1. Marketing 101 Presented by Professor Sridhar Balasubramanian
Acknowledgment: Thanks to Professor Barry L. Bayus for sharing many of the slides.

2. Dr. B’s Marketing Map: How Everything Fits Together
Marketing Strategy
Players
Creating sustainable advantage
Arena
Implementation
Tools
Copyright Sridhar Balasubramanian

3. Company Objectives, Goals, Mission Mission Statement
A statement of the organization’s purpose
Should be:
market oriented (i.e., defined in terms of customer needs)
realistic
specific
based on firm’s distinctive competencies
motivating

4. Example: Mission Statement(s)
“A computer on every desk and in every home.” (1975)
“To empower people through great software---any time, any place, and on any device.” (2002)
“At Microsoft, we work to help people and businesses throughout the world realize their full potential.” (current)

5. Company’s Product-Market Growth Strategies: Types
Current
New
Markets
Current New
Products 1 2
Market
Penetration
New Product
Development 3 4
Market
Development
Diversification
Which is usually most (least) risky?

6. Example: P&G Diversification Market Development Product Development
Brand platforms
Form (powder, liquid) platform
Derivatives
Breakthrough
Market Penetration
See also Wheelwright
and Sasser (1989, HBR),
“The New Product
Development Map”

7. Competitors Ignoring competitors can lay waste to the best plans
Importance of defining competition broadly – Railroads versus transportation (Avoid “Marketing Myopia”)

8. Defining Competitive Boundaries
Direct product-level competitors: American Airlines versus Delta
Indirect category-level competitors: Airline versus Cruise line
Even broader: Competitors for customer resources: Disneyland versus Bermuda

9. Customers Consumers, customers, end-users Value proposition
Lie at the heart of marketing
Good marketers pursue a really deep understanding of customers and their needs.

10. SWOT Analysis helps evaluate the company in its environment
Source: Kerin, etal. (2006), Marketing

11. Segmentation: Why is it important?
Firms have limited resources
Most firms can not afford to spend unlimited $$ to completely satisfy individual customers
More effective communication
Targeted marketing enables firms to establish a closer relationship with their customers
Better returns on marketing investments
Effective segmentation allows firms to market to those customers who value their product offering the most---leading to higher profits

12. Effective Segmentation
A “good” market segment is
Homogeneous (customers in a segment derive similar value from the offering and will respond in a similar fashion to the firm’s marketing mix)
Substantial (the segment must be large enough and have enough potential to be profitable)
Operational (the firm must be able to cost effectively reach the segment with its marketing mix)

13. Segmenting the market
product segmentation is usually based on product attributes whereas customer segmentation is based on needs/wants/benefits
segmentation “theory” is that segmentation should be done before product development; but often firms already have products they want to introduce in a particular market (e.g., expanding globally)
“Bases” versus “Descriptors”
Demographic versus psychographic

14. Targeting the right segment is crucial…

15. Targeting: Which segments?
Market size
Expected growth
Responsiveness
Media exposure and costs
Compatibility and fit
In practice, there is often a tradeoff between selecting target segments that will find the product most appealing and the ease of influencing a particular segment

16. Positioning Positioning is not what you do to a product.
Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect.
Ries and Trout (1981), Positioning: The Battle for Your Mind

17. Why is positioning important?
Positioning is giving meaning to a product which differentiates it from the competition and causes people to want to buy it.

18. Positioning should… Differentiate your product from the competition’s
Address important customer buying criteria
Articulate key product (company) characteristics

19. Perceptual Map – A positioning tool
lasting memory
common
special
for the moment

20. Products (Offering)
Anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a want or need
Products (Tide detergent, Chevy Volt)
Services (banking, home repairs)
Organizations (UNC, US Army, clubs)
Entertainment (NASCAR, American Idol)
People (Oprah, Martha Stewart, students)
Places (Las Vegas, RTP)
Ideas, Values, Causes (MADD)
etc.

21. Names (labels) matter!

22. How does a brand differ from a product?
Here is the famous advertising copywriter and ad agency founder David Ogilvy's definition of a brand:
The intangible sum of a product's attributes: its name, packaging, and price, its history, its reputation, and the way it's advertised.
A brand is more than just the offering. The “cornflakes” test….

23. P&G’s Brand Development Strategies
Product Category
Existing New
Brand Name
Brand
Extension
Line
Extension
Existing
New
New
Brands
Multi-brands

24. Brand Extensions (Too Far?)

25. Promotion Integrated Marketing Communications
The intentional coordination of every communication from a firm to a target customer to convey a clear, consistent and compelling message about the organization and its products

26. Common Promotion Tools

27. Push & Pull Strategies
Kerin, et al. (2006), Marketing

28. Place (Distribution Channels)
A set of interdependent organizations (intermediaries) involved in the process of making a product or service available for use or consumption by the consumer or business user
The channel performs the work of moving goods from producers to consumers to overcome the time, place, and possession gaps that separate producers from customers.

29. (Generic) Channel Functions
Product Information
Promotion & Demand Generation
Product Customization
Quality Assurance
Lot Size
Assortment
Availability
After Sales Service
Logistics
Financing
Waiting Time
Spatial Convenience (especially Internet)

30. Channels can be efficient, but also involve conflict
Channels are often more efficient than direct distribution
HOWEVER, manufacturers and retailers often have opposing objectives. The importance of “channel coordination.”

31. Pricing
Narrowly, price is the amount of money charged for a product or service
Broadly, price is the total value that consumers exchange for the benefits of having or using the product or service

32. Why is pricing important?
A firm captures the value of its offering through its pricing decisions
product decisions creates value for consumers
promotion decisions communicate this value to consumers
distribution decisions delivers this value to consumers
price is the only one of the 4P’s devoted to capturing value for the firm

33. General Pricing Approaches
Competition-Based
Cost-Based
Value-Based
price <= competitor’s price
price = production costs + markup
price = customer value

34. Price Discrimination
1st degree
2nd degree
3rd degree
1999

35. Dr. B’s Marketing Map: How Everything Fits Together
Marketing Strategy
Players
Creating sustainable advantage
Arena
Implementation
Tools
Copyright Sridhar Balasubramanian

36. STATE OF THE MARKETING MARKET
The economy affects all functional areas to some extent or the other. But, that said, marketing is less subject to sharp swings in employment opportunities and retrenchment.
Many companies today are interested in candidates with interests in:
Marketing Analytics and Branding Skills
Global marketplaces
Green/sustainable initiatives
Emerging marketing techniques (e.g., Social media-based marketing…Facebook and Twitter) 36 1

37. FUNCTIONAL ACTIVITIES THAT MARKETING MANAGERS ARE INVOLVED IN
Innovation and New Product Design/Development
Consumer and Market Research
Services Design and Marketing
Brand Management
Pricing Management
Sales and distribution channel management
Customer Relationship Management (CRM)
Advertising and Integrated Communications Management (IMC) 1

38. FUNCTIONAL ACTIVITIES THAT MARKETING MANAGERS ARE INVOLVED IN
Market-based consulting
International market development and expansion
New Business Development & Market planning
Market and Competitor Analysis 1

39. INDUSTRY SECTORS WHERE MARKETING MANAGERS MAY BE PLACED
Financial services (Citibank, Wachovia)
Consumer services (Ritz-Carlton, AT&T)
Consumer packaged goods (P&G, Kraft)
Medical and pharmaceuticals (J&J, Pfizer)
Business to Business sectors (Dupont, GE)
Technology (Microsoft, Lenovo, Apple)
Durable goods (Toyota, Whirlpool)
Consulting (Deloitte, Accenture) 1

40. INDUSTRY SECTORS WHERE MARKETING MANAGERS MAY BE PLACED
Fashion and apparel (Nike)
Advertising (McCann Erickson)
Market research (Yankelovich, ACNielsen) 1

41. WHAT IS SPECIAL ABOUT A MARKETING CAREER
# 1: To be a great marketer, you need to use both sides of your brain! You will need to be analytical AND you will need to be creative and innovative.
#2: To be a great marketer, you will need to do new and different things on a continuous basis. You should be comfortable with managing a variety of tasks.
#3: To be a great marketer, you need to get out from your office chair and be out on the field. You should enjoy meeting and getting to know your customers, channel partners, and other market players. 1

42. WHAT IS SPECIAL ABOUT A MARKETING CAREER
#4: To be a great marketer, you need to work well with people both on the outside and within the organization (including other functional areas). Marketing is a boundary-spanning function.
#5: To be a great marketer, you need to communicate effectively. 1