom you are talking to. Audience Target Market Dress/appearance Can you dress the dress? Can you relate to them? Position/ status—enhance it by creating interest o Charisma—be able to communicate and make that emotional connection, ability to present yourself in a likeable manner. Done by your: Delivery Poise Presence Where are your weaknesses? You are considered smart if you know your weaknesses.
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Management Marketing Philosophies o Production orientation company looks internally/inward and produces what they produce best; WE CREATE IT. Problem: there may not be a market for the product, no demand for it o Sales orientation when you put together skills and sales force to use (move) a product and have the ability to sell the idea/product. o Marketing orientation understanding and satisfying the customer’s needs and wants by providing them with what they need and want; gather research and find out enough information about consumers and company to satisfy their needs. o Social orientation to satisfy the customer’s needs and wants and to supply them with the appropriate need or want while keeping our environment and society safe. MARKET ORIENTATION + keeping environment safe Sustainability—leave the planet the way it was once you leave environment friendly. EX: Patagonia, Pepsi Refresh Campaign
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If you put your product in the hands of someone that the public loves, the product will sell. o Shaq writing a 4page case study in a textbook.
Marketing Orientation (3 Key Concepts of Marketing) • What are three marketing concepts? o What gives you an advantage over your competition o Customer value (expectation) Benefits – cost = customer value Will make customers want to buy your product Some people focus more on benefits and some focus more on costs, even when costs are high. EX: boxes at the stadium, benefits/value are still very high, southwest does very well with low costs. o Customer satisfaction Great impact on customer spending. How can you make their experiences pleasant? Have to keep customers happy or else they may start to protest, quit buying the product, spread bad word of mouth, etc. 63% of customers are most likely to change a purchase because of the indifference of one person. 75% of people who change companies would tell somebody else why they are change companies “switching”; tell them about their bad experience. 7% will tell the manager to correct a problem • EX: Delta Airlines—through marketing research, better do something or else will lose business. They spend 1.2 billion dollars to retrain employees, so that they can show that they have better customer service. Service Profit Chain • To measure employee job satisfaction: o How is pay? Are they happy with it? Is it significant? Is it enough? o Do they like their coworkers? o Promotion: Do you think you will be a cashier forever? Can I progress? o How does the boss treat them? o Do they like the customers? • Company—everyone wants to work in sports, a lot of money spent on training employees • Customer—have to research and figure out what they think • Employee job satisfaction customer value customer satisfaction customer loyalty profits back to employee job satisfaction • Employee satisfaction leads to customer satisfaction. NEED in order to have good customer satisfaction. o EX: Canes—employees are good all the time to where they give good customer service. People wearing Raising Cane’s tshirt, people don’t wear McDonalds tshirts. Prospect Theory • We remember the bad things so much that we forget about all the goods things— rather than multiple good aspects, we recall that one bad thing. o Mystery shopper—posed as a customer, used to enable a company to evaluate a company and keep the staff on their toes.
EX: McDonald’s—breakfast and coffee = bad, service = terrible, so they learned and created McCafe and fresher options. o 2 types of dissatisfied customers: Angry customer—always will be violent, obnoxious; cause a scene; you have already identified them. Remorseful customer—goes to event and sits and eats and sounds like they enjoyed every minute, but once they walk away, they complain; may go and blog bad things. Recovery—says “sorry” for a service failure • Failure and recovery—be able to correct a problem and also do something that is beneficial to the customer, every company should have one. o You thought you were giving them good service and you weren’t so now they are mad. o If we failed, research/customers will tell us that. How we are going to identify it, recognize it, acknowledge it, and correct it. o Sometimes companies fail on purpose. o If you can figure out a well thought out planned apology—top 6 benefits that you can use in your line of work. EX: United breaks guitar; knows United broke it, guys upset, files complaint, writes a song “United Breaks my guitar,” song becomes famous (3 million people view it). A year later, United goes in crisis mode (look at all problems that took place and how are they going to resolve/confront this)—Because they took so long to respond to problem, it became too late to fix. Guy + song are famous! • What would you have done if you were United? • What would your recovery plan be? • How do you soften this outrage? There are three things that yield good customer satisfaction: • Referrals—although may not get that extra penny, but will get GREAT referrals. • Premium pricing—able to make service price high by 10%20% more if good • Reduce selling effort o Developing LongTerm Relationships Development takes time. Put together a system to interact with individuals to build trust. EX: suites in tiger stadium, build relationships with businesses and the media. • They build the new suites, and people who have money go into the suites with people that they want to entertain (they take their clients to football games). o Bring people to these suites to strengthen relationships. You must be able to manage relationships. Elements that enhance for service quality which shows that you like the customer and to create loyalty and trust to strengthen the relationship: • Be responsive you have to be able to respond. • Be reliable • Assurance that you will fix the problem • Empathy understands who the person is and what the big picture is. Your ability to be able to manage failure or disappointment is very important in dealing with customers.
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Ex: free vitamin water outside of the union; people taking the wall street journal without paying for it and it hurts the business schools relationship with Wall Street Journal. Story about failure: he got a call to work for a big sports marketing company. They heard about him through word of mouth. They wanted him to manage a coach at a school’s personal branding. He drove to Atlanta to make the presentation. He can’t find a parking spot, he eventually finds one and the security guard tells him he is not allowed to park in the parking spot. A man is giving him a tour of the building and another member of the team says he wants to sit in on the presentation. The man says “you don’t know who I am”. Lonnie Cooper was the owner and the founder of the company and he did not know who he was. The only person who watched the presentation was JP. He said that it was everything they were looking for and they would call him during the week. • He destroyed the relationship before he had time to cultivate the relationship he insulted someone. • 7 months later he wrote an apology letter. • Prospect theory—they remember the good things that you do.
Switching: o Switching—why a customer left one business and brought their money to another company. They were not satisfied so they left. The loyalty was broken and something went wrong. o Reasons people switch: Core Service Failure the service that you wanted was not there. The company fails at the service they provide you with. Service encounter failure the person who dealt with someone did something wrong— they were rude, inattentive, arrogant, cold, sassy, distant, lack of knowledge. • The employee that helped you was rude, mean, not attentive, etc. • Only 7% of the people with a bad experience will tell the service provider. Price price matters • Price matters in many ways: o Ethical aspect EX: Katrina—people were selling generators for $1000 when they normally sell for $400. Price gouging when times are tough. o Fairness aspect • Unfair or deceptive pricing they say this is the final bill and then they add on extra charges (shipping and handling). • Under pricing—you might not switch because its too cheap but you might not purchase it. Inconvenience not convenient for people • Difficult to get to, park, or exit • Can’t get an appointment; had to wait too long. • Bad location in the city; traffic • EX: Fat Cow good location but not enough parking Failure to Respond to Service Failure if you want a relationship that will last for a long time, where trust is the over time, you must learn how to respond to service failure. • The customer will rough you up and attack you, but then you have to address the problem. Attraction from Competition the competition is just better. • EX: Towne Center—if you build something in Towne Center, you will probably get people to switch because they want to go to this elite location.
Unethical behavior cheating, short changing o If you can understand why people leave, you are able to address the problem. Get information from your customer as to why they are happy or unhappy Marketing Strategy Framework: • Three levels of the marketing strategy framework: o LEVEL ONE: Market Analysis—in a market analysis, you look at factors and analyze and see what value you are missing out on. Look at the company who are you, what are your strengths and weaknesses, do you have the resources and finances and personnel and the supply chain management in place. Look at the customer who is the customer and does the customer change and do we see the customer change. Is the population big enough to matter? • Demographics: o Age—from prebirth until death, there are many categories that marketing has identified (baby boomers, senior citizens). The big money is in baby boomers (they like to save their money). o Gender—Male or female o Race—so simply but it is often ignored. EX: Before the Civil Rights movement, Pepsi couldn’t find someone to buy their product because Coke was taking over. The Negro population could afford soft drinks but no one would appeal to them. Pepsi shifted their advertisements and appealed to Negro families and it was enough to generate revenue to keep them surviving. EX: corner drug store where Chimes is now. There was one shelf in the entire store that sold beauty products for African Americans. EX: Lowe’s and Home Depot—manuals in English and Spanish Proctor and Gamble article in Wall Street Journal—on the labeling they will have more words in Spanish (instead of Downy, they will have Downy in Spanish) o Education—sometimes an uneducated population probably does not care about sophisticated products (EX: iPad) You will know what kind of appeal to use. o Income—lowincome workers don’t care about sophisticated technology products (their life is very simple). Financial planners are marketing to our generation. They convince us to save money. o Occupation o Religion—does not matter all of the time. You have to make sure that in your appeal to identify a segment market, you don’t want to offend a population. You want to be able to appeal to a population. o Geographical regions—what happens in different parts of the country. Sell different products in Louisiana and Minnesota. o EX: selling expensive sunglasses—go to China to sell the sunglasses and only about half of the population buys the sunglasses. Rebuild sunglasses to conform with the facial structure of the Asian population. Understand your competition who they are and what are they doing, embrace the competition and see what you can do with your customers so they don’t leave and go to the competitor.
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EX: the competition to LSU is Drew Brees and the Saints. EX: Before iPhone, the Blackberry was the main phone and now Blackberry is struggling. Stock is falling off the charts and now they are being forced to market in Indonesia. • EX: Proctor and Gamble has to know what Colgate is doing. Conditions what is happening around us. Look at the external environment and everything around you. External factors to look at: • Economy—when economic conditions are good, we can price a certain way. Then when the economy changes, we have to change the prices. • Technological changes—are you able to keep up when the technology changes. Technology is the ability to make work easier; the ability to create a device that can transport information fast and to create machines that will ad value to the company. o EX: blackberry lost here o Ford used technology to differentiate themselves from the competitors. It lifted them above every one else. They were able to create this very inexpensive car. o EX: UPS uses a card now to get to the packages instead of a key. • Political changes—the government says that things are going to change and you have to respond or you will not be able to keep up. The government will ban certain billboard ads. o EX: laws require that every car must be made with seat belts. • Social factors—the lifestyles and the values of the day. When the social factors change, how do you respond? o Due to 9/11 events, the FDA made regulations that if you did not have a small bag that could go through the scanner, then they must be checked. Samsonite went to research and development department with the dimensions and they designed a bag that is the correct size and that could hold everything that a male or female needed. o LEVEL TWO: Strategy Development—three phases of strategy development Phase 1 segmentation—how are you going to divide the population and then focus on that segment. Four ways to make sure that the segment you have identified is worth identifying: • Identifiable is the population identifiable • They have to be able to respond to what you are selling do they need the product and do they want the product • Can you reach this population you know who they are and you have identified them. Can you reach them: can you get the product to them (distribution) and can you communicate with them through things like technology (radio). • Substantial is the population big enough to matter. Phase 2 Targeting—who are you going to target. Three strategies for selecting a proper target market: • Undifferentiating—mass marketing. You are shooting for the entire population that buys this product. • Multisegment—choose not just one large population, but several segments. o EX: Walmart got jealous of Target because Target sells chic clothing. Walmart tried to design chic clothing and they failed. Walmart found that if they focused on the three segments of the market, they could recover from the failure.
Segment One—lower income individual who needs the cheapest prices that they can find because the economy is bad. Segment Two—lower to middle income but still trying to make ends meet. Their income level isn’t very high. These people still like a little bit of style and class. They found that this segment was large enough to matter. Segment Three—people who just want household goods that they can save a little money on. They don’t want to spend unneeded money on basic things. • An upper class individual who buy the finer things like clothing at another place, but the basic necessities like bath and clothing supplies are bought at Walmart. • Niche marketing—your one concentrated area. A small, little population o You have to make sure it is big enough to matter and can support your product enough. Phase three Positioning—how is the population going to see the product that you are going to position. You have to position the product to reach the correct market. When you are positioning, look for three factors: • Attributes—the features of the product • Benefits—the benefits that it brings to the consumer • Communication of value—how you communicate the value of the product to the customer. o Ex: Mountain Dew—20 years ago, no one would buy Mountain Dew. They directed their focus to the population of skate boarders and extreme sport category. Mountain Dew repositioned their entire drink to revolve around the extreme sports group. o LEVEL THREE: Implementation how do we make it all work together. The four P’s (Sellers Perspective)—interchangeable components that you put together and this is how you will reach the segment of the population that you have chosen to target: • Product look at what the product is and what category it is in. • Price you have to know how to price the product. If you price wrong, you will drive away customers and not attract those customers that might want to switch to your product. You can either attract or distract a large population. o Most fluid; lower price o Easiest to control o The price may affect the outlook of the product’s quality More expensive = better quality o EX: Karam’s hourly rate for consulting with a big company being too low, they decided not to use him for another project because his price was too low. • Place where is the product going to be or distribution—how are you going to get the product to them. o How do we get the product from the manufacturer to the shelves? • Promotions tell them what and where to get it. o How do you persuade people to buy your product? o How do you advertise? The Four C’s (Buyer’s Perspective) • Customer Value
o Place • Cost o Price • Convenience o Promotion • Communication o Product The decline of target • Economic shift o They began by selling “higher end” brands • Change in customer perception o People left Target for Walmart
Products • Product Life Cycle o Introduction Initial entry of product into the market Must consider pricing Must also consider the type of promotion to run o Growth Formed a loyal customer base and word begins to spread about your product. As you gain popularity, does your pricing/promotion change? o Maturity The peak of popularity and the beginning of decline o Decline Product has become outdated or unnecessary Some people continue to buy because it is cheap The life of the product can be extended • Technological improvements. • The four categories of products (based on the level of involvement—time/effort spent in searching/evaluating a purchase decision): o Convenience—not a lot of time or money spent; quick decisions; not a lot of risk involved. o Shopping products—a little more involved and a little bigger risk and more money involved. Needs good promoting to set the product apart from the rest. EX: technology products o Specialty products—you like a certain type of a product. (EX: William Sonoma) Luxury items; even higher level of involvement o Unsought Products Highest level of involvement EX: Life Insurance • Retail Mix o Adds presentation to the 4 P’s Décor • Components of a product o The product itself The name • Bluray vs. HDDVD o Packaging o Warranty
Implied warranty Written warranty • Lee Ayocoka o Worked at Ford and then began working at Chrysler o At Chrysler, he created the 10 year, 100,000 mile bumper to bumper warranty. o Service after sale o Brand/Company Images Objectives of branding • Identification • Repeat sales • Introduce new products EX: Tiffany’s • Tiffany’s has always been associated with high quality, high priced jewelry • They designed a cheaper, more accessible piece of jewelry • It sold like crazy • Because of this, overall sales dropped because the prestige of the “Tiffany’s” name had been diminished.
Three Objectives to Branding: 1. Identification 2. Be able to repeat sales 3. Introduce new products • Motel 6—Econo Lodge, stay if you are not on a family vacation, just drop in and keep on going. o They own land up and down America. This company bought Motel 6 and turned it around. o They hired researchers to figure out focal groups. Motel 6 was outdated (dirty); people only wanted to spend 45 minutes there. A lot of the people staying in Motel 6 are wealthy. o Segmentation—there is a segment of the population that use Motel 6 (people who travel by car) o People would rather save their money then spend it on a hotel room. They are frugal. o Motel 6 went through remodeling to clean the place up and make it a better hotel. The company who bought Motel 6 turned it around and flipped it. o They go to the Richard’s Group and told them to rebrand Motel 6: Three strategies: • Positionthey said they had to change their position. They needed to position Motel 6 as a clean and affordable (always the cheapest in a certain city) hotel chain. o We want all that a good hotel has and all the technology that a good hotel has and we want to position it as a place where successful, wholesome person stays. Not as a family vacation or business meeting. • Personality they said they had to create a personality for Motel 6. o The personality must match with the brand • Affiliation who is going to stay there? o Honorable, hard working, frugal people who want a clean, safe night stay. o Checkin, stay there for a short time, and then move on. Consumer DecisionMaking Process
Persuasion—how can we get you to buy our product • Persuasion is the attempt to modify the thought or behaviors of the consumers and move them toward a predetermined goal. • Emotional appeal—only works for certain individuals • “If you don’t want to be converted, don’t walk to the reliable” o Don’t go to the used car shop or a jewelry store. Five Steps in the consumer decision making process: 1. Need recognition • Maslow’s Hierarchy of Needs—we want to fulfill the highest need and recognize the highest need. 2. Information search—depending on how much information you need and how much involvement the search requires. • Sometimes the information search is fast or slow. • The bigger the level of involvement, the more we search. o EX: buying a house • Involvement is the time and effort spent searching and evaluating a purchase decision. • Involvement: o Routine—quick, low risk o Limited—moderate, spend some time on it o Extensive—high risk, you know nothing about what you are buying. o EX: buying a refrigerator—he knows nothing about buying a fridge because he hasn’t bought one in so long so it is an almost extensive search. ▫ Extensive search is not always the most expensive product. o Gather as much information to make a good decision. • What are the external factors that we look at when trying to gather information: o Personal ▫ Family and friend get information from family or friends; trustworthy and honorable ▫ Word of mouth when people talk, you listen to what they have to say. i. EX: movie industry (“sneezing”)—talk about how good the movie was. ii. EX: restaurants ▫ Buzz marketing a style of marketing that impacts word of mouth. i. When a company has a relatively new product, and they want to introduce the product to the market and they find the opinion leaders in that market. Tell the opinion leader to use that product (for free), and hope that the opinion leaders will spread good word about the product, which will lead to sales for the new products. ii. EX: moped—bring the moped (vespa) to Ohio State University; they gave the vespas to the football players. It worked in this case and in many other cases. 1. Put the moped in the hand of opinion leaders and the product will sell. The opinion leader will usually say that the product is good. iii. The ethical concern in buzz marketing is making sure that the people who are given the product are giving unsolicited word of mouth. iv. You do not use a celebrity; you use an opinion leader.
▫ Celebrity endorsement a celebrity endorser is someone that a company is paying money to to use the product and they say that they like it. i. Tom cruise and Ray Bans ii. Tom Brady, super star quarterback Patriots, signed a contract to be an endorser for Uggs for Men. **** 1. Percentage of royalty and a percentage of the company. iii. Three goals of celebrity endorsers: 1. Boost sales 2. Change the perception of the product—EX: Tom Brady and the Uggs. o Commercial—biased source of information ▫ TV—biased; Reebok is sued for the easy tone shoes ▫ Radio ▫ Newspaper ▫ Direct mail—more money spent each year than on TV. ▫ Internet ▫ Billboards—effectiveness depends on demographics o Public Information—the unbiased sources that we use to make decisions ▫ Consumer Report—an objective break down of the product. i. Automobiles—JD Power and Associates
John Camp (September 2001) said the number one thing you must do to be successful for yourself or for a company is market yourselves—make people believe in you and like you. o No company will hire you unless you can sell yourself. You have to know how people perceive you and you must be effective. Personal branding your impact on people. o You have to know people. If you know people, they can say good things about you. They will reference you a lot—word of mouth. Networking; connections. o You need to be able to maintain contact. Stay in touch with people and follow up. This enables you to be able to keep your name or the name of your company ever present in someone’s mind. o How can you be more successful according to John Camp?
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To be able to be as successful as you want to be, you must have some special traits o Be creative this is what companies want. Figure out a way that you can change how an industry is or how a certain problem can be resolved. o Be aggressive being able to hear the word NO and rethink the situation and try again. You have to be able to continue to work through struggle. Overcome distractions and continue doing what you need to do. You need to be able to face failure and then regroup. o Be enthusiastic you have to be able to carry yourself and not weigh down a company. o Be smart you can work hard; You can learn and write, if you don’t know the answer you can use your creativity to figure out the answer. Two levels of smart—4.0 GPA smart and the people without a 4.0 who can learn and speak well and figure out the answer. o Be honest once honesty is violated and once they lose trust in you, it is over. Honesty can distinguish you from the competition.
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What makes you likeable? How do you sell yourself? o In order to be able to be used in an effective way—successful o There are three things that are critical to likeability: 38% of the emotional impact you have is judged based on your vocal delivery. • Vocal delivery is judged on the tone of voice that you have. • Tone is what defines you. • Two Killer B Tones: o Boredom—saying the same thing over and over again. o Bitterness—bitterness in simple words and sounds will get you fired. 55% of the emotional impact you have is judged according to your visual delivery. • Your ability for someone to see you, like you, and want to hire you. • Most critical element of visual delivery is facial expressions. • Default look 7% of the emotional impact you have is judged according to the verbal arrangement of the message.
o Likeability is the emotional impact you have when you are dealing with someone. They will be attracted to you and listen to you. •
Credibility is “are you believable?” o How people perceive you and your believability—if you don’t have it you lose customers and shareholders. o When it’s damaged, your ability to establish & maintain it is weakened. o Someone heard who you were before you came into the room and your credibility is positive. o Someone heard who you were and it wasn’t good, your credibility is negative. o Unknown/don’t know who you are.
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There are several factors that can influence credibility. Once you have credibility, you become more valuable to the company. o Trust/sincerity can your employees be trusted. A company wants you to be able to represent the company, and not exploit the company. Once these are compromised your credibility is weakened; shaky voice, good mind shows, good sincerity. Empathy in relationships (consider everyone affected). o Knowledge/expertise you have to be smart. Credibility is enhanced when you give credit to where you got your information. o Identification/association can you speak the language. Being able to hit the responsive cord, connect with your market, saying things that appeal to your market, getting that emotional response. Identify whom you are talking to. Audience Target Market Dress/appearance Can you dress the dress? Can you relate to them? Position/ status—enhance it by creating interest o Charisma—be able to communicate and make that emotional connection, ability to present yourself in a likeable manner. Done by your: Delivery Poise Presence Where are your weaknesses? You are considered smart if you know your weaknesses.
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Management Marketing Philosophies o Production orientation company looks internally/inward and produces what they produce best; WE CREATE IT. Problem: there may not be a market for the product, no demand for it o Sales orientation when you put together skills and sales force to use (move) a product and have the ability to sell the idea/product. o Marketing orientation understanding and satisfying the customer’s needs and wants by providing them with what they need and want; gather research and find out enough information about consumers and company to satisfy their needs. o Social orientation to satisfy the customer’s needs and wants and to supply them with the appropriate need or want while keeping our environment and society safe. MARKET ORIENTATION + keeping environment safe Sustainability—leave the planet the way it was once you leave environment friendly. EX: Patagonia, Pepsi Refresh Campaign
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If you put your product in the hands of someone that the public loves, the product will sell. o Shaq writing a 4page case study in a textbook.
Marketing Orientation (3 Key Concepts of Marketing) • What are three marketing concepts? o What gives you an advantage over your competition o Customer value (expectation) Benefits – cost = customer value Will make customers want to buy your product Some people focus more on benefits and some focus more on costs, even when costs are high. EX: boxes at the stadium, benefits/value are still very high, southwest does very well with low costs. o Customer satisfaction Great impact on customer spending. How can you make their experiences pleasant? Have to keep customers happy or else they may start to protest, quit buying the product, spread bad word of mouth, etc. 63% of customers are most likely to change a purchase because of the indifference of one person. 75% of people who change companies would tell somebody else why they are change companies “switching”; tell them about their bad experience. 7% will tell the manager to correct a problem • EX: Delta Airlines—through marketing research, better do something or else will lose business. They spend 1.2 billion dollars to retrain employees, so that they can show that they have better customer service. Service Profit Chain • To measure employee job satisfaction: o How is pay? Are they happy with it? Is it significant? Is it enough? o Do they like their coworkers? o Promotion: Do you think you will be a cashier forever? Can I progress? o How does the boss treat them? o Do they like the customers? • Company—everyone wants to work in sports, a lot of money spent on training employees • Customer—have to research and figure out what they think • Employee job satisfaction customer value customer satisfaction customer loyalty profits back to employee job satisfaction • Employee satisfaction leads to customer satisfaction. NEED in order to have good customer satisfaction. o EX: Canes—employees are good all the time to where they give good customer service. People wearing Raising Cane’s tshirt, people don’t wear McDonalds tshirts. Prospect Theory • We remember the bad things so much that we forget about all the goods things— rather than multiple good aspects, we recall that one bad thing. o Mystery shopper—posed as a customer, used to enable a company to evaluate a company and keep the staff on their toes.
EX: McDonald’s—breakfast and coffee = bad, service = terrible, so they learned and created McCafe and fresher options. o 2 types of dissatisfied customers: Angry customer—always will be violent, obnoxious; cause a scene; you have already identified them. Remorseful customer—goes to event and sits and eats and sounds like they enjoyed every minute, but once they walk away, they complain; may go and blog bad things. Recovery—says “sorry” for a service failure • Failure and recovery—be able to correct a problem and also do something that is beneficial to the customer, every company should have one. o You thought you were giving them good service and you weren’t so now they are mad. o If we failed, research/customers will tell us that. How we are going to identify it, recognize it, acknowledge it, and correct it. o Sometimes companies fail on purpose. o If you can figure out a well thought out planned apology—top 6 benefits that you can use in your line of work. EX: United breaks guitar; knows United broke it, guys upset, files complaint, writes a song “United Breaks my guitar,” song becomes famous (3 million people view it). A year later, United goes in crisis mode (look at all problems that took place and how are they going to resolve/confront this)—Because they took so long to respond to problem, it became too late to fix. Guy + song are famous! • What would you have done if you were United? • What would your recovery plan be? • How do you soften this outrage? There are three things that yield good customer satisfaction: • Referrals—although may not get that extra penny, but will get GREAT referrals. • Premium pricing—able to make service price high by 10%20% more if good • Reduce selling effort o Developing LongTerm Relationships Development takes time. Put together a system to interact with individuals to build trust. EX: suites in tiger stadium, build relationships with businesses and the media. • They build the new suites, and people who have money go into the suites with people that they want to entertain (they take their clients to football games). o Bring people to these suites to strengthen relationships. You must be able to manage relationships. Elements that enhance for service quality which shows that you like the customer and to create loyalty and trust to strengthen the relationship: • Be responsive you have to be able to respond. • Be reliable • Assurance that you will fix the problem • Empathy understands who the person is and what the big picture is. Your ability to be able to manage failure or disappointment is very important in dealing with customers.
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Ex: free vitamin water outside of the union; people taking the wall street journal without paying for it and it hurts the business schools relationship with Wall Street Journal. Story about failure: he got a call to work for a big sports marketing company. They heard about him through word of mouth. They wanted him to manage a coach at a school’s personal branding. He drove to Atlanta to make the presentation. He can’t find a parking spot, he eventually finds one and the security guard tells him he is not allowed to park in the parking spot. A man is giving him a tour of the building and another member of the team says he wants to sit in on the presentation. The man says “you don’t know who I am”. Lonnie Cooper was the owner and the founder of the company and he did not know who he was. The only person who watched the presentation was JP. He said that it was everything they were looking for and they would call him during the week. • He destroyed the relationship before he had time to cultivate the relationship he insulted someone. • 7 months later he wrote an apology letter. • Prospect theory—they remember the good things that you do.
Switching: o Switching—why a customer left one business and brought their money to another company. They were not satisfied so they left. The loyalty was broken and something went wrong. o Reasons people switch: Core Service Failure the service that you wanted was not there. The company fails at the service they provide you with. Service encounter failure the person who dealt with someone did something wrong— they were rude, inattentive, arrogant, cold, sassy, distant, lack of knowledge. • The employee that helped you was rude, mean, not attentive, etc. • Only 7% of the people with a bad experience will tell the service provider. Price price matters • Price matters in many ways: o Ethical aspect EX: Katrina—people were selling generators for $1000 when they normally sell for $400. Price gouging when times are tough. o Fairness aspect • Unfair or deceptive pricing they say this is the final bill and then they add on extra charges (shipping and handling). • Under pricing—you might not switch because its too cheap but you might not purchase it. Inconvenience not convenient for people • Difficult to get to, park, or exit • Can’t get an appointment; had to wait too long. • Bad location in the city; traffic • EX: Fat Cow good location but not enough parking Failure to Respond to Service Failure if you want a relationship that will last for a long time, where trust is the over time, you must learn how to respond to service failure. • The customer will rough you up and attack you, but then you have to address the problem. Attraction from Competition the competition is just better. • EX: Towne Center—if you build something in Towne Center, you will probably get people to switch because they want to go to this elite location.
Unethical behavior cheating, short changing o If you can understand why people leave, you are able to address the problem. Get information from your customer as to why they are happy or unhappy Marketing Strategy Framework: • Three levels of the marketing strategy framework: o LEVEL ONE: Market Analysis—in a market analysis, you look at factors and analyze and see what value you are missing out on. Look at the company who are you, what are your strengths and weaknesses, do you have the resources and finances and personnel and the supply chain management in place. Look at the customer who is the customer and does the customer change and do we see the customer change. Is the population big enough to matter? • Demographics: o Age—from prebirth until death, there are many categories that marketing has identified (baby boomers, senior citizens). The big money is in baby boomers (they like to save their money). o Gender—Male or female o Race—so simply but it is often ignored. EX: Before the Civil Rights movement, Pepsi couldn’t find someone to buy their product because Coke was taking over. The Negro population could afford soft drinks but no one would appeal to them. Pepsi shifted their advertisements and appealed to Negro families and it was enough to generate revenue to keep them surviving. EX: corner drug store where Chimes is now. There was one shelf in the entire store that sold beauty products for African Americans. EX: Lowe’s and Home Depot—manuals in English and Spanish Proctor and Gamble article in Wall Street Journal—on the labeling they will have more words in Spanish (instead of Downy, they will have Downy in Spanish) o Education—sometimes an uneducated population probably does not care about sophisticated products (EX: iPad) You will know what kind of appeal to use. o Income—lowincome workers don’t care about sophisticated technology products (their life is very simple). Financial planners are marketing to our generation. They convince us to save money. o Occupation o Religion—does not matter all of the time. You have to make sure that in your appeal to identify a segment market, you don’t want to offend a population. You want to be able to appeal to a population. o Geographical regions—what happens in different parts of the country. Sell different products in Louisiana and Minnesota. o EX: selling expensive sunglasses—go to China to sell the sunglasses and only about half of the population buys the sunglasses. Rebuild sunglasses to conform with the facial structure of the Asian population. Understand your competition who they are and what are they doing, embrace the competition and see what you can do with your customers so they don’t leave and go to the competitor.
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EX: the competition to LSU is Drew Brees and the Saints. EX: Before iPhone, the Blackberry was the main phone and now Blackberry is struggling. Stock is falling off the charts and now they are being forced to market in Indonesia. • EX: Proctor and Gamble has to know what Colgate is doing. Conditions what is happening around us. Look at the external environment and everything around you. External factors to look at: • Economy—when economic conditions are good, we can price a certain way. Then when the economy changes, we have to change the prices. • Technological changes—are you able to keep up when the technology changes. Technology is the ability to make work easier; the ability to create a device that can transport information fast and to create machines that will ad value to the company. o EX: blackberry lost here o Ford used technology to differentiate themselves from the competitors. It lifted them above every one else. They were able to create this very inexpensive car. o EX: UPS uses a card now to get to the packages instead of a key. • Political changes—the government says that things are going to change and you have to respond or you will not be able to keep up. The government will ban certain billboard ads. o EX: laws require that every car must be made with seat belts. • Social factors—the lifestyles and the values of the day. When the social factors change, how do you respond? o Due to 9/11 events, the FDA made regulations that if you did not have a small bag that could go through the scanner, then they must be checked. Samsonite went to research and development department with the dimensions and they designed a bag that is the correct size and that could hold everything that a male or female needed. o LEVEL TWO: Strategy Development—three phases of strategy development Phase 1 segmentation—how are you going to divide the population and then focus on that segment. Four ways to make sure that the segment you have identified is worth identifying: • Identifiable is the population identifiable • They have to be able to respond to what you are selling do they need the product and do they want the product • Can you reach this population you know who they are and you have identified them. Can you reach them: can you get the product to them (distribution) and can you communicate with them through things like technology (radio). • Substantial is the population big enough to matter. Phase 2 Targeting—who are you going to target. Three strategies for selecting a proper target market: • Undifferentiating—mass marketing. You are shooting for the entire population that buys this product. • Multisegment—choose not just one large population, but several segments. o EX: Walmart got jealous of Target because Target sells chic clothing. Walmart tried to design chic clothing and they failed. Walmart found that if they focused on the three segments of the market, they could recover from the failure.
Segment One—lower income individual who needs the cheapest prices that they can find because the economy is bad. Segment Two—lower to middle income but still trying to make ends meet. Their income level isn’t very high. These people still like a little bit of style and class. They found that this segment was large enough to matter. Segment Three—people who just want household goods that they can save a little money on. They don’t want to spend unneeded money on basic things. • An upper class individual who buy the finer things like clothing at another place, but the basic necessities like bath and clothing supplies are bought at Walmart. • Niche marketing—your one concentrated area. A small, little population o You have to make sure it is big enough to matter and can support your product enough. Phase three Positioning—how is the population going to see the product that you are going to position. You have to position the product to reach the correct market. When you are positioning, look for three factors: • Attributes—the features of the product • Benefits—the benefits that it brings to the consumer • Communication of value—how you communicate the value of the product to the customer. o Ex: Mountain Dew—20 years ago, no one would buy Mountain Dew. They directed their focus to the population of skate boarders and extreme sport category. Mountain Dew repositioned their entire drink to revolve around the extreme sports group. o LEVEL THREE: Implementation how do we make it all work together. The four P’s (Sellers Perspective)—interchangeable components that you put together and this is how you will reach the segment of the population that you have chosen to target: • Product look at what the product is and what category it is in. • Price you have to know how to price the product. If you price wrong, you will drive away customers and not attract those customers that might want to switch to your product. You can either attract or distract a large population. o Most fluid; lower price o Easiest to control o The price may affect the outlook of the product’s quality More expensive = better quality o EX: Karam’s hourly rate for consulting with a big company being too low, they decided not to use him for another project because his price was too low. • Place where is the product going to be or distribution—how are you going to get the product to them. o How do we get the product from the manufacturer to the shelves? • Promotions tell them what and where to get it. o How do you persuade people to buy your product? o How do you advertise? The Four C’s (Buyer’s Perspective) • Customer Value
o Place • Cost o Price • Convenience o Promotion • Communication o Product The decline of target • Economic shift o They began by selling “higher end” brands • Change in customer perception o People left Target for Walmart
Products • Product Life Cycle o Introduction Initial entry of product into the market Must consider pricing Must also consider the type of promotion to run o Growth Formed a loyal customer base and word begins to spread about your product. As you gain popularity, does your pricing/promotion change? o Maturity The peak of popularity and the beginning of decline o Decline Product has become outdated or unnecessary Some people continue to buy because it is cheap The life of the product can be extended • Technological improvements. • The four categories of products (based on the level of involvement—time/effort spent in searching/evaluating a purchase decision): o Convenience—not a lot of time or money spent; quick decisions; not a lot of risk involved. o Shopping products—a little more involved and a little bigger risk and more money involved. Needs good promoting to set the product apart from the rest. EX: technology products o Specialty products—you like a certain type of a product. (EX: William Sonoma) Luxury items; even higher level of involvement o Unsought Products Highest level of involvement EX: Life Insurance • Retail Mix o Adds presentation to the 4 P’s Décor • Components of a product o The product itself The name • Bluray vs. HDDVD o Packaging o Warranty
Implied warranty Written warranty • Lee Ayocoka o Worked at Ford and then began working at Chrysler o At Chrysler, he created the 10 year, 100,000 mile bumper to bumper warranty. o Service after sale o Brand/Company Images Objectives of branding • Identification • Repeat sales • Introduce new products EX: Tiffany’s • Tiffany’s has always been associated with high quality, high priced jewelry • They designed a cheaper, more accessible piece of jewelry • It sold like crazy • Because of this, overall sales dropped because the prestige of the “Tiffany’s” name had been diminished.
Three Objectives to Branding: 1. Identification 2. Be able to repeat sales 3. Introduce new products • Motel 6—Econo Lodge, stay if you are not on a family vacation, just drop in and keep on going. o They own land up and down America. This company bought Motel 6 and turned it around. o They hired researchers to figure out focal groups. Motel 6 was outdated (dirty); people only wanted to spend 45 minutes there. A lot of the people staying in Motel 6 are wealthy. o Segmentation—there is a segment of the population that use Motel 6 (people who travel by car) o People would rather save their money then spend it on a hotel room. They are frugal. o Motel 6 went through remodeling to clean the place up and make it a better hotel. The company who bought Motel 6 turned it around and flipped it. o They go to the Richard’s Group and told them to rebrand Motel 6: Three strategies: • Positionthey said they had to change their position. They needed to position Motel 6 as a clean and affordable (always the cheapest in a certain city) hotel chain. o We want all that a good hotel has and all the technology that a good hotel has and we want to position it as a place where successful, wholesome person stays. Not as a family vacation or business meeting. • Personality they said they had to create a personality for Motel 6. o The personality must match with the brand • Affiliation who is going to stay there? o Honorable, hard working, frugal people who want a clean, safe night stay. o Checkin, stay there for a short time, and then move on. Consumer DecisionMaking Process
Persuasion—how can we get you to buy our product • Persuasion is the attempt to modify the thought or behaviors of the consumers and move them toward a predetermined goal. • Emotional appeal—only works for certain individuals • “If you don’t want to be converted, don’t walk to the reliable” o Don’t go to the used car shop or a jewelry store. Five Steps in the consumer decision making process: 1. Need recognition • Maslow’s Hierarchy of Needs—we want to fulfill the highest need and recognize the highest need. 2. Information search—depending on how much information you need and how much involvement the search requires. • Sometimes the information search is fast or slow. • The bigger the level of involvement, the more we search. o EX: buying a house • Involvement is the time and effort spent searching and evaluating a purchase decision. • Involvement: o Routine—quick, low risk o Limited—moderate, spend some time on it o Extensive—high risk, you know nothing about what you are buying. o EX: buying a refrigerator—he knows nothing about buying a fridge because he hasn’t bought one in so long so it is an almost extensive search. ▫ Extensive search is not always the most expensive product. o Gather as much information to make a good decision. • What are the external factors that we look at when trying to gather information: o Personal ▫ Family and friend get information from family or friends; trustworthy and honorable ▫ Word of mouth when people talk, you listen to what they have to say. i. EX: movie industry (“sneezing”)—talk about how good the movie was. ii. EX: restaurants ▫ Buzz marketing a style of marketing that impacts word of mouth. i. When a company has a relatively new product, and they want to introduce the product to the market and they find the opinion leaders in that market. Tell the opinion leader to use that product (for free), and hope that the opinion leaders will spread good word about the product, which will lead to sales for the new products. ii. EX: moped—bring the moped (vespa) to Ohio State University; they gave the vespas to the football players. It worked in this case and in many other cases. 1. Put the moped in the hand of opinion leaders and the product will sell. The opinion leader will usually say that the product is good. iii. The ethical concern in buzz marketing is making sure that the people who are given the product are giving unsolicited word of mouth. iv. You do not use a celebrity; you use an opinion leader.
▫ Celebrity endorsement a celebrity endorser is someone that a company is paying money to to use the product and they say that they like it. i. Tom cruise and Ray Bans ii. Tom Brady, super star quarterback Patriots, signed a contract to be an endorser for Uggs for Men. **** 1. Percentage of royalty and a percentage of the company. iii. Three goals of celebrity endorsers: 1. Boost sales 2. Change the perception of the product—EX: Tom Brady and the Uggs. o Commercial—biased source of information ▫ TV—biased; Reebok is sued for the easy tone shoes ▫ Radio ▫ Newspaper ▫ Direct mail—more money spent each year than on TV. ▫ Internet ▫ Billboards—effectiveness depends on demographics o Public Information—the unbiased sources that we use to make decisions ▫ Consumer Report—an objective break down of the product. i. Automobiles—JD Power and Associates
