Download SLIDE 1 My name is Kate Mackey and I`ve developed this course for

MMBA 6530 Week 1, Lecture 1 - 1
SLIDE 1
My name is Kate Mackey and I've developed this course for you and I'm looking forward to
working with you as we go through it.
Let me tell you a little bit about my background. You can go up to the classroom to get more
detail. But I worked in many years in marketing after getting my MBA. I worked for a
number of years at National Semiconductor and then moved on to a classic marketing
background with the Pillsbury Company.
SLIDE 2
As a result of that, I have a very strong pers- perspective that is strategic and practical when I
think about marketing. Oftentimes, you think of marketing as fluff, as advertising and
promotion and all those soft things. In reality, marketing management in a pure strategic
sense is extremely, extremely analytical and very structured as well. And, that's the focus
that we'll be taking as we go through this particular course.
SLIDE 3
Now this very lecture here will give you a really brief overview of marketing. We're going
to come back in lecture two and tell you a little bit about the course and what the objectives
are and so on.
But I would rather that you have a broad overview first - just a picture view of what is
marketing before we go very far. Think of it as a wine tasting through a fire hose. We are
going to zip through everything that's going to be covered in this course.
Don't worry, we're going to come back and touch every single bit of it over the course of the
semester.
SLIDE 4
So, the objectives of this particular session are that you be able to explain the role of
marketing within the firm; and that you describe the basic elements of marketing. And, by
the time the course is over, you're going to be sick to death of hearing about the five C's,
STP, and four P's.
So, let's move forward.
SLIDE 5
Now the very first thing to think about here is marketing in the context of the firm. After all,
you're getting a master's degree in business administration. And, business administration - it
usually entails at least three areas within a firm. You may hear someone say - Oh, finance is
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most important. Or, you may hear someone else say - Oh, operations is more important. Or
you may hear someone say marketing is most important.
But, frankly, they don't know what they're talking about. A business is a like a three-legged
stool. You have to have finance to acquire capital and allocate resources. you have to have
operations to produce products and services that meet needs. And, you have to have
marketing to generate cash; and you do that through acquiring and retaining customers.
So, don't let anybody tell you that one field within business is more important than another.
In order to be successful, you have to be good in three.
SLIDE 6
Now, let's think for a second about marketing and marketing plans. By the end of this term,
you're going to be very good at developing marketing plans. And, basically, what a
marketing plan does is it looks at the history of a business, what's going on the market; and
then recommends a variety of strategies going forward.
And, then typically, you have some kind of a marketing budget. Now, when you think about
the realities of a firm, you never have enough resources. You will never have enough
money, you will never have enough time, you will never enough people. So, then how do
you actually manage a business to maximize what it is you actually have?
So, you could take the same product and the same marketing conditions and the same
marketing budget and wind up with totally different profit outcomes.
SLIDE 7
If you look at this pro forma income statement for Marketing Plan A versus Marketing Plan
B, you can see that one of them is making a whole lot more money than the other. And, yet
both of them are spending a million dollars in marketing expense.
What this is all about is how do you maximize the utility of those scarce resources that you
have. You will never have enough money. You will never have enough time. So, how do
you do the most with what you have? And, that's a lot about what this course is about.
SLIDE 8
So, here is the wine tasting through a fire hose. A market is the set of all actual and potential
buyers of the product. And, so a market segment, then, is a smaller group of that. It's a
segment, a subset of those. And, you can break them up a number of different ways - that's
called segmentation. And it's best if you look for different segments that have problems or
needs in common - a group of people who have a common problem - because when you talk
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to them later, then whatever it is you say to them resonates because they know that you're
talking about their problem. So, that's a market segment.
SLIDE 9
Here is an official definition of marketing. It's the process of planning and executing the
conception, pricing, promotion, and distribution of ideas, goods, and services to create
exchanges that satisfy individual and organizational goals. So, let's take that apart for just a
second.
First of all, it should the warm the cockles of your heart to see that this is a process. This is a
process like any other process and that's planning and executing. You- part of what
marketers do on a day to day basis is that they develop marketing plans and they execute
them. They execute the conception of ideas, goods and services. In other words, they
develop products that meet customer needs; or they develop services; or, especially important
for you, they develop ideas because that's a lot about what you do.
It's also about planning and executing the pricing and the promotion and advertising, and the
distribution of those ideas, goods, and services.
Now, here's another thought. It's to create exchanges. So, it isn't always money that changes
hands here. It's the exchange. Think barter, or think you scratch my back, I'll scratch yours.
It's creating exchanges that satisfy individual and organizational goals. Individual goals,
perhaps for an individual consumer who is buying your product; organizational goals because
your organization must grow to survive. And, you want it to survive over the long-term. So,
that's kind of an official definition of what marketing is.
SLIDE 10
Here is another concept that we're going to be talking about in the course. It's called the
"product life cycle." And, basically what it's saying is that products as they're introduced into
market go through a number of fairly predictable stages.
Now, when we get to that section, we'll go into in more detail. But, this is basically saying
that a product goes through a period of slow introduction; and it starts to take off and grow in
terms of sales; then it starts to slow and mature; and, then it may either stay in maturity for a
long time -or as is the case in many high tech industries, it may decline very rapidly. So, this
life cycle could last 100 years, or 100 days.
SLIDE 11
Now, another concept that's going to be very important to you in this course is the marketing
plan. And, basically, a marketing plan is a on-year document and it's typically the first year
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of a three-year strategic plan. In other words, you get approval from management for a threeyear strategic plan on a company-wide basis - not just marketing, but an overall business
plan. And, then this is the year of implementation for the first year of that. And, it includes a
number of sections.
SLIDE 12
First, it includes an executive summary. And, this you write last. It includes everything else
that's in it. It's pulling it back together into a summary. Oftentimes, this is all executives will
read, so you really have to do it well.
SLIDE 13
The marketing situation analysis is analyzing all of the things that are going on in the market.
What's going on with your customer base in those potential segments? What's going on with
the competition? And, what's going on with potential collaborators? And, what's going on in
the economy, the macro environment, the context? And, what's going on within your own
company?
SLIDE 14
So, the situation analysis then leads you to the opportunities and issues analysis. And, this is
where you look for opportunities out there in the market or with the competition or in the
context that you can take advantage of based on your own internal company strengths and
weaknesses.
SLIDE 15
Then, of course, you set objectives because if you don't set objectives, you don't know
whether you've won or not at the end of the day. And, we'll be talking about all of these in a
great deal of depth as we go forward in the course.
SLIDE 16
Now, we get to marketing strategy. Marketing strategy includes segmentation, targeting,
differentiation, and positioning.
That's the heart of marketing strategy. Once you get that done, you can use what's called the
marketing mix to implement it. That's product design strategy, place or distribution strategy,
pricing strategy, and then, promotion and communication strategy.
SLIDE 17
At that point, you develop very detailed action programs. This is that we're going to develop
a widget that has a certain weight and a certain color, and we're going to sell in Poukeepsie,
and we're going to sell it and we're going to launch it during the month of March with a fourCyber-Com Tr anscrip tion Services
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color ad in their journals, their newspapers.
Action programs are very specific tactical details.
SLIDE 18
Then you must always be thinking about market research next steps. Remember I told you
that marketing is very analytical. In order to understand what you're going to do next, you
have to understand what's going on in the marketplace. And, this requires ongoing, constant
research. Now, as part of this course, you're going to be actually running a simulation and
running a business. And, you're going to be doing market research on a regular basis in order
to get the competitive edge versus your teammates on other firms.
SLIDE 19
And, then, finally, financials. Because after all, we are running a business here and you have
to make a profit in order to be sustained, in order to grown, and be successful in the long
term.
So, that's the marketing plan. And, the course is structured around that.
SLIDE 20
Okay, so then here is the promised key elements of marketing. You can actually go up to
somebody and you say you know all there is to know about marketing. If you know what the
5-C's, STP, and the 4-P's are - you know all there is to know about marketing.
SLIDE 21
The 5-C's - that's the stuff in the situation analysis. It's what's going on in the context - in
other words, the broader, macro economic. Economic, political, regulatory stuff that's
outside of your control but that you have to take into account when you're actually
developing your marketing strategies.
The second one is company. It's your own organization. What are your strengths and
weaknesses? Customers - who are the different customers you have and what are the
markets that are out there, and the market segments, and how do they make decisions, and
what do they like and what don't they like.
Competitors - who are they? You know that most start-ups fail because they don't have a
clear enough understanding of either their customers or their competitors, or both.
And, then finally, collaborators. Business has changed dramatically in the last 20 years or so.
So many companies use collaborators in order to put together their product and to get out to
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market.
So, the 5-C's is a situation analysis. You're analyzing what's going on in the context in your
company, with your customers, with your competitors, and with the collaborators you're
currently using.
SLIDE 22
STP - Let's first- first with S and T. S stands for segmentation. So, a segment is a group of
customers who have similar problems, or maybe similar characteristics in some way.
Then targeting is picking one of those to focus your marketing efforts on. So, segmentation
is finding different groups of people who have a similar problem; and then targeting is
picking one, just one to focus on.
SLIDE 23
The next key part is called positioning. And, actually, positioning is a two-step process. It's
called differentiation and positioning - so, try to think in terms of differentiation and
positioning as you go through this.
Now, here's the official definition: It's determining how a benefit or a characteristic of your
product or service or idea are or could be different from the competition in ways that are
important to your customer.
And, then positioning is designing the offering or image. So, it- it occupies a meaningful
place in your target customer's mind.
Another way to say that is like this: Number one - Differentiation is figuring out what it is
your customers give a rip about and how you can do that one thing better or differently than
the competition.
And then positioning is using all the rest of the marketing mix - product design strategy,
pricing strategy, promotion strategy, place and distribution strategy - to communicate that
differentiation to the target.
SLIDE 24
So then we get to the 4-P's and that's called the marketing mix and it's what most people
think marketing is. And, in reality, these are the executional elements. The real heavy lifting
in marketing is segmentation, targeting, differentiation, and position.
So, then, we have this mix - the marketing mix that you use to implement the positioning for
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the target.
SLIDE 25
So, product strategy includes all of those things that you design into the product - things that
your customer wants. Different quality levels, certain features or options, what type of style do you want it to be high style fancy, or something kind of rudimentary and basic? How
many sizes do you offer, and what sizes? How many services do you offer with it and what
kinds of warranties and how do you manage returns? What kind of a brand name do you put
on this and how do you package it?
So, all of these are the decisions that go into designing a product, or a product strategy.
SLIDE 26
The next one is pricing strategy and that starts with what is your list price. In other words,
the price that you have on a price list that a customer could look at, also called your base
price. And, then from there, what kinds of discounts do you take off of that or what kinds of
allowances? An allowance is like a discount but the customer has to do something in
exchange for getting the discount. For example, if you're talking a retail outlet, they might
have to put up a display, or put a reduced price on the shelf.
The payment period is actually part of your pricing strategy. How long do you give people to
pay? And, perhaps, what kind of credit terms do you give them? All of those fold into what
is pricing strategy.
SLIDE 27
Place strategy is also referred to as channels of distribution. It's how do you get products to
customers from the manufacturer. So, it includes things like channels of distribution, the
various locations where you offer the product, how you carry inventory and how much, how
you transport it from one place to another; and, the idea of strategic alliances, because of
much of your channels of distribution will be alliances with distributors or with other
companies that are helping you get product to customers.
SLIDE 28
And finally, we have promotion and communication strategy. This is what most people think
marketing is. You can see here that it's- while it's extremely important, it's only the tip of the
iceberg. It includes personal selling, things like trade shows and events. It includes things
like sales promotion - for example, coupons or rebates or buy one, get one free. It includes
advertising, both in terms of what's the message - what is it you're going to say and what is
the media you're going to use to say it.
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And, it includes public relations, which are usually unpaid information about your company.
For example, in the newspaper or in a magazine.
SLIDE 29
So, that's the quick overview of the course. You should be able to explain the overall role of
marketing within the firm, and describe the basic elements of marketing.
So, that concludes the first lecture for week one. And, in the second lecture, we'll come back
and talk more about the overall objectives of the course and some of the specific topics that
we'll be covering.
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