MBA 640 Conduct a Research

Write a four-page document detailing the main findings of your research about your client, including its mission and vision statement. Submit your document to your team’s study group.

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Strategic Alliances

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Strategic Alliances

Faced with the challenge of turbulent markets and changing consumer tastes and

preferences, organizations are increasingly using global strategic alliances in an effort to

secure commercial advantage and eliminate waste from their distribution channels (Wu,

Shih, & Shan, 2009). These alliances use global virtual innovation teams that cross national

borders and help to create and enhance the alliance’s competitive position.

Organizations are no longer isolated islands; they need to collaborate with one another—

including with competitors—in order to survive (Bengtsson, Eriksson, & Wincent, 2010;

Ybarra & Turk, 2011). Alliances enable organizations to obtain needed technical and

managerial knowledge, to secure valuable resources (Muthusamy & White, 2005), and to

enhance organizational innovation (Ahuja, 2000). Alliances enable interorganizational

knowledge exchange; member organizations gain access to unavailable knowledge and

may accelerate their innovation process and enhance their competitive advantage. Global

virtual teams are at the core of any knowledge exchange. These teams capitalize on their

diverse knowledge and talent pool to leverage their organization’s global new-product

development efforts (Salomo, Keinschmidt, & de Brentani, 2010). However, while global

virtual teams have their advantages, managing them can be a challenge as they operate

across time, space, and corporate boundaries, and because their communication is

primarily electronic (Montoya, Massey, Hung, & Crisp, 2009).

References

Ahuja, G. (2000). Alliance networks, structural holes, and innovation: A longitudinal study.

Administrative Science Quarterly, 45, 425-455. Retrieved from

http://www.johnson.cornell.edu/Administrative-Science-Quarterly.aspx

Bengtsson, M., Eriksson, J. & Wincent, J. (2010). Co-opetition dynamics – an outline for

further inquiry. Competitiveness Review, 20(2), 194–214. doi:

10.1108/10595421011029893

Learning Topic

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Montoya, M. M., Massey, A. P., Hung, Y. C., & Crisp, C. B. (2009). Can you hear me now?

Communication in virtual product development teams. Journal of Product Innovation

Management, 26(20), 139–155. doi: 10.1111/j.1540-5885.2009.00342.x

Muthusamy, S. K., & White, M. A. (2005). Learning and knowledge transfer in strategic

alliances: A social exchange view. Organization Studies, 26(3), 415–441.

Salomo, S., Keinschmidt, E. J., de Brentani, U. (2010). Managing new product development

teams in a globally dispersed NPD program. Journal of Product Innovation Management,

27(7), 955–971.

Wu, W. Y., Shih, H., & Chan, H. (2009). The analytic network process for partner selection

criteria in strategic alliances. Expert System with Applications, 36(3), 4646–4653. doi:

10.1016/j.eswa.2008.06.049

Ybarra, C. E. & Turk, T. A. (2011). Strategic alliances with competing firms and shareholder

value. Journal of Management and Marketing Research, 6, 1–10. Retrieved from

http://www.aabri.com/jmmr.html

© 2020 University of Maryland Global Campus

All links to external sites were verified at the time of publication. UMGC is not responsible for the validity or integrity

of information located at external sites.

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Business Buying Behavior

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Business Buying Behavior

Business suppliers and their customers are using more vertical coordination and are

exploring ways to create more value from their relationships. Customer loyalty is largely

driven by early supplier involvement, supply-chain management, and purchasing alliances

(Kotler & Keller, 2015). For example, the Renault-Nissan Alliance led by Chairman Carlos

Ghosn is able to secure preferential prices from its suppliers. Neither Renault nor Nissan

would be able to get the same prices when buying alone. Although vertical coordination of

this type may foster strong customer-supplier relationships, it may also involve risks (e.g.,

limited flexibility).

Business to business (B2B) marketers use every available marketing tool to gain and retain

customers. They bundle valuable services with their product offerings, use systems selling

(i.e., buying a total-solution package from a single vendor), and capitalize on online and

offline communications. Furthermore, B2B marketers are increasingly borrowing

marketing practices from business-to-consumer markets to create and enhance their

brands (Kotler & Keller, 2015). These marketers routinely rely on long-term personal

relationships with their major customers, providing useful information and establishing

trust to secure big contracts (Zhang, Watson IV, Palmatier, & Dant, 2016).

While B2B companies recognize the disruptive power of technology, many have been

cautious in anticipating the impact of advances such as the internet, social media, and

crowdsourcing on corporate buying behavior. These companies have also been slow to

adopt marketing analytical tools and big data, even though these developments could

change existing company-wide business practices and models. Changes to company-wide

operations require a closer alignment between the business marketers and other

functional units within the company. For example, several B2B companies increasingly rely

on social media to incorporate the voice of the customer (VoC) to narrow the gap between

sales, marketing, and innovation (Spekman, 2015).

Much of the B2B sector is in the service business (e.g., hotels, banks, airlines, hospitals,

and repair companies), just as many employees in the manufacturing sector, including

accountants, lawyers, and IT professionals, are actually service providers. As B2B

Learning Topic

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companies struggle to differentiate their physical products, they are increasingly striving

for service differentiation by providing faster customer response, faster complaints

resolution, and timely delivery (Kotler & Keller, 2015).

References

Kotler, P. & Keller, K. L. (2015). Marketing management (15th ed.). Upper Saddle River, NJ:

Pearson.

Spekman, R. E. (2015). The Journal of Business-to-Business Marketing at 21 and my

perspective on the field of B to B marketing. Journal of Business-to-Business Marketing,

22(1–2), 87–94. doi:10.1080/1051712X.2015.1020245

Zhang, J. Z., Watson IV, G. F., Palmatier, R. W., & Dant, R. P. (2016). Dynamic relationship

marketing. Journal of Marketing, 80(5), 53–90. doi:10.1509/jm.15.0066

Resources

Reading: Business Buying Behavior

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businessbuyingbehavior.html?ou=516043)

© 2020 University of Maryland Global Campus

All links to external sites were verified at the time of publication. UMGC is not responsible for the validity or integrity

of information located at external sites.

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What is Marketing?

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What is Marketing?

What makes a business idea work? Does it only take money? Why are some products a

huge success and similar products a dismal failure? How was Apple, a computer company,

able to create and launch the wildly successful iPod, yet Microsoft’s first foray into digital

audio players was a total disaster? If the size of the company and the money behind a

product’s launch were the difference, Microsoft would have won. But for Microsoft to

have won, it would have needed something it has not had in a while—good marketing, so it

could produce and sell products that consumers want.

So how does good marketing get done?

Defining Marketing

Marketing is defined by the American Marketing Association as “the activity, set of

institutions, and processes for creating, communicating, delivering, and exchanging

offerings that have value for customers, clients, partners, and society at large” (American

Marketing Association,

n.d.)

. If you read the definition closely, you see that there are four

activities, or components, of marketing:

creating—the process of collaborating with suppliers and customers to create

offerings that have value

communicating—broadly, describing those offerings, as well as learning from

customers

delivering—getting those offerings to the consumer in a way that optimizes value

exchanging—trading value for those offerings

The traditional way of viewing the components of marketing is via the four Ps:

product—goods and services (creating offerings)

promotion—communication

Learning Resource

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place—getting the product to a point at which the customer can purchase it

(delivering)

price—the monetary amount charged for the product (exchanging)

Introduced in the early 1950s, the four Ps were called the marketing mix, meaning that a

marketing plan is a mix of these four components.

If the four Ps are the same as creating, communicating, delivering, and exchanging, you

might be wondering why there was a change. The answer is that they are not exactly the

same. Product, price, place, and promotion are nouns. As such, these words fail to capture

all the activities of marketing. For example, exchanging requires mechanisms for a

transaction, which consist of more than simply a price or place. Exchanging requires,

among other things, the transfer of ownership. For example, when you buy a car, you sign

documents that transfer the car’s title from the seller to you. That’s part of the exchange

process.

Even the term product, which seems pretty obvious, is limited. Does the product include

services that come with your new car purchase (such as free maintenance for a certain

period of time on some models)? Or does the product mean only the car itself?

Finally, none of the four Ps describes particularly well what marketing people

do.

However, one of the goals of this book is to focus on exactly what marketing professionals

do.

Value

Value is at the center of everything marketers do. What does value mean?

When we use the term value, we mean the benefits buyers receive that meet their needs.

In other words, value is what the customer gets by purchasing and consuming a company’s

offering. Although the offering is created by the company, the value is determined by the

customer.

Furthermore, our goal as marketers is to create a profitable exchange for consumers. By

profitable, we mean that the consumer’s personal value equation is positive. The personal

value equation is

value = benefits received – [price + hassle].

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Hassle is the time and effort the consumer puts into the shopping process. The equation

reflects personal impressions, because each consumer will judge the benefits of a product

differently, as with the time and effort he or she puts into shopping. Value, then, varies for

each consumer.

One way to think of value is to imagine a meal in a restaurant. If you and three friends go

to a restaurant and order the same dish, each of you will like it more or less depending on

your personal tastes. Yet the dish was exactly the same, priced the same, and served

exactly the same way. Because your tastes varied, the benefits you received varied.

Therefore, the value varied for each of you. That’s why we call it a personal value

equation.

Value varies from customer to customer based on each customer’s needs. The marketing

concept, a philosophy underlying all that marketers do, requires that marketers seek to

satisfy customer wants and needs. Firms operating with that philosophy are said to be

market oriented. At the same time, market-oriented firms recognize that the exchange

must be profitable for the company to be successful. A marketing orientation is not an

excuse to fail to make profit.

Firms don’t always embrace the marketing concept and a market orientation. Beginning

with the Industrial Revolution in the late 1800s, companies were production oriented.

They believed that the best way to compete was by reducing production costs. In other

words, companies thought that good products would sell themselves. Perhaps the best

example of such a product was Henry Ford’s Model A automobile, the first product of his

production line innovation. Ford’s production line made the automobile cheap and

affordable for many more people. The production era lasted until the 1920s, when

production-capacity growth began to outpace demand growth, and new strategies were

called for. There are, however, companies that still focus on production as the way to

compete.

From the 1920s until after World War II, companies tended to be selling oriented,

meaning they believed it was necessary to push their products by heavily emphasizing

advertising and selling. Consumers during the Great Depression and World War II did not

have as much money, so the competition for their available dollars was stiff. The result

was this push approach during the selling era. Companies like the Fuller Brush Company

and Hoover Vacuum began selling door-to-door, and the vacuum-cleaner salesperson

position was

created.

Just as with production, some companies still operate with a push

focus.

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In the post–World War II environment, demand for goods increased as the economy

soared. Some products, limited in supply during World War II, were now plentiful to the

point of surplus. Companies believed that to compete, they had to sell different products

than the competition, so many focused on product innovation. This focus on product

innovation is called the product orientation. Companies like Procter & Gamble created

many products that served the same basic function as one another, but with a slight twist

or difference in order to appeal to a different consumer, and as a result products

proliferated. But as consumers had many choices available to them, companies had to find

new ways to compete. Which products were best to create? Why create them? The

answer was to create what customers wanted, leading to the development of the

marketing concept, and from about 1950 to 1990, businesses operated in the marketing

era.

So what era would you say we’re in now? Some call it the value era, a time when

companies emphasize creating value for customers. Is that really different from the

marketing era, in which the emphasis was on fulfilling the marketing concept? Maybe not.

Others call today’s business environment the one-to-one era, meaning that the way to

compete is to build relationships with customers one at a time and to serve each

customer’s needs individually. For example, the longer you are a customer of Amazon, the

more details they gain about your purchasing habits and the better they can target you

with offers of new products. With the advent of social media and the empowerment of

consumers through ubiquitous information from consumer reviews, there is clearly greater

emphasis on meeting customer needs. But is that substantially different from the

marketing concept?

Still others argue that this is the time of service-dominant logic, and that we are in the

service-dominant logic era.

Service-dominant logic is an approach to business that

recognizes that consumers want value no matter how it is

delivered, whether it’s via a product, a service, or a

combination of the two.

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Although there is merit in this belief, there is also merit to the value approach and the

one-to-one approach, and all three beliefs are intertwined. Perhaps, then, the name for

this era has yet to be decided.

Whatever era we’re in now, most historians would agree that defining and labeling it is

difficult. Value and one-to-one approaches are both natural extensions of the marketing

concept, so we may still be in the marketing era. To make matters more confusing, not all

companies adopt the philosophy of the era. For example, in the 1800s, Singer and

National Cash Register adopted strategies rooted in sales, so they operated in the selling

era forty years before it existed. Some companies are still in the selling era. Recently, many

believed automobile manufacturers had fallen into trouble because they had been working

too hard to sell or push product and not hard enough on delivering value.

Creating Offerings That Have Value

Marketing creates goods and services that the company offers at a price to its customers

or clients. The entire bundle consisting of the tangible good, the intangible service, and

the price is the company’s offering. When you compare one car to another, for example,

you can evaluate each of these dimensions—the tangible, the intangible, and the price—

separately. However, you can’t buy one manufacturer’s car, another manufacturer’s

service, and a third manufacturer’s price when you actually make a choice. Together, the

three make up a single firm’s offer.

Marketing people do not create the offering alone. For example, when the iPad was

created, Apple’s engineers were also involved in its design. Apple’s financial personnel had

to review the costs of producing the offering and provide input on how it should be

priced. Apple’s operations group needed to evaluate the manufacturing requirements the

iPad would need. The company’s logistics managers had to evaluate the cost and timing of

getting the offering to retailers and consumers. Apple’s dealers also likely provided input

regarding the iPad’s service policies and warranty structure. Marketing, however, has the

biggest responsibility because it is their responsibility to ensure that the new product

delivers value.

Communicating Offerings

Communicating is a broad term in marketing that means describing the offering and its

value to your potential and current customers, as well as learning from customers what

they want and like. Sometimes communicating means educating potential customers

about the value of an offering, and sometimes it means simply making customers aware of

where they can find a product. Communicating also means that customers get a chance to

tell the company what they think. Today, companies are finding that to be successful, they

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need a more interactive dialogue with their customers. For example, Comcast customer

service representatives monitor Twitter. When they observe consumers tweeting

problems with Comcast, the customer service reps will post resolutions to their problems.

Similarly, JCPenney has created consumer groups that talk among themselves on

JCPenney-monitored websites. The company might post questions, send samples, or

engage in other activities designed to solicit feedback from customers.

Mobile devices, like iPads and Android smartphones, make mobile marketing possible too.

For example, if consumers check in at a shopping mall on Foursquare or Facebook, stores

in the mall can send coupons and other offers directly to their phones and computers.

Companies use many forms of communication, including advertising on the internet or

television, on billboards or in magazines, through product placements in movies, and

through salespeople. Other forms of communication include attempting to have news

media cover the company’s actions (part of public relations), participating in special events

such as the annual International Consumer Electronics Show in which Apple and other

companies introduce their newest gadgets, and sponsoring special events like the Susan G.

Komen Race for the Cure.

Delivering Offerings

Marketing can’t just promise value, it also has to deliver value. Delivering an offering that

has value is much more than simply getting the product into the hands of the user; it also

entails making sure the user understands how to get the most out of the product and that

he or she is taken care of if service is required later on. Value is delivered in part through a

company’s supply chain. The supply chain includes a number of organizations and

functions that mine, make, assemble, or deliver materials and products from a

manufacturer to consumers. The actual group of organizations can vary greatly from

industry to industry, and include wholesalers, transportation companies, and retailers.

Logistics, or the actual transportation and storage of materials and products, is the

primary component of supply-chain management, but there are other aspects of supply-

chain management that we will discuss later.

Exchanging Offerings

In addition to creating an offering, communicating its benefits to consumers, and

delivering the offering, there is the actual transaction, or exchange, that has to occur. In

most instances, we consider the exchange to be cash for products and services. However,

if you were to fly to Louisville, Kentucky, for the Kentucky Derby, you could pay for your

airline tickets using frequent-flier miles. You could also use Hilton Honors points to pay for

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your hotel, and cash-back points on your Discover card to pay for meals. None of these

transactions would actually require cash. Other exchanges, such as information about your

preferences gathered through surveys, might not involve cash.

When consumers acquire, consume, and dispose of products and services, an exchange

occurs. For example, via Apple’s One-to-One program, you can pay a yearly fee in

exchange for additional periodic product training sessions with an Apple professional.

Each time a training session occurs, another transaction takes place. A transaction also

occurs when you are finished with a product. For example, you might sell your old iPhone

to a friend, trade in a car, or ask the Salvation Army to pick up your old refrigerator.

Disposing of products has become an important ecological issue. Batteries and other

components of cell phones, computers, and high-tech appliances can be very harmful to

the environment, and many consumers don’t know how to dispose of these products

properly. Some companies, such as Office Depot, have created recycling centers where

customers can take their old electronics.

Apple has a web page where consumers can fill out a form, print it, and ship it to Apple

along with their old cell phones and MP3 players. Apple then pulls out the materials that

are recyclable and properly disposes of those that aren’t. By reducing the hassle

associated with disposing products, Office Depot and Apple add value to their product

offerings.

The focus of marketing has changed from emphasizing the product, price,

place, and promotion mix to one that emphasizes creating,

communicating, delivering, and exchanging value. Value is a function of

the benefits an individual receives, and consists of the price the

consumer paid and the time and effort the person expended making the

purchase.

Who Does Marketing?

The short answer to the question of who does marketing is “everybody!” But let’s take a

moment and consider in greater detail how different types of organizations engage in

marketing.

Key Points

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For-Profit Companies

The obvious answer to the question, who does marketing? is for-profit companies like

McDonald’s, Procter & Gamble (the makers of Tide detergent and Crest toothpaste), and

Walmart. For example, McDonald’s creates a new breakfast chicken sandwich for $1.99

(the offering), launches a television campaign (communicating), makes the sandwiches

available on certain dates (delivering), and then sells them in its stores (exchanging). When

Procter & Gamble (P&G) creates a new Crest tartar-control toothpaste, it launches a

direct-mail campaign in which it sends information and samples for dentists to offer to

their patients. P&G then sells the toothpaste through retailers like Walmart, which has a

panel of consumers sample the product and provide feedback through an online

community. These are all examples of marketing activities.

For-profit companies can be defined by the nature of their customers. A business-to-

consumer (B2C) company like P&G sells products to be used by consumers like you, while

a business-to-business (B2B) company sells products to be used within another company’s

operations, as well as by government agencies and entities. To be sure, P&G sells

toothpaste to other companies like Walmart (and probably to the army, prisons, and other

government agencies), but the end user is an individual person.

Another way to categorize companies that engage in marketing is by the functions they

fulfill. P&G is a manufacturer, Walmart is a retailer, and Grocery Supply Company is a

wholesaler of grocery items that buys from companies like P&G in order to sell to small

convenience store chains. Though they have different functions, all these types of for-

profit companies engage in marketing activities. Walmart, for example, advertises to

consumers.

Grocery Supply Company salespeople will call on convenience store owners to take orders

and will build in-store displays. P&G might help Walmart or Grocery Supply Company with

templates for advertising or suggest special cartons to use in an in-store display, but all

the companies are using marketing to help sell P&G’s toothpaste.

Similarly, all the companies engage in dialogue with their customers to understand what to

sell. For Walmart and Grocery Supply, the dialogue may result in changing what they buy

and sell. For P&G, customer feedback may yield a new product or a change in pricing

strategy.

Nonprofit Organizations

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Nonprofit organizations also engage in marketing. When the American Heart Association

(AHA) created a heart-healthy diet for people with high blood pressure, it bound the diet

into a small book, along with access to a special website that people could use to plan

their meals and record their health-related activities. The AHA then sent copies of the diet

to doctors to give to patients. When does an exchange take place, you might be

wondering? And what does the AHA get out of the transaction?

From a financial standpoint, the AHA does not directly benefit. Nonetheless, the

organization is meeting its mission, or purpose, of getting people to live heart-healthy lives

and considers the campaign a success when doctors give the books to their patients. The

point is that the AHA is engaged in the marketing activities of creating, communicating,

delivering, and exchanging. This won’t involve the same kind of exchange as a for-profit

company, but it is still marketing.

When a nonprofit organization engages in marketing

activities, this is called nonprofit marketing.

Some schools offer specific courses in nonprofit marketing, and many marketing majors

begin their careers with nonprofit organizations.

Government entities also engage in marketing activities. For example, when the US Army

advertises to parents of prospective recruits, sends brochures to high schools, or brings a

Bradley Fighting Vehicle to a state fair, the army is engaging in marketing. The US Army

also listens to its constituencies, as evidenced by recent research aimed at understanding

how to serve military families more effectively. One result was advertising aimed at

improving parents’ responses to their children’s interest in joining the army. Another was a

program aimed at encouraging spouses of military personnel to access counseling services

when their spouse is serving overseas.

Similarly, the Environmental Protection Agency (EPA) runs a number of advertising

campaigns designed to promote environmentally friendly activities. One such campaign

promoted the responsible disposal of motor oil instead of simply pouring it on the ground

or into a storm sewer.

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There is a difference between these two types of activities. When the army is promoting

the benefits of enlisting, it hopes young men and women will join the army. By contrast,

when the EPA runs commercials about how to properly dispose of motor oil, it hopes to

change people’s attitudes and behaviors so that social change occurs. Social marketing,

which can be done by government agencies, nonprofit institutions, religious organizations,

and others, is conducted in an effort to achieve certain social objectives. Convincing

people that global warming is a real threat via advertisements and commercials is social

marketing, as is the example regarding the EPA’s campaign to promote the responsible

disposal of motor oil.

Individuals

If you create a résumé, are you using marketing to communicate the value you have to

offer prospective employers? If you sell yourself in an interview, is that marketing? When

you work for a wage, you are delivering value in exchange for pay. Is this marketing, too?

Some people argue that these are not marketing activities and that individuals do not

necessarily engage in marketing. (Some people also argue that social marketing really isn’t

marketing either.) What do you think? Can individuals market themselves and their ideas?

Marketing can be thought of as a set of business practices that for-profit

organizations, nonprofit organizations, government entities, and

individuals can use. When a nonprofit organization engages in marketing

activities, this is called nonprofit marketing. Marketing conducted in an

effort to achieve certain social objectives is called social marketing.

What types of companies engage in

marketing?

What is the difference between nonprofit marketing and social

marketing?

What can individuals do for themselves that would be considered

marketing?

Key Points

Ask Yourself

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Why Study Marketing?

Products don’t sell themselves. Generally, the “build it and they will come” philosophy

doesn’t work. Good marketing educates customers so that they can find the products they

want, make better choices about those products, and extract the most value from them. In

this way, marketing helps facilitate exchanges between buyers and sellers for the mutual

benefit of both parties. Likewise, good social marketing provides people with information

and helps them make healthier decisions for themselves and others.

Of course, all business students should understand all functional areas of the firm,

including marketing. There is more to marketing, however, than simply understanding its

role in the business. Marketing has a tremendous impact on society.

Marketing Delivers Value

Marketing not only delivers value to customers, it also creates value for the firm as it

develops a reliable customer base and increases its sales and profitability. Franklin D.

Roosevelt, the US president with perhaps the greatest influence on our economic system,

once said, “If I were starting life over again, I am inclined to think that I would go into the

advertising business in preference to almost any other. The general raising of the

standards of modern civilization among all groups of people during the past half century

would have been impossible without the spreading of the knowledge of higher standards

by means of advertising” (Famous Quotes and Authors, n.d.). Roosevelt referred to

advertising, but advertising alone is insufficient for delivering value. Marketing finishes the

job by ensuring that what is delivered is valuable.

Marketing Benefits Society

Marketing benefits society in general by improving people’s lives in two ways. First, as we

mentioned, it facilitates trade. As you have learned, or will learn, in economics, being able

to trade makes people’s lives better. Because better marketing means more successful

companies, jobs are created. This growth generates wealth for workers, who are then able

to make purchases, which, in turn, creates more jobs.

The second way marketing improves the quality of life is through the function of the

value-delivery approach in creating choices for consumers. When you add all the

marketers together who are trying to deliver offerings of greater value to consumers and

are effectively communicating that value, consumers are able to make more informed

decisions about a wider array of choices. From an economic perspective, more choices and

smarter consumers are indicative of a higher quality of life.

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Marketing Costs Money

Marketing can sometimes be the largest expense associated with producing a product. In

the soft drink business, marketing expenses account for about one-third of a product’s

price—about the same as the ingredients used to make the soft drink itself.

Some people argue that society does not benefit from marketing when it represents such

a huge chunk of a product’s final price. In some cases, that argument is justified. Yet when

marketing results in more informed consumers receiving a greater amount of value, the

cost is justified.

Marketing Offers People Career Opportunities

Marketing is the interface between producers and consumers, shouldering the

responsibility for both making money for the company and delivering satisfaction to

customers. In addition, because marketing can be such an expensive part of a business and

is so critical to its success, companies actively seek strong marketing employees. There are

a variety of jobs available in the marketing profession. The following positions represent

only a few of the opportunities available in the field.

marketing research—Personnel in marketing research are responsible for studying

markets and customers in order to understand what strategies or tactics might work

best for firms.

merchandising—In retailing, merchandisers are responsible for developing strategies

regarding what products wholesalers should carry to sell to retailers such as Target

and Walmart.

sales—Salespeople meet with customers, determine their needs, propose offerings,

and make sure that the customer is satisfied. Sales departments can also include

sales support teams who work on creating the offering.

advertising—Whether it’s for an advertising agency or inside a company, some

marketing personnel work on advertising. Television commercials and print ads are

only part of the advertising mix. Many people who work in advertising spend all their

time creating advertising for electronic media, such as websites and their pop-up

ads, podcasts, etc.

product development—People in product development are responsible for

identifying and creating features that meet the needs of a firm’s customers. They

often work with engineers or other technical personnel to ensure that value is

created.

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direct marketing—Professionals in direct marketing communicate directly with

customers about a company’s product offerings via channels such as e-mail, chat

lines, telephone, or direct mail.

digital media—Digital media professionals combine advertising, direct marketing, and

other areas of marketing to communicate directly with customers via social media,

the web, and mobile media (including texts). They also work with statisticians in

order to determine which consumers receive which message, and with IT

professionals to create the right look and feel of digital media.

event marketing—Some marketing personnel plan special events, orchestrating face-

to-face conversations with potential and current customers in a special setting.

nonprofit marketing—Nonprofit marketers often don’t get to do everything listed

previously, as nonprofits typically have smaller budgets. But their work is always

very important as they try to change behaviors without having a product to sell.

A career in marketing can begin in a variety of ways. Entry-level positions for new college

graduates are available in many of the roles previously mentioned.

A growing number of CEOs are people with marketing backgrounds. Some legendary

CEOs, like Ross Perot and Mary Kay Ash, got their start in marketing. More recently, CEOs

like Mark Hurd, CEO of Oracle, and Jeffrey Immelt at GE, are showing how marketing

careers can lead to the highest position of an organization.

Criticisms of Marketing

Marketing is not without its critics. We already mentioned that one reason to study

marketing is because it is costly, and business leaders need to understand the cost/benefit

ratio of marketing in order to make wise investments. Yet that cost is precisely why some

criticize marketing. Some allege that if that money could be put into research and

development of new products, perhaps the consumers would be better satisfied. Or, some

critics argue, prices could be lowered. But marketing executives do not intentionally waste

money on marketing, and are always on the lookout for less expensive ways to have the

same performance.

Another criticism is that marketing creates wants among consumers for products and

services that aren’t really needed. For example, fashion marketing creates demand for

high-dollar jeans when much less expensive jeans can fulfill the same basic function. Taken

to the extreme, consumers may take on significant credit card debt to satisfy wants

created by marketing, with serious negative consequences. When marketers target their

messages carefully so an audience that can afford such products is the only group

reached, such extreme consequences can be avoided.

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By facilitating transactions, marketing delivers value to both consumers

and firms. At the broader level, this process creates jobs and improves

the quality of life in a society. Marketing can be costly, so firms need to

hire strong employees to manage their marketing activities. Being

responsible for both making money for your company and delivering

satisfaction to your customers makes marketing a great career.

Why study marketing?

How does marketing provide value?

Why does marketing cost so much? Is marketing worth it?

What is the main cost of marketing?

Themes in Marketing

We previously discussed marketing as a set of activities that anyone can do. Marketing is

also a functional area in companies, just like operations and accounting. Within a company,

marketing might be the title of a department, but some marketing functions, such as sales,

might be handled by another department. Marketing activities do not occur separately

from the rest of the company, however.

As we have explained, pricing an offering, for example, will involve a company’s finance

and accounting departments in addition to the marketing team. Similarly, a marketing

strategy is not created solely by a firm’s marketing personnel. Instead, it flows from the

company’s overall strategy.

Everything Starts with Customers

Most organizations start with an idea of how to serve customers better. Apple’s engineers

began working on the iPod by looking at the available technology and thinking about how

customers would like to improve the availability and affordability of their music, through

Key Points
Ask Yourself

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downloading.

Many companies think about potential markets and customers when they start. John

Deere, for example, founded his company on the principle of serving customers. When

admonished for making constant improvements to his products even though farmers

would take whatever they could get, Deere reportedly replied, “They haven’t got to take

what we make and somebody else will beat us, and we will lose our trade” (John Deere,

n.d.). He recognized that if his company failed to meet customers’ evolving needs,

someone else would.

Here are a few mission statements from other companies. Note that they all refer to their

customers, directly or indirectly. Note also how these are written to inspire employees and

others who interact with the company.

Company Mission Statements

IBM

IBM will be driven by these values:

Dedication to every client’s success.

Innovation that matters, for our company and

for the world.

Trust and personal responsibility in all

relationships. (IBM, n.d.)

Coca-Cola

Everything we do is inspired by our enduring mission:

To refresh the world in body, mind, and spirit.

To inspire moments of optimism through our

brands and our actions.

To create value and make a difference

everywhere we engage. (Coca-Cola Company,

n.d.)

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Not all companies create mission statements that reflect a marketing orientation. Note

Apple’s mission statement: “Apple ignited the personal computer revolution in the 1970s

with the Apple II and reinvented the personal computer in the 1980s with the Macintosh.

Today, Apple continues to lead the industry in innovation with its award-winning

computers, OS X operating system and iLife and professional applications. Apple is also

spearheading the digital media revolution with its iPod portable music and video players

and iTunes online store, and has entered the mobile phone market with its revolutionary

iPhone” (Apple, Inc, 2009). This mission statement reflects a product orientation, or an

operating philosophy based on the premise that Apple’s success is due to great products

and that simply supplying them will lead to demand for them. Apple, and for that matter,

many other companies, have fallen prey to thinking that they knew what a great product

was without asking their customers. In fact, Apple’s first attempt at a graphic user

interface (GUI) was the LISA, a dismal failure.

The Marketing Plan

The marketing plan is the strategy for implementing the components of marketing:

creating, communicating, delivering, and exchanging value. Once a company has decided

what business it is in and expressed that in a mission statement, the firm then develops a

corporate strategy. Marketing strategists subsequently use the corporate strategy and

mission and combine that with an understanding of the market to develop the company’s

marketing plan.

McDonald’s

To be our customers’ favorite place and way to eat

(McDonald’s, n.d.).

Merck

To provide innovative and distinctive products and

services that save and improve lives and satisfy

customer needs, to be recognized as a great place to

work, and to provide investors with a superior rate of

return (Merck & Co., n.d.).

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Marketers also want to know their customers—who they are and what they like to do—so

as to uncover this information. Generally, this requires marketing researchers to collect

sales and other related customer data and analyze it. In this pursuit, there are three

important goals: understanding the customer’s wants and needs, understanding how the

customer wants to acquire, consume, and dispose of the offering, and determining what

makes up their personal value equation.

Once this information is gathered and digested, the planners can work to create the right

offering. Products and services are developed, bundled together at a price, and then

tested in the market. Decisions have to be made about when to alter the offerings, add

new ones, or drop old ones. These decisions are the focus of the next set of chapters and

are the second step in marketing planning.

Following the material on offerings, we explore the decisions associated with building the

value chain. Once an offering is designed, the company has to be able to make it and then

be able to get it to the market. This step, planning for the delivery of value, is the third

step in the marketing plan.

The fourth step is creating the plan for communicating value. How does the firm make

consumers aware of the value it has to offer? How can it help them recognize that value

and decide that they should purchase products? These are important questions for

marketing planners.

Once a customer has decided that her personal value equation is likely to be positive, she

will decide to purchase the product. That decision still has to be acted on, however, which

is the exchange. As exchanges occur, marketing planners then refine their plans based on

the feedback they receive from their customers, as well as what their competitors are

doing and how market conditions are changing.

The Changing Marketing Environment

We previously mentioned that the view of marketing has changed from a static set of four

Ps to a dynamic set of processes that involve marketing professionals as well as many

other employees in an organization. The way business is being conducted today is

changing, too, and marketing is changing along with it. There are several themes that

underscore these changes.

ethics and social responsibility—Businesses exist only because society allows them

to. When businesses begin to fail society, society will punish them or revoke their

license. The crackdown on companies in the subprime mortgage–lending industry is

one example. These companies created and sold loans (products) that could only be

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paid back under ideal circumstances, and when consumers couldn’t pay these loans

back, the entire economy suffered greatly. Scandals such as these illustrate how

society responds to unethical business practices. However, whereas ethics require

only that you do no harm, the concept of social responsibility requires that you

actively seek to improve the lives of others. Today, people are demanding businesses

take a proactive stance in terms of social responsibility, and companies are being

held to ever-higher standards of conduct.

sustainability—An example of social responsibility, sustainability involves engaging in

practices that do not diminish the earth’s resources. Coca-Cola, for example, is

working with governments in Africa to ensure clean water availability, not just for

manufacturing Coke products but for all consumers in that region. Further, the

company seeks to engage the participation of American by offering opportunities to

contribute to clean-water programs. Right now, companies do not have to engage in

these practices, but because firms represent the people behind them (their owners

and employees), forward-thinking executives are seeking ways to reduce the impact

their companies are having on the planet.

service-dominant logic—You might have noticed that we use the word offering a lot

instead of the term product. That’s because of service-dominant logic, the approach

to business that recognizes that consumers want value no matter how it is delivered

—whether through a tangible product or through intangible services. This emphasis

on value drives the functional approach to value that we’ve taken—that is, creating,

communicating, delivering, and exchanging value.

metrics—Technology has increased the amount of information available to decision

makers. As such, the amount and quality of data for evaluating a firm’s performance

is increasing. Earlier in our discussion of the marketing plan, we explained that

customers communicate via transactions. Although this sounds both simple and

obvious, better information technology has given us a much more complete picture

of each exchange. Cabela’s, for example, combines data from Web browsing activity

with purchase history in order to determine the likely next-best offer. Using data

from many sources, we can build more-effective metrics that can then be used to

create better offerings, better communication plans, and so forth.

a global environment—Every business is influenced by global issues. The price of oil,

for example, is a global concern that affects everyone’s prices and even the

availability of some offerings. We already mentioned Coke’s concern for clean water.

But Coke also has to be concerned with distribution systems in areas with poor or

nonexistent roads, a myriad of government policies and regulations, workforce

availability, and many more issues associated with selling and delivering Coke around

the world. Even companies with smaller markets source some or all their offerings

from companies in other countries or else face some sort of direct competition from

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companies based in other countries. Every business professional, whether working in

marketing or elsewhere, needs some understanding of the global environment in

which companies operate.

A company’s marketing plan flows from its strategic plan. Both begin with

a focus on customers. The essential components of the plan are

understanding customers, creating an offering that delivers value,

communicating the value to the customer, exchanging with the customer,

and evaluating the firm’s performance. A marketing plan is influenced by

environmental trends such as social responsibility, sustainability, service-

dominant logic, the increased availability of data and effective metrics,

and the global nature of the business environment.

Why does everything start with customers? Or is it only marketing

that starts with customers?

What are the key parts of a marketing plan?

What is the relationship between social responsibility, sustainability,

service-dominant logic, and the global business environment? How

does the concept of metrics fit?

References

American Marketing Association. (n.d.). Definition of marketing.

Retrieved from

http://www.marketingpower.com/AboutAMA/Pages/DefinitionofMarketing.aspx?

sq=definition+of+marketing

Apple, Inc. (2009). Apple’s app store downloads top 1.5 billion in first year. Retrieved from

http://www.apple.com/hk/en/pr/library/ 2009/07/14apps.html

Coca-Cola Company. (n.d.). Mission, vision & values. Retrieved from http://www.thecoca-

colacompany.com/ourcompany/mission_vision_values.html

Key Points
Ask Yourself

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Famous Quotes and Authors. (n.d.). Franklin D. Roosevelt quotes and quotations.

Retrieved from

http://www.famousquotesandauthors.com/authors/franklin_d__roosevelt_quotes.html

IBM. (n.d.). About IBM. Retrieved from http://www.ibm.com/ibm/us/en

John Deere (n.d.). John Deere: A biography. Retrieved from

http://www.deere.com/en_US/compinfo/history/johndeere2.html

McDonald’s. (n.d.). Our company. Retrieved from

http://aboutmcdonalds.com/mcd/our_company/mcd_faq/student_research.html#1

Merck & Co. (n.d.). The new Merck. Retrieved from

http://www.merck.com/about/Merck%20Vision%20Mission

Licenses and Attributions

Chapter 1: What Is Marketing? (https://2012books.lardbucket.org/books/marketing-

principles-v2.0/s04-what-is-marketing.html) from Marketing Principles is available

under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported

(https://creativecommons.org/licenses/by-nc-sa/3.0/) license without attribution as

requested by the site’s original creator or licensee. UMUC has modified this work and it is

available under the original license.

© 2020 University of Maryland Global Campus

All links to external sites were verified at the time of publication. UMGC is not responsible for the validity or integrity

of information located at external sites.

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Crafting a Digital Marketing Strategy

Any activity with an end goal (whether it’s winning a war, building a city, or selling a

product) should have a blueprint in place for every person in the organization to follow. In

digital marketing, however, there is no single definitive approach—each business must

create its own roadmap. However, there are questions you can use to guide the process.

A strategy needs to cover who you are, what you are offering and to whom, and why and

how you are doing so. The steps and questions below cover what an organization should

be aware of when creating and implementing a strategy that will meet its marketing

objectives and solve its challenges.

Step 1: Examine the Context

The first step in crafting a successful strategy is to examine the context of the

organization and the various stakeholders:

What is the context in which you are operating (PESTLE factors) and how is this

likely to change in the future?

Who are you, why does your brand matter, and what makes your brand useful and

valuable?

Who are your customers, and what needs, wants, and desires do they have?

Who are your competitors? These may extend beyond organizations that compete

with you on the basis of price and product and could also be competition in the form

of abstracts such as time and mindshare.

Thorough market research will reveal the answers to these questions.

Step 2: Examine Your Value Exchange

Learning Resource

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Once you have examined the market situation, the second step is an examination of your

value proposition or promise. In other words, what unique value can your organization add

to that market? It is important to identify the supporting value-adds to the brand promise

that are unique to the digital landscape. What extras, beyond the basic product or service,

do you offer to customers?

The internet offers many channels for value creation. However, the value depends largely

on the target audience, so it is crucial to research your users and gather insights into what

they want and need.

Content marketing is the process of conceptualizing and creating this sort of content.

Examples of value-based content include a DIY gardening video for a hardware brand, a

research paper for a business analyst, or a funny infographic for a marketing company.

Step 3: Establish Digital Marketing Goals

When setting your digital marketing goals, there are three key aspects to consider:

objectives, key performance indicators (KPIs), and targets. Let’s look at each one in turn.

Objectives

Objectives are essential to any marketing endeavor. Without them, your strategy would

have no direction and no end goal or win conditions. It’s important to be able to take a

step back and ask several questions:

What are you trying to achieve?

How will you know if you are successful?

Objectives need to be SMART:

specific—The objective must be clear and detailed, rather than vague and general.

measurable—The objective must be measurable so that you can gauge whether you

are attaining the desired outcome.

attainable—The objective must be something that is possible for your brand to

achieve, based on available resources.

realistic—The objective must also be sensible and based on data and trends; don’t

exaggerate or overestimate what can be achieved.

time-bound—Finally, the objective must be linked to a specific timeframe.

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Key Performance Indicators

Key performance indicators (KPIs) are the specific metrics or pieces of data that you will

look at to determine whether your tactics are performing well and meeting your

objectives. For example, a gardener may look at the growth rate, color, and general

appearance of a plant to evaluate whether it is healthy. In the same way, a marketer will

look at a range of data points to determine whether a chosen tactic is delivering. KPIs are

determined per tactic, with an eye on the overall objective.

Targets

Finally, targets are the specific values that are set for your KPIs to reach within a specific

time period. If you meet or exceed a target, you are succeeding; if you don’t reach it,

you’re falling behind on your objectives and you need to reconsider your approach (or

your target).

Example of Digital Marketing Goals

SMART objective: Increase sales through the eCommerce platform by 10 percent

within the next six months.

KPIs:

Search advertising—number of search referrals; cost per click on the ads

Facebook brand page—number of comments and shares on campaign; specific

posts

Targets:

Search advertising—one thousand search referrals after the first month, with a

10 percent month-on-month increase after that

Facebook brand page—50 comments and 10 shares on campaign-specific posts

per week

Step 4: Establish Tactics and Evaluation

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Tactics are the specific tools or approaches you will use to meet your objectives, for

example, a retention-based email newsletter, a Facebook page, or a CRM implementation.

As a strategy becomes more complex, you may have multiple tactics working together to

try to achieve the same objective. Tactics may change (and often should), but the objective

should remain your focus.

Many digital tools and tactics are available once you have defined your digital marketing

objectives. Each tactic has its strengths. For example, acquisition (gaining new customers)

may best be driven by search advertising, while email is one of the most effective tools for

selling more products to existing customers.

The table below expands on some of the most popular tactics available to digital

marketers and their possible outcomes.

Common Tactics and Their Outcomes

Tactic Outcome

SEO—This is the practice of
optimizing a website to rank
higher on the search engine
results pages for relevant
search terms. SEO involves
creating relevant, fresh and
user-friendly content that
search engines index and serve
when people enter a search
term that is relevant to your
product or service.

Customer retention and acquisition—SEO has a
key role to play in acquisition, as it ensures your
organization’s offering will appear in the search
results, allowing you to reach potential customers.
A site that is optimized for search engines is also a
site that is clear, relevant and well designed.
These elements ensure a great user experience,
meaning that SEO also plays a role in retention.

Search advertising—In pay-
per-click or search advertising,
the advertiser pays only when
someone clicks on their ad.
The ads appear on search
engine results pages.

Sales, customer retention, and acquisition—The
beauty of search advertising is that it is keyword
based. This means an ad will come up in response
to the search terms entered by the consumer. It
therefore plays a role in sales, acquisition and
retention. It allows the advertiser to reach people
who are already in the buying cycle or are
expressing interest in what they have to offer.

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Tactic Outcome

Online advertising—Online
advertising covers advertising
in all areas of the Internet –
ads in emails, ads on social
networks and mobile devices,
and display ads on normal
websites.

Branding and acquisition—The main objective of
display advertising is to raise brand awareness
online. It can also be more interactive and
therefore less disruptive than traditional or static
online advertising, as users can choose to engage
with the ad or not. Online advertising can be
targeted to physical locations, subject areas, past
user behaviors, and much more.

Affiliate marketing—Affiliate
marketing is a system of
reward whereby referrers are
given a finder’s fee for every
referral they give.

Sales and branding—Online affiliate marketing is
widely used to promote eCommerce websites,
with the referrers being rewarded for every
visitor, subscriber or customer provided through
their efforts. It is a useful tactic for brand building
and acquisition.

Video marketing—Video
marketing involves creating
video content. This can either
be outright video advertising,
or can be valuable, useful,
content marketing.

Branding, customer retention, and value creation
—Since it is so interactive and engaging, video
marketing is excellent for capturing and retaining
customer attention. Done correctly, it provides
tangible value— in the form of information,
entertainment or inspiration—and boosts a
brand’s image in the eyes of the public.

Social media—Social media,
also known as consumer-
generated media, is media (in
the form of text, visuals and
audio) created to be shared. It
has changed the face of
marketing by allowing
collaboration and connection
in a way that no other channel
has been able to offer.

Branding, value creation, and participation—From
a strategic perspective, social media is useful for
brand building, raising awareness of the brand
story and allowing the consumer to become
involved in the story through collaboration. Social
media platforms also play a role in building
awareness, due to their shareable, viral nature.
They can also provide crowdsourced feedback
and allow brands to share valuable content
directly with their fans.

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Tactic Outcome

Email marketing—Email
marketing is a form of direct
marketing that delivers
commercial and content-
based messages to an
audience. It is extremely cost
effective, highly targeted,
customizable on a mass scale
and completely measurable—
all of which make it one of the
most powerful digital
marketing tactics.

Customer retention and value creation—Email
marketing is a tool for building relationships with
potential and existing customers through valuable
content and promotional messages. It should
maximize the retention and value of these
customers, ultimately leading to greater
profitability for the organization as a whole. A
targeted, segmented email database means that a
brand can direct messages at certain sectors of
their customer base in order to achieve the best
results.

Once the objectives and tactics have been set, these should be cross-checked and re-

evaluated against the needs and resources of your organization to make sure your strategy

is on the right track and no opportunities are being overlooked.

Step 5: Ongoing Optimization

It is increasingly important for brands to be dynamic, flexible, and agile when marketing

online. New tactics and platforms emerge every week, customer behaviors change over

time, and people’s needs and wants from brands evolve as their relationships grow. The

challenge is to break through the online clutter to connect with customers in an original

and meaningful way.

This process of constant change should be considered in the early stages of strategy

formulation, allowing tactics and strategies to be modified and optimized as you go. After

all, developing a digital marketing strategy should be iterative, innovative, and open to

evolution.

Understanding user experience and the user journey is vital to building successful brands.

A budget should be set aside upfront for analyzing user data and optimizing conversion

paths.

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Social thinking and socially informed innovation are also valuable and uniquely suited to

the online space. Socially powered insight can be used to inform strategic decisions in the

organization, from product roadmaps to service plans. Brands have moved from a mere

presence in social media to active use, aligning it with actionable objectives and their

corresponding metrics. This is critical in demonstrating return on investment (ROI) and

understating the opportunities and threats in the market.

Managing the learning loop (the knowledge gained from reviewing the performance of

your tactics, which can then be fed back into the strategy) can be difficult. This is because

brand cycles often move more slowly than the real-time results you will see online. It is

therefore important to find a way to work agility into the strategy, allowing you to be

quick, creative, and proactive, as opposed to slow, predictable, and reactive.

Licenses and Attributions

2.7 Crafting a Digital Marketing Strategy

(https://www.redandyellow.co.za/content/uploads/woocommerce_uploads/2017/10/ema

rketing_textbook_download ) from eMarketing: The Essential Guide to Marketing in

a Digital World, 5th Edition by Rob Stokes and the Minds of Quirk is available under

a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported

(https://creativecommons.org/licenses/by-nc-sa/3.0/) license. © 2008, 2009, 2010,

2011, 2013 Quirk Education Pty (Ltd). UMUC has modified this work and it is available

under the original license.

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All links to external sites were verified at the time of publication. UMGC is not responsible for the validity or integrity

of information located at external sites.

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11/23/2020

Marketing

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Marketing

Definitions

One of the most important functional areas in business is marketing, as it deals with

customers more than any other function. Companies such as Google, Swiss Bank,

Deutsche Bank, Gucci, Airbus, Apple, McDonalds, and Toyota have a passion for

understanding their customers and satisfying their needs in “well-defined target markets”

(Kotler & Armstrong, 2014, p. 4). Basically, marketing is a managerial and social function

through which companies and consumers create and exchange value.

The American Marketing Association (AMA) defines marketing as “the activity, set of

institutions, and processes for creating, communicating, delivering, and exchanging

offerings that have value for customers, clients, partners, and society at large” (AMA,

2013, para. 1).

Kotler and Armstrong (2014) define marketing as the “process by which companies create

value for customers and build strong customer relationships in order to capture value from

customers in return” (p. 5).

On the other hand, Kotler and Keller (2015) define marketing management as the science

and art of selecting target markets, and the practice of acquiring, maintaining, and growing

customers through the creation, delivery, and communication of superior customer value—

all while maintaining profitability.

Remember, marketing is not selling; selling is just a

component of marketing!

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The Marketing Process

Selecting a product or a service to develop is a demanding process that requires cross-

functional teams to research, select, develop, and launch new products. In addition, the

company needs to evaluate the attractiveness of a new business. Sometimes the company

may seek external help to develop a new product, as it may lack the necessary technical

expertise, market knowledge, or resources, or may simply want to spread the financial risk

involved (i.e., open innovation, or innovation using strategic alliances.)

The marketing process involves five steps (Kotler & Armstrong, 2014, p. 5):

1. understanding the marketplace and consumer needs and wants

2. designing a consumer-driven marketing strategy

3. constructing an integrated marketing program that delivers superior value

4. building profitable relationships and creating consumer satisfaction

5. capturing value from customers to create profits and customer equity

To effectively engage in the marketing process, a business needs to understand the

following elements:

1.

consumers

2. how to acquire market knowledge (primary and secondary research)

3. how to turn that knowledge into products that are needed and wanted by a group of

consumers

4. how to create market offerings that not only create value for the consumer but

profitability for the organization

5. how to accomplish these tasks while being socially responsible and engaging in

ethical behavior

Furthermore, there are five major customer value themes (Kotler & Armstrong, 2014, p.

XVI):

1. creating value for the consumer in order to capture value from them in return

2. creating and managing strong local and global value-creating brands

3. capitalizing on new marketing technologies, such social media (i.e., digital marketing)

4. assessing and managing return on marketing investment

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5. sustainable global marketing

References

AMA. (2013). Marketing definition. Retrieved from www.ama.org

Kotler, P. & Armstrong, G. (2014). Principles of marketing (15th ed.). Upper Saddle River,

NJ:

Pearson.

Kotler, P., & Keller, K. (2015). Marketing management (15th ed.). Upper Saddle River, NJ:

Pearson.

Resources

What Is Marketing? (/content/umuc/tgs/mba/mba640/2208/learning-

resourcelist/what-is-marketing.html?ou=516043)

Crafting a Digital Marketing Strategy

(/content/umuc/tgs/mba/mba640/2208/learning-resourcelist/crafting-a-

digitalmarketingstrategy.html?ou=516043)

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11/23/2020

Primary and Secondary Research

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Primary and Secondary Research

The American Marketing Association (AMA) defines marketing research as follows: “the

function that links the consumer, customer, and public to the marketer through

information—information used to identify and define marketing opportunities and

problems; generate, refine, and evaluate marketing actions; monitor marketing

performance; and improve understanding of marketing as a process. Marketing research

specifies the information required to address these issues, designs the method for

collecting information, manages and implements the data collection process, analyzes the

results, and communicates the findings and their implications.” (AMA, 2013, para. 2)

There are two types of research (Marshall & Johnston, 2011):

primary research—Data is collected specifically for a certain research question, (i.e.,

primary data). Data may be quantitative (statistical analysis), or qualitative (e.g.,

surveys, focus groups, and interviews). Primary research is important when making

strategic decisions. While primary research is costly and more time consuming, it is

more accurate and reliable.

secondary research—Data was collected for some other purpose than the research

question at hand. Secondary research may involve an internet search, periodicals,

CRM data, government sources (e.g., economic census), and market research

organizations. Secondary data is cheaper to obtain and is less time consuming to use

because it is readily available; however, it may be outdated or unreliable. In addition,

secondary research may not be a perfect fit for the research question. In general,

primary research usually starts with a scan of the available secondary information to

help further refine the search.

References

AMA (2013). Marketing research definition. Retrieved from www.ama.org

Learning Topic

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Marshall, G. W., & Johnston, M. W. (2011). Essentials of marketing management. New

York, NY: McGraw-Hill.

Resources

Conducting Online Market Research

(/content/umuc/tgs/mba/mba640/2208/learning-resourcelist/conducting-

onlinemarketresearch.html?ou=516043)

Gathering and Using Information: Marketing Research and Market Intelligence

(/content/umuc/tgs/mba/mba640/2208/learning-resourcelist/gathering-and-

usinginformationmarketingresearchandmarketintellig.html?ou=516043)

Big Data in Market Research: Why More Data Does Not Automatically Mean

Better Information (http://ezproxy.umgc.edu/login?

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Marketing Plan

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Marketing Plan

A marketing plan is a written document that outlines the marketing program for a

company or a product or service, along with the promotional budget allocation over the

planning period. In other words, a marketing plan details what is needed to implement a

marketing program and achieve the goals within it. When developing a marketing plan, you

should be guided by the organization’s vision and mission statements.

It is important to note that a marketing plan is not the same as a business plan. While the

marketing plan is part of the business plan, business plans typically also include additional

information such as financial strategies, operations plans, risk management techniques,

and human resources details.

Resources

The Marketing Plan (/content/umuc/tgs/mba/mba640/2208/learning-

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Not Your Father’s Marketing Plan (http://ezproxy.umgc.edu/login?

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The Marketer’s Action Plan (MAP): Six Steps to Developing Effective Marketing

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Marketing Plan Template

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Marketing Plan Template

Marketing Plan Template

1.  Executive summary

2.  Situation analysis

2.1  Mission

2.2  Product or service description

2.3  Value proposition

2.4  Internal environment scan (SWOT analysis)

2.5  External environment scan (PESTEL & Porter’s five forces analyses)

2.6  Critical issues

3.  Market analysis

3.1  Marketing research

3.2  Market size and growth

3.3  Market trends

3.4  Customer analysis (including needs analysis)

4.  Strategic analysis

4.1  Marketing objectives (including financial objectives)

4.2  Market segments

4.3  Target market

4.4  Positioning strategy

4.5  Product and branding strategy

Course Resource

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4.6  Pricing strategy

4.7  Distribution and supply chain strategy

4.8  Integrated marketing communications strategy

5.  Financial analysis

5.1  Breakeven analysis

5.2  Sales forecast

5.3  Expense forecast

6.  Implementation, controls, and contingency plan

6.1  Implementation

6.2  Controls

6.3  Contingency plans

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11/23/2020

Value Proposition

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Value Proposition

Companies address their customers through their value proposition, which is the totality

of the benefits offered to satisfy customer needs and wants. The product or service will

only be successful if it delivers value and satisfies the target customer. In other words, the

value proposition is more than just the core positioning of the product or service; it

represents the whole set of benefits that a company promises to deliver. Accordingly,

astute product or service positioning will result in a successful customer-focused value

proposition (i.e., a clear reason why the target customers should buy the offering) (Kotler

& Keller, 2015).

References

Kotler, P. & Keller, K. L. (2015). Marketing management (15th ed.). Upper Saddle River, NJ:

Pearson.

Resources

Value Proposition (http://ezproxy.umgc.edu/login?

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Learning Topic

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Vision

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Vision

Responsibility for articulating an organization’s vision typically rests with the CEO and

leadership team. While a mission describes the present purpose of the enterprise, vision is

about a desired future. When done well, vision statements serve as a source of ongoing

inspiration for all stakeholders, helping them see what is possible if everyone commits and

performs optimally. In Vision, located in the Resources section below, Porterfield (2004)

explains more about the purpose of an organizational vision and vision statement as well

as how they should be developed and communicated.

Resources

Vision (http://ezproxy.umgc.edu/login?

url=http://sk.sagepub.com/reference/healthcaremanagement/n837.xml)

Collins and Porras (1991) examine the challenges of creating a single vision for large

multidivisional and geographically dispersed organizations. They write about how difficult

it can be for a leader to craft a compelling vision and how sometimes the resulting

statement ends up being more about mission than vision. In presenting their proposed

framework for vision creation, Collins and Porras emphasize the importance of agreement

about core values and beliefs, sharing examples that are as relevant now as they were

when their article was published.

Furthermore, an analysis of powerful vision statements led Kantabutra and Avery (2010, p.

3) to propose seven important characteristics:

conciseness

clarity

future orientation

stability

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challenge

abstractness

desirability or ability to inspire

Consult UMUC’s online library to find out out more about how a vision should be

developed, the appropriate role of leaders in formulating them, their relative importance

for organizational success, and other questions related to the development of an

organization’s vision.

Namely, an organization’s vision statement should be powerful and serve as a compelling

source of inspiration for stakeholders.

References

Collins, J. C., & Porras, J. I. (1991). Organizational vision and visionary organizations.

California Management Review, 34(1), 30.

Kantabutra, S., & Avery, G. C. (2010). The power of vision: Statements that resonate.

Journal of Business Strategy, 31(1), 37-45. doi:10.1108/02756661011012769

Porterfield, R. (2004). Vision. In M. J. Stahl (Ed.), Encyclopedia of health care management

(pp. 586-586). Thousand Oaks, CA: SAGE Publications Ltd. doi:

10.4135/9781412950602.n837

Resources

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Question 1

Briefly, what is the difference between an organization’s mission and its

vision?

Show Answer

Question 2

Why is a vision statement important to an organization?

Show Answer

Question 3

Which one of the following is NOT a goal of an effective vision

statement?

conveys a broad sense of direction that unifies organizational

direction

expresses the principles that guide behavior within the organization

aids in changing organizational direction and the rationale for

redirection when internal resistance exists

provides executives with an opportunity for a clear, consistent

compass for resource justification and allocation

rallies and energizes employees and stakeholders

Question 4

Check Your Knowledge

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True or false: An organization’s vision must be achievable, and the

strategies needed to accomplish that vision must be known.

True

False

Question 5

How should a vision statement be communicated?

Show Answer

Question 6

The following two vision statements belong to pharmaceutical

companies.

Which of these vision statements qualifies as most effective and

why?

In which of these companies would you want to invest, work, or

serve as a board member?

If your answer to the second question is different from the first you will

probably want to reflect on the reasons.

Company 1: Our vision is to be a trusted leader in changing the practice

of medicine.

Company 2: To make a difference in the lives of people globally through

our innovative medicines, vaccines, and animal health products. We are

committed to being the premier, research-intensive biopharmaceutical

company and are dedicated to providing leading innovations and

solutions for today and the future.

Show Answer

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11/23/2020

Mission

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Mission

An organization should have a clearly defined mission that guides decisions and (along

with an organizational vision) future directions. While organizations’ missions are typically

stable, changes in scope and sometimes even purpose do occur. Sometimes these changes

are intentional, and the rationale is easy to discover. but sometimes this is not the case. A

common occurrence known as mission creep can happen when an organization’s scope

expands, often incrementally, in a direction that was not originally intended. You will also

see changes in mission caused by market expansion or contraction, mergers and

acquisitions, innovation, changing societal needs, and so on.

Another common occurrence, known as mission proliferation, can happen when different

parts of the organization articulate and publish independent missions, often to help inspire

and direct those working in subunits. In theory, each subunit mission statement should

align with and support the organization’s mission, but this is not always the case and

deviations from the organization’s mission may contribute to confusion. This outcome may

be especially true in organizations that are large and complex, or in ones where decision

making is decentralized.

An organization’s mission may be found in a formal published statement or explained

verbally be the CEO or another senior leader. Public sector organizations sometimes have

two organizational mission statements—an official version that is long and detailed, and an

abbreviated version used for public dissemination. A mission can change over time, and it

can be instructive to examine the process used the bring about that change. It is also

useful to ask whether there is evidence an organization’s mission is having a positive

impact on its performance.

Learning Topic

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Benefits, characteristics, components, and examples of customer-

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Missions and Mission Statements

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A Mission Statement Analysis Comparing the United States and Three

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11/23/2020 Mission

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Question 1

What purposes should an organizational mission serve?

Show Answer

Question 2

What is mission creep?

Show Answer

Question 3

One of the potential challenges associated with organizational missions is

mission proliferation. Explain what this means and why it can be

problematic.

Show Answer

Question 4

What are some of the things that a mission statement should

accomplish?

Show Answer

Question 5

What are some of the problems that can occur in the absence of an

effective and organizational mission and well-written mission statement?

Check Your Knowledge

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Show Answer

Question 6

Below are mission statements for Coca-Cola and Pepsi published on their

corporate websites in 2016. Apply what you have just read about

effective missions and mission statements to an analysis of these two

examples.

1. Which statement does the best job describing the company’s

purpose and why? What about if you were an investor?

2. Would your conclusion change if you were looking at this from

the perspective of a customer? What about if you were an

employee?

Coca-Cola Our Mission Our Roadmap starts with our mission, which is

enduring. It declares our purpose as a company and serves as the

standard against which we weigh our actions and decisions. To refresh

the world… To inspire moments of optimism and happiness… To create

value and make a difference.

Pepsi As one of the largest food and beverage companies in the world,

our mission is to provide consumers around the world with delicious,

affordable, convenient and complementary foods and beverages from

wholesome breakfasts to healthy and fun daytime snacks and beverages

to evening treats. We are committed to investing in our people, our

company and the communities where we operate to help position the

company for long-term, sustainable growth.

Show Answer

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11/23/2020

Canadian Solar Inc.

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Canadian Solar Inc.

COMPANY PROFILE

Headquarters Guelph, Ontario, Canada

Established 2001

Annual
revenue:

US$3.39 billion in 2017

Number of
employees:

12,129

Website: http://www.canadiansolar.com

Industry Solar

Product line: Manufacturer of solar modules that are used in residential,
commercial, and industrial solar power generation systems

Competitors: First Solar, JinkoSolar, SunPower

Sources

Barron’s. (n.d.). Canadian Solar Inc. Retrieved from

https://www.barrons.com/quote/stock/us/xnas/csiq/company-people

Course Resource

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Nasdaq. (n.d.). Canadian Solar Inc. Common Shares (CSIQ) Quote & Summary Data.

Retrieved from https://www.nasdaq.com/symbol/csiq

The Wall Street Journal. (n.d.). Quotes and Companies: CanadianSolar. Retrieved from

https://quotes.wsj.com/CSIQ

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Prepare a Situation Analysis Report

Hi again. I wanted to provide you with the company case file and some pertinent questions for you to consider while you work on your B2B marketing plan.

As part of the preparation necessary to complete your business-to-business marketing plan, you and your team will need to do in-depth research on your client’s company, including its operations, global reach, and range of offerings.

By the end of Week 8, I need you to produce a situation analysis report explaining your team’s findings on the company. Be sure to include a 

value proposition

, essentially the promise that is made to the customer, explaining the reason a customer purchases a product or uses a service (i.e., the value that a company delivers to its customers).

Start by reading the attached case file and be sure to consider the following questions while you do additional research:

· Where is the company headquartered?

· What are the company’s major products and/or services?

· What is the company’s annual revenue in dollars, and what is its annual production in units?

· Does the company own its own facilities or does it subcontract manufacturing to others?

· Who are the company’s major suppliers of raw materials or parts, and where are they located?

· What is the distribution of the company’s workforce by country?

· How does the company differentiate its offering in its highly competitive markets?

· Does the company have exclusive marketing or distribution agreements or partnerships?

· Who are the company’s major global and US customers?

· What benefits does the company offer to its customers?

· Who are the company’s major global and US competitors?

When developing your situation analysis, you should also understand the importance of 

vision

 and 

mission

 statements and then research the company’s own vision and mission statements.

Write a four-page document detailing the main findings of your research about your client, including its mission and vision statement. Submit your document to your team’s study group.

That’s it for now,
Jillian