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Marketing Redefined
Dr. Dawne Martin
MKTG 241
January 19, 2012
© 2009 Prentice Hall
Rethinking Marketing, 1st Edition
1-1
Who was Janus?
• Janus was the Roman god of
– Gates and doors
– Beginnings and endings
– Always represented with a double-faced head
• Each face pointed in opposite direction
– Transitions from
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Primitive life to civilization
Countryside and city
Peace and war
Past and future
© 2009 Prentice Hall
Rethinking Marketing, 1st Edition
1-2
Learning Objectives
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Identify the meaning of a “Janus trend”
List the eight Janus trends
Explain how what is good is also bad
Explain the difference between


Evolutionary change
Revolutionary change
© 2009 Prentice Hall
Rethinking Marketing, 1st Edition
1-3
Beginnings and Ends
• Post-modern twenty-first trends paradoxical
– Neither universally positive nor negative
– Trends are not bad for everyone or good for
everyone
• Janus trends
– Paradoxical
– Seldom function in one direction
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1-4
Trend 1: Growth and Prosperity vs. Poverty
and Despair
• More wealth
– More than 7.7 million globally hold more than U.S. $1
million
– 236,000 millionaires in China, 61,000 in India
• Poverty and despair
– 2001 2.7 billion people survive on less than $2 daily
– 1960 (average income) 20% of world’s wealthiest
population was 30 times higher than poorest 20%
– 2001 It was 82 times higher!
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1-5
Disparities Between Wealthy and Poor
• Huge rise in elective
surgery
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Facelifts
Breast enhancements
Liposuction
Regular botox
treatments
© 2009 Prentice Hall
• Preventable diseases that
are three biggest killers of
children
– Measles
– Malaria
– Diarrhea
• 30 million children are not
immunized
• 6 million children under age
5 die of hunger every year
Rethinking Marketing, 1st Edition
1-6
Education and the Growing Disparities of
Wealth
• Every year cost of education worldwide
increases by an average of 10%
• 134 million children between ages 7–18 have
never attended school
• Girls are more likely than boys to not attend
school
– Middle East and Africa—only one-third of girls in
proportion to boys attend school
© 2009 Prentice Hall
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1-7
Trend 2: Free Markets vs. Growing
Protectionism
• Free markets
– WTO has 147 members representing 90% of world
trade
– Average tariff has fallen from 40% to less than 4%
since 1950
– Over past decade freight and communication cost
have declined sharply
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1-8
<FIG>Figure 1.1 : <TTL>How Transport and Communication Costs Have Declined[SN1]
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• Growing protectionism
– EU agricultural tariffs remain at 20% restricting
growth of poorest countries whose exports are
70% agriculture
– United States enacts “safeguard quotas” against
Chinese textiles
– Ongoing row regarding Boeing and Airbus
subsidies between United States and the
European Union
– 7 years from the Uruguay Round on textiles and
clothing, few quota restrictions have phased out
© 2009 Prentice Hall
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1-10
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Trend 3: Population Growth vs. Population
Shortages
• Population growth
– World’s population has doubled from 3 billion to 6
billion in past 40 years
– By 2050
• World population expected to reach 9 billion
• World’s 50 poorest countries will triple in population
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<FIG>Figure 1.3: <TTL>The World’s Population
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• Population growth—cont.
– Five countries account for approximately one-half
of the world’s population
– Population of five largest cities exceeded or
almost matched majority of world’s nations
(including geographically large nations such as
Australia and Canada)
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Most populated countries Most populated cities
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• Population shortages
– 27 potential future members of European Union
will experience 6% decrease in population through
2050
– Current EU members will also experience declines
• Italy’s population by 12.5 million
• Spain’s population by 3 million
• Germany could experience 50 million decline by 2100
– Canada’s Alberta province despite economic boom
lacks enough workers
© 2009 Prentice Hall
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1-16
Trend 4: Global Bliss vs. Global Gloom
• Global bliss
– Cultures and countries realizing
• Greater similarities than differences
• More to gain by cooperation than conflict
– Global brands
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McDonald’s
Starbucks
Sony
Coca Cola
Mercedes Benz
VISA and MasterCard
© 2009 Prentice Hall
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• Global bliss—cont.
– Globally integrated production processes
• Multiple sources of origin on products
– Advances in logistics have lowered containerized
transportation cost
• Massive decrease in port handling cost
• Lower freight charges
• Increased trade flow
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1-18
Top 10 container shipping companies in order of TEU [SN1]capacity, first [SN2]January 2006
<COLH2>Company[SN3]
TEU Capacity[5][SN4]
Market Share (%)
Number of Ships
1,665,272
18.2
549
Mediterranean Shipping Company S.A.
865,890
8.6
299
CMA CGM
507,954
5.6
256
Evergreen Marine Corporation
477,911
5.2
153
Hapag-Lloyd
412,344
4.5
140
China Shipping Container Lines
346,493
3.8
111
American President Lines
331,437
3.6
99
Hanjin-Senator
328,794
3.6
145
COSCO
322,326
3.5
118
NYK Line
302,213
3.3
105
<TB>A.P. Moller-Maersk Group
© 2009 Prentice Hall
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1-19
• Global bliss—cont.
– Time boundaries all but eliminated
• Internet
• Cell phones
– Regulatory boundaries fall as nations seek to
increase trade
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NAFTA—North America
EU—Europe
ASEAN—Asia
SADEC—Southern Africa
© 2009 Prentice Hall
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• Global gloom
– Many people feel
• Globalization is a bad thing
• Majority of the world’s population is worse off
• Undermines
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Environment
Labor rights
National sovereignty
Great majority of people in developing world
– Anti-globalization protests accompany most major
meetings of political and business leaders
• Protesters are united in their opposition to the power
of large corporations
– Diluting of local cultures by global brands
© 2009 Prentice Hall
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1-21
The Spread of "McWorld"
(<SRC>from Source: <URL>http://www.worldwatch.org/node/814)
• McDonald’s operates 30,000 restaurants in 119
countries and serves 46 million customers each day.
Its total revenue was $15.4 billion in 2002. On
opening day in Kuwait City, the line for the
McDonald’s drive-through was more than 10
kilometers long.
• Siemens, the German manufacturer of mobile
phones, computers, medical supplies, lighting, and
transportation systems, employs 426,000 people and
is represented in 190 countries. In 2002, Siemens’
net sales amounted to $96.4 billion, of which 79%
were international.
© 2009 Prentice Hall
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1-22
The Spread of “McWorld”—cont.
• Levi Strauss sells clothing in more than 100 countries,
and its trademark is registered in 160 countries. It
employs 12,400 people worldwide. It reported total
sales of $4.1 billion in 2002, and a net income of
$151 million in 2001.
• Coca-Cola sells more than 300 drink brands in more
than 200 countries. More than 70% of the
corporation’s income originates outside of the
United States, and its net revenues reached $19.6
billion in 2002. Coca-Cola employs 60,000 people in
Africa alone.
© 2009 Prentice Hall
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1-23
Trend 5: The MNCs vs. the Fragility of
MNCs
• The Power of MNCs
– Of 100 largest economies 51 are corporations, 49
are nation states
– Sales of Ford and GM > GDP of sub-Saharan Africa
– Wal-Mart revenues > most economies of eastern
Europe
– MNCs’ powers increases as they merge and
acquire firms across the world (as seen on next
chart)
© 2009 Prentice Hall
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© 2009 Prentice Hall
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• The Power of MNCs—cont.
– Combined market shares of the 10 largest
companies in
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Automobile industry 80%
Phamaceuticals 50%
Computers 70%
Telecommunications 86%
Pesticides 85%
– Strong emphasis on R&D
– Aggressive intellectual property protection
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• Fragility of MNCs
– Modulation of value chain makes smaller
companies more competitive
– Vulnerable to “brand companies”
• companies that outsource all activities except
marketing of brand
• More flexible, no overhead cost or investment in major
infrastructure
© 2009 Prentice Hall
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• Fragility of MNCs—cont.
– Susceptible to activities of so-called
champions”
“hidden
• Small- to medium-sized firms with strong global
presence
– Pursue clearer strategy
– Manage their finances more professionally
– Provide superior customer service
– Invest more heavily in R&D
– Lack of adequate laws protecting intellectual
property rights
• Patents
• Copyright protection
© 2009 Prentice Hall
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1-28
Trend 6: Worldwide Media Reach vs.
Fragmentation of Media and Audience
• Worldwide media reach
– “Buying”new from CNN, SKY, BBC, extends smaller
stations reach
– Global availability of
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Financial Times
The Economist
Time
CNN
MTV
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• Fragmentation of media and audiences
– Advertising in video games
• Advertisers pay large sums for product placement
– Sony
– Motorola
– Shell
– “U-commerce”
• Commerce that is ubiquitous, universal, unique, and in
unison with recipient
• “Permission notification”—email notification that is
recipient authorized
• M (or mobile)-Media advertisements to cell phones
and other portable devices
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• Fragmentation of media and audiences cont.
– Internet
• “Podcasting” anyone can be a broadcaster
• YouTube permits anyone to upload video and others to
download content
• MySpace is a communications tool that also allows
upload of video and download of content
© 2009 Prentice Hall
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Trend 7: Enhanced Service vs. Diminished
Service
• Enhanced service
– Singapore Airlines
• Pampers business class passenger
– Elegant “Singapore girls”
– Gourmet meals, fine wines
– Nordstroms
• Legendary return policy
• Personal shoppers
– FedEx
• Guaranteed delivery
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• Diminished service
– Demise of operated assisted calls in favor of direct
dial
– ATMs in place of bank tellers
– Online statement retrieval in place of paper
notification
– Customers don’t always want warm delightful
service—they want solutions
– Customers want
• Speed
• Efficiency
• control
© 2009 Prentice Hall
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1-35
Trend 8: The Age of Brands vs. The Era of
the Anti-Brand
• The age of brands
– Brand equity—value of a brand name
• brand recognition = brand equity
– Brand equity in not-for-profit firms
• Red Cross
• Amnesty International
• Habitat for Humanity
© 2009 Prentice Hall
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1-36
2006 Brand Value ($Millions)
21795
Marlboro
McDonalds
27501
Disney
27848
Toyota
27941
30131
Nokia
32319
Intel
48907
GE
IBM
56201
Microsoft
56926
67000
Coca Cola
0
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20000
30000
40000
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60000
70000
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• The era of the anti-brand
– Anti-globalization movement
– Dilution of local culture
– Exploitation of foreign workers
“Free speech is meaningless if the commercial
cacophony has risen to the point where no one
can hear you.” —from Naomi Klein’s successful antibranding book No Logo
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What is a marketer to do?
Managing in an era of Janus trends
• Balance tension between global scale
efficiency and multinational flexibility
– Continually explore innovations
– Leverage knowledge on a worldwide basis
• Achieve strategic balance
– Firms need to evolve, making slow changes
– Revolution—“evolution by jerks”
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• Edgy entrepreneurial communication
strategies
– Guerilla marketing—any nontraditional approach
to marketing
• Flyers on windshields
• Personal letters
• Broadcast emails and faxes
– Ambush marketing—getting your brand viewed
without paying for the privilege
• Wearing logo brand apparel to a competitor’s
sponsored event
– Viral marketing—spread
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1-41
Rethink Tool #1
• Think at the crossroads of disciplines to
discover breakthrough ideas where different
worlds collide.
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• AMA in 2004 redefined marketing as
“. . . an organizational function and a set of
processes for creating, communication, and
delivering value to customers and for
managing customer relationships in a way that
benefit the organization and its stakeholders”
© 2009 Prentice Hall
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2-43
Long Live the New 4 C’s
1. Co-created solutions/experience
—Don’t presume you understand me
—Don’t try to capture, captivate, or engage me
2. Communication with communities
—I want interconnected interactions with
minded others, not information
like-
3. Customizable personal value
—I am not cost-to-serve or one of many
4. Choice of convenience
—I am here, why are you not?
© 2009 Prentice Hall
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2-44
Seven (or Eight) Steps in
Marketing Process
• Identify and understand changes in the external
environment that creates opportunities
• Identify and understand customer needs
– Identify customer segments (groups of customers with similar
needs and response to marketing offer)
– Identify target market segments – segments chosen/where you
offer the most value
– Develop value statement and position relative to competition
• Develop Marketing Mix
– Develop the products, services or experiences to meet those
needs
– Price the products, services or experiences to create value for
target customers
Seven (or Eight) Steps in
Marketing Process
– Inform customers that these products, services, or
experiences exist – and how they satisfy customer
problems or needs
– Deliver the products, services, or experiences
efficiently and conveniently for customers
– Identify the right people to create or deliver your
product, service or experience
• Ensure customer satisfaction during and after
the exchange process (sale).
• Build long term relationships with customers
One-Page Opportunity Identification
• Due: Thursday, January 26, 2012
• Trends: Identify, document and describe
trends relevant to the opportunity
• Opportunity: Describe the opportunity,
including industry, business model and target
market
• Justification: Expand on trends and how the
trends suggest this opportunity