Current Marketing Issues Seminar

1. Current Marketing Issues Seminar BA635Dr. Ed ForrestFall * 2009

2. E • Telephone: • (O)786-4161 • (Cell) 874-8784 • Email: • EdwardF@cbpp.uaa.alaska.edu • W3site: http://www.cbpp.uaa.alaska.edu/afef/

3. Everything is Online

4. Tonight: • Examine logic & paradigmof course… • which will guide our exploration of • “Current Marketing Issues”

5. What is Marketing?

6. Everybody is a Marketer • Everybody promotes/ sells themselves– • To get job/ promotion • To get date/ mate • Everybody has their price…………………

7. Everyday You Market Yourself • Your packaging–clothes, piercing, tattoos, cars, etc. • We all engage in “Positioning & Differentiation”

8. I think might be better "Ogar’s Fire" & Always been Marketers I’m calling it HOT • Innate sense of exchange • 1,000’s of years… bartered & traded “branded” goods & services “The Dawn of Marketing”

9. Marketing Defined • a FUNCTION • a PROCESS • a PERFORMANCE • a FUNCTION & PROCESS • > Function = ORIENTATION

10. Classic Functional Definition All activities performed in between: The Point of Production & The Point of Consumption

11. 1st Formal Definition ~1919 *Marketing and Merchandising by Ralph Butler & John Swinney, • Book distinguishes marketing from merchandising, • w/ marketing being something manufacturers do • & merchandising being the domain of jobbers; retailers. • Marketing defined as‘the manner in which the product is disposed of, the way in which it is distributed…, through various channels of trade.” 

12. Marketing Defined -1935 - “The performance of business activities that direct the flow of goods & services from producers to consumers.”

13. Marketing Defined-as a Process- 1985 "The process of planning & executing the conception, pricing, promotion & distributionof ideas goods & services to create exchange & satisfy individual & organizational objectives"

14. The Latest Official AMA Definition

15. In 2004-AMA Re-defined Marketing • "Marketing is an organizational function & a set of processes • forcreating, communicating & delivering value to customers • & formanaging customer relationshipsin ways that benefit the organization & its stakeholders."

16. Why the changed focus? What happened between 1985 & 2004 that made the AMA change the definition of marketing?

17. The AMA Rationale: “Technology & marketing been changing quite rapidly over last five to 10 years… Marketing should be customer-centric -- not brand-centric" • The 1985 definition was not encompassing enough. The new definition more clearly infuses the customer into marketing."

18. Marketing > Function =An Orientation ” “Marketing is so basic that it cannot be considered a separate functionon a par w/others such as manufacturing or personnel…

19. Marketing > Function =An Orientation “Marketing is… …the whole business seen from the point of view of its final result, -from the customers’ point of view.”

20. Management Reorientation:The Marketing Concept Focus on Consumer • Not product • Long –Term Relationships • Not Short-term Sales

21. Management Reorientation:Relationship Marketing Long-term Wide -Angle view of the customer build life-long relationship in the hope of establishing long-term repeat purchasing.

22. Losing a customer means losing the entire stream of purchases over a lifetime of patronage = Customer Lifetime Value

23. Estimate Customer Lifetime Value (CLV) • Estimate the number of purchase occasions by the customer over a given interval… • Estimate the average amount spent per visit. • Estimate likely additional purchases thru cross selling & upselling • Subtract the costs of maintaining the account per visit. • Add the value of the new referrals by the customer. • Take the present value of this net income stream with an appropriate discount rate.

25. A lot of Media + Not much Loyalty Can cost 5 times as much to acquire a new customer ……. vs.keep an existing one Costs of new customer acquisition have increased dramatically:

26. Retaining an additional 5%of customers each year… …can increase profits by 25-35%

27. Net Present Value

28. Marketing’s new definitionreflects a broadened focus-- • Was focused on short term profitable transactions… • Now look at customers' lifetime value • Was focused on capturing new customers…. • Now focus on keeping existing customers • Was focused on mass- media advertising...... • Now use integrated strategy w/ all points of contact • Was segmented on geo/demographic variables • Now use all relevant variables, especially behavioral variables -- usage rate & loyalty • Performance was measured by financial metrics… • Now also measured strategic & customer-satisfaction metrics

29. Changed focus--resulted in restructuring: • Company was organized by product units..... • Now organized by customer segment • The marketing department did the marketing… • Now everyone does some marketing • Company was the unit of analysis......... • Now whole value chain is unit of analysis • Had individual / hierarchical work structures… • Now cross functional teams

30. Marketing Next Step- ID the issues…

31. 1.2 billion in .4 sec 2008=27.1 million in .12 sec

32. GOOGLE- CAFFEINEhttp://www2.sandbox.google.com/ 57 million MORE RELEVANT in .25sec

33. As it is -On Any Given Day- One can find Issues of: • Product Quality • Service Quality • Consumer Confidence/Satisfaction • Value/Pricing Practices • Free/Fair trade • Globalization • Advertising (volume, veracity, political-correctness)

34. What the issues are-- Depends on Your Perspective: • Marketer- • Issues = factors that affect sales • Consumer- • Issue = factors that affect one’s sensibilities

35. Marketing Issues- as delineated by an old UAA Syllabus… • Marketing performance • The Creation of Customer Satisfaction & Value • Buyer Behavior • Relationship Marketing • Inter-firm Relationships in Marketing • Services Marketing & Service Quality • Competition & Strategy • Marketing and Information Technology • Marketing Globally • Ethics and Legal Issues in Marketing

36. Bad Marketing Ideas Future Markets Marketing High Technology Product By Design The Next Big Market Generational Divide Asian-American Consumers Why Service Stinks ReMarketing Old Brands Kamikaze Pricing The Old Pillars of New Retailing Global Marketing In The New Millennium Segmenting Global Markets The Nation as Brand Michael Porter’s Big Ideas Marketing Myopia More Issues / Other Syllabi

37. Could of used the text-- “Clashing Views on Controversial Issues in Marketing”

38. Question Addressed • Does Marketing Have Appropriate Boundaries– on what & how it “sells”? • Is the practice of Multilevel Marketing (ie Mary Kay/ pyramid schemes) legitimate? • Has the “Keep It Simple” concept become “All Change, All the Time?” • Is Relationship Marketing a Tenable Concept? • Does Cause-Related Marketing Marketing Benefit All Stakeholders? • Is Mass Customization the Wave of the Future? • Are Outrageous Prices Inhibiting Consumer Access to Life-Sustaining Drugs? • Will E-Commerce Eliminate Traditional Intermediaries? • Is Communications Technology “Death of the Salesman”? • The New Marketing Paradigm Shift: Are Consumers Dominating the Balance of Power in the Marketplace?

39. Fact is--these & most issues… Are RE-CURRENT issues- that Ebb & Flow w/ socio-economic events

40. We could- examine these issues 1 by 1… Boring! Too Simple & Just too Superficial

41. “Yes… you seem to be suffering from a marketing issue….” Examining only symptoms --not diagnosing the cause

42. Ergo- the Real Question is….

43. Ergo- the Real Question is…. Where do marketing issues come from?

44. Willing to sell Willing to buy Marketing’s “utility”/value derived from its Facilitation of Exchange! Temporal Utility Spatial Utility  Transactional Utility Marketing

45. Key Point: Keep Marketing in Perspective Seller Anything/Everything one does to facilitate exchange Buyer Whatever impacts Why- What- Where- When- How Exchange occurs… is (or becomes) an Issue…

46. Society Marketing Issuesin Perspective Marketing - part ofBusiness &Business - part ofSociety “Societal Change” creates “issues” for Business… which creates “issues” for Marketing Marketing Business

47. Thus- in order to identify- anticipate- understand Marketing Issues in particular One needs to identify-anticipate-understand • Societal Change • in general

48. Society Defined: A group of humans broadly distinguished by: • mutual interests, • participation in characteristicrelationships, • shared institutions, & • a commonculture

49. THUS- …become marketing issues In the final analysis marketing strategy is formulated to address… Patterns of/changes to: human interests, relationships, institutions & culture… Hence- our search for marketing issues begins w/ examination of…

50. & what better time to study Societal Change …We are living thru one of the great periods of societal change in the history of humankind…