1. ELC 310 Day 19

2. Agenda First Student Case –Dell by G 2 –Email presentations at least 15 min before class so I may upload to web server Discussion/lecture –Formulate a strategy to fill needs

3. Rest of Schedule Today –Dell Online G.Sumyla –Formulate a strategy to fill needs Nov 20 –Insite Marketing Technologies G. Nagradic –Segmentation and Positioning Nov 27 –Terra Lycos K. Pelletier –New Products Nov 30 –MarketSoft Corporation L. Dubois –Communication and Selling Dec 4 –OSRAM Sylvania G.Sumyla –Pricing and Distribution Dec 7 –Logistics.com A & B G. Nagradic –Build a Trusting Relationship with Customers Dec 11 –Travelocity K. Pelletier –The Future of Digital Marketing Dec 14 –Citibank Online L. Dubois –Written Case Study Due Dec 20 @ 3PM –Quiz #4 –Case Study Presentations Due

4. Overview Strategy Formulation Consumer Power –Theories P & T Trust based marketing Strategic Choice –Push vs. Trust

5. Understanding customer needs and behavior Formulate a strategy to fill needs Implement effectively and efficiently Build trusting relationship with customers

6. Strategy Formulation Modified SWOT –Identify key marketing strategic success factors and rate your self against competitors 1.Much worse 2.Worse 3.Equal 4.Better 5.Much Better 4 & 5 are strengths 1 & 2 are weaknesses

7. Strategy Formulation Identify specific market opportunities Identify environmental threats Match –Offensive Strategies Strengths <> Opportunities Strengths <> Threats –Defensive Strategies Weaknesses <> Threats Weaknesses <> Opportunities

8. Consumer Power 3 factors drive consumer empowerment –More options (choices) –More Information –Simpler transactions Can be an opportunity or a threat Evidence of consumer power can be seen –Travel (death of the travel agency) –Health Care (self-diagnose, reviews) –Automobiles (price transparency)

9. McGregor’s Theories X & Y Douglas McGregor, X-Y theory in his 1960 book 'The Human Side Of Enterprise'. Theory X workers could be described as follows: –Individuals who dislike work and avoid it where possible –Individuals who lack ambition, dislike responsibility and prefer to be led –Individuals who desire security Theory Y workers were characterized as: –Consider effort at work as just like rest or play –Ordinary people who do not dislike work. Depending on the working conditions, work could be considered a source of satisfaction or punishment –Individuals who seek responsibility (if they are motivated)

11. Theory P & T marketing P  Push based marketing –Customers avoid decision-making responsibility Are passive and must be coerced Have difficulty learning and prefer to be influenced Have little imagination T  Trust (advocacy) based marketing –Decision making is natural –Customers Are active and want to control the buying process Prefer to learn and make an informed decision Have imagination, ingenuity and creativity

12. Trust based marketing Four levels of trust –Belief that the company’s statements might be true –Confidence in the statements of the company –Reliance on the company –True Trust: customer delegates the right to make decisions and take action to the company The Internet enables trust building

13. Strategic choice: Push vs. trust 3 Choices –Push marketing Manipulate buyers Maximize sales (high margin) with no regard for customer satisfaction Ads to create hype (infomercials) –Selective trust Match customers to products Lost of honest information & comparison to existing products Value based pricing strategies Good (not great) fulfillment & customer service Attempts at retention –Full trust Advocacy for consumers Under promise and over deliver Unconditional customer service Impeccable honesty

14. Leave the blocks that apply Tilts left  Push Tilts right  Trust Balanced  Selective

15. Choices Theory P when –Low cost leader –Ill informed consumers –No need to build relationship Theory T when –High quality product –Differentiation through innovation –Informed and educated consumers –Industry values relationships

16. Benefits of Theory T No price competition Provide real consumer value High customer retention Stable revenue streams Higher sales volume without higher marketing costs –Positive PR and viral marketing