Chapter 4

Happy Valentines Day

Started Class by reading article "Ads Must Reach for Content that Aspires to Bigger Ideas"



Chapter 4
Marketing: Building Blueprints for Business

Marketing & Advertisers
- Many different types of marketers
+ Packaged Goods [consumer & that's it]
+ Durable Goods [cars, washing machines, lasts a while]
+ Services [American Express Credit Card, Travel Services, not really a tangible product]
+ Retailers [Target]
+ High Tech [Goodby Silverstein's HP "Maestro" ad]
+ Other [Virgin: Part airline, part music, part everything]
but they all have similar methodologies and organizations

"Marketing is Everything"
- Marketing has become the dominant and often most critical business function
- Manufacturing techniques and resources are now less critical, often easy to obtain
- Brand equity and intellectual capital are now more critical, harder to duplicate
- Business is evolving from a manufacturing of goods to manufacture of "thinking"

"The Five P's"
Five Critical Marketing Decisions:
- Product
- Price
- Place (physical distribution)
- Promotion
+ All types of promotional activities
+ Advertising, Sales Promotions, PR, etc
- The Fifth P = People

1. PRODUCT
Product may be "tangible"
- Packaged goods
- Durable goods
###
Products are bundles of benefits

2. PRICE
Key part of "value equation" [I get $2 worth of value]
At the price, product must have some measure of "functional superiority." [something makes be belive they are superior]
Price must also contain margin
- For funding of necessary activites...
- and profit
Price can send additional signals
Can be a strategy in itself or more likely part of a strategy (low end: walmart; high end: Apple)

3. PLACE
Similar products can make different "place" decisions.
Example: Coffee (Folgers, Gevalia, Starbucks)

4. PROMOTION
A range of marketing communications (MarCom) techniques can be used:
- Advertising, Sales Promotions, Public Relations, Publicity, Internet/New Media, Direct Sales, Direct Marketing, Event Marketing, Trade Shows, Promotional Products

5. PEOPLE
Some controversy over the "Fifth P"
- Once, some said "packaging"
- One consutlant says "personalization"
- We say it's "People..."
+ Your customers
+ Your own people
‡ Work force & sales force
+ Other "stakeholder"
‡ Trade, Supplies, Stockholders


THE MARKETING MIX
The right combinations of...
- Demand (Example: Price/Supply)
- Marketing Variables (Five P Variables & Promotions)
###


Unique Cominations / Unique Maketing Strategies
Example: Early auto industry
- Ford - Product / Price
- GM - Product / Value
- GM - Multiple Brands
- Chrysler - Competitive Position

Example: Bose
- Promotion + Place
###

2 Types of Organizations
- Vertical Organization (example: Oscar Mayer KGF)
+ Traditional military "command" structure
+ Clear lines of responsibilty
+ Seems to work best when there are numerous similar products
- Horizontal Organization (example: McDonnell-Douglas)
+ More fluid "ad hoc" structure
+ Organize around needs and functions

Top Job Functions
for both types of organizations CEO, COO, CMO / CFO, CIO
Chief Executive Officer, Chief Operating Officer, Chief Marketing Officer
###


Vertical Organizations
- Category Manager
+ Veteran (in 30s)
+ Major overall responsibily
###

Horizontal Organizations
VP of Program
+ Must know the business
+ Maturity/ power / clout - 35+
Marketing Manager
+ Marketing experience, not necessarily advertising
+ Responsible for all advertising, PR, sales promotion, trade shows, etc.