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The Role of Marketing in Our Lives
KWHS Teacher Seminar
Professor David Reibstein
The Wharton School
October 26, 2013
What is Marketing?
What is marketing?
• First, marketing is ‘OUTSIDE IN’ • (put pictures here)
• The task is understanding • What needs exist?
• For example, showers in the UK—the lack water pressure, temperature stability, speed to heat, etc.this lead to the Aqualisa Quartz
• What is important to the customer • For example, Apple, in designing their new iPad, had to find out how important was battery
life vs. weight of the device vs. quality of the pictures.
• Who might be in the greatest need? • Not everyone has a need nor the same needs. Who has the greatest needs/less served
currently.
Next steps
• Segmentation—not every wants the same thing • Segmentation for shampoo
• Segmentation for gasoline (Shell)
• Targeting—Identify who you want to target and who you do not
Definition of Positioning
• Positions are • perceptual
• based on benefits sought by customers
• never wrong
• The customers’ perception of each brand relative to the others in the market (and often relative to an ideal) on important dimensions to the customer
Why Positioning?
• It is an apriori decision by the firm as to how they would like the market to perceive the brands/products they have to offer.
• For a portfolio it is the desire to position the brands to non-redundant perceptions in order to appeal to different parts of the market.
Differentiating with Positioning
• Position thyself with • Services • Distribution • Product • Relationships • Experience • Branding
Position
• With a target customer in mind
Differentiating Financial Services
• Unique approach
• Unique position
• Service and image
You’re Not On Wall Street Anymore...
You’re at Janus
American Express:
Platinum
Gold
Green
Optima
Blue
Let’s do a comparison between brands …
•
Now that we have the STP, we develop our Marketing Mix, the 4 P’s • Product and services (package, brand, warranty, …)
• Promotion (advertising, key words, sales force, public relations…)
• Place (distribution)
• Price
Product/services (package, brand, warranty,…) • iPod
• Perrier
How does a brand help the firm?
The consumer
Quick recognition – reducing search costs
(tuna auction in Japan)
Associations in the consumer’s mind
Inferred attributes
Gucci watch – fashionable, expensive, durable?
Intel – latest technology
Nordstrom’s – great service
Consistency
Simplifies decision process
How does a brand help the firm? • The producer
• Premium price or added market share
• Faster recognition, thereby reduces advertising necessary
• Speed of new product introductions
• Power with trade (Hormel)
• Durable asset (PanAm, Polaroid)
• Ease brand extensions
• Competitive barrier
• Benefits Human Resource efforts
• Balance sheet
Brand Equity as Financial Value
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Pri
ce
Quantity
p
q
p’
q’
Brand’s role in terms of the firm’s value
• (Erika, put my slides in here showing latest Interbrand values, then remove the other slides that follow)
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Best Global Brands 2010
Data: Interbrand, JPMorgan Chase & Co., Citigroup, Morgan Stanley, BusinessWeek
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26
27
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Promotion
• We generally think about advertising, but it also includes all forms of communication—PR, sales force, banner ads, key words, product placement, etc.
• The decisions made are not just content, but: • What to say
• Where to say it
• How much money to put behind it
• How to measure it
Place
• Where to put your products • Everywhere is not always best
• Needs to match your target’s shopping behavior
• Not easy to get on “the shelf”
Price
• Particularly difficult
• Not to be driven by costs alone, but what is worth to the customer
• Problem is what it is worth differs significantly across customers
• Skim vs. Penetrate
Your students are marketers
• When they graduate, they have a product to sell—THEMSELVES
• They need to understand • Who is their target?
• How to position themselves versus others?
• What is best to communicate?
• And, maybe, at what price
• Marketing is everywhere in our lives
