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Marketing
Management
WEEK 1
1
Logistics
- You should feel free to ask questions during class.
- Please raise your hand before asking/answering a question,
and please wait until you are called before asking your
question.
- Bring and display your name card.
- State your name first before asking your question or
answering my question.
2
What is Marketing?
Tell me what you think Marketing is about (the
first thing that comes to your mind).
3
What is Marketing?
Tell me what you think Marketing is about (the
first thing that comes to your mind).
Marketing is not just about developing ad, or
selling!
◦These activities only represent the tactical stage
of marketing.
4
What is Marketing?
“Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for
“customers” or “consumers” (broadly defined), from AMA.
◦ Exchanging offerings that have value for consumers → requires us to
understand how consumers/individuals make their decisions – Theory
of Choice/Choice Modeling
◦ Creating offerings … that have value for consumers → discover unmet
consumer/market needs.
◦ Communicating → marketing communication & promotion (incl.
advertising, publicity campaign)
◦ Delivering → help consumers find your offerings (physical distribution
network, or digital channel)
5
Marketing Management - Marketing
Strategies and Plans
It is the full process of identifying a company’s
differential/competitive advantage in serving consumers
through an organized, in-depth study which involves:
◦ Consumers-Company-Competitors (3Cs/SWOT) analysis
◦ Market-needs analysis (Segmentation, Targeting and
Positioning, STP)
◦ Marketing-mix analysis (4Ps, tactical tools) which involves
creating products, pricing, placement/distribution, and
promotion of ideas and products.
6
What is the fundamental goal of
Marketing?
- The most fundamental goal is to understand how
individuals make their decisions.
- It involves economics, psychology, sociology,
experiments, statistics, econometrics, data science, etc.
- Marketing is a multi-disciplinary scientific area.
7
- Key premise: Business succeeds by providing
products/services that generate superior customer value.
- High customer value → High firm value
- Many businesses fail to understand this link.
- We will develop a framework to help create and manage
customer value.
8
Amazon
- In 1999, it incurred $719 million loss.
- In 2000, it had only $350 million cash on hand.
- "Will Amazon Ever Make Money?"
9
Example: Amazon
Amazon just celebrates 20 years of extremely impressive
growth.
◦ Their mission: “To be Earth's Most Customer-Centric Company”
How do they achieve it?
◦ Prime membership.
◦ Two-day free shipping (no min purchase).
◦ Prime video.
◦ Free delivery from Wholefood.
10
Example: Blackberry
11
Customer Value and Firm Value
12
Finding an efficient way
of attracting
and retaining customers
Increase Firm ValueMarketing
Profit = f(customers demand, price, cost, …)
Maximize
Long term
profits
Theory of Choice –
First Principle
How do we attract new customers and retain old
customers?
◦ Attracting Customers: By offering a product/service to the
customers that gives customer value - such that
13
Value from my product Value from not purchasing at all
Value from purchasing
Competitor’s products
Value from my product
>
>
Attracting and Retaining
Customers
Retaining Customers: Providing value not
only ensures that consumers will buy the
product today, but if they are satisfied, they
will buy it again in the future => Loyalty =>
Long term Profits
14
Customer Value
What is Customer Value?
◦ The positive and negative consequences (consumer utility) of buying
and consuming a product/service
Value Drivers:
◦ The factors that the customer weighs while buying a product/service
Customer Value = function (Value Drivers)
◦ We call this “Utility Function.”
Example: Nursing Home
◦ Customer Value or consumer utility
= function(distance from home, #registered nurses per
patient, #practical nurses per patient, size, doctor on site, …)
15
Course Expectations
This is a rigorous course
◦ Not a course in ‘creative’ advertising.
◦ But you need creativity.
◦ Requires critical thinking.
Math Analysis
◦ There is math, but more emphasis on the analytics.
16
Assignments, Case Analysis, Team Presentation
Slides, Team Project Final Report
Homework due dates are stated in the syllabus.
◦ For homework, you need to write up your answers and upload it
to Canvas before the deadline.
◦ Assignment 1 due in week 3.
◦ Case Analysis due in week 4.
◦ Team project progress report (slides only) due in week 5. A
representative from your team will give a short in-class
presentation of 5 minutes (lightning presentation!).