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MARKETING. Week 6 Dr. Thomas Webb. Marketing - The Meaning Of Life.
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MARKETING Week 6Dr. Thomas Webb
Marketing - The Meaning Of Life “Marketing is so basic that it cannot be considered a separate function. It is the whole business seen from the point of view of the final result, that is, from the customer’s point of view!Business success is not determined by the producer but by the consumer.” Peter Drucker BUSINESS IS A CONSUMER SATIFYING PROCESS, NOT A GOOD PRODUCING PROCESS. IF YOU REALLY BELIEVE THIS AND LIVE THIS, THEN YOU WILL BE SUCCESSFUL! Theodore Levitt
The Marketing Concept! • WHAT IS MARKETING NOT? • NOT advertising • NOT sales • NOT marketing research • NOT planning • NOT cute ads, a hustling salesman, a sex ad, a $2.99 price, a survey. • ALL OF THEM AND MORE • Marketing is not exploitive by nature only by those that want to exploit. • WHAT IS THE MARKETING CONCEPT? • It is a way of thinking • Everything starts with the consumer, user or client. • A way of defining the objectives of your business • At the heart of all organizational strategies • It is a way of thinking about YOU and your life • It is the business of every entity and every person in an organization, profit/non profit, political, education.
WEBB’S 10 CORE PREMISES OF MARKETINGThe marketing concept is a way to view the world and live your life!
Always start your thinking on the outside with the consumers, the competition and the environment. Most problems arise because you forgetting this simple thought!It is a way to think! • Corollary 1.1 - Listen to the market. If you are hard of hearing you make big mistakes! • Corollary 1.2 - Consumer satisfaction is the defining premise. • Corollary 1.3 - The golden rule is wrong! “Do unto others as they want to be done unto.” Look outside, look at consumer needs and define your business around that! • Corollary 1.4Don’t underestimate the consumer. They search for value with competence.
Corollary 1.4Don’t underestimate the consumer. They search for value with competence Buyers are value maximizers. • This concept has a lot going for it. It assumes reasoned decision-making. In most purchases people buy TOTAL VALUE. Choice based on information, problem solving, experimentation, etc. • The product must create perceived value to the buyer • Look at ALL THE INFLUENCES ON BENEFITS AND COSTS When you measure benefits and costs you MUST look at the ENTIRE transaction, look broadly at the benefits and costs to assess value – benefits and value can be in use, in perception, and acceptance. TOTAL VALUE = Total Benefits – Total Costs Benefits = Product + Service + Situation + Image + reactions Costs = Money + time + energy + psychic + image + reactions
The Buying Center – Roles There are many participants who have an impact on the buying decision User Buyer DecisionMaker ACTION Gatekeeper Approver Initiator Influencer KIBDKey Influencer
Define the real product based on the consumer needs being fulfilled and the benefits received, not the physical object. This is the single most misunderstood and important concept in marketing. As long as you define the product as the physical object you are selling you are at a significant competitive disadvantage. • Corollary 2.1 – The product is what is does NOT what it is! • Corollary 2.2 – The product is everything that goes into creating it! • Corollary 2.3 - In the end whether it is a physical product, a service, a consumer good or a business product, they are the same from a marketing perspective.
3. You are in the business you say you are in, so define it very carefully. Look broadly. You may not be in the business you think you are in! Roberto Goizueta came to Coke as CEO when everyone thought Cokes sales has maxed out, mature market. He reframed the view of Coke’s market share – Coca-Cola accounted for less than 2 ounces of the 64 ounces of fluid that each of the world’s 4.4 billion people drank on an average day. “The enemy is coffee, milk, tea and water.” He ushered in a huge period of growth. • Corollary 3.1 -- The Great Buggy Whip Example! • Corollary 3.2 -- How you define your business changes everything! • Corollary 3.3 --Understanding the real competition is key to strategic success
4. You have a position in the consumer’s mind. Know what it is. Don’t try to be something you are not! Know what it is. • Corollary 4.1 -- Do you own a position, a place. Or not. Read Positioning Era • Corollary 4.2 -- Lets define Market segmentation, targeting, positioning and differential advantage or competitive advantage or USP My segments.com http://www.claritas.com/MyBestSegments/Default.jsp LOHAS is a VALS – What is it!
5. Understand the “expectation-reality gap” and you will make better decisions and be a better leader. Perhaps the single most important concept in management, relationships and understanding behavior. And NO management class or book has ever said this. • Corollary 5.1People almost always do what you would predict that they would do, it just isn’t want them to do something else. • The concept of trust is usually based on having accurate expectations. • Proper expectations are essential • Corollary 5.2Expectations are not the key. Reality is not the key. • The gap is the key • You understand this and you understand a lot. • Corollary 5.3 – Buyer Satisfaction is also based on the difference between expectations and reality. • Satisfaction is NOT based on reality but on the Expectation-Reality gap. • Satisfaction is a function of the product’s perceived performance in relationship to the buyer’s expectations. • Expectations generated from past experience, friends, associates, information, ads – all wrapped up into your package of expectations.
6. Go to the gap, avoid the crowd. • Corollary 6.1 Niches, targets, gaps, holes, that is where the action is. It is the passion for segmentation. • Corollary 6.2 Look at the holes in the channels, in pricing, in a product line, in what a product doesn’t do, in the parts the consumer does or could do. • Corollary 6.3 You must find a USP to succeed, differentiate every day • USP is the single most important sales concept I have. • Why us, why me, why select me, what is it about me that is different and the customer, company wants? • You, test USP out on you!
7. Understanding the Diffusion of Innovation is critical to new product development and knowing where and how to compete. • Corollary 7.1Diffusion Of Innovation –Adoption Process! People differ markedly in their propensity to try new products • Corollary 7.2Product Life Cycle - Every product goes through a product life cycle, sometimes more than one. Strategy is different in each state of of the cycle because the environment is different.
Corollary 7.1 Diffusion Of Innovation Innovators Early Early Late Laggards Adopters Majority Majority People differ markedly in their propensity to try new products
Corollary 7.1 Diffusion Of Innovation – The Stages • Innovators – Seek out pioneer products, venturesome, independent, not opinion leaders • Early adopters, Opinion leaders, legitimizes product, try new ideas, link to mass market • Early Majority – Given legitimization, they accept, prove success of mass market. Deliberate but innovative, determine success of product • Late Majority – Lag in adoption, when they get in it means slowdown in adoption rate and market saturation. Skeptical, harder to change • Laggards, Tradition bound, Ludites, laggards. • Three Key Participants • Change agents – tend to be outside the major groups, try to influence early adopters in acceptance - Tipping point, agricultural agents, • Translators. MUST have translators between Innovators and Early Adopters and Early adopters and Early Majority. • Gatekeepers. Key decision maker on when innovation accepted, housewife on food products
Corollary 7.2 Product Life Cycle Market Market Market Market Introduction Growth Maturity Decline Strategy in each stage is different because the environment is different in each stage
8. Always deal with the entire system. Never leave off the ends. The opportunities are in the nocks and crannies – that is where the action is! • Corollary 8.1Where does a channel start and end? The crux is to be inclusive. Look at the entire line from beginning to end and go back even further. The broader the view, the greater the opportunities. • Go to the very finest detail - what shelf is it on, how high is it. • Ask the question, where was it before this step and where is it going after this step. • Corollary 8.2 – A channel can define the product, it can determine your competition. • Corollary 8.3 Going into a new channel is often a failure. They just don’t know it and make major mistakes,
9. You are communicating with your customers every day so look at what you are saying. Always consider an integrated marketing communications program. Notice I said communications not advertising. I also didn’t say TV ads which are very expensive. Ads are the least of the issue for most small businesses. BUT communications is KEY. • Corollary 9.1 It is essential to integrate all the elements of a communications program and have them reinforce the others • Corollary 9.2Personal Influence Channels . Buzz doesn’t happen by accident. • Corollary 9.3Personal Selling - The Hercules of Marketing. At the heart of personal sales is the marketing concept and knowing your USP.
Corollary 9.1 It is essential to integrate all the elements of a communications program and have them reinforce the others
10. Price is a lot more than price. It generates revenue and represents all the elements of the product. • Corollary 10.1“Pricing should be done last because it integrates the entire marketing strategy into a single number.” Sam Pardue, Lensbabies • Corollary 10.2Price is the only element that generates revenue and it is the easiest to adjust, BUT it is also a critical element of strategy with major communications and financial ramifications. • Corollary 10.3Price is everywhere, name something that doesn’t have a price?
WEBB’S 10 PREMISES OF CREATIVE LIVINGHere are some core principals that are related to marketing, management and life!
WEBB’S 10 PREMISES OF CREATIVE LIVING • Go outside the paradigm to find the answer. “Think sideways!” Greatness often is the ability to go outside the existing paradigm then the new idea becomes obvious. • Often things aren’t what they seem, don’t assume you know. • Never, ever base a decision on sunk costs. It has destroyed companies and countries. • Don’t forget what made you successful. • Usually it is the little things that make the difference. Big thinkers are worthless, if that is all they can do. • Allow failure in order to succeed. • Always have people around you who are better than you are • Fun and humor are important. Take yourself and everything around you with a grain of salt. • The ethics and morality of an organization do not come from marketing but from the leadership. Set clear values. • The marketing concept is a way to view the world and live your life everyday. If you do that, you will be successful.
