Current Current Marketing Marketing

Issues SeminarIssues SeminarBA635Dr. Ed Forrest

Telephone: (Office) 786-4161 (Cell) 854-8784

Email: afejf1@uaa.alaska.edu

W3site: http://faculty.cbpp.uaa.alaska.edu/afef/

E

3

Everything is

OnlineEverything is

Online

Tonight:

Deconstruct the Title:

“Current Marketing Issues

Seminar ”

Deconstruct the Title:

“Current Marketing Issues

Seminar ”

5

What is Marketing

?

6

Get people to buy things they don’t need…

With money they don’t have… To impress people they don’t like.

Marketing’s Marketing’s SignificanceSignificance

Personnel Significance

• Everything you try, buy, vote for, drive, eat, wear– is “marketed”

• Let alone- $.50 Cents of Every Dollar you spend goes to “marketing” costs

Marketing Impacts You - Everyday of Your Life

Economic Significance

•The Economy-- JOBS-

1/4 -1/3 of the Work-force perform marketing functions

Marketing Aligns Production & Consumption

Consumption Sector

Production Sector

DiscrepanciesDiscrepancies of Quantity

DiscrepanciesDiscrepancies of Assortment

Separations:Separations:

in Space, Time &

Ownership

Marketingaddresses

discrepancies&

separations

Significance of Marketing

Improves quality of life by/thru… providing variety of goods & services

For example- What For example- What would life be like would life be like without thewithout the….….

The Traveling Head RestThe Traveling Head Rest

Or the Traveling Head HolderOr the Traveling Head Holder

The Porto-Wipe

The Porto-Wipe

The Total-Surround UmbrellaThe Total-Surround Umbrella

Accu-Drop GlassesAccu-Drop Glasses

And How About the “Butter-

Marker”

And How About the “Butter-

Marker”

Or The Attachable Noodle- CoolerOr The Attachable Noodle- Cooler

And last but not least—The Mr. Mom Baby Feeder!

And last but not least—The Mr. Mom Baby Feeder!

20

Everybody is a Marketer:Everybody

promotes themselves….

Packages themselves …..

Everybody has their price……

21

& Always been Marketers

I’m I’m

calling it calling it

HOTHOT

I’m I’m

calling it calling it

HOTHOT

““The Dawn of Marketing”The Dawn of Marketing”““The Dawn of Marketing”The Dawn of Marketing”

Innate sense of exchange

1,000’s of years…

bartered & traded “branded” goods & services

I thinkI think

might be might be

betterbetter

I thinkI think

might be might be

betterbetter

The Evolution of The Evolution of “Marketing”“Marketing”

From a clearly defined “Function &

Process”

…to an

“All Encompassing Philosophy”

Classic Functional Definition

All activities performed in between:

The Point of ProductionThe Point of Production

&

The Point of ConsumptionThe Point of Consumption

24

11stst Formal Definition Formal Definition ~1919~1919

Marketing defined as ‘‘the manner in the manner in which the which the product product is disposed of, the is disposed of, the way in which it is way in which it is distributed…, distributed…, through various through various channels of channels of trade.” trade.”

*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 DefinedMarketing Defined -

1935 -

“The performance of business

activities that direct the flow of goods &

services from producers to consumers.”

Marketing Defined-Marketing Defined-as a Process- 1985as a Process- 1985

"The process of planning & executing the conception,

pricing, promotion & distribution of ideas, goods

& services to create exchange & satisfy

individual & organizational objectives"

The Latest Official The Latest Official AMA Definition AMA Definition (circa (circa

2004)2004)

..an organizational function & a set of processes

for creating, communicating & delivering value to customers

& for managing customer relationships in ways that benefit the organization & its stakeholders

Why the changed focus?

What happened between 1985 & 2004 that made the AMA change the definition of marketing?

30

Marketing should be customer-

centric -- not brand-centric"

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."

The 1985 definition was not encompassing enough. The new definition more clearly infuses the customer into marketing."

The AMA Rationale: “Technology & marketing been changing quite rapidly over last five to 10 years…

Focus on Focus on ConsumerConsumer–Not Not productproduct

Long –Term Long –Term RelationshipsRelationships Not Short-term Sales

Management Reorientation: The Marketing ConceptThe Marketing Concept

Marketing > Function =An Orientation ”

“Marketing is so basic that it cannot be considered a separate function on a par w/others such as manufacturing or personnel…

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.”

Marketing Process > Complex & All Encompassing

Situation AnalysisSituation Analysis Strategic Strategic PlanningPlanningStrategic Strategic PlanningPlanning

•CCompanyompany

•CConsumersonsumers

•CCompetitorsompetitors

•CConditionsonditions• PESTPEST

TargetTargetMarketMarket

Product Place

PromotionPrice

TargetTargetMarketMarket

Product Place

PromotionPrice

TargetTargetMarketMarket

Product Place

PromotionPrice

The Marketing Mix:The Marketing Mix:

Marketing StrategyMarketing Strategy

Growth & Growth & CompetitiveCompetitive StrategiesStrategies

P’s

WMWM

TGTTGT

EEDD

CCNNGG

FF

Service Positioning Positioning StrategyStrategy

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

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

Average ConsumerAverage Consumer

Customer AnonymityCustomer Anonymity

Standard Mktg. MixStandard Mktg. Mix

Mass ProductionMass Production

Mass DistributionMass Distribution

Mass AdvertisingMass Advertising

Mass PromotionMass Promotion

One-Way Comm.One-Way Comm.

Economies of ScaleEconomies of Scale

Share of MarketShare of Market

All CustomersAll Customers

Customer AttractionCustomer Attraction

Must Change Your focus & objectives:

Individual CustomerIndividual Customer

Customer RelationshipCustomer RelationshipCustomized Market OfferingCustomized Market Offering

Customized ProductionCustomized Production

Individualized DistributionIndividualized Distribution

Individualized MessageIndividualized Message

Individualized IncentivesIndividualized Incentives

Interactive CommunicationInteractive Communication

Economies of ScopeEconomies of Scope

Share of CustomerShare of Customer

Profitable CustomersProfitable Customers

Customer RetentionCustomer Retention

From: To:

Changing Structure of Economy: From Product to Service based

Time, per Capita Income

Share of Employment

Industry

Services

Agriculture

The Economist, 1996

0

10

20

30

40

50

60

70

80

1820 1840 1860 1880 1900 1920 1940 1960 1980 2000

Per

cen

t

Year

Services

Industry

Agriculture

Waves of Change..

In the olden days- … Marketing was defined “categorically” according to the “tangibility”of the entity you were selling:

Pure Pure tangible tangible good; no good; no serviceservice

Tangible Tangible goods with goods with

some some servicesservices

Hybrid: Hybrid: equal part equal part goods and goods and

serviceservice

Major Major service service

with with minor minor goodgood

Pure Pure service; service;

no tangible no tangible goodgood

Milk Computer& Warranty

Meal atRestaurant

LegalAdvice

Hair Styling

Product - Service Product - Service SpectrumSpectrum

TangibleDominant

IntangibleDominant

SaltSoft Drinks

DetergentsAutomobiles

Cosmetics

AdvertisingAgencies

AirlinesInvestment

ManagementConsulting

Teaching

Fast-foodOutlets

Fast-foodOutlets

PureService

TangibleTangibleGoodGood

w/w/ServicesServices

MajorMajorServiceService

w/ Goodsw/ GoodsHybridHybrid

PureTangible

Good

Inseparability

Services cannotbe separated

from theirproviders

Inseparability

Services cannotbe separated

from theirproviders

Intangibility

Services cannotbe experienced

beforepurchase

Intangibility

Services cannotbe experienced

beforepurchase

Variability

Quality ofservices dependson who provides

them & when,where, & how

Variability

Quality ofservices dependson who provides

them & when,where, & how

Perish-ability

Services cannotbe stored for

later sale or use

Perish-ability

Services cannotbe stored for

later sale or use

Re: service marketing – for decades this has been the

thinking-

Separate Products from

Services

1.Only have meaning from a manufacturing perspective… and

2.Suggest inappropriate marketing strategies

1.Only have meaning from a manufacturing perspective… and

2.Suggest inappropriate marketing strategies

Key Point- Product-service differentiation is result of industrial

age-2nd wave thinking

A shift in perspective

Instead of focusing on product – service differences

…Focus on consumer commonalities

…in “consuming & evaluating” that which is purchased

Re- Re- VariabiltyVariabilty:: Customizaton not standardization is the goal

Re-Re-InseparabilityInseparability:: “Customer-ization” not isolation = goal

Re-Re-PerishabilityPerishability:: Services can be/are inventoried (ie-knowledge in

databases & experts head) AND Inventory management not maximization is objective; Everything is perishable—if not in substance certainly in style…

Re: Re: IntangibilityIntangibility: : its not the product that people are buying. It’s the

functions served & benefits rendered- as it is w/ services

Re- Re- VariabiltyVariabilty:: Customizaton not standardization is the goal

Re-Re-InseparabilityInseparability:: “Customer-ization” not isolation = goal

Re-Re-PerishabilityPerishability:: Services can be/are inventoried (ie-knowledge in

databases & experts head) AND Inventory management not maximization is objective; Everything is perishable—if not in substance certainly in style…

Re: Re: IntangibilityIntangibility: : its not the product that people are buying. It’s the

functions served & benefits rendered- as it is w/ services

Marketing

Next Step- ID the issues…

2008= 27

million

in .12 sec

As it is -On Any Given Day- On Any Given Day- One can find Issues ofOne can find Issues of:

Product Quality

Service Quality

Consumer Confidence/Satisfaction

Value/Pricing Practices

Free/Fair trade

Globalization

Advertising (volume, veracity, political-correctness)

What the issues are--

Marketer- Issues = factors

that affect sales

•Consumer-Issue = factors

that affect one’s sensibilities

Depends on Your Perspective:

Marketing performance The Creation of Customer Satisfaction & ValueBuyer 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

Marketing Issues- as delineated Marketing Issues- as delineated by anby an old UAA Syllabus old UAA Syllabus……

More Issues / Other Syllabi

Bad Marketing Ideas Future Markets Marketing High TechnologyProduct By Design The Next Big Market Generational Divide Asian-American ConsumersWhy Service Stinks

Bad Marketing Ideas Future Markets Marketing High TechnologyProduct By Design The Next Big Market Generational Divide Asian-American ConsumersWhy Service Stinks

ReMarketing Old Brands Kamikaze Pricing The Old Pillars of New Retailing Global Marketing In The New Millennium Segmenting Global MarketsThe Nation as Brand Michael Porter’s Big Ideas Marketing Myopia

ReMarketing Old Brands Kamikaze Pricing The Old Pillars of New Retailing Global Marketing In The New Millennium Segmenting Global MarketsThe Nation as Brand Michael Porter’s Big Ideas Marketing Myopia

Could of used a text…

Does Marketing Have Appropriate Boundaries– on what & how it “sells”?

Is the practice of Multilevel Marketing -pyramid schemes- legitimate?

Is Relationship Marketing a Tenable Concept?

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?

Issues Addressed:

Fact is--these & most issues…

Are RE-CURRENT

issues- that Ebb & Flow

w/ socio-economic

events

We could- examine these issues 1 by 1…

Boring!

Too Simple

& Just too

Superficial

Examining only symptoms --not diagnosing the

cause

“Yes… you seem to be suffering

from a marketing issue”

Ergo- the Real Question

is….

Ergo- the Real Question

is….Where do marketing issues come from?

Marketing’s “utility”/value derived from its Facilitation of Exchange!

Willing

to sell

Willing

to buy

Temporal Utility

Spatial Utility 

Transactional Utility

Marketing

Key Point: Keep Marketing in Perspective

Anything/Everything one does to facilitate

exchange

Whatever impactsWhy- What- Where- When- How Exchange occurs…

is (or becomes) an Issue…

Marketing Issues in Perspective

Marketing - part of Business & Business - part of Society

Marketing

Business Society

“Societal Change” creates

“issues” for Business…

which creates

“issues” for Marketing

One needs to identify-anticipate-

understand

Thus- in order to identify- anticipate- understand

Marketing Issues in particular

Societal Change in general

Society Defined:Society Defined:

A group of humans broadly distinguished by:

mutual interests, participation in

characteristic relationships,shared institutions, &a common culture

Hence- our search for marketing issues begins w/ examination of…

Patterns of/changes to:

human interests, relationships, institutions &

culture…

…become marketing issues

THUS-

In the final analysis marketing strategy is formulated to

address…

& what better time to study

Societal Change

…We are living thru one of the great periods

of societal change in the

history of humankind…

… in the way we live, communicate, work, produce & consumelive, communicate, work, produce & consume……

… in the way we live, communicate, work, produce & consumelive, communicate, work, produce & consume……

We’re in midst - next great Paradigm Shift…Paradigm Shift…We’re in midst - next great Paradigm Shift…Paradigm Shift…

"In a time of change, it is learners who inherit the future. --The learned find themselves well equipped to live in a world that no longer exists." — Eric Hoffer

Re-imagine!: Business Excellence in a Disruptive Age

“ -- that shift will accelerate as technological change accelerates…”

“It's all so strange and different that I don't even know what a superlative for it would be…”

tompeters.com

Our Place in Time2011

In Context of: Human Evolution & Technological Development

YEARS AGO

Hominid Age 2,000,000

Homo Sapiens 100,000 yrs

Tribal Age 25,000 yrs

Agricultural Age 10,000 yrs

Scientific Age 380 yrs (1500-1770)

Industrial Age 180 yrs (1770-1950)

Information Age 70 yrs (1950-to date)

There is– Something Curious Going On…

- observed time intervals between significant techno-advances ….

3 million years ago collective rock throwing; early stone use

1.5 million years ago lever, wedge, inclined plane

500,000 years ago control of fire

50,000 years ago bow and arrow; fine tools

5,000 years ago wheel and axle; sail

500 years ago printing press with movable type; rifle

60 years ago commercial digital computers

15 years ago commercial internet

Not only is “progress”

Exponential

it is

Predictable

Transistor Doublings (2 years)

DRAM Miniaturization =5.4 years

Processor Performance (MIP Speed doubles every 1.8

years)

price/performance doubles every 12-18 months

Brad DeLong (2003) noted that memory density… predictably outgrows microprocessor density…..which predictably outgrows wired bandwidth….. which predictably outgrows wireless.

Brad DeLong (2003) noted that memory density… predictably outgrows microprocessor density…..which predictably outgrows wired bandwidth….. which predictably outgrows wireless.

Expect: 1st: New Storage Apps, 2nd: New Processing Apps, 3rd: New Communications Apps, 4th: New Wireless AppsExpect: 1st: New Storage Apps, 2nd: New Processing Apps, 3rd: New Communications Apps, 4th: New Wireless Apps

@ Given Rate of Evolution

What can we predict?

Hominid Age 2,000,000

Homo Sapiens 100,000 yrs

Tribal Age 25,000 yrs

Agricultural Age 10,000 yrs

Scientific Age 380 yrs (1500-1770)

Industrial Age 180 yrs (1770-1950)

Information Age 70 yrs (1950-2020)

Symbiotic Age 30 yrs (2020-2050)

Singularity ≈ 2050

@ Given Rate of Evolution

What can we predict?

In 30 year cycle (~1990-2020): Net Evolution 1.0 -3.0

Next 20 Year Cycle ~2020-40): advanced Robotic & adaptive AI; broadband interfaces between the human brain and machine

Then 10 Year Cycle (~2040-50): culminating in the SINGULARITY!

The Symbiotic Age From GUI to LUI A time when computers “speak our language”

A time when our technologies are very responsive to our needs & desires

A time when humans & machines are intimately connected & always improving each other

The Knowledge Navigator

The Knowledge Navigator

“The future’s already here. --It’s just not evenly distributed yet.” ― William Gibson

Personality Capture &

Transhumanity

In the long run, we become seamless w/ our machines “Technology is becoming organic. Nature is becoming technologic.”

In the long run, we become seamless w/ our machines “Technology is becoming organic. Nature is becoming technologic.”

Robo Sapiens

AIST and Kawada’s HRP-2 “Huey and Louey”

The Symbiotic AgeA time when we will begin to feel “naked” without our computer “clothes.” (youtubes)

UCT in Everything you wear-

washable garments w/ miniaturized in-ear speakers /solar cells to provide energy

technology woven into fabric

components allowing many functions to be almost `built in' to our bodies, creating a `second skin‘

RFID- everywhere & in everything

SmartCode making0.25mm chips

targetcost 5-10 cents ..w/15-20 feetrange

Manufacturing capacity10+ billion a year

UCT Enhanced Jewelry

embed functional technology into jewelry & body accessories -- rings, necklaces, earrings, glasses and watches. - -

for body adornment - for more intimate & discreet communication, information gathering & entertainment.

Integration of Information & intelligent technologies

RFID

Sematic Web

Face/object recognition

Mobile Communications

TeraFlop Databases

CRM

Analytics

Future-integrated-seamless world of sensing & sharing

Intelligent & Interactive environment…

On your way to the store (that is if you still go to stores)

The i-board will recognize you & based on your past purchase profile – make you an offer (based on data-mined calculations) that you can’t refuse

No longer just movie magic…

Predicting a diverse future: Directions and issues in the marketing of services European Journal of Marketing ; Bradford; 2002; Angus Laing

Predicting a diverse future: Directions and issues in the marketing of services European Journal of Marketing ; Bradford; 2002; Angus Laing

“Driven by technological

developments, deregulation, and

globalization- the service sector

in post-industrial economies is

facing unprecedented

change”

“Driven by technological

developments, deregulation, and

globalization- the service sector

in post-industrial economies is

facing unprecedented

change”

Exact nature of Future Changes- depends on Business Sector

Network Information Services: banking, credit card, insurance, telecom

Retail Hospitality: travel, restaurants, lodging,

leisure, hotels Labor & Expertise:

– Business Support: administration-processes, consulting, customer service

– Personal & Professional: medical, legal, financial, technical assistance

Network Information Services: banking, credit card, insurance, telecom

Retail Hospitality: travel, restaurants, lodging,

leisure, hotels Labor & Expertise:

– Business Support: administration-processes, consulting, customer service

– Personal & Professional: medical, legal, financial, technical assistance

UCTEnhanced

Self-Service

IncreasinglyOutsourced

IncreasinglyVirtualized

The

Law of Accelerating Returns

explains why

TECHNOLOGY & EVOLUTIONARY processes

progress in an exponential fashion

Years Ago

Billions

12 Big Bang (MEST)

11.5 Milky Way (Atoms)

8 Sun (Energy)

4.5 Earth (Molecules)

3.5 Bacteria (Cell)

2.5 Sponge (Body)

0.7 Clams (Nerves)

0.5 Trilobites (Brains)

0.2 Bees (Swarms)

0.100 Mammals

0.002 Humans, Tools & Clans Co-evolution

Generations Ago

100,000 Speech

750 Agriculture

500 Writing

400 Libraries

40 Universities

24 Printing

16 Accurate Clocks

5 Telephone

4 Radio

3 Television

2 Computer

1 Internet

0 AI & Nano-tech

PhysicalTechnological

Law of Acceleration