Tuesday, September 27, 2011

Chapter 8 - Creating Brand Equity

Summary
Strategic brand management combines the design and implementation of marketing activities and programs to build, measure, and manage brands to maximize their value and strengthen brand loyalty.  Marketers want consumers to recognize and be loyal to their brands.  To help this process they choose trade marketable brand elements to apply to their products and on a brand extension, a firm puts an established brand on a new product. This may or not work and should be judged by how well they leverage existing brand equity.

A.    What is Brand Equity?
1.      Brand equity is the added value endowed on products and services by the brand. The brand is the name, term, sign, symbol or design that identifies a product.
2.      A brand can be a good (Bic razor), a service (American Airlines), a store (Target), a person (singer Toby Keith), a place (the city of New York) an organization (United Way), or an idea (free trade).
3.      Brands identify the source or maker of a product and allow consumers to assign responsibility for its performance to a particular manufacturer or distributor.  They perform valuable functions for a company by allowing them to organize according to brands. A credible brand signals a level of quality to consumers so they will choose a particular brand again. Branding a product teaches consumers about the product by giving it features to identify it and to care about its brand equity. Three key ingredients of customer-based brand equity are: 1) brand equity arises from differences in consumer response; 2) differences in response are a result of consumer’s brand knowledge; 3) brand equity is reflected in perceptions, preferences, and behavior related to all aspects of the brand’s marketing.  A brand promise is the marketer’s vision of what the brand must be and do for consumers.

B.     Building Brand Equity
1.      Marketers build brand equity by creating the right brand knowledge structures with the right consumers by using the right brand equity driver.
2.      An example of this is the name Bing for Microsoft’s search engine which is supposed to convey the “aha” moment of finding something you’ve been searching for.
3.      There are three brand equity drivers – Choosing brand elements, designing holistic marketing activities, and leveraging secondary associations. Marketers want to choose brand elements to identify and differentiate their products, such as the Nike “Swoosh” logo. This allows the consumer associate how they think or feel with the product. Marketers should use these six criteria when choosing their brand elements: memorable, meaningful, likable, transferable, adaptable, and protectable.  Customers get to know and recognize a brand through brand contact.  This is any experience with the brand, either positive or negative. A company must put a lot of effort into managing these contacts.  The final way to build brand equity is to link the brand to other information in memory that conveys meaning to consumers.  Marketers must also adopt an internal perspective to ensure employees are aware of how they can help, or hurt, brand equity.  Some companies collaborate with consumers to create value through communities built around brands. Three characteristics identify brand communities: 1) a sense of connection to the brand, 2) shared rituals, stories, traditions, and 3) shared responsibility or duty.

C.     Measuring and Measuring Brand Equity
1.      Brand equity can be measured indirectly by assessing potential sources of brand equity by identifying and tracing consumer brand knowledge structures, or directly by assessing the actual impact of brand knowledge on consumer response to different marketing aspects.
2.      The brand-management firm, Interbrand, has developed a model to estimate the dollar value of a brand.
3.      Companies will want to measure brand equity, either directly or indirectly. Brand audits are good for helping marketers understand the sources of brand equity and how they affect outcomes of interest, and brand tracking is will help marketers understand how these sources and outcomes change over time. Brand equity should not be confused with brand valuation, which is the job of estimating the total financial value of the brand. Marketers can reinforce brand equity by constantly conveying the brands meaning to consumers. Old and tired brands that consumers have started to overlook can be revitalized by understanding the original sources of brand equity.  Should the same sources be used again or new ones?

D.    Devising a Brand Strategy
1.      A branding strategy reflects the number and nature of both common and distinctive brand elements.
2.      General Mills uses the strategy of naming its brands by using individual names for its product brands, such as Nature Valley or Wheaties.
3.      A firm has three main choices when deciding how to brand new products: 1) develop new brand elements, 2) apply some of its existing brand elements, or 3) use a combination of new and existing brand elements.  When a firm must choose which brand names to use, it can use the strategies to use individual or family brand names, to use a corporate umbrella or company brand name, or to use a sub-brand name.  A brand portfolio is all the brands and brand lines a particular firm offers for sell in a category or market segment. Brands can play roles in a portfolio such as flanker (or fighter) brands, cash cows, low-end entry level or high-end prestige. Many new products are introduced as brand extensions under their strongest brand names, up to 80 or 90 percent per year.  Consumers will form expectations based on what they know about the old brand. Extensions increase the ease of getting retailers to stock the new product, be less expensive to launch and they can provide feedback benefits.  A disadvantage of extensions is brand dilutions – when consumers no longer associate a brand with a specific product.

E.     Customer Equity
1.      Customer equity is the sum of lifetime values of all customers.
2.      Customer equity focuses on bottom-line financial value unlike brand equity, which emphasizes strategic issues in managing brands and brand awareness.  They are both important to use in attracting customers to products.

Sunday, September 11, 2011

Chapter 7 Identifying Market Segments and Targets

Summary
Target marketing includes three activities: market segmentation, market targeting and market positions.  Segments are large identifiable groups of customers who share similarities.  Marketers will sometimes break down groups into even smaller target markets.  Target markets can be at four main levels: mass, multiple segments, single or niche, and individuals.  Only large companies can be successful at using mass marketing.  More companies are choosing to do mass customization.  Marketers must choose target markets in an ethical and socially responsible manner.  

A.      Bases for Segmenting Consumer Marketing
1.       Target marketing is when marketers identify and profile distinct groups of buyers who differ in their needs and wants, select one of more market segments to enter, and establish and communicate the offering’s distinctive benefits to each target segment.
2.       France’s Club Med is a company that through the years has targeted different customer groups.  As the marketing environment changed, they would change their target segment in order to grow and expand.
3.       Market segmentation divides the market into smaller sections.  A segment consists of a group of customers who share a similar set of needs and wants. There are geographic segments (groups such as nations, states, regions, counties, cities, or neighborhoods), demographic segments (age, family size, family life cycle, gender, income, occupation, education, religion, race, generation or cohort, nationality, and social class), psychographic segments (psychological/personality traits, lifestyle, or values) and behavior segments (knowledge of, attitude toward, use of, or response to a product).

B.      Bases for Segmenting Business Markets
1.       Business markets can be segmented in many of the same ways as consumer markets with a few others also – operating variables, purchasing approaches, situational factors, and personal characteristics.
2.       Business marketers generally identify segments through a sequential process.

C.      Market Targeting
1.       Market targeting is breaking down groups into even smaller segments perhaps using the seven-step approach: needs-based segmentation, segment identification, segment attractiveness, segment profitability, segment positioning, segment “acid test”, and marketing-mix strategy.
2.       A bank may identify a group of wealthy customers, and then within that group target retired customers.  A marketer may identify teenagers as a group and then break it down into males and female.
3.        To be useful, market segments must rate favorably on five criteria: measurable, substantial, accessible, differentiable, and actionable.  They must have long-term segment attractiveness, according to Michael Porter, who has identified five forces that determine such: the threat of intense segment rivalry, threat of potential entrants, threat of substitutes, threat of buyers’ growing bargaining power, and the threat of suppliers’ growing bargaining power. Marketers must be skilled in evaluating segments because they can waste a lot of money targeting the wrong market. Marketers have a range of possible levels of segmentation.  They can use full market coverage, multiple segment specialization, single segment concentration (niche), and individual marketing.  Marketers must be wary and not violate any ethical standards when selecting their market segmentation.



Saturday, September 10, 2011

Chapter 6 - Analyzing Business Markets

Summary

Organizational buying is the decision making process of by which formal organizations purchase products they need.  Organizations can be institutions such as hospitals or schools or they can be governments.  There are three types of buying situations – the rebuy, modified rebuy, and new tasks.  Each organization has a buying center, which is made up of all the people who fulfill a role in the buying process.  Marketers need to influence these parties and should stay aware of things currently going on in the marketplace that could influence the buying center’s decisions. Organizations build strong relationships with their customers and supply added value.

A.      What is Organizational Buying?
1.       Organizational buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.
2.       Oracle is a great example of an organization that owns many businesses.  They not only sell products, they also produce many products that require vast quantities of raw materials to build components. 
3.       Organizations that produce goods and services must purchase many materials to operate.  They are part of a complex system called a business market.  In a business market, businesses buy from other businesses and face many key challenges in identifying new opportunities and measuring marketing performance and accountability.  In the business market there are also many institutional (schools, hospitals, nursing homes, etc.) and government (local, state, federal and in Oklahoma – Indian tribes) organizations.  There are three types of buying situations – the straight rebuy, modified rebuy and new task. Also, there is systems buying, which is when a firm prefers to buy a total problem solution from one seller and the seller handles everything involved and turns over a completed project at the end.  Originating with government purchases, systems selling is a key marketing strategy in bidding to build large-scale industrial projects.

B.      Participants in the Business Buying Process
1.       There can be many people involved in the business buying process, including purchasing agents, who help select suppliers, department personnel, who initiate the requests and engineers who often select the product configurations.
2.       In my organization I worked for six years in the purchasing department as a supervisor of the employees, including the staff of buyers.  We frequently had vendors who would initiate their contact with the department who would be most likely to use their products.  I’ve been involved in many issuances of requests for proposals and I recognize the seven roles.  Often, much of the work leading up to the actual award has already been completed by the time the request came to my procurement department.
3.       In a buying organization there is always a buying center, which consists of all the people involved in the buying process.  There are typically seven roles in a buying center: Initiators, users, influencers, deciders, approvers, buyers and gatekeepers.  Sometimes, one person may fulfill more than one role. Each participant in the buying center may have different levels and amounts of influence on the purchases.   Successful marketing to organizations requires knowing which type of organizations to focus on in the selling efforts and figuring out who are the major decision participants and who are the right people to reach.


C.      Stages in the Buying Process
1.       The business buying-decision process includes eight stages called buyphases. These are the phases that occur: problem recognition, general needs description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification and performance review. Some stages in the process can be skipped under certain circumstances.
2.       An example of this is when a buyer already has a favorite supplier or a ranked list of suppliers and can skip the search and proposal solicitation phase.
3.       Someone in the organization recognizes a need or a problem and starts the buying process. The buyer decides what and how much of a product is needed, sometimes getting input from others such as for configurations and budget restraints.  Once the buyers know the details of the needed product, he or she begins a search for a vendor or supplier.  This can be done by searching the internet, reviewing information received at trade shows or conferences, recommendations from others, or past experience and knowledge.  Large and complex orders may require issuing a request for proposal from qualified suppliers or requests from approved suppliers may be sufficient. Some purchases are given to the lowest bidder, but many awards are made only after a complex scoring and evaluation process which also looks at quality, past experience of the supplier and post-award service. The orders are placed with all the specifics of quantity, price, etc. in place for the one purchase or a blanket order may be placed after a price is negotiated that allows a company to make many routine purchases under the same contract.  Supplier performance is reviewed and evaluated periodically to ensure the supplier is still performing in a manner that meets the organizations qualifications.

D.      Managing Business-to-Business Customer Relationships
1.       Managing relationships means cultivating the right relationships to improve effectiveness and efficiency.
2.       A large organization may need an automated timekeeping system.  This can involve input and planning of several departments in the organization and a lot of customizations may need to be made to allow the timekeeping system to run on a company’s network. Because this is a lengthy process and involves much effort on both sides, a company may insist on training and technical support from the supplier.
3.       A number of forces influence the development of a relationship between business partners and four relevant factors are availability of alternatives, importance of supply, complexity of supply, and supply market dynamism. From these four factors we can classify relationships into eight categories: 1) basic buying and selling; 2) bare bones; 3) contractual transaction; 4) customer supply; 5) cooperative systems; 6) collaborative; 7) mutually adaptive; and 8) customer is king. Sometimes a strong customer-supplier relationship can increase risk to the customer and the supplier’s specific investments, which is time and money spent on endeavors tailored to a specific company.  When buyers can’t easily monitor a supplier’s performance, they aren’t always aware of opportunism, which is some form of undersupply (or cheating) on the part of the supplier.

Chapter 5 - Analyzing Consumer Markets

Chapter 5 – Analyzing Consumer Markets
Summary
Consumer behavior is influenced by three factors: cultural, social, and personal.  Cultural can have three subsets of culture, subculture, and social class.  Social can be reference groups, family, social roles and statuses. Personal can be age, stage in lifecycle, occupation, economic circumstances, personality and self-concept, and lifestyle and values.   Consumers go through a buying process consisting of recognizing a need, researching or searching for information about products, evaluating the alternatives, making the decision purchase and post purchase behavior.  Behavioral decision theories help marketers understand why consumers aren’t always rational in their decision making process.  Two theories are decision heuristics and framing.

A.      What Influences Consumer Behavior?
1.       Consumer behavior is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants.  A consumer’s buying habits are influenced by cultural, social, and personal factors.
2.       Teens often purchase products based on what their friends say about that product or because of what a sales person tells them about the product.
3.       Consumer buying behaviors are affected by the culture in which they live and the social class in which they are in.  Other social factors such as reference groups, which have a direct or indirect influence on a consumer’s attitude, family and roles and status within a group all play a role in determining what consumers choose to buy. Other factors that play a role are the consumer’s personal characteristics such as age and stage of the life cycle, occupation and economic circumstances, personality and self-concept, and lifestyle and values. 

B.      Key Psychological Processes
1.       Key psychological processes are the way consumers process stimuli and make purchasing decisions.  There are five key psychological processes – motivation, perception, learning, emotions, and memory.
2.       A good example of advertising that is supposed to affect our psychological needs is for State Farm Insurance.  Their slogan, “Like a good neighbor, State Farm is there” encourages the consumer to think of them as safe, helpful and dependable.
3.       Consumer needs can be either biogenic (physical) or psychogenic (mental/emotional).  A need becomes a motive when it drives us to act. There are three best-known theories of human motivation – those of Sigmund Freud, Abraham Maslow, and Frederick Herzberg.  A consumer’s perception of a situation determines how they will be motivated to act.  How much they notice and remember the marketing stimuli around them depends to a degree, on what their immediate needs are.  When we act, we learn and learning induces changes in our behavior based on our experiences.  Our emotions may cause us to like or dislike a product and what we remember about the product or company also influences whether or not we purchase and what brand we purchase.

C.      The Buying Decision Process: The Five-Stage Model
1.       The five stage model is useful for companies trying to understand the buying decision process – all the experiences in learning, choosing, using, and disposing of a product.  The five stages are problem recognition, information search, and evaluation of alternatives, purchase decision and post purchase behavior.
2.       A consumer may need to purchase a new washing machine.  They research brands and models, sizes, load capacities, and prices.  After comparing features of several models, they decide on a washer and make the purchase.  Afterward, they review the performance and decide if they are satisfied or unhappy with their choice.
3.       The buying process starts long before the actual purchase.  It begins when the consumer recognizes a need in response to some internal or external stimuli.  The consumer then searches for information about the product and when the research is satisfied, he evaluates the different alternatives before making a final purchase decision.  The decision can be influenced by a couple of factors.  The first is the attitude of others.  A negative or positive attitude from a person the buyer respects, or has a high regard for their opinion, can influence whether or not he purchases the product.  The second factor is unanticipated situational factors.  The buyer may lose his job or have a sudden, unexpected expense elsewhere that will prevent him from making the intended purchase. What happens after the purchase can influence whether the buyer purchases that product again.  A good experience can cause the buyer to repurchase or a negative experience can cause the buyer to never repurchase that product.  How well the company follows up and monitors how well buyers use and dispose of the product can determine how they market it in the future.

D.      Behavioral Decision Theory and Behavioral Economics
1.       Consumers don’t always make buying decisions in a deliberate, rational manner.  In fact, they sometimes make irrational choices.  Behavioral decision theory (BDT) studies these buying decisions and reinforces that consumer behavior is very constructive and the context of decisions matter.
2.       Consumers were given a choice of purchasing a normally expensive brand of chocolate, Lindt, at great savings for a very low price or an inexpensive brand of chocolate, Hershey’s, for a penny.  Most buyers chose the Lindt brand.  When the price of Lindt was lowered to 14 cents and Hershey’s was free, they chose the free chocolate, even though the Lindt was a better bargain.
3.       There are two key areas of behavioral economics – decision heuristics and framing.  Heuristics are “mental shortcuts” that consumers take in the decision process.  Three heuristics they may use: 1) Availability – when consumers base their predictions on how quickly and easily a particular example of an outcome comes to mind. 2) Representativeness – how representative or similar the outcome is to other examples. 3) Anchoring and adjustment – consumers arrive at an initial judgment and then adjust it based on additional information. Decision framing is the manner in which choices are presented to and seen by a decision maker.



Chapter 4 - Creating Long-term Loyalty Relationships

Summary
Customers will buy from the company they perceive to offer them the highest customer-delivered value.  This is defined as the difference between total customer benefits and total customer cost. Companies realize that a satisfied customer can lead to long-term customer loyalty and customer lifetime value. Companies develop programs to retain customers through customer relationship management and by gathering as much information as they can about the customers and their buying history and store it in databases and data warehouses for later mining and marketing purposes.

A.      Building Customer Value, Satisfaction, and Loyalty
1.       Customers will research an offer to see which one will deliver the most perceived value.  Customer perceived value is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.
2.       An example of this is when a customer compares two or more similar offers to determine which one will ultimately offer the best value, such as when a customer compares a Caterpillar tractor with a Komatsu tractor and weighs all the advantages and disadvantages of each.
3.       Customer value, satisfaction and loyalty are expectations of the customer for the company to provide long-term benefits for purchasing their product over a competitor’s product.  A seller must assess the total customer benefits and costs associated with the customer evaluating a competitor’s product against their own and choosing which offer to accept. Customers have varying degrees of loyalty to products and brands, depending on their satisfaction with the product. Companies must also monitor customer satisfaction and how well they treat the customers.  A highly satisfied customer is usually a more loyal customer.  In order to keep a customer satisfied, a company must offer product and service quality.  A company has delivered quality when a customer is completely satisfied with the product and service.

B.      Maximizing Customer Lifetime Value
1.       Marketing is the art of attracting and keeping profitable customers but not every customer is profitable and the company may lose money on some of its customers.  The 80 – 20 rule states that 80 percent or more of the profits come from 20 percent of its customers.
2.       A great example of customer loyalty to a company is auto manufacturers.  Consumers, especially men, seem to be extremely loyal to Chevy, Ford or Dodge.  Once a consumer has a preference of one brand over another, it seems to be nearly impossible to change their minds.
3.       In defining a profitable customer the emphasis is on lifetime revenue stream and not just the profit from one transaction.  Not all customers are profitable and the company should try to rid itself of unprofitable customers because there are costs associated with serving that customer.  A customer profitability analysis is a useful tool for determining customer profitability and can be conducted with activity-based costing (ABC), which estimates revenue against the cost associated with serving the customer. The concept of customer lifetime value describes the net present value of the stream of future profits expected over the customer’s lifetime purchases.

C.      Cultivating Customer Relationships
1.       Companies can cultivate customer relationships through customer relationship management (CRM), which is a process of managing detailed information about customers and customer touch points to maximize loyalty.
2.       Hotels have many customer touch points as guests go through reservations, check in and check out, room service, business services, etc.
3.       CRM enables companies to provide excellent real time customer service through the effective use of individual account information.  Companies can market services based on information they have gathered about customers preferences and buying history. Companies who wish to increase their profits must spend a lot of time increasing their customer base and then they must be able to retain the customers and keep them from defecting.  The marketing funnel identifies the percentage of the potential target market at each stage in the decision process.  A customer profitability analysis and the marketing funnel help marketers decide how to manage groups of customers.  Companies want to create a strong, tight connection to customers.  They can do this by interacting with customers, developing loyalty programs and creating institutional ties.

D.      Customer Databases and Database Marketing
1.       A customer database is an organized collection of comprehensive information about individual customers or prospects that is current, accessible, and actionable for lead generation, lead qualification, sales, or maintenance of customer relationships. Database marketing is the process of building, maintaining, and using customer databases and other databases (products, suppliers, resellers) to contact, transact with, and build relationships with customers.
2.       Amazon is a good example of a customer database and database marketing.  When you pull up the Amazon website, they provide you with a list of previously viewed and purchased items and make suggestions for things that you might be interested in.
3.       Marketers must know their customers.  They must learn their preferences, their buying habits, the past purchase volumes and other key and relevant information.  They keep and organize this information in data warehouses.  From these marketers can capture, query, and analyze it. Data mining allows marketers to extract useful customer information from the databases.  There are problems with using database marketing.  The benefits do not come without costs and risks.



Monday, September 5, 2011

Chapter 3

Summary

Good marketers need insights to help them analyze customer needs, interpret past performance and trends, and plan future activities.  Every successful company must have a marketing information system to communicate to its marketing managers.  This system consists of people, equipment and procedures to gather, analyze and distribute information.  Review of marketing intelligence and research will help a company to use forecast and demand measurements to evaluate performance and future growth opportunities.  There are six major environmental forces to measure: demographic, economic, socio-cultural, natural, technological, and political-legal.  All of these different forces can have a profound effect on a marketer’s success or failure.

A.      The Marketing Information System and Marketing Intelligence
1.      A marketing information system is a system used to organize and distribute information and marketing intelligence to its marketing managers.  Marketing intelligence is a set of procedures and sources that managers use to obtain everyday information about developments in the marketing environment.
2.      Kimberly Clark is a great example of a company that has used a series of marketing innovations through the years to develop successful products that provide real value to consumers through its studies and research of what consumers really needed.  Their marketing intelligence research of what parents went through in a simple diaper change helped them create a better diaper.
3.      Marketing managers rely on information from internal reports and databases of all sorts.  The order-to-payment cycle helps the track how quickly sales orders from customers are filled, shipped and then an invoice is paid by the customer. Marketing managers must track what consumers are buying and carefully interpret the buying trends.  Databases help managers keep track of customer information, purchase histories and other key information that can then be “mined” to gather fresh insights into neglected customer segments. 

B.      The Marketing Research System
1.      The marketing research system giving market insights that provide diagnostic information about how and why we observe certain effects in the marketplace and what it means to marketers.
2.      The success of Gillette’s Venus razor is due to insightful research that led to the product design, packaging and advertising cues.
3.      Most firms have their own market research departments to find, analyze and report significant data important to a company’s product development.  Companies study their competitors, industries and audiences to channel strategies and to budget money towards marketing.  Marketing research follows six steps: define the problem and research objectives, develop the research plan, collect the information, analyze the information, present the findings and make the decision.

C.      Forecasting and Demand Measurement
1.      Information gathered from conducting market research is used to measure and forecast the size, growth and profit potential of each new opportunity.
2.      When evaluating opportunities, firms can look at the potential market, which is the set of consumers with a sufficient level of interest, or the available market that have both the interest and access to the offer, or the qualified available market which has interest, income, access, and qualifications for the offer.  The firm pursues the target market and the penetrated market is the set of consumers who actually buy the product.  The company must next estimate the total market demand.  It is not a fixed number, but a function of the stated conditions, which is why it is called the market demand function.  Companies also want to estimate current demand by researching total market potential and area market potential as well as industry sales and market shares.  Estimating future demand is called forecasting, to anticipate what buyers are likely to do under certain conditions.

D.     Analyzing the Macroenvironment
1.      Analyzing the macroenvironment involves identifying trends, which have momentum and durability, and identifying fads which are unpredictable and of short duration.
2.      Apple has been able to successfully identify trends and respond quickly by analyzing downloads from customers from sites such as iTunes, the App Store and iBooks.  This has allowed them to lead in the very popular touch screen technology.
3.      Companies must monitor the six major forces that affect the broad marketing environment: demographic, economic, sociocultural, natural, technological and political-legal. Population growth, age mix, diversity within the market, educational groups and household patterns are some of the most important areas for marketing managers to watch.  An economy’s purchasing power depends on incomes, pricing, savings, debts and the availability of credit. Consumers have changing and evolving views of the sociocultural environment and what is acceptable and what is rejected based on core values and beliefs.  Concern about the health of the environment and pollution drives many companies to strive for more environmental friendly products.  Technology is ever changing and a company can quickly grow stagnant if their technology is not kept current.  Laws, government agencies and pressure groups influence organizations in ways that sometimes leads to new business opportunities.  Regulations that protect companies from unfair practices of competitors as well as the design of safer consumer products have created growth potential for companies willing able to take advantage and grow.  The power and demands of special interest groups have changed the political-legal environment by demanding that business executives respect the rights of consumers.

Chapter 2

Summary

The marketing management process has key ingredients that are insightful, creative strategies and plans that guide marketing activities.  There must be strategies for a range of products and services within the organization and a value delivery process which includes choosing, providing and communicating superior value.  Successful companies develop strong core values, strategic business processes and mission statements.  The mission statement and core values should define the reason for the company’s existence and be guides for establishing strategic business units, assigning resources, assessing growth opportunities and measuring performance. Companies develop marketing plans for every product they offer and use performance measurement tools including marketing metrics, marketing dashboards and various analyses.


A.      Marketing and Customer Value
1.      In order for companies to exceed today they must know how to thoughtfully and creatively devise marketing plans that deliver superior customer value.
2.      Yahoo! is a great example of a company that delivers customer value through product diversification and continuously seeks growth through new markets.  
3.      Marketers can no longer follow the traditional view of making a product, then selling it to the consumer.  Economies that are made up of many types of people with many various tastes, needs, wants and viewpoints demand a smarter approach by marketers.  The value delivery process has three phases using the formula “segmentation, targeting, positioning”.  The value chain proposed by Harvard’s Michael Porter, is a tool for identifying ways to create more customer value using five primary and four support activities within a company and examining their value and cost. The primary activities are 1) inbound logistics; 2) operations; 3) outbound logistics; 4) marketing; and 5) service.  Support activities are 1) procurement; 2) technology development; 3) human resource management and 4) firm infrastructure. Companies should also examine their own core competencies and focus on developing and improving them.  George Day sees organizations excelling in market sensing, customer linking and channel bonding.  A holistic marketing approach addresses three key management questions concerning value exploration, value creation and value delivery.

B.      Corporate and Division Strategic Planning
1.      All corporate headquarters should undertake four planning activities – defining the corporate mission, establishing strategic business units, assigning resources to each unit and assessing growth opportunities.           
2.      Amazon changed its mission from being the world’s largest online bookstore to being the largest online store.
3.      Companies should define why they exist by creating a mission statement.  It states their purpose and gives a shared sense of purpose, direction, and opportunity.  Companies also establish strategic business units and each a different business unit has its own strategy.  A strategic business unit (SBU) has three characteristics: 1) a single business or collection of related businesses, 2) its own set of competitors, 3) a manager responsible for strategic planning and profit performance.  Companies also will assign resources to each SBU and assess growth opportunities.  Companies also have a corporate culture, which is the shared experiences, stories, beliefs, and norms that characterize an organization.  The mission statement of the organization I work for, the Chickasaw Nation is, “To enhance the overall quality of life of the Chickasaw People.”  It is the reason we exist and almost every employee can quote it word for word.  It is so important to the identity of our organization that it is not only memorized, but is a deeply ingrained part of the culture of the organization.

C.      Business Unit Strategic Planning
1.      The business unit strategic planning process consists of the business mission for that particular unit within the broader corporate mission. 
2.      An example of a company that has different business units is Newell Rubbermaid.  They have a variety of business units with brands including Sharpie, Lenox, and Graco - all providing products and services from very different units.
3.      Each unit should conduct a SWOT analysis to monitor the external (threat and opportunity) and internal (strength and weaknesses) marketing environment.  They should always be aware of marketing opportunities and buyer needs and interests that the company has a high probability of satisfying.  After the SWOT analysis, the company should formulate specific goals and objectives to accomplish within a specific time frame and then a strategy for achieving them.  The strategy, or game plan, consists of marketing strategy, a compatible technology strategy and a sourcing strategy. Even the best strategic planning can be useless without great implementation.   A company has to be willing to invest in time and money to accomplish the goals and objectives.  Marketers have to accomplish the goals they set.  Some companies find it difficult to reach their goals on their own and form alliances or partnerships with other companies.  This is called partner relationship management. There are seven elements, all beginning with the letter S, in successful business practices.  They are: strategy, structure, systems, style, skills, staff and shared values. Companies should also re-examine their strategic fit with the environment because they change.  Adjustments may need to be made in order for a company to stay healthy.

D.     The Marketing Plan and Marketing Performance
1.      A marketing plan summarizes what the marketer has learned about the marketplace and indicates how the company plans to reach its marketing objectives.  It contains guidelines and financial allocations for the planning period.
2.      An example of this is the organization, 3M, which is known for its Post It notes, but also produces medical and manufacturing products.   3M tracks the proportion of sales resulting from its recent innovations.
3.      Marketing plans usually contain an executive summary, situation analysis, marketing strategy, financial projections and implementation controls.  Many companies start well in advance of the marketing period to allow time for planning and research, review and coordination between departments.  Companies must also measure performance of the action programs; marketing metrics, marketing dashboards and analysis are useful tools to assess performance in both the short-term and changes in brand equity.  Marketing metrics help organizations quantify, compare, and interpret their marketing performance.  Dashboards are a summary of relevant internal and external measures that visually display real time indicators of performance.  Marketing analysis can include sales analysis, market share analysis, marketing expense to share analysis and financial analysis.