Marketing in Today’s Economy

Marketing in Today’s Economy 1 C H A P T E R

Power Shift to Customers Massive Increase in Product Selection Audience and Media Fragmentation Changing Value Propositions Shifting Demand Patterns New Sources of Competitive Advantage Privacy, Security, and Ethical Concerns Unclear Legal Jurisdiction The Challenges and OpportunitiesOf Marketing in Today’s Economy

U.S. Households by Internet Access Exhibit 1.1

The Children’s Online Privacy Protection Act (COPPA) Exhibit 1.2

Discussion Question • Increasing customer power is a challenge to marketers in today’s economy. In what ways have you personally experienced this shift in power; either as a customer or as a business person? Is this power shift uniform across industries and markets? How so?

Basic Marketing Concepts • Marketing (AMA 2005 definition) • “…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.” • Market • A collection of buyers and sellers

Basic Marketing Concepts • Marketspace • Electronic marketplaces that are not bound by time or space • Metamarket • A cluster of closely related goods and services that center around a specific consumption activity • Metamediary • Provides a single access point where buyers can locate and contact many different sellers in the metamarket

Example: Metamediary

Common Metamarkets and Participants Exhibit 1.3

What is Exchange? • Exchange • Process of obtaining something of value by offering something in return • Five Conditions of Exchange • There must be at least two parties to the exchange. • Each party has something of value to the other party. • Each party must be capable of communication and delivery. • Each party must be free to accept or reject the exchange. • Each party believes it is desirable to exchange with the other party.

People Places Experiences and Events Real or Financial Property Organizations What is a Product? • Product • Something that can be acquired via exchange to satisfy a need or a want • Examples • Goods • Services • Ideas • Information • Digital Products

The Concept of Utility • Utility • Ability of a product to satisfy a customer’s desires • Five Types of Utility • Form Utility • Time Utility • Place Utility • Possession Utility • Psychological Utility

Strategic Planning Strategy Tactical Planning Marketing Plan Social Responsibility and Ethics Social Responsibility Marketing Ethics Major Marketing Activities and Decisions (1 of 5)

Discussion Question • How concerned are you about privacy and security in today’s economy? Are you more concerned about online security or about the potential ramifications of RFID technology? Will these issues still be important in 10 years? Explain.

Research and Analysis Internal Analysis Competitive Intelligence Environmental Scanning Situation Analysis Developing Competitive Advantage Competitive Advantage SWOT Analysis Major Marketing Activities and Decisions (2 of 5)

Major Marketing Activities and Decisions (3 of 5) • Marketing Strategy Decisions • Market Segmentation and Target Marketing • Product Decisions • Product Positioning • Pricing Decisions • Leads to revenue and profit • Directly connected to customer demand • Easy to change • Major quality cue for customers

Online Social Networking • Social networking sites like MySpace.com, LinkedIn.com, and Facebook.com have been criticized for questionable content and easy access to predators. • How can advertisers balance the opportunities presented by these sites with the risk? Beyond the Pages 1.2

Major Marketing Activities and Decisions (4 of 5) • Marketing Strategy Decisions (continued) • Distribution and Supply Chain Decisions • Distribution and Supply Chain Management • Supply Chain Effectiveness • Promotion Decisions • Integrated Marketing Communications (IMC)

Major Marketing Activities and Decisions (5 of 5) • Implementation and Control • Marketing Implementation • Developing and Maintaining Customer Relationships • Transactional Marketing • Relationship Marketing

Major Characteristics of Transactional and Relationship Marketing Exhibit 1.4

Corporate Culture Matters

Taking on the Challenges ofDeveloping Marketing Strategy(1 of 2) • Unending Change • People-Driven Nature of Marketing • Lack of Rules for Choosing Marketing Activities • Basic Evolution of Marketing & Business Practice • Increasing Demands of Customers • Overall Decline in Brand Loyalty & Increase in Price Sensitivity

Discussion Question • The text argues that marketing possesses very few rules for choosing the appropriate marketing activities. Can you describe any universal rules of marketing that might be applied to most products, markets, customers, and situations?

Taking on the Challenges ofDeveloping Marketing Strategy(2 of 2) • Competing in Mature Markets • Increasing commoditization • Little real differentiation among product offerings • Increasing Expansion into Foreign Markets • Aggressive Cost-Cutting Measures • Increasing Cooperation with Supply Chain Partners and Competitors

American Customer Satisfaction Index Exhibit 1.5

Marketing Strategy in Action • Increasing expansion into foreign markets is becoming a necessity to compete in the global marketplace. • What kind of opportunities and threats are presented by the increasing global nature of the marketplace?

Marketing in Today’s Economy