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Published on March 19, 2008

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Business 130:The Principles of Marketing:  Business 130:The Principles of Marketing Instructor Martin J. Kandes Class 1 What is this Course About?:  What is this Course About? It’s a Course About How to Think About Marketing Marketing 130 Introduction / Orientation:  Marketing 130 Introduction / Orientation Course Requirements Read The Textbook, Be In Class, Professionalism View and Understand Video Case Studies Do Five (5) Business Case Studies Do 3-5 page Book Report From Required List Mid Term Examination Final Examination Required Textbook:  Required Textbook “Basic Marketing” by William Perreault and Jerome McCarthy Required Book Report Selection List:  Required Book Report Selection List “The Marketing Imagination” by Theodore Levitt “Relationship Marketing” by Regis McKenna “Crossing the Chasm” by Geoffrey Moore “You are the Message” by Roger Ailes “Selling to the Top” by David Peoples “The Fifth Discipline” by Peter Senge “Made in Japan” by Akio Morita “Sacred Hoops” by Phil Jackson Teaching Strategies:  Teaching Strategies Dialogue based upon Textbook reading Lecture and Discussion in Class Video Case Presentation / Discussion Case Studies Examinations Web Site Address:  Web Site Address Http://www.cob.sjsu.edu/facstaff/kandes _m/index.htm Grading:  Grading Personal Profile 15 points Case Analysis (5) 50 points Mid Term Examination 100 points Final Examination 100 points Book Report 75 points Grading:  Grading A+ Outstanding A Excellent A- Exceptional B+ Very Good B Good B- Above Average C Average What is the Purpose of Education?:  What is the Purpose of Education? Slide11:  “Education is not filing a bucket but lighting a fire” William Butler Yeats The Fire :  The Fire “A man only learns in two ways, one by reading, and the other by association with smarter people” Will Rodgers Learning What is Learning?:  What is Learning? Learning is a behavior that can influence our personal growth as individuals and as a community. Each individual has his or her individual path to sculpting and unlocking their potential, beginning with their hereditary roots and their learning behavior. Learning:  Learning Is about improvement of the mind as we accumulate and enhance data, information, knowledge, understanding, know-how and wisdom as we live life and gain experience. Slide15:  Standards Learning Performance Time S0 S1 S2 Learning is all about Personal Growth! Results Slide16:  Learning Practice Standard Peak Performance Results Personal Growth! Slide17:  Learning Practice Standard Peak Performance Results Soccer Success! Slide18:  Personal Growth Requires Individual Accountability Taking Responsibility for Setting Standards, Performance, Results and Learning by Continually Improving the Process of Practice Prior to Performance Practice First Perfection Later I Want To Play Better Golf:  I Want To Play Better Golf Standard: Mine Worldclass: Tiger Woods Performance (Practice / Game) Mine Worldclass: Tiger Woods Results Mine Worldclass Learning What’s Right What’s Wrong Slide20:  Standards Performance Results Learning I Want To Play Better Golf Learning is for You, Incorporated:  Learning is for You, Incorporated You are the CEO of Your Own Business…YOU As CEO you are responsible for creating clarity of purpose and the conviction necessary to grow personally. Position Yourself For Personal Growth of You, Inc. Through Learning Learning is a process. Learning is about improving your capability, capacity, creativity, competency, conduct, capital and contacts to position yourself for the success and happiness of You, Inc. What do you need to do to market You, Inc. to others? Marketing as a System:  Marketing as a System Introduction Slide23:  Marketing as a System The “Classic” 4 P’s of Marketing Product Price Promotion Place The is a Course About These P’s and More... The Marketing Strategy of You, Inc:  The Marketing Strategy of You, Inc Product: You (Your Feature and Benefits) Price: What You Will Work For Promotion: How You Influence Others Place: Where and When do You Sell You But there are P’s other than these….. Slide25:  Performance Persuasion Perception Products Package Promotion Place Price Positioning The Many “P’s” of Marketing People Slide26:  Performance Persuasion Perception Products Package Promotion Place Price Positioning Also the P’s of Product Management People Marketing is about Managing:  Marketing is about Managing These “P’s” Slide28:  The Most Important “P” PEOPLE ! Who You Market To---Your Customers How Does One Manage People?:  How Does One Manage People? Select Employees Motivate Employees Train Employees Coach Employees Appraise Them Organize Them Direct Them Control Them This is the Classic View of Management Marketing is Also About Managing :  Marketing is Also About Managing Manage One’s Self Integrity Ethics D,I, K, U, KH, W Temperament Thoughts / Thinking Emotions Actions Use this as a window to understand others- your customers and what they need from you! To Manage One Needs to... :  To Manage One Needs to... Look up Look Down Look Out Look In Look Around Understand, influence, motivate, lead by example To Market To Customers You Need….:  To Market To Customers You Need…. To Know a Lot About People! Slide33:  Because Customers are People... ….The Key “P” People - They are target of marketing What are people from a marketing perspective? They have a mind, a body, a spirit Complex System of Organs Marketing Organ Systems- Brain, Eyes, Ears and Heart People also have beliefs, emotions feelings, thoughts (past) and thinking (present) Slide34:  The CEO of Human Life The Brain of People Works like a camera. A holographic camera. Makes you aware of what is and isn’t. It’s a true virtual reality machine. It gives you images and you decide what the image means. Your brain is a multi-purpose picture taking organ with no owners manual. What you learn is what you learn. The brain will let you do only what you think about. Slide35:  What controls your brain? Your beliefs How many of you drove here today? Think about where you parked your car. Is it there? You belief it is. The brain gives you the most logical feeling and an objective reality of the car. The brain operates like a holographic camcorder. Slide36:  People and their Brains Left Brain - Logic, Problem Solving Right Brain - Images to move the nervous system Image thinkers - mind works like a T.V. Concept thinker - mind works like a radio How people think and how people’s minds work effects how you market and sell to them. What is this thing called mind? Slide37:  The mind is…... Seat of consciousness, thought, volition and feeling. Your mind through your brain directs you to do, to act. Each persons mind is constructed in a different way by life experiences, cultural background. education, social norms, genetics etc. You interpret what you see not what is? Imagine a brick wall. The brain gave you an image of a wall. What are the attributes of the wall? The Mind:  The Mind Everything you know is in your mind You perceive the world through your mind What we create in the material world begins in the mind as an idea Slide39:  Left Brain (Newtonian) Right Brain (Quantum) Data Information Knowledge Action Wisdom Knowing Sensory Input Art Language Self Tools: Intellect Questions Dialogue Model Logic Analysis Tools: Intuition Metaphor Senses Art Poetry Myth Vision Brain Focus We use both! The Brain Within You:  The Brain Within You Left Brain Discipline Accountable Scripted Facts and Logic Measurable Knowledge Based Justify Right Brain Freedom Artful Ad Lib Feelings and Emotion Intangible Intuitive Buy You Are What You Think !:  You Are What You Think ! Left Brain (x cells) logical verbal reasoning intellectual analytical linear (sequential) time bound analysis control Right Brain (50x cells) pattern recognition non verbal processing visual awareness intuitive emotional creative timeless see the whole synthesis Slide42:  The Brain Has Three States of Emotion Positive- Buy Negative- Don’t Buy Neutral- Learn more What is emotion? Strong mental or instinctive feeling? e.g. love, fear Slide43:  Three Kinds of Intelligence Mental = Brain (Thoughts) Emotional = Heart (Feelings) Intuitive = Gut (Beliefs) Knowledge Emotion The Brain Looks at Product and Services Through This Lens. That’s why Marketer's Need to Know This Types of Intelligence:  Types of Intelligence Intellectual Emotional Spiritual Visual Kinesthetic Musical Interpersonal Intrapersonal Intelligence:  Intelligence IQ SAT’s Grades Degrees Knowledge Learning Intellectual Skills Doing Self awareness manage your emotions motivational empathy read feelings of others teamwork persuasion relationship development Being Intellectual Emotional Slide46:  Belief, Emotion, Feeling Belief- acceptance as truth, it is not truth. Truth is what you believe not fact. Brain has seen it before. It’s right from the perspective of the brain. Emotion = the response to something real or imagined by the brain. A disturbance in the body. Feeling = Responsive awareness or recognition, a type of emotional state. Class #2:  Class #2 More About the Most Important “P” People How Many People Are There?:  How Many People Are There? Creation to 1800 1B 1930 2B 1960 3B 1974 4B 1987 5B 1999 6B The Target Market! Markets by Population in 1998:  Markets by Population in 1998 China 1.2B India 989M USA 250M People:  People The most complex element of any business. Know them By first knowing yourself People Feel….:  People Feel…. Tension Ambivalence Conflict Fear Anxiety Excitement Pay Attention When You Feel This way! Slide52:  People Acquire Facts and Knowledge Facts = Objective truth Knowledge = The sum of what is known about something. But there is more! What is Knowledge?:  What is Knowledge? Rational Scientific Method Objective Events Linear Sequential Abstract Symbolic Intuitive Inner Experience Complex Holistic Multi-dimensional Non Linear Beyond Sense Based The Continuum of Knowing:  The Continuum of Knowing Data Information Knowledge Understanding Know-How Wisdom What Creates Knowing? Thinking!:  Thinking! “Few people think more than two or three times a year. I’ve made an international name for myself thinking once a week.”:  “Few people think more than two or three times a year. I’ve made an international name for myself thinking once a week.” ………George Bernard Shaw How Often Do You Think?:  How Often Do You Think? Space-The Final Frontier…….. To Boldly Go Where No Man Has Gone Before By Thinking Types of Thinking:  Types of Thinking Divergent: Expand The Picture (Right Brain) Convergent: Reduce The Picture (Left Brain) Learn to Think Marketing to do Marketing Thinking is about Creativity:  Thinking is about Creativity Initiation Incubation Illumination Integration 4 Stages of Creativity Slide60:  “Creativity is one percent inspiration and ninety-nine percent perspiration” Thomas Edison Tesla, would say that was Edison’s Problem To Get Creative! Suspend The Left Side Explore the Right::  To Get Creative! Suspend The Left Side Explore the Right: Jog Shower Driving Nap Wine Flying Walk Where do you think best? Think Deeper:  Think Deeper Taste Touch Sight Smell Sound Think In 5 Senses! The Five Senses of……….:  The Five Senses of………. Christmas Thanksgiving London Hawaii Hard Rock Café World Cup Can you relate? What is your Personal Style?:  What is your Personal Style? How about others? Carl Jung (1875-1961):  Carl Jung (1875-1961) Perceiving (Take In) Sensing (S) Intuition (N) Judging (Organize) Thinking (T) Feeling (F) Theory of Psychological Type Myers-Briggs Type Indicators:  Myers-Briggs Type Indicators Katherine Cook Briggs (1875-1968) Mother Isabel Briggs Myers (1897-1980) Daughter Elaborated Jung’s Ideas and Applied Them to Human Interaction Four Approaches To Life :  Four Approaches To Life How are you energized, (Extrovert / Introvert)? What do you pay attention to, (Sensing / Intuition)? How do you make decisions, (Thinking / Feeling)? How do you live and work, (Judgement / Perception)? How Are You Energized?:  How Are You Energized? Extrovert (E) Attuned Externally Prefer Talking Learn By Doing Learn By Discussing Talk First Reflect Next Sociable Expressive Introvert (I) Draw To Inner World Prefer Writing Learn By Reflection Private Under control, contained Concentration / Focus Depth How Do You Pay Attention? :  How Do You Pay Attention? Sensing (S) Focus on Real 5 Senses Concrete / Factual Present Focused Practical Trust Experience Detailed Sequential Intuition (N) Sixth Sense Big Picture Future Oriented Imagination / Insight See Patterns Trust Inspiration Leap of Faith Novelty How You Make Decisions?:  How You Make Decisions? Thinking (T) Analytical Logical Cause and Effect Objective Critique Reason Firm / Fair Tough Minded Feeling (F) Heart Value Based Harmony Empathy Compassionate Mercy Accepting How Do You Live and Work?:  How Do You Live and Work? Judgement (J) Plan Goals Methodical Closure Decisive Organized Scheduled Perception (P) Flow Let Life Happen Open To Change Flexible / Adaptive Casual Energized By Changes Spontaneous The Shadow Side:  The Shadow Side Introvert Sensing Thinking Judging Extrovert Intuitive Feeling Perceiving Creative people seem to have integrated their shadow side into their light side Know Thy Self:  Know Thy Self Know Your Colleagues Know Your Customers Know Your Competitors Slide74:  Economic Buyer *Final Approval *Controls $ *Veto Power User Buyer *What’s For Me *Impacts Job Influence Buyer *Experience *Knowledge *Vested Interest Gatekeeper *Can’t Say Yes *Can Say No Know Your Customers Behavioral Styles:  Behavioral Styles Driven Decisive Independent Self-Directed Wants It Yesterday Risk Taker Fast Decisions Action Oriented Just The Facts Analytical Deliberate Exacting Structured Detailed Needs Proof Planned Risk Averse Detached Behavioral Styles:  Amiable People Oriented Relationship Oriented Feelings Focused Customer Focused Avoids Conflict Listener Supportive Personable Expressive Inspiring Persuasive Creative Innovative Big Picture Spontaneous Energized Intuitive Behavioral Styles Which One Are You?:  Which One Are You? Which One Is Your Customer? Slide78:  Famous Names Analytical Drivers Amiable Expressive Slide79:  Marketing as a System The 4 P’s of Marketing Product Price Promotion Place Slide80:  Performance Persuasion Perception Products Package Promotion Place Price Positioning The P’s of Product Management People Slide81:  Performance Persuasion Perception Products Package Promotion Place Price Positioning Marketing as a System People The Purpose of All Companies is...:  The Purpose of All Companies is... Profitable Financial Growth Slide83:  Marketing Myopia Every major industry was once a growth industry. In every case growth is threatened and is because of a failure of management. Defining what business you are in is important to growth. Customer oriented not product oriented. Slide84:  What is Marketing Myopia Seeing the market in a nearsighted (short term, short sighted way). Focus on building product not customer need, wants and demands. Focus on Selling not Marketing Slide85:  What Business Are You In? Penn Central Disney ATT NEC Sony B of A Charles Schwab What do you think? Slide86:  What Business Are You In? Penn Central Disney ATT NEC Sony B of A Charles Schwab Transportation Entertainment Communications C & C Entertainment Financial Service Financial Service Introduction to Case Analysis:  Introduction to Case Analysis Slide88:  P The Unmet Need Relevance Reach Relate Retain Revenue The Unique Solution The Idea Target Market Rethink Redirect Reorganize Reposition Rebuild Insight 1 2 3 4 5 6 Feelings Beliefs Emotions Thoughts Thinking Segmentation / Size Strengths Weaknesses Opportunities Strengths Implementation Growth Share Market Market Penetration Market Development Product Development Diversification 7 Strategy Structure Skills Style Marketing Mix Dog Cow ? 8 Foresight Product Packaging Performance Price Promotion Positioning Perception Place Persuasion Value Creation/Wealth 9 Shareholders Suppliers Employees Customers Mergers Acquisitions Innovation New Business Models Reengineering Quality Cost Reduction Profitable Growth 10 Revenue ROS, ROE, EPS Stock Price Standards Results Performance Adoption 11 Relative Advantage Compatibility Complexity Divisibility Communicability Infrastructure capital Human Capital Intellectual Capital Attention Capital (“Best Practice) (“Best Results”) Class 3:  Class 3 Review Case Method and Process:  Review Case Method and Process Slide91:  P The Unmet Need Relevance Reach Relate Retain Revenue The Unique Solution The Idea Target Market Rethink Redirect Reorganize Reposition Rebuild Insight 1 2 3 4 5 6 Feelings Beliefs Emotions Thoughts Thinking Segmentation / Size Strengths Weaknesses Opportunities Strengths Implementation Growth Share Market Market Penetration Market Development Product Development Diversification 7 Strategy Structure Skills Style Marketing Mix Dog Cow ? 8 Foresight Product Packaging Performance Price Promotion Positioning Perception Place Persuasion Value Creation/Wealth 9 Shareholders Suppliers Employees Customers Mergers Acquisitions Innovation New Business Models Reengineering Quality Cost Reduction Profitable Growth 10 Revenue ROS, ROE, EPS Stock Price Standards Results Performance Adoption 11 Relative Advantage Compatibility Complexity Divisibility Communicability Infrastructure capital Human Capital Intellectual Capital Attention Capital (“Best Practice) (“Best Results”) Slide92:  Learning (Results) Bad, Good, Excellent, Outstanding Standard (Who’s The Best) Peak Performance Results Personal Growth! Slide93:  “Then I asked: Does a firm persuasion that a thing is so, make it so? He replied: All poets believe that it does and in all ages of imagination this firm persuasion removed mountains; but many are not capable of firm persuasion of anything”. William Blake 1793 Slide94:  What is Marketing? A business function that identifies customer needs and wants. A business function that determines the target market the organization can best serve. a business function that designs products, services and programs to serve the market. A philosophy of delivery of customer satisfaction for a profit Slide95:  Selling versus Marketing Selling Focus on needs of the seller Focus on converting product to cash Create orders/sales Takes cues from business owner Sell what you have Exchange cash for product Marketing Focus on needs of buyer Focus of satisfying customer Create Value that customers want Takes cue from the customer Find market Value that the exchange is about Slide96:  Needs , Wants and Demands Need = Necessity, Requirement, Essential, Pre-requisite A state of felt deprivation. Want = Aspiration, Desire, Wish The form shaped by a human need by culture and personality Demand = Wants that are backed buy buying power Slide97:  + Needs Wants Demands Marketing Strategist = Influence Product Service D,I,K,U,KH, W Creativity Slide98:  Products - anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a need or want. Services - activities or benefits offered for sale that are essentially intangible and don’t result in the ownership of anything. Satisfiers of Needs and Wants Slide99:  Customer Value - benefit that the customer gains from owning and using a product compared to the cost of obtaining the product. Customer Satisfaction - depends on the product’s perceived value versus expectations. How Customers Make a Choice Slide100:  Consumers favor products that are available and highly affordable Improve production and distribution Consumers favor products that offer the most quality, performance, and innovative features Consumers will buy products only if the company promotes/ sells these product Focuses on needs/ wants of target markets & delivering satisfaction better than competitors Focuses on needs/ wants of target markets & delivering superior value Society’s well-being Marketing Management Philosophies Slide101:  The Cornerstone to Effective Marketing Customer Needs / Wants Knowledge Slide102:  What Marketing is Not It is not the art of selling. What is selling? Slide103:  What is Selling? Make over or dispose of for money. Betray for money or other award. Promote, advertise, publish the merits of. Persuade or convince of value or importance. Cause to be sold. Slide104:  The Selling Concept The Marketing Concept Starting Point Marketing versus Selling Slide105:  Selling Strategic Emotional Approach First Knowledge Based Tactical Knowledge First Types of Selling Approach:  Types of Selling Approach Intellectual Knowing Answers Winning/Losing Inequality Power/Manipulate Prove Points Emotional Finding Out Questions Sharing/Partnering Equality Respect Explore Possibilities Effective Strategic Selling:  Effective Strategic Selling From Problem Circumstance Control FUD WIN To Opportunity Purpose Adaptive Confidence and Trust WIT Slide108:  Marketing’s Goal Create customer satisfaction profitably. Build value laden relationships. To know what to make or provide to create and keep customers. What are these entities called customers? How Does Marketing Influence Customers?:  How Does Marketing Influence Customers? It begins with Communications Slide110:  What Are Some Marketing Words That We Use To Communicate? Slide111:  Marketing Words Attitude, Action Beliefs Creative, Conceptual Dialogue, Differentiation Emotional Feeling, Felts Good, Great Honesty Integrity, Influence Judging Knowledge Learning, Logical Motivational Need, Noble Opinion Process Quality Slide112:  Marketing Words Relationship Strategic, Systems Tactical, Targeted Unified Value, Vision Winning, Worthy Xeno You, Yourself Zest, Zeal,Zen Slide113:  The Marketing Iceberg Price Product Promotion Place Telling, Selling Advertising Strategic Planning:  Strategic Planning The -S-Curves of Business “The Future Ain’t What It Use To Be” Yoggi Berra:  “The Future Ain’t What It Use To Be” Yoggi Berra Prediction Is a “Probletunity” Change Is Faster Than Ever:  Change Is Faster Than Ever Information Float It took centuries to move information about smelting to bring about the Iron Age It took 1.4 seconds to see a man on the moon Information moves quickly today Life Float First life forms 5B years ago on earth Cells about 2.2B years Reptiles .5B years Complex Mammals 100M years How Many of You Use Float?:  How Many of You Use Float? How About Your Checking Account The Time Between What is and What Will be is Shorter!:  The Time Between What is and What Will be is Shorter! The past, present and the future gets closer How Does One Plan in This Environment ?:  How Does One Plan in This Environment ? Slide120:  Planning in Business: Strategic Planning The Process : 1. Defining a Mission: Statement of an organization’s purpose; should be market oriented. 2. Setting Company Objectives: Supporting goals and objectives to guide the entire company. 3. Designing a Business Portfolio: Collection of businesses and products that make up the company. 4. Planning Functional Strategies: Detailed planning for each department designed to accomplish strategic objectives. Value and Profitable Business Growth are a Function of…. :  Value and Profitable Business Growth are a Function of…. Strategy Structure Skill Style Lets Discuss Strategy What is Strategy?:  What is Strategy? Slide123:  Envisioning the Changing Landscape of Business….. ...And Doing Something About It. That’s Strategy. Slide124:  Strategic Vision…... Some People See Further…..They Have Strategic Vision Newton Edison Ford Einstein Gandhi Deming Jobs Berners-Lee What They Have In Common is….. Slide125:  They Have Foresight That Creates New Insights That Transform the Landscape…... Value / Growth Time Inflection Point Slide126:  1600 1905 New Insights Create Inflection Points…... 1988 2000 2020 Value / Growth Year Inflection Point Newton Einstein Slide127:  1968 1972 1980 1988 For Example…… ...The Internet Transforms Everything 1998 2000 2020 Value/ Growth Year Inflection Point Internet Tim Berners-Lee What is a Strategic Inflection Point ?:  What is a Strategic Inflection Point ? A Time in Life When the Fundamentals Change Horse Power to the Internal Combustion Engine Newtonian Physics to Quantum Physics Mini Computers to Microprocessors Television to Cable Television One Phone Company to Many Phone Companies Conventional Networking to the Internet Traditional Phone to Wireless Phone Commerce to e-Commerce Medicine to Molecular Based Medicine. Strategic Inflection Points Create:  Strategic Inflection Points Create Opportunity or Problems (Probletunities) What Causes Inflection Points:  What Causes Inflection Points Innovation and Technological Change The Nature of Competition The Nature of Regulation Changes People Change in Demographics Fear, Uncertainty and Doubt How Does It Feel To Experience the Inflection ?:  How Does It Feel To Experience the Inflection ? Its like going from the green ski run to the double black diamond. Its like going from class 1 rapids to class 4 rapids. Feel the change. Its turbulent its forceful. The force be with you! …you’ll need it. Six Forces Effecting Business according to Michael Porter:  Six Forces Effecting Business according to Michael Porter Competition (Current and New) Customers Complementors Chain of Supply Conversion (Substitution) Companies Needs a Strategy to Deal With Each Class 4:  Class 4 Slide134:  P The Unmet Need Relevance Reach Relate Retain Revenue The Unique Solution The Idea Target Market Rethink Redirect Reorganize Reposition Rebuild Insight 1 2 3 4 5 6 Feelings Beliefs Emotions Thoughts Thinking Segmentation / Size Strengths Weaknesses Opportunities Strengths Implementation Growth Share Market Market Penetration Market Development Product Development Diversification 7 Strategy Structure Skills Style Marketing Mix Dog Cow ? 8 Foresight Product Packaging Performance Price Promotion Positioning Perception Place Persuasion Value Creation/Wealth 9 Shareholders Suppliers Employees Customers Mergers Acquisitions Innovation New Business Models Reengineering Quality Cost Reduction Profitable Growth 10 Revenue ROS, ROE, EPS Stock Price Standards Results Performance Adoption 11 Relative Advantage Compatibility Complexity Divisibility Communicability Infrastructure capital Human Capital Intellectual Capital Attention Capital (“Best Practice) (“Best Results”) Slide135:  They Have Foresight That Creates New Insights That Transform the Landscape…... Value / Growth Time Inflection Point Slide136:  The Power of Inflection…..It Transforms the Very Essence of Business Value/ Growth Growth Decline What’s Marketing’s Role?:  What’s Marketing’s Role? Rely of Instinct and Personal Judgement to Recognize the Beginning of a Strategic Inflection Point Convince Others That it is real and Its Time to Wake Up and Listen. Cant’ Wait Until You Know. Develop a Transition Plan To Act- A Strategy to Take Advantage of the Insight A Strategic Inflection Point:  A Strategic Inflection Point The Computer Industry Slide139:  IBM DEC Sperry Wang Sales/ Place Applications Operating System Computer Architecture I D S W I D S W I D S W I D S W I D S W 1982 Vertical Structure of Computer Industry Slide140:  Sales/ Place Applications Operating System Computer Architecture Stores Superstores Dealers Mail Order Word WordPerfect PowerPoint Excel Dos/Windows OS/2 Mac Unix IBM Compaq Apple Dell Intel AMD Motorola Risc Going Horizontal in 1995 This Inflection Point Changed the... :  This Inflection Point Changed the... Strategy Structure Skills Style Of All Companies in The Computer Industry The Old Rules Change:  The Old Rules Change The First Mover Has An Opportunity to Gain, e.q. Dell Computer and Order By Mail. Distinction Through Innovative Products and Services Creates Differentiation Strategic Planning Is Supposed to...:  Strategic Planning Is Supposed to... Help detect, define and determine a strategy and tactics to create profitable growth for the business. To See The Strategic Inflection Point Coming It Rarely Does Slide144:  Market Growth / Share Grid ? Cash Cows Dogs High Low High Low Share Growth Low Growth ,profit, share Build, Takes Cash Produces Cash Invest More A Tool: The BCG Matrix Slide145:  Product Market Expansion Grid Market Penetration Product Development Market Development Diversification Existing Products New Product Existing Markets New Markets Another Tool Slide146:  Market Penetration: increase sales to present customers with current products. How? Cut prices, increase advertising, get products into more stores. Market Development: develop new markets with current products. How? Identify new demographic or geographic markets. Product Development: offering modified or new products to current customers. How? New styles, flavors, colors, or modified products. Diversification: new products for new markets. How? Start up or buy new businesses. The Product Market Expansion Grid Strategies Slide147:  Market Segmentation: determining distinct groups of buyers (segments) with different needs. Market Targeting: evaluating and selecting which target segments to enter. Market Positioning: products distinctive and desirable place in the minds of target segments compared to competing products. Sense the Inflection Points: This is probably the most important job. Marketing’s Job #1 in Strategic Planning Slide148:  Marketing Strategies Market-Leader Market Challenger Market-Follower Market-Nicher Slide149:  Marketing Planning Develop Marketing Strategies to Achieve Marketing Objectives Develop Marketing Plans & Budget Marketing Implementation Turn Marketing Plans into Action Plans to Achieve Marketing Objectives Market Analysis and Management Control Measure Results Evaluate Results Take Corrective Action Creating Strategic Inflection Points:  Creating Strategic Inflection Points Innovation:  Innovation Disney Nissan Design Institute VISA Innovation Drives Business:  Innovation Drives Business Steam Engine 1800’s Automobile 1900’s Computer 1960’s Internet and Information 1990’s Biotechnology and Genetics 2000’s People Drive Innovation Innovation Has Phases:  Innovation Has Phases Innovative Companies Launch Products Ford Apple Netscape Rivals Move Into Market and Creates Competition GM, Chrysler, Honda IBM, Sun, HP, Microsoft, Dell, Gateway Explorer, DSL Prices Fall, Growth Stalls, Seek Lower Cost Manufacturing Business Evolution and Revolution:  Business Evolution and Revolution The Industrial Revolution Electricity Internal Combustion Air Travel Telecommunications Pharmaceuticals Chemicals The Information Revolution Microprocessors Computers Application Software Databases Internet Cell Phone Wireless Biotechnology The Walt Disney Company:  The Walt Disney Company The competition is anyone the customer compares you with. Attention to Detail. Everyone walks the talk. Everything walks the talk. Customers are heard through many ears. Reward, Recognize, and Celebrate Xvxryonx Makxs a Diffxrxncx The E’s of Walt Disney Company:  The E’s of Walt Disney Company The E’s of Walt Disney Company:  The E’s of Walt Disney Company Everyone Energy Edge Enthusiasm Emotion Excitement Excellence Exemplary Experience Entertainment Slide160:  Vision Current Reality Individual Innovation Opportunity Options Organization Operations “Out of the Box at Disney”:  “Out of the Box at Disney” Displayed Thinking Category Note Taking Thinking In All Senses Conscious Unconscious Working In Color Nissan Design Institute:  Nissan Design Institute Dialogue, Debate and Distinctive Design Slide163:  Nissan Creates Designs that produce personal commitment through participation. Be Involved. Understand the details. Explore the interactions. Imagine the potential. Dissect it. Criticize it. Support it. Implement it. Slide164:  Collaborative Design Joint Experimentation Public Reflection Shared Insight Define a Shared Vision of The Product Slide165:  Create an Organization where process and relationships are key to success. Structure comes and goes to support process. Structure supports relationships. Structure creates the interactions we need. Structure is created to fit the moment. Structure is created to suit the task. NDI Results:  NDI Results Pathfinder Pulsar Sentra Maxima 300 ZX The “New” 300ZX Getting People to Play The Game:  Getting People to Play The Game Baseball Set Position Slow Time (3 hours) 9 Members Individual (Hit, Pitch, Field) T.E.A.M Basketball Shifting Movements Speed Time (48 minutes) 5 Members Collaborative (Pass, Shoot, Rebound) T.E.A.M. Product Development Is More Like Basketball Class 5:  Class 5 Innovative Service Products:  Innovative Service Products The VISA Story VISA International:  VISA International The Ultimate “Chaordic” Organization Company Results:  Company Results Since 1970 it has grown 10,000% It continues to expand 20% per year It operates in 200 countries It serves 0.5 Billion customers It annuals sales volume is over a trillion dollars That’s Profitable Growth!!! Do you Know This Company:  Do you Know This Company How many of you can tell me who owns Visa? Where is it headquartered? Where can I buy shares? Who’s in charge? How is it structured and governed? The Landscape at the Beginning:  The Landscape at the Beginning Bank of America Introduced a plastic card in 1966 called BankAmericard In response, 5 California Banks jointly launched MasterCharge B of A franchised their card Soon every bank was issuing plastic cards By 1968 things were out of control-chaos Multi-million dollar losses and growing What Happened?:  What Happened? Credit Card Orgy Banks Massed Mailed Pre-Approved Cards Children, Felon, Pets Got Cards Fraud Was Rampant. The Banks Were Badly in the Red Ink. Not Good!!! B of A Called a Meeting of it’s Licensees in 1968 to Do Something!:  B of A Called a Meeting of it’s Licensees in 1968 to Do Something! Dee W. Hock was at that meeting! Who is Dee Hock? Dee Hock:  Dee Hock 38 Years of Age VP of a Seattle Bank The Youngest of Six Children Of Parents With Just Eight Years of Education Ceased the Opportunity to Change The Landscape of Commerce Throughout the World How? Iconoclastic Innovation:  Iconoclastic Innovation Went To Work For A Small Bank in Seattle Was Assigned to Manage the Credit Card Program Dee Was Assigned To The Committee to Look At All The Problems When the Music Stopped He was Left Without a Chair and was made Chair of the Committee What Happened?:  What Happened? By June 1970 Visa International Was Created Dee W. Hock was named CEO The New Company was very different How? How Was Visa Different?:  How Was Visa Different? A non-stock company for profit membership corporation Ownership was non-transferable Structure Highly Decentralized Highly Collaborative Action Pushed to the Periphery to the Members The Members:  The Members The banks were the members They issued the cards They were very competitive with one another They had to collaborate because participating merchants had to take any banks card anywhere. A Unique Blend of Cooperation and Competition! The Idea:  The Idea Reinvent the concept of money, credit and bank Insight: Money was nothing more than guaranteed, alpha-numeric data recorded on paper or metal Credit Card: A device to exchange value in the form of electronic signals Structure: What organizational form could guarantee electronic exchange of value The Borderless Organization for the Exchange of Value:  The Borderless Organization for the Exchange of Value It must be owned by all participants Power and function must be distributed Governance must be distributed It must be malleable and durable It must embrace diversity and change. Visa International:  Visa International Born June 1970 Visa International Today:  Visa International Today Comprised of 23,000 financial institutions They create products The 23,0000 members are part of regulated industries, but they are not regulated as Visa It is not a privately traded company, You can’t buy stock in Visa If it were public it’s market value would be $150B Visa International Today:  Visa International Today Visa transcends politics, religion, language, custom etc. It has no less than 20% and as much as 50% compounded annual growth for a quarter of a century Its products a universal and used worldwide Staff of 3000 in 13 countries, 21 offices How Much Money Does Visa Make:  How Much Money Does Visa Make $1.75 Trillion per year 1,100 transactions per second at a penny each Its employees have no stock options The prototype of the communications system used today was done in 90 days for $25,000 What’s is Visa’s Product?:  What’s is Visa’s Product? What does it provide? Why is it paid? What is the service Visa provides? C- - -d - - -t - - -! COORDINATION!:  COORDINATION! As A Business Model for Success That’s Innovation!:  That’s Innovation! Dialogue and Competition What’s the Next VISA?:  What’s the Next VISA? The VISA of your time! “It is no failure to fall short of realizing all that we might dream. The failure is to fall short of dreaming all that we might realize” :  “It is no failure to fall short of realizing all that we might dream. The failure is to fall short of dreaming all that we might realize” Dee Hock Chairman Emeritus Visa International Relationship Marketing and Management:  Relationship Marketing and Management How to Build Relationships with the Target Market Relationship Building with the Target Market:  Relationship Building with the Target Market Connections School Church Hobbies Connectors Family Friends Mentors What is the purpose? To Influence the Perception of the Target Market Toward Your Purpose or Product :  To Influence the Perception of the Target Market Toward Your Purpose or Product The Architecture of Relationship (influence) Building:  The Architecture of Relationship (influence) Building Dialogue Share Mental Models Develop Shared Vision of Purpose Think Systemically Act Together Learn Together Slide196:  Dialogue To Build Relationships Conversation Is The Medium of Organizational Creativity Conversation Enables Divergence and Diversity of Thinking Conversation Is Shaped By Beliefs, Feelings and Emotions Conversation Can Be “Boundaryless” (Internet) Conversation Sets Boundaries (Tasks, Progress,Questions) Conversation Facilitates Listening How Does One Do This In Markets? Slide197:  Mental Model to Build Relationships Our Assumptions About How The/Our World Works What’s Important Image of What’s Right and Wrong Image of Success and Failure Beliefs, Feelings, Emotions What We Think and Why We Think What We Think Frame Of Our History and Stories I’ll Believe It When I See It (How we make a choice) I’ll See It When I Believe It Slide198:  Shared Vision of the Market for the Product The Common View Of The Now The Common View Of The Future T.E.A.M. (Together Each Achieves More) Individual Talent / Group Dynamic Independent / Interdependent Interconnected Insight Display Your Thoughts and Thinking Shared Vision Of People:  Shared Vision Of People Japanese Car’s 1970’s-90’s Vince Lombardi U.S. Army Class 6:  Class 6 Slide201:  Performance Products Price Marketing as a System People Slide202:  What are some types of Products? tangible (own) hardware software people activities places intangible (no ownership) hotel airlines medicine legal Product Markets:  Product Markets Consumer Business Consumer Product Success?:  Consumer Product Success? Disney Land Disney World Euro Disney Disney Land Japan Can You Predict Success?:  Can You Predict Success? France There is the culture French is the language Foreign Words (cheeseburger) Legislate U.S. Films Fast Food Great art, music, and architecture Japan Emulated U.S. in ‘50’s Taught Children English Come to U.S. U.S. Kareoke Love Baseball Fastest Growing Fast Food in Japan MD’s Transformational Marketing:  Transformational Marketing Idea Unmet Need Unique Solution To Unmet Need SWOT of Solution Execution Plan Product (Performance, Price, Package) Promotion (Positioning, Perception) Place (Persuasion) Target Customer / Market People Case (Idea) Analysis:  Case (Idea) Analysis Idea - What is it? Unmet Need - Who does it serve? Target Market Unique Company Solution - How does it serve? Customer - Why will they buy? Company Goals - How are they achieved? Market Growth, Market Share, Profits Market Penetration Product Development Market Development Diversification (Product / Market) Case (Idea) Analysis:  Case (Idea) Analysis S.W.O.T. What are the key Strengths of the Idea /Solution? What are the key Weaknesses of the Idea / Solution? What are the key Opportunities for the Idea / Solution? What are the key Threats to the Idea / Solution? Case (Idea) Analysis:  Case (Idea) Analysis Marketing Plan (The P’s of Marketing) Product, Packaging, Performance, Price Promotion, Positioning, Perception Place, Persuasion People (The Target Customer) Who are They? Beliefs Emotions Feelings Thoughts Thinking Slide210:  P The Unmet Need Relevance Reach Relate Retain Revenue The Unique Solution The Idea Target Market Rethink Redirect Reorganize Reposition Rebuild Insight 1 2 3 4 5 6 Feelings Beliefs Emotions Thoughts Thinking Segmentation / Size Strengths Weaknesses Opportunities Strengths Implementation Growth Share Market Market Penetration Market Development Product Development Diversification 7 Strategy Structure Skills Style Marketing Mix Dog Cow ? 8 Foresight Product Packaging Performance Price Promotion Positioning Perception Place Persuasion Value Creation/Wealth 9 Shareholders Suppliers Employees Customers Mergers Acquisitions Innovation New Business Models Reengineering Quality Cost Reduction Profitable Growth 10 Revenue ROS, ROE, EPS Stock Price Standards Results Performance Adoption 11 Relative Advantage Compatibility Complexity Divisibility Communicability Infrastructure capital Human Capital Intellectual Capital Attention Capital (“Best Practice) (“Best Results”) Tiger Woods (People):  Tiger Woods (People) Standard: Jack Nicklaus (records) Arnold Palmer (charisma) Bobby Jones (legacy grand slam) Foresight: Father decides to try and build a golf champion Change the face of golf globally Tiger Woods (People):  Tiger Woods (People) Insight: People will appreciate excellence in any face Idea: Create and perpetuate a personal image of excellence that dominates and transcends the sport of golf Perfecting the implausible today, even though it was impossible yesterday Tiger Woods (People):  Tiger Woods (People) Target Market: Originally golf novices and young adults. Now multi-cultural / national fans of life that share his competitive spirit for athletic achievement and excellence. Beliefs: Need for icon that crosses the boundaries of their conforming niche Emotions: Lack of an everybody’s American hero after M.J.’s Feelings:An increasing desire for a quality character to market to the world Thoughts: We can’t find hero’s at home, in local arenas and politics so we look to athletes Thinking: Benefits come to us when we allow others to “raise the bar” regarding personal standards. Tiger Woods (People):  Tiger Woods (People) The Unmet need: The present void for the newest, latest, greatest, truly all-American hero. Unique Solution: Idea: Squeaky clean performer and personality Concept: Raise the roof, continual personal improvement Product: One narrow gauged, now broad appeal beyond golf Service: To satisfy the public’s appetite for great sports entertainment Tiger Woods (People):  Tiger Woods (People) Unique Solution (Continued) Rethink: Could be more than just a golfer Redirect: Stay the course, be a golfer first then more Reorganize: As we become more, we are able to do more Reposition: Golf is primary, more than Nicklaus, Palmer and Jones combine Rebuild: Multi-national / cultural marketing to the mass media Tiger Wood (People):  Tiger Wood (People) S.W.O.T. of Solution: Strengths: Name Recognition. Tiger-a prominent animal, dominant animal. Cross sport appeal Weaknesses: Getting over stuffed on prey and becoming lackadaisical. Living golf 24/7/365. Allow people to manage him beyond his values. Opportunities: To remain king of the jungle for two generations Threats: Future Focus. Don’t let original motives get lost in the B.S. Tiger Woods (People):  Tiger Woods (People) Marketing Plan: Product: A master Jedi of the modern art of golf Performance: Radiant, brilliant, mythical, dreamlike Price: Free spirit burned into our minds, watch out for the hidden packaging costs Packaging: An Olympian without the Olympics Promotion: The talk of the town, Media spotlight Positioning: Youthfulness, like-ability, skill, marketability Perception: Destiny. Sent from golf heaven Place: Elite clubhouses and tree houses too Persuasion: Be better than your best. Better than you are Tiger Woods (People):  Tiger Woods (People) Implementation: Strategy: To remain one step ahead of his ego during a game and life. Control brand in the market. Tactics: Cultivate image of ‘every man” High Profile Wins Focused endorsements Structure: A prodigy. Star Child Skills: Multi-talented, multi-tasking, Worldclass putter, driver, irons and thinking Style: Be yourself, work hard, body and mind working a a team. “Chance Favors the Prepared Mind” ...Louis Pasteur:  “Chance Favors the Prepared Mind” ...Louis Pasteur The question is what is that mind prepared to perceive? The Probability of Product Success:  The Probability of Product Success Foresight 0.9 Insight 0.9 Idea 0.9 Unique Solution 0.9 Implementation 0.9 Price 0.9 Product Function 0.9 Place 0.9 Brand 0.9 Total= 0.39 90% probability of success individually is only 39% collectively! P1 P2 P3 Marketing Thinking….. :  Marketing Thinking….. ...And Product Success What Is The Product Management Mental Model?:  What Is The Product Management Mental Model? What is a mental model? What do we manage about the product? Slide223:  Mental Model Our Assumptions About How Our World Works What’s Important Image of What’s Right and Wrong Image of Success and Failure Beliefs, Feelings, Emotions What We Think and Why We Think What We Think Frame Of Our History and Stories I’ll Believe It When I See It I’ll See It When I Believe It The Mental Model of Coaching Sports:  The Mental Model of Coaching Sports Paid Professional Entertainment for Viewers Goal is to Win Amateur (For the Love of the game) Fun for Participants Double Goal Win Character /Life Lessons Pro Sports Youth Sports For Example What do we manage about the product?:  What do we manage about the product? Price Product (Features, Benefits) Promotion Place Positioning (Brand) Packaging Performance (Function) Perception (Brand) Persuasion (Market / Sell) How about R’s? How about S’s? Lets stick with P’s for now! Lets Discuss The Product Management:  Lets Discuss The Product Management Of Product YOU! Slide227:  (Personal Mastery!) “Mastery Is Inside- “The Inner Game” Mastery Is Multi-dimensional Competence Know Thy Self (Awareness) Self #1 The critic of our self Self #2 The positive coach of our self The “Beginners Mind” (Learning) Continuous Improvement (Process) Learn More When Things Go Wrong Value beyond victory Competition Is From Within You as a Product! Develop It! The Product YOU! Slide228:  Birth High School The Inflection Points of One’s Life…... College Work Marriage Year Kids Grad School Grammar School Every Effort in Mastery Follows The S-curve Strategic Inflection Etc. Slide229:  Mastery (Better Product) Michael Jordon Joe Montana Tiger Woods Tina Turner Elton John Practice, Practice, Practice Staying Power Strong Beliefs Just Do It, I Can In The Zone Entertainer as a Product You Inc. Slide230:  Challenge Skill / Capability Peak Performance Control Relaxation Boredom Apathy Worry Anxiety Arousal Character Possibility Energy Enjoyment Character Bridge Individual Mastery Adapted From Mihaly Csikszentmilalyi Slide231:  Systems Thinking in Marketing Non-Linear Leaps Of Thinking See The Whole Not Just The Parts Can’t Redesign The Whole By Dividing It Into Parts Sees Events, Patterns, Behavior and Mental Models HyperLinks / Hypertex / HyperLoops Causal Loop Diagrams Innovations Begin Here! What They Forgot to Teach Me at Yale, Harvard and Golden Gate!:  What They Forgot to Teach Me at Yale, Harvard and Golden Gate! What you need to create successful products and business success! Three Stages of Any Business:  Three Stages of Any Business Starting It Growing It Selling It At Each Stage You Need………..? Why are Companies Started?:  Why are Companies Started? The Answer is…….. Money !:  Money ! What You Need to Know About Money "The only thing money gives you is the freedom not to worry about money." -- Johnny Carson:  "The only thing money gives you is the freedom not to worry about money." -- Johnny Carson What is Money?:  What is Money? A medium of exchange. An agreement between two parties A relationship between members of a community. An asset to be used. Is Money, Money on a Deserted Island?:  Is Money, Money on a Deserted Island? Where is Money Born?:  Where is Money Born? Money is born in the banking system. It lives between the bank and you. It takes two to tango with Money Five Things You Need to Know About Money!:  Five Things You Need to Know About Money! How To Make It How To Grow It How To Save It How To Spend It How to Give It Away How Do You Make Money?:  How Do You Make Money? You Change The World! Some World Changers!:  Some World Changers! Nicola Tesla Steve Jobs Bill Gates Warren Buffet Hewlett- Packard Dee Hock The Beatles Richard Branson They all saw something that didn’t exist, but was ready to emerge or unfold. They saw the underlying future! “Never doubt that a small number of committed people can change the world; indeed it’s all that ever has…….:  “Never doubt that a small number of committed people can change the world; indeed it’s all that ever has……. Margaret Mead Remember!:  Remember! Money is just the result of creating products and services people are willing to but. Slide245:  To Make Money You Need to Understand This Income Expenses Assets Liabilities Positive Cash Flow:  Positive Cash Flow Income Expenses Assets Liabilities Slide247:  How People Make Money Income Expenses Assets Liabilities Paycheck Taxes, Car Food, Rent Clothes, Fun Mortgage Loans Credit Cards Job What about Savings? What About Growth? What About Giving it Away? Slide248:  Wealth Creation Process Income Expenses Assets Liabilities Paycheck Interest Rental Income Royalties Taxes, Car Food, Rent Clothes, Fun Mortgage Loans Credit Cards Job Savings Bonds Stocks Real Estate Intellectual Property Slide249:  Negative Cash Flow Bye! Bye! Income Expenses Assets Liabilities Slide250:  How Do Companies Make Money? Income Expenses Assets Liabilities Sales Revenue Royalties Rent Taxes, Rent Utilities Down Payments I&W Itl’Commissions What about EBIT? What About Growth? What About Giving it Away? New Orders Backlog Orders Royalties Real Estate Rent Brand Stock Do Business Three Key Courses To Take at SJSU !:  Three Key Courses To Take at SJSU ! Presentation and Communications Skills Psychology Negotiation Skills How to be a Parent Kids, perhaps your most important product. What You Should Know About Yourself!:  What You Should Know About Yourself! Strengths and Weaknesses To Focus on Strengths To Improve To T.E.A.M. with others to Minimize your Weaknesses How You Spend The Most Valuable Thing You Have Next to Health…….. Time Class 7:  Class 7 Information is Power in Marketing:  Information is Power in Marketing Information Separates Events From Trends in the Market Slide255:  Consists of people, equipment, and procedures to gather, sort, analyze, evaluate and distribute needed, timely, and accurate information to marketing decision makers. Function: Assess, Develop and Distribute Information. Data, Information, Knowledge, Understanding, Know How, Know What, Know Why, Know When, and Wisdom. Marketing Information Systems Slide256:  Obtains Needed Information for Marketing Managers From the Following Sources Slide257:  Secondary Primary Determine the Specific Information Needed Information collected for the specific purpose at hand. Both Must Be: Relevant Accurate Current Impartial Information that has been previously collected. New Product Development:  New Product Development How to think about creating new Products and services. How Do Companies Create Assets?:  How Do Companies Create Assets? Create New Products orders sales Create New Services orders sales Sell Stock Lets Build A Globally Appealing Car:  Lets Build A Globally Appealing Car Porsche Volvo Volkswagen Beetle Jeep Benz What’s The Pattern? BMW "You can observe a lot by watching.” Yogi Berra :  "You can observe a lot by watching.” Yogi Berra What Customers Don’t Ask For:  What Customers Don’t Ask For Cellular Telephones Fax Machines Mini Vans SUV’s Beanie Babies ATM’s Pump Your Own Gas “You can learn from yours customers, but don’t expect them to lead you.” Technology: Positive Energy Saver:  Technology: Positive Energy Saver Pony Express Horse Map Library Telegraph Wells Fargo Bank Wall Street E-mail Space Shuttle GPS Internet Cell Phone Online Banking (ATM) E-Trade A Continuum of Capability Imagine You Are The Product Manager of These Products:  Imagine You Are The Product Manager of These Products Television Medicine Yale University Home Telephone Mainframe Computers Desktop PC’s Book Stores What’s the Next Product? You Are The Product Manager:  You Are The Product Manager Television U.S. Mail Medicine Yale University Home Telephone Mainframe Computers Desktop PC’s Book Stores Cable E-mail Managed Care Co-Education Cellular Telephones Mini-computer Mobil Internet PC Amazon.com Shopping Continuum:  Shopping Continuum Main Street Malls Mini Malls Internet e-malls v-malls Ways to Innovate Products:  Ways to Innovate Products Product Extension Pattern Reversal Strange Attractors Distinction that Make a Difference Product Extension:  Product Extension Elaboration: modify or perfect what exists Disney Sony Walkman Virgin Atlantic Recycle: Bring back the old (revered) POGS Vests, Wide Ties, Cuff Links, Suspenders Bell Bottom Jeans Titanic Snow White Pattern Reversals:  Pattern Reversals Burgers Fancy Coffee (Starbucks) Women's Business Suits Soda Veggie Burgers Fancy Juice (Jamba Juice) Victoria Secrets Fruit Juice Strange Attractors (Paradox):  Strange Attractors (Paradox) Beanie Babies Teenage Mutant Ninja Turtles (Names) Star Wars Star Trek G.I. Joe Barbie Dolls LL Bean Outwear Distinctions That Make A Difference:  Products Books Exercise Equipment Education Golf Clubs Winning Process Reading Exercise Participation Practice Effort Distinctions That Make A Difference Slide273:  What is Price? The amount of money charged for the product or service. The sum of the values exchanged for the benefits of having or using a product or service. Slide274:  What is Performance Meet customer expectations. Delight customers with your product or service. Do something satisfying. Sustaining customer satisfaction. Customer value = difference the value gained and the cost to acquire. TQM = Total Quality Management Exchange (trade value) versus Transaction ( build relationship) Class 8:  Class 8 Product Development Strategies:  Product Development Strategies “Architecting” the Unmet Need Strategies to Obtain New Product Ideas:  Strategies to Obtain New Product Ideas Acquire Companies Acquire Patents Acquire Licenses Innovate New Original Unique Products Product Improvements Product Modifications Create New Brands Why New Products Sometimes Fail:  Why New Products Sometimes Fail Design Problems Missed the Unmet Need Missed the Target Market Missed the Target Market Size Bad P’s Time To Market was too Long Competition Beat You to the Punch The Five Phases of the Product Development Process:  The Five Phases of the Product Development Process Idea Phase Generate and Screen Ideas Market Size, Development Time Cost, ROI Demonstration Phase Concept Development and Testing Prototype Development and Testing Execution Phase Business Analysis Marketing Strategy Design, Build and Test Commercialization Adjustment Phase Learning Phase Slide280:  The Five Phases of the Product Development Process Adjustment Phase Find out What Works Fix what Doesn’t Learning Phase Lessons Learned Review Development Learning Histories Adjustment Phase Learning Phase Marketing Strategy Development:  Marketing Strategy Development Describe Target Market and Size, Is it Worth It? Can We Win? What are the P’s Strategy Sales and Profit Goals and Objectives Commercialization When Where To Whom How Product Life Cycle:  Product Life Cycle Birth: Product Development + Introduction Growth Maturity Decline Death B G M Show Me The Money! Goals of Product Life Cycle By Phase:  Goals of Product Life Cycle By Phase Birth +Introduction Low Sales High Costs Negative Profits Marketing is Focused on Awareness Product is First Version Minimal Features Price to Build Early Adopters Luminaries Goals of Product Life Cycle By Phase:  Goals of Product Life Cycle By Phase Growth Phase Sales Increase Profits Increase Goal is to Penetrate Market and Get Share Product Has More Features and Benefits Price to Penetrate Market to Build Share Expand Distribution (Place) Promote to Generate Mass AIDA Goals of Product Life Cycle By Phase:  Goals of Product Life Cycle By Phase Maturity Phase: Sales Peak Low Cost Structure High Profits Maximize Profits and Defend Share Product Diversification Price to best Competitors Build More Distribution (Place) Promotion to Stress Differentiation and Benefits What Happens in the Decline and Death Phase?:  What Happens in the Decline and Death Phase? Bad Stuff! Don’t go there without a plan to be re-borne! Product Mix = Product Lines Offered:  Product Mix = Product Lines Offered Product Line Width Number of different product lines Product Line Length Total number of items in the line Product Line Depth Number of different versions of each product A company can expand Width, Length and Depth! Key Goal of New Product:  Key Goal of New Product Customer Awareness Customer Interest Customer Evaluation Customer Trial Customer Adoption The Faster the Better! Speed of Adoption is Influenced By:  Speed of Adoption is Influenced By Communicability Relative Advantage Compatibility Complexity “Tri-ability” Adoption By Whom?:  Adoption By Whom? The Target Market Market Targeting starts with...:  Market Targeting starts with... Segmentation Evaluation Size and Growth Potential Attractiveness Can We Win? Do we have the resources to attack? Are we positioned to attack? Do we have unique competitive advantages? Are their substitute strategies Slide292:  Market Targeting and ends with... Market Positioning Developing positioning for each segment Who are the potential customers? How do they think about us? How do they think about the competitors? What are their IDEAL offerings? Develop marketing mix (P’s) for each segment Differentiation Distinction that make a difference Types of Market:  Types of Market Business Markets Consumer Markets Business Market are Unique:  Business Market are Unique Fewer, larger buyers Fluctuating demand More professional buyers More complex decision process more people involved more formal, e.g. bids, RFQ’s long term relationship oriented Business Buyer Players:  Business Buyer Players Gatekeepers User Buyer “Influencers” Financial Buyer Decision Maker Class 9:  Class 9 Mid Term Examination Class 10:  Class 10 Mid Term Examination Review Class 11:  Class 11 Place: Distribution and Logistics Distribution:  Distribution A Distribution Channel A set of inter-dependent organizations Intermediaries Purpose: involved in the process of a product or service available for use by the consumer Also called a channel The Purpose of Intermediaries:  The Purpose of Intermediaries Greater ability to get goods to the target market Intermediaries have capability (experience) capacity(resources availab

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