Marketing Defined

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Marketing Defined

• The process of creating, distributing, promoting,
  and pricing goods, services and ideas to
  facilitate satisfying exchange relationships in a
  dynamic environment.
• A voluntary exchange of things of value

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Social Marketing Definitions

• Process that applies marketing principles and
  techniques to create, communicate, and deliver
  value in order to influence target audience
  behaviors that benefit society as well as the
  target audience.
• Process for creating, communicating, and
  delivering benefits that a target audience(s)
  wants in exchange for audience behavior that
  benefits society without financial profit to the
  marketer

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Definitions cont.

• Application of commercial marketing technologies
  to the analysis, planning, execution, and
  evaluation of programs designed to influence the
  voluntary behavior of target audiences in order
  to improve their personal welfare and that of
  their society.
• Systematic applications of marketing concepts and
  techniques to achieve specific behavioral goals
  relevant to a social good.

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Old Versus New Marketing
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Core Concepts of Marketing

• Needs, wants, demands
• Needs -- state of felt deprivation -- dont
  create needs
• Wants -- specific satisfiers -- shaped by culture
  and individual experience -- we can influence
  wants
• Demands -- wants backed by buying power --demands
  often for a group of benefits and may be
  addressed by a number of needs/wants
• Basic needs are relatively few -- usually have
  many wants -- and limited demand
• Products
• Anything that satisfies a need or want
• We buy the service/benefit -- sell the service
• Marketing myopia -- focus on the product versus
  customer need

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Core Concepts of Marketing

• Value, cost and satisfaction
• Value is consumers estimate of products
  capacity to satisfy a need or want --versus the
  cost
• Cost is part of the need-satisfaction equation
• Often more emotionally driven than rational
• Exchanges transactions
• Exchanges -- the act of obtaining desired objects
  by offering something in return
• Transactions -- actual trade of value between two
  or more parties
• Agreement reached -- the event

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Role of Marketers

• Identify needs and wants
• Communicate customer expectations for product
  design
• Make sure company is delivering the
  product/service
• Follow up and control feedback from the customer
• Provide feedback to the organization
• Make sure adjustments get made where necessary

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Marketing Challenge

• Unfavorable state of societal and individual
  demand for change
• Hostile environment for social marketing
• Limited training of public health to be effective
  marketers

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Social versus Consumer Marketing

• Selling voluntary behavior change (accept,
  reject, modify, abandon)
• Customer Orientation, Select and Influence target
  markets
• Competitive analysis
• Exchange Theory, Benefits gt Costs
• Research is prevalent
• 4 Ps are considered
• Results are key

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Differences

• Financial gain versus societal gain
• Goods/service versus desired behavior
• Instant vs. delayed gratification
• Replacing maladaptive yet gratifying behavior
• Consumer aims at groups already positive toward
  the product, social aims toward hard-to-reach or
  at-risk groups

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More Differences

• Competition is other goods and services versus a
  preferred behavior
• Social focuses on more complex behaviors and
  products consumer products are sold
• Consumer has fewer intermediaries who are often
  more motivated
• Consumer has a simple exchange process gains are
  more salient
• Social considers ethics and equity issues
• Social changes both behavior and social structure

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McGuires Inputs

• Source
• Message
• Channel
• Receiver
• Destination

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Definitions

• Source the person, organization, or other
  entity identified as the origin of the message
• Message may be rational, emotional,
  educational, persuasive, action-oriented
• Channel the route of message delivery
  (broadcast, print, display, internet, etc.)

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Definitions

• Receiver the audience for a message and its
  demographics, psychological, and lifestyle
  characteristics
• Destination behavior change or product that
  the audience is expected to adopt

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McGuires Outputs

• Exposure
• Attending
• Interest
• Comprehension
• Skill Acquisition
• Attitude Change

• Memory Storage
• Information Retrieval
• Decision Making
• Behavior
• Reinforcement
• Consolidation

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Information Processing is Selective

• 1. Selective exposure/attention
• 2. Selective perception
• 3. Selective retention

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Information Processing

• Selective Attention
• People attend to messages that appeal to them or
  with which they already agree
• Selective Retention
• Reminders and attitudes may affect whether and in
  what form information is retrieved
• Selective Perception
• When presented with at least equivocal results,
  individuals will interpret results according to
  established attributes and values

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Contrasts Between the Sales Concept and the
Marketing Concept
Starting point
Focus
Means
Ends
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The Boundary Spanning Role of Marketing
The Environment
Support firms (e.g., ad agency)
The firm
Production
Finance/ accounting
RD
Personnel
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Factors InfluencingMarketing Strategy
Demographic/ economic environment
Technological/ physical environment
Marketing Intermediaries
Marketing information system
Marketing Planning system
Product
Target Customers
Place
Price
Suppliers
Publics
Marketing control system
Promotion
Marketing organization and implementation system
Political/ legal environment
Socio/ cultural environment
Competitors
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The Four PsComponents of the Marketing Mix
Marketing Mix
ProductProduct variety Quality Design Features Br
and name Packaging Sizes Services Warranties Retur
ns
PlaceChannels Coverage Assortments Locations Inve
ntory Transport
PriceList Price Discounts Allowances Payment
period Credit terms
PromotionSales Promotion Advertising Sales
force Public relations Direct Marketing
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Other Ps

• Partnerships
• Positioning
• Prompting
• Encouraging customers to adopt/maintain healthy
  behaviors
• Reminding
• Communicating with customers to increase their
  awareness of the health/wellness benefits they
  receive from HSO/HS

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Defining Customer Value

• Total Customer Value
• Product, Service, Personnel, Image Values
• Total Customer Cost
• Monetary, Time, Energy, Psychic Costs
• Customer Delivered Value
• Profit to the Consumer
• Consumers also weigh psychological costs such as
  image, reputation decision time

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Marketing-Mix Strategy
Promotion Mix
Offering Mix
Company
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Strategic Marketing Management

• Market Analysis
• Factors necessary to define and address a
  product/market
• Competitor Analysis
• Customer Analysis
• Needs assessment, target audience analysis and
  segmentation
• Capabilities Analysis
• Environmental analysis, ability to provide service

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The Planning Process

• Define mission and focus
• Examine internal environment
• Examine external environment
• Set corporate and business unit goals
  objectives
• Segment audience
• Design programs (with evaluation)
• Implement
• Examine feedback and provide control

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5 Dimensions of Audience Segmentation (Table 6.1)

• 1. Demographic
• 2. Geographic

• Age, sex, income, education, religion, ethnicity,
  census forms, occupation, family status
• State, region, city size, density, climate, local
  govt area, zip code, census area

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5 Dimensions of Audience Segmentation (cont.)

• 3. Psychographic
• 4. Epidemiological
• 5. Behavioral

• Values, lifestyle, social class
• Risk factor status
• Occasion, benefit sough, usage levels, readiness
  stage, attitude

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Choosing Approach

• Greatest need
• Size, incidence, severity, defenselessness
• Most ready for action
• Ready, willing, able to respond
• Easiest to reach
• Identifiable, distribution/communication
• Best match
• Mission, expertise, resources

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Targeting the Market

• Segment the Market
• Divide larger population into smaller groups that
  require a unique strategy to change behavior.
• Have something in common that makes them respond
  similarly to program efforts
• Must be cost-effectively identified, measured,
  analyzed
• Evaluate segments
• Each segment is evaluated to assist with
  prioritizing

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Quantifying Model

• Demand for a service
• Population at risk (from census)X incidence rate
  (from NCHS)X average use per incidenceX market
  share (assumed served )

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Marketing Strategies
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Creating Customer Value
Relative Price
Relative Benefit
Drs. Michael George Belch, 1994. All rights
reserved.
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Miles and Snow

• Prospectors
• HSOs aggressively search for new market
  opportunities and engage in innovation
• Analyzers
• HSOs maintain stability in most areas but seek
  some new opportunities
• Defenders
• HSOs rely on successful strategies and rarely
  make changes, or even small adjustments
• Reactors
• HSOs perceive threats/opportunities but are
  unable to adapt consistently and effectively

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Porters Strategies

• Cost-Leadership
• Always the lowest priced while maintaining
  equal quality
• Reach broad buyers
• Differentiation
• Unique customer benefits
• Competitive advantage

• Focus
• Focus entire marketing effort to attract one
  segment with unique needs/wants
• Niche marketing
• Middle of the road
• Some combination of all

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Market Penetration Strategy

• The fundamental strategy in the core business is
  to drive out competition by becoming the
  customers choice.
• While price competition is the simplest way to
  gain market share, it is very costly in a mature
  market

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Market Penetration Strategy (cont.)

• The following non-price strategies are more
  appropriate as they balance growth with profits

• Target marketing
• Product customization
• Key account management
• Specialty markets
• Relationship marketing
• Team selling

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Market Development Strategy

• The goal of a market development strategy is to
  increase the sales of present products by tapping
  new markets. This is generally accomplished
  using two broad approaches
• 1. Reaching new customer groups through regional,
  national, or international geographic expansion.
• 2. Reaching new market segments (customer groups)
  in present geographic markets.
• Demographic segments Benefit segments
• Life style segments Usage segments

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Product Development Strategy

• The goal of a product development strategy is to
  grow by selling new products to its present
  customers, or improved versions of its present
  products to its present customers. Action
  possibilities include
• The product reformulation strategy
• Making improvements in present products such as
  using better ingredients, additives, etc.

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Product Development Strategy

• The product quality improvement strategy.
• Improving the functional performance of present
  products, e.g., their durability, reliability,
  etc.
• The product feature additions strategy.
• Building new features into present products.
• The product line extension strategy.
• Broadening the product line by introducing
  additional sizes, forms, models, etc., of present
  products.
• The new product development strategy.
• Introducing new products in present markets that
  are either related to or unrelated to present
  products.

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Market Position Analysis BCG Matrix
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1
3
5
2
6
7
8
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Stars

• Characteristics
• Market leaders
• Fast growing
• Substantial profits
• Require large investment to fire growth
• Obtain a large share of the new users

• Strategies
• Protect existing share
• Reinvest earnings in the form of price
  reductions, product improvements, providing
  better market coverage, production efficiency,
  etc.

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Problem Children

• Characteristics
• Rapid Growth
• Poor profit margins
• Enormous demand for cash

• Strategies
• Invest heavily to get a disproportionate share of
  new sales
• Buy existing market shares by acquiring
  competitors
• Divestment (see dogs)
• Harvesting (see dogs)
• Abandonment (see dogs)
• Focus on a definable niche where dominance can be
  achieved

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Cash Cows

• Characteristics
• Profitable products
• Generate more cash than needed to maintain market
  share

• Strategies
• Maintain market dominance
• Invest in process improvements and technological
  leadership
• Maintain price leadership
• Use excess cash to support research and growth
  elsewhere in the company

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Dogs

• Characteristics
• Greatest number of products fall in this category
• Operate at a cost disadvantage
• Few opportunities for growth at a reasonable cost
• Markets are not growing therefore little new
  business

• Strategies
• Focus on a specialized segment of the market that
  can be dominated and protected from competitive
  inroads
• Harvesting-cut back all support costs to a
  minimum level supports cash flow over the
  products remaining life
• Divestment-sale of a growing concern
• Abandonment-depletion from the product line

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GE/McKinsey Matrix
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GE Matrix

• Market Attractiveness
• Revenues, growth rate, profit margin
• Competitive intensity, inflation sensitivity
• Business Unit Strength
• Current market share, rate of growth
• Brand strength, product quality, distribution
• Cost/Managerial factors

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Herrington Customer Satisfaction Hierarchy
Customer is an Integral Team Member
Dedicate Resources to Understanding Customer
Two-way Relationship (Employees Listen to
Customer)
Basic Support Services (Billing, Schedule,
Service)
Meet Core Capabilities (Product Must Work)
Drs.. Michael George Belch, 1994. All rights
reserved.
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Tracking Customer Satisfaction

• Critical is done on regular basis
• Several methods available
• Complaint suggestion systems
• Customer satisfaction surveys
• Ask the customer
• Telephone
• Mail out surveys
• Exit interviews
• Ghost shopping -- retail outlets
• Lost customer analysis
• Tracking research very affordable
• Can also get competitive information at the same
  time