Wharton's Introduction to Marketing

Wharton Business School’s Introduction to Marketing

Course delivered by Profs. Barbara E. Kahn, Peter Fader, & David Bell IDcourserians sharing session by Andrea K. Iskandar

Scope and Limitations

Prof. Barbara E. Kahn

Marketing• Study about market.

• Seller’s market. Production: focus on company.

• Buyer’s market. Marketing: focus on customer and competition.

Marketing• 3 principles:

• Customer Value • Differentiation • Segmentation, Targeting, Positioning !

• 4 P’s: • Product • Place • Promotion • Price

Strategies for Market Leadership

• Know your markets

• Customers have the final say

• Commit to being first in the markets you serve


• Value mapping

Relative costs!to customer

Relative perceived benefits

—

+

— +

inferior value

superior valueeconomy

|

pari

ty

|

premium fair value line


operational excellence

performance superiority customer intimacy

operational competence

customer responsiveness

product differentiation

Building Strong Brands• Mental maps

• Core brand values:

• POP = point of parity

• POD = point of difference

• Brand mantras: communicate, simplify, inspire.

Consumer Behavior in an Omni-Channel World

• Information search • Consideration set / evoked set • Choice overload

• At the assortment stage, variety is good • At the choice stage, variety can become

complex • New model of satisfaction:

• f (perceived performance - expectations)

Messages that Catch On and Get Shared

• Social currency: we share what makes us look good

• Triggers: when reminded, we share

• Emotion: emotional messages are more powerful

• Public: making behavior public makes it more catching

• Practival value: we like to be useful and informative

• Stories: information travels under the guise of chatter

Prof. Peter Fader

Business Approach• Product-centric

• Customer-centric

Cracks in theProduct-Centric Approach

• Technology-enabled product development > commoditization

• Technology-enabled information flow > smart customers • Technology-enabled delivery > retail saturation • Globalization • Deregulation • Customers want “end-to-end solutions,” which may

require products/services from multiple vendors • Information systems enable customer-level tracking

Three Cheers forDirect Marketing!

• The individual customer is the unit of analysis

• Know who their customers are and what they buy

• Aim to determine marketing communication based on past purchases

• Constantly determine (and leverage) individual customer value

Who is the customer?

Customer-Centricity• Customer centricity is a strategy that aligns a

company’s development/delivery of its products/services around the current and future needs of a select set of customers in order to maximize their long-term financial value to the firm.

• Customer centricity requires the company to be willing and able to change its organizational design, performance metrics, and employee/distributor incentive structures to focus on this long-run value creation/delivery process.

Customer-Centricity• Celebrate customer heterogeneity: distinguish

profitable customers from less profitable ones

• Focus on future profitability (CLV, customer lifetime value) rather than past profits

• Customer-centric organizational structure

• The competitive advantage: relationship expertise with respect to focal customers

Customer-Centricity• What to do with non-focal customers?

• Paradox of customer-centricity:the more that a firm tightens its central focus on a select group of customers, the more it needs its “non-focal” customers to stabilise the overall mix.

CPA vs. VPA• Metric used to guide acquisition activities?

• CPA • VPA

• VPA = CLV

Prof. David Bell

Four Unstoppable Trends• Democratization in access

• Value chain disruption

• Collaborative consumption

• Matching of supply and demand

success = product x marketing

marketing = STP and the other 3P’s (price, promotion, place)

Frictions in the Real World• Search friction

• Geographic friction

The Long Tail Concept

http://www.longtail.com/

http://www.longtail.com/

Wrap Up


• Know your markets

• Customers have the final say

• Commit to being first in the markets you serve


• Value mapping

Relative costs!to customer

Relative perceived benefits

—

+

— +

inferior value

superior valueeconomy

|

pari

ty

|

premium fair value line

The End

Course delivered by Profs. Barbara E. Kahn, Peter Fader, & David Bell IDcourserians sharing session by Andrea K. Iskandar

Wharton's Introduction to Marketing

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