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Chapter2—AdaptingMarketingtotheNewEconomy
Overview
TheNewEconomypresentsmanynewchallengesandopportunitiesforthemarketer.ThemostimportantpointisthattheNewEconomyassuredlyplacesthecustomermorefirmlyinthedriver’sseatfordecisionsonher/hisproductandservicechoices(customizationandcustomerization).Inaddition,therehavebeenandwillbemanychangesinbusinessandmarketingpracticesasbothconsumersandbusinesseshavevirtualandreal-timeaccesstoliterallymillionsofproducts,offers,options,prices,people,competitors,andsourcesofinformationthatdidnotexistuntilrecentyears.Asaresult,themarketingmixwillchangeasmarketersandfirmsidentifynewusesforintangibleassetsandeffectivecustomerrelationshipmanagementthatismorethanamarketingterm.Wecanassumethatthisincreasinglyrapidgrowthandrateofchangewillcontinue,anddespitethedot-combust,recession,andothermajorsocial,political,andeconomicadjustments,theInternetandtheNewEconomyhavechangedmarketersandmarketingforthelong-termfuture.
Manyspecificareasofmarketingalsowillfeelthestingofchange.Marketingchannelsarebecomingincreasinglydirect,ascustomerscontrolthetimeandplaceofcontact.Internationalmarketingisbecomingmorelocalizedasthemarketingimagesfromoneregioncanquicklybeidentifiedandutilizedinotherregions.Informationdisseminationcapability,despitevirtualoverload,isbringingmassivechangestoadvertisers,competitors,suppliers,andotherstakeholders,withonlythemostcustomer-awareandmarket-awareplayerssurviving.Marketerswhotakeforgrantedtheirpastimages,marketpositions,andchannelpositionscanandoftendofindthemselvesontheoutsidelookinginratherthantheinsidelookingout.
Databasemarketing
XE"Databasemarketing"
continuestobeanimportantelementintheNewEconomymarketingprocess,placingevenmoreresponsibilityonmarketerstoensurethatdataisaccurate,up-to-date,andnonintrusive.Marketershavehigherlevelsofresponsibilityforabusesthathaveoccurredindirectmarketingoverthelastfewyears.Despitethepotentialforonlineanddirectmarketing,thecontroversyassociatedwithdirectmarketingcontinues.Thereareissuesofconcernregardingirritation,unfairness,deception,andfraud,andincreasinglytheinvasionofprivacy.InternalmonitoringbetweenmarketersisallthatstandsbetweenunfetteredgrowthoftheInternet,e-marketing,directmarketing,andeventualgovernmentcontroloftheInternet.
Asband-width(broadband)capabilitiesincrease,thelevelofmarketingdetailandqualityaddsthepotentialfor“remotemarketing”thatbringstheworldclosertotrue24/7marketing,limitedonlybythecreativityandintegrityofmarketers.Thejob/careeroptionsformarketerswilllikelyreachnewlevelsincomingyears,butitisimportantnottoignorethebasicsofmarketingandconstantlytoobservetheconsumerandchangingconsumerlifestyledirectionsandpatternsfromaglobalperspective.
LearningObjectives
Afterreadingthechapterthestudentshouldunderstand:
ThemajorforcesdrivingtheNewEconomy
HowbusinessandmarketingpracticeschangeasaresultoftheNewEconomy
HowmarketersusetheInternet,customerdatabases,andcustomerrelationshipmanagementintheNewEconomy
ChapterOutline
Introduction
Hybridnatureofforcesintheneweconomy
Subcontractingandoutsourcing,retaincore,benchmarking,partnering,interdepartmentteaming,developnewadvantages,marketintangibles,information,customergroupingversusproducts
Oldeconomymarketingaround,butmoreonrelationshipsandinformationinneweconomymarketing
Majordriversoftheneweconomy
Generally,technology,globalization,andmarketderegulation
Specificdriversthatunderpintheneweconomy:
Digitalizationandconnectivity
Disintermediationandreintermediation
Customizationandcustomerization
Industryconvergence
Industryboundariesareblurringrapidly
ExamplesincludeKodak(chemicalstoelectronics),Shiseido(cosmeticstodermatologydrugs),Disney(cartoonsandthemeparkstomajorfilms,licensing,retailstores,hotels,cruiseships,andeducationalfacilities)
Recognitionthatnewopportunitiesmaybeattheintersectionoftwoormoreindustries
Howbusinesspracticesarechanging
Oldeconomybusinessbeliefs
Organizebyproductunits,focusonprofitabletransactions,focusonshareholders,onlymarketingdoesthemarketing,buildbrandsthroughadvertising
Focusoncustomeracquisition,nocustomersatisfactionmeasurement,overpromise,underdeliver
Neweconomybusinessbeliefs
Marketingshouldbuildbrandsthroughbehaviorthat
Focusesoncustomerretentionandgrowth
Measurescustomersatisfactionandretentionrates
Organizesbycustomersegments
Focusesoncustomerlifetimevalue
Focusesonmarketingscorecard(alongwithfinancialscorecard)
Focusesonstakeholders
Underpromises
Overdelivers
Movesfromnocustomersatisfactionmeasurementtoin-depthcustomersatisfactionmeasurement
Newhybrid
Mostcompaniesareahybridoftheoldandtheneweconomies.Theyretainskillsandcompetenciesthatworkedinthepastbutaddnewunderstandingsandcompetencies
Themarketplacetodayismadeupoftraditionalconsumers(whodon’tbuyonline),cyberconsumers(whomostlybuyonline),andhybridconsumers(whodoboth)
Howmarketingpracticesarechanging:e-business
Definitions:e-business,e-commerce,e-purchasing,e-marketing
E-Businessande-vcommercetakeplaceoverfourmajorinternetdomains:B2C(businesstoconsumer),B2B(businesstobusiness),C2C(consumerstoconsumers),andC2B(consumerstobusinesses).
B2C(businesstoconsumer)
Targettherightcustomers
Ownthecustomer’stotalexperience
Streamlinebusinessprocessesthatimpactthecustomer
Providea360-degreeviewofthecustomerrelationship
Letcustomershelpthemselves
Helpcustomersdotheirjobs
Deliverpersonalizedservice
Fostercommunity.
Internetislessusefulforproductsthatmustbetouchedorexaminedinadvance.
Note:cluetrainmanifesto—companiesaretoobureaucratic,tooartificial,toomanipulative,toogiventoone-wayrhetoric.Companiesthatdon’trecognizethattoday’smarketsareconversationsaredestinedtoflounde.
B2B(businesstobusiness)
10–15timesthevolumeofB2C
Auctionsites,spotexchanges,onlineproductcatalogs,bartersites,andsoon
Loweringinvoicecostsfrom$100to$20
Buyingalliances
EfficienciesbasedonuseofsupplierWebsites,infomediaries,marketmakers,andcustomercommunities,withtheresultthatpricingismuchmoretransparent
C2C(consumertoconsumer)
Shareinformation(wordofweb)growing
eBay,A,WebMD
C2B(consumertobusiness)
Offeringcall-in,customerservice
Needforfaster,betterresponse
Newsletters,specialpromotions(basedonpurchasinghistory),otherreminders
Pure-clickversusbrick-and-clickcompanies
Pure-clickcompanies
Websitewithoutpriorexperienceasafirm
Searchengines,ISPs,commerce,transaction,contentandenablersites
Dot-comsfailedforavarietyofreasons
Rushedtomarketwithoutproperresearchorplanning,poorlydesignedWebsites,complexity,poornavigation,anddowntime
Lackedadequateinfrastructuresforshippingontimeandforansweringcustomerinquiries.Believedthatfirstcompanyenteringacategorywouldwincategoryleadership
Wantedtoexploitnetworkeconomics—thevalueofanetworktoeachofitsmembersisproportionaltothenumberofotherusers(Metcalfe’sLaw)
Somerushedtothemarketinthehopeoflaunchinganinitialpublicoffering(IPO)whilethemarketwashot
But,manypure-clickdot-comsaresurvivingandevenprospering
Othersareshowinglossestoday,buttheirbusinessplansarefundamentallygood..
Howmarketingpracticesarechanging:settingupwebsites
CompaniesneedtoMoveintoE-marketingandE-purchasing
Howcanweusemarketingtospreadword-of-mouth?
Howcanweconvertvisitorsintorepeaters?
HowdowemakeourWebsitemoreexperientialandreal?
Howcanwebuildastrongrelationshipwithourcustomers?
Howcanwebuildacustomercommunity?
Howcanwecaptureandexploitcustomerdataforup-sellingandcross-selling?
HowmuchshouldwespendonbuildingandmarketingourWebsite?
Howdowechoosetherightsitesforplacingouradsorsponsorship?
Howcanwecoordinateouronlinecommerceandstoresalesandservice?
Howmuchwillourretailoperationsbehurtbyouronlinesalesandbyothere-tailers?
Shouldthesitebesetupinsideoroutsideofthecompany?
Howdowegetmanagementbuy-inandfunding?
HowcanwefightpricepressureandpricetransparencyontheInternet?
Designinganattractivewebsite
Attractiveonfirstviewing;interestingenoughtoencouragerepeatvisits
Earlytext-basedwebsitesreplacedbysophisticatedsitesthatprovidetext,sound,andanimation.examples:
Context:layoutanddesign
Content:text,pictures,sound,andvideotheWebsitecontains
Community:howthesiteenablesuser-to-usercommunication
Customization:site’sabilitytotailoritselftodifferentusersortoallowuserstopersonalizethewebsite
Communication:howthesiteenablessite-to-user,user-to-site,ortwo-waycommunication
Commerce:site’scapabilitiestoenablecommercialtransactions
Contextfactors
Contentfactors
Gettingfeedback
Placingadsandpromotiononline
Banneradsandsmallboxescontainingtextandperhapsapicturearethemostbasis
Buildingarevenueandprofitmodel.Thecompany’srevenuestreammaycomefromseveralsources:
Advertisingincome
Sponsorshipincome
Allianceincome
Membershipandsubscriptionincome
Profileincome
Productandservicesalesincome
Transactioncommissionsandfees
Marketresearch/information
Referralincome
Howmarketingpracticesarechanging:customerrelationshipmarketing
Customerrelationshipmarketinganddatabasemarketing(CRM)
Enablecompaniestoprovideexcellentreal-timecustomerservicebydevelopingarelationshipwitheachvaluedcustomerthroughtheeffectiveuseofindividualaccountinformation
Basedoncustomerattributes,companiescancustomizemarketofferings,services,programs,messages,andmedia
Reducestherateofcustomerdefection
Increasesthelongevityofthecustomerrelationship
Enhancesthegrowthpotentialofeachcustomerthrough“shareofwallet,”cross-selling,andup-selling
Makeslow-profitcustomersmoreprofitableorterminatesthem
Focusesdisproportionateeffortonhighvaluecustomers
Notedifferencesinmassmarketingversusone-to-onemarketing
MassMarketing
One-to-OneMarketing
Averagecustomer
Individualcustomer
Customeranonymity
Customerprofile
Standardproduct
Customizedmarketoffering
Massproduction
Customizedproduction
Massdistribution
Individualizeddistribution
Massadvertising
Individualizedmessage
Masspromotion
Individualizedincentives
One-waymessage
Two-waymessages
Economiesofscale
Economiesofscope
Shareofmarket
Shareofcustomer
Allcustomers
Profitablecustomers
Customerattraction
Customerretention
Otherconsiderations:
Interactwithindividualcustomerstoimproveknowledgeoftheirindividualneedsandtobuildstrongerrelationships
Customizeproducts,services,andmessagestoeachcustomer
Customerdatabasesanddatabasemarketing
Datawarehousesanddatamining
Capturinginformationeverytimeacustomercomesintocontactwithanyofitsdepartments
Thetouchpointsincludeacustomerpurchase,acustomer-requestedservicecall,anonlinequery,oramail-inrebatecard.Thesedataarecollectedbythecompany’scontactcenterandorganizedintoadatawarehouse.Companypersonnelcancapture,query,andanalyzethedata
Inferencescanbedrawnaboutanindividualcustomer’sneedsandresponses
Telemarketerscanrespondtocustomerinquiriesbasedonatotalpictureofthecustomerrelationship
Companiescanusetheirdatabasesinfiveways
Identifyprospects
Decidewhichcustomersshouldreceiveaparticularoffer
Todeepencustomerloyalty
Toreactivatecustomerpurchases
Toavoidseriouscustomermistakes
Downsideofdatabasemarketing
Goodandbadsides—threeproblemscandeterafirmfromeffectivelyusingCRM:
Requiresalargeinvestmentincomputerhardware,databasesoftware,analyticalprograms,communicationlinks,andskilledpersonnel.Buildingacustomerdatabasenotbeworthwhile
Whentheproductisaonceina-lifetimepurchase(e.g.,agrandpiano)
Whencustomersshowlittleloyaltytoabrand(e.g.,thereislotsofcustomerchurn)
Whentheunitsaleisverysmall(e.g.,acandybar)
Whenthecostofgatheringinformationistoohigh
Thesecondproblemisthedifficultyofgettingeveryoneinthecompanytobecustomer-orientedandtousetheavailableinformation.It’seasiertocarryontraditionaltransactionmarketing
Thethirdproblemisthatnotallcustomerswantarelationshipwiththecompanyandresentcollectedutilizationofpersonalinformation
Marketersmustbeconcernedaboutcustomerattitudestowardprivacyandsecurity
Europeancountriesinparticulardonotlookfavorablyupondatabasemarketing.
Databasemarketingisnotforeveryone
Mostfrequentlyusedbybusinessmarketersandserviceproviders(hotels,banks,andairlines)thatnormallyandeasilycollectalotofcustomerdata.
Itisusedlessoftenbypackaged-goodsretailersandconsumer-packaged-goodscompanies,thoughsomecompanies(Kraft,QuakerOats,RalstonPurina,andNabisco)havebuiltdatabasesforcertainbrands
70percentoffirmsfoundlittleornoimprovementthroughCRMimplementation
Allthispointstotheneedforeachcompanytodeterminehowmuchtoinvestinbuildingandusingdatabasemarketingtoconductitscustomerrelationships
Thegrowthandbenefitsofdirectmarketing—directmarketingisaninteractivebuildingprocess(directrelationshipmarketing).
Lecture—E-MarketingandtheAirlinesInformationWeek,November12,2001.
Introduction
Followingthedismalearningsduringthelastfourmonthsof2001,U.S.airlinesscrambledtofilltheirseats,andmanyreliedone-marketingtodrumupbusiness,improvecustomerservice,andkeepalidoncosts.
ThecrisisofSeptember11andafter,forcedairlinestoobtainthegreatestpossiblevalueoutoftheirinformationtechnologyande-marketingsystems.ThesesystemswereneverpushedtoperformliketheywereafterSeptember11.AsthepresidentofContinentalAirlinesnoted:“We’relivingonoursystemsandourpeoplerightnow.”Asconsumerspostponedflightsandbusinessesrestrictedtravel,theairlinesattemptedtoenhanceschedulingandrevenue-managementsystemstocontrolcostsandmaximizerevenue.Atthesametime,theairlinesalsoacceleratedplannede-marketing,Web-site,andcustomer-serviceinitiativestokeepprofitablecustomershappyandrecruitnewones.
Background
TheninelargestairlinesintheUnitedStatescollectivelyreportednetlossesof$2.43billionforthethirdquarterof2001andoperatinglossesof$3.65billionforthesameperiod.BeforeSeptember11,industryanalystswereforecastingthatU.S.airlineswouldhaveabout$2billioninlosses,butafterSeptember11theypredictedlossesforthefourthquarteraloneof$3to4billion.Boeingplannedtodeliverasmanyas520newaircraftduring2002,andthatnumberdroppedtoaround400.percentofitsseatsinOctober2001,comparedwith70percentinOctober2000.NorthwestAirlines’percentpercent,andUnitedAirlines’spercentpercent.
Unitedreportedtheworstresultsinitshistory,with$542millioninnetlosses,aftertakinginhalfofthegovernment’s$5billionbailoutforthethirdquarter.AirCanadaannounceditmaysellitsverysuccessfulregionalaircraftmanufacturingdivisiontoerasesomeofits$6.3billiondebt.Lastly,AmericaWestannounceditwaslosingabout$2millionaday.
Thesteeplossesforcedcarrierstorethinksomelong-plannedinitiatives.SouthwesthadformonthsbeenplanningtostartservicetoVirginia’sNorfolkInternationalAirportonOctober7,andhadorderedaircraftfromBoeingtosupportthenewroute.However,aftertheSeptember11attacksSouthwestdeferreditsshipmentfromBoeingandinsteadredirectedsomeofitsexistingplanestoNorfolk.
PostSeptember11,2001,Marketing
Soonaftertheattacks,Southwestexecutivesspentaweekendanalyzingdataintheairline’sschedulingandlogisticssystemstofigureoutwherepilots,crew,andaircrafthadendedupafterthemandatorygrounding.Thentheyrepositionedthemasnewflighttrendsemerged.Accordingly,theyhadtomakevariousmarketingdecisionsthattheinteractivemarketingsystemenabledthemtoaccomplishquickly.
Meanwhile,asscheduleschanged,airlinesreliedonrevenue-managementsystemstoanalyzetimetables,capacity,andpassengerdemandtodetermineticketpricesthatmaximizerevenue.Inboomtimes,ifcertainflightslostmoney,profitableflightscouldmakeupthedifference.Now,everydollaroneveryflightcounted.
BeforeSeptember11,airtrafficwaspredictable,andairlinestypicallystoredthreeyears’worthofdatatoprojectfuturebusiness.Buttheattackshavemadeitallbutimpossibletoestimatehowmanyticketedpassengerswouldshowup.“Yieldmanagementbasicallywentoutthewindow,”anairlineexecutivesaid.
Intheweeksaftertheattacks,revenue-managementanalystsadjustedthepredictivemodelstoassumethatcustomerswhoboughtticketsafterSeptember11wouldfly;thosewhopurchasedticketsbeforeSeptember11werelesslikely.Thatletairlinessellmoreticketswithoutfearofoverbooking.
AtFrontierAirlinesInc.,theterroristattackshurtdemandforflightsinandoutofBoston,NewYork,andWashington,D.C.,worsethanthoseinthewesternUnitedStates.Frontieradjusteditssystemintheeasttousedifferentmodelstopredictdemandandno-showsforeachflight.Formanyairlines,revenue-managementsystemswerethelifelinethatdeterminedwhethertheywouldstayinbusiness.
Thirty-fiveairlinesuseSabre’sAirMaxrevenue-managementsystem,whichcombinesdataonfaresthatallairlinesofferwithaparticularflightscheduletocalculateticketprices.AfterSeptember11,Sabrereprogrammedthesystemtoreflectfluctuatingdemandandthefactthatbusinesstravelreboundedfasterthanleisuretravel.
Earlierin2001,ContinentalAirlinesrolledoutmarketingandfinancialapplicationspackagesthatinteractedwiththeotherITsystemstoprovidekeydetailsaboutoverallperformance.Airlinemanagerswereabletoanalyzetheprofitofanyflightonanygivenday.Beforetheattacks,Continentalwasshiftingfrommonthlytoweeklyfinancialreviews.FollowingSeptember11,however,executivesbegantoreviewthedatadailytospottrendsandchangeschedulesmorequicklytomaximizerevenue.
Manyairlinesalsorampedupcustomerserviceande-marketingprojects.Forexample:
AlaskaAirlinesworkedaroundtheclocktolaunchanautomatedphonesystemonSeptember19,twomonthsaheadofschedule.TheyutilizedPAR3Communicationssoftwaretoautomaticallycallpassengerstoinformthemofschedulechangesandaskwhethertheyintendtokeeptheirreservations.AlaskaAirlinessentmorethan100,000alertstocustomers,freeingreservationsstafftobooknewflights.
SouthwestAirlinesbegantargetingitsfrequentflyerswithane-marketingcampaign.Theyreceive“featureddestination”e-mailsthathighlightcertaincitiesandincludehotelandcarrentalrates,alongwithalistofplacestovisit.Thegoalwassimple:Getpeoplebackintheair.
UnitedAirlinesfocusedonfrequentfliers.Inthepast,whenatop-tiermileagemembercalledtobookaseatonasold-outflight,heorshewasturnedaway.Now,Unitedreservationsagentscanviewrevenue-managementdatatoseewhatpercentageofpeopleareexpectedtoshowupanddecidewhethertoselltheimportantcustomeraticket.
Totietogethertheairlinemarketinginformationwiththatinotherindustries,considerwhatelsehashappenedsinceSeptember11,2001.Source:InformationWeek,November5,2001.
TheInternetnowoffersanalternativetodirect-mailmarketing.Anthraxworrieshavesentcompaniesscramblingtocomeupwithelectronicmarketingoptions:
ElectronicmarketingprovidersareofferingWeb-basedalternativestobusinessesconcernedabouttheanthraxscare’seffectontheirdirect-mailmarketingcampaigns.However,giventheimmaturityofe-marketingsoftwareandservices,someobserversquestionedwhethertheInternethasthesamereachandimpactasdirectmail.
AnOklahoma-basedmediacompany(PennWellCorporationofTulsa,Oklahoma)usesdirectmarketingtoreachmagazinesubscribers.Thepublisherexpecteda10percentdropinsubscriberresponsesduetoconcernsaboutthesafetyofpostalmail.Manyintheonline-marketingarenahavebeenvocalinpromotingtheInternetasasafealternativetosnailmail.Thecompanyisadvisingcompanieswithdirect-mailprogramstoturntotherelativesafetyandcost-efficiencyoftheInternet.
Tohelpmovebusinessesonline,BigFootInteractive,whichsellse-mailmarketingsystems,putoutguidelinesfore-marketerswhileencouragingthemtointegratee-mailintotheircampaigns.
Inanefforttomakemarketersfeelmoresecure,e-maillist-managementsoftware-makerL-SoftInternationalmadeavailablefreevirus-checkingtoolsfromF-SecureCorporationaspartofitssoftware.
Adirectmarketer(BrannBaltimore)thatusedbothonlineanddirect-mailmarketingnotedthatmanyofitscustomersbeganthinkingabouttheimpactoftheanthraxscareontheirmarketingefforts.Interestingly,however,noneofthefirm’sclientseliminateddirectmailormadedrasticchangesintheiroverallmarketingplans.Theprimaryreasonwasthatthereachofe-mailwasnotyetclosetothelevelofdirectmail.Asacompanyexecutiveputit:“Therearehundredsofmillionsofpostaladdresses,butonly20to22millione-mailaddresses.”
Tosummarize:Marketersthathavenotyetbuiltupadatabaseofcustomerswhoopttoreceiveelectronicmessagesmustbuythosee-mailnamesandthensendoutunsolicitedmailtounqualifiedprospects.Marketerswillsaythat’snodifferentfromsendingunsolicitedpapermail,saysanindustryanalystfromForresterResearch.Asaresult,companiescouldbeperceivedasspammers,andthismakesitnotyetaviablelong-termsolution.
MarketingandAdvertising
TheePadadinFigure1,targetedtoconsumers,highlightsoneaspectoftheboominelectronicpayment:thelegalityofelectronicsignaturesforcompletingavarietyofsalestransactions.InterlinkElectronicsispositioningtheePadasasimpleyettechnologicallyadvancedmethodofsecurelyandpermanentlydocumentingaconsumer’ssignatureonapaperlessrealestatecontractoranyotherelectronictransaction.
HowdoesInterlinkElectronicsbuildonthemajordriversoftheNewEconomyinmarketingtheePad?
IfInterlinkwantedtoexpandfromthisB2CadtoaB2Bad,whomightthecompanytargetandwithwhatbenefits?
HowmightInterlinkElectronicsenhanceitsrevenuestreambytargetingbusinessbuyersforePadpurchases?
Answer
Thisadstressesdigitalizationofacustomer’ssignature;digitalizationisoneoftheNewEconomy’sdrivers.Italsostressescustomerizationbecauseitcapturesthecustomer’suniquesignature.StudentsmaymentionotheraspectsofthenewEconomy,suchasconvergence.
ForaB2Bad,Interlinkmighttargetbusinessesthatrequiresignaturestocompletetransactions,suchasmajorbanks,insurancecompanies,andsecuritiesbrokeragefirms.ItmightalsotargetbusinessessuchasWesternUnion,whichcanusesignaturestoverifyidentitiesofpeoplesendingorreceivingmoneyinremotelocations.InterlinkcouldstresssuchB2Bbenefitsasbeingabletocompleteatransactionwithoutthecustomer’sphysicalpresence,andtheconvenienceandcost-efficiencyofcompletingtransactionsacrossmilesratherthanhavingtotraveltoasinglelocation.Studentsmayciteadditionalbenefitsaswell.
Toenhanceitsrevenuestream,InterlinkmightoffertosellePadsinvolume(atareducedprice)toWesternUnion(foritsmoneytransferservice),WellsFargo(foritsbankingandrealestateloanbusinesses),CharlesSchwab(foritsbrokeragebusiness),andotherfinancialservicesfirmsthatcouldprovidetheePadstoconsumersorbusinessownersforuseincompletingtransactions.ItmightalsoinvestigatetheneedforePadstocompleteonlinepurchasesofproductsthatarefinanced,suchascars,inordertotargetB2Bmarketingtowardcar-makersandtheirdealers.
Adnumber2:ThisadfortheGarminStreetPilotin-vehiclesatellitenavigationsystemfocusesonNewEconomyconnectivity.Atthesametime,itsuggestsaccesstotheburgeoningworldofm-commerce,inwhichcustomerswillbeabletolocateandbuygoodsandservicesinthevastvirtualmarketspace,notjustthemarketplace.
Whichcoremarketingconceptsarereflectedinthetextofthisad?
IfGarmincollecteddataaboutcustomeruseoftheStreetPilot,howmightitusethisinformationforrelationshipmarketing?
WhatconcernsmightcustomershaveifGarmindecidedtotracktheiruseoftheStreetPilot?HowcouldGarminrespondtosuchconcerns?
Answer
Theadreflectsseveralcoremarketingconcepts:targetmarkets(addressingdrivers,specificallythosewhoareinterestedinin-carnavigationdevices);needs,wants,anddemands(customerswanttobeabletofindhotelsandotherdestinationslistedinthead);productoroffering(describedasan“in-carsatellitenavigationsystem”);valueandsatisfaction(theproductisdescribedas“affordable,”relatingtoitscosts,andisalsodescribedasbeing“portable”andoffering“peaceofmind,”relatingtoitsbenefits);marketingchannels(theadincludescommunicationchannelssuchasGarmin’sphonenumberandWebaddress).
KnowinghowcustomersusetheStreetPilotwouldhelpGarminbetterunderstanditscustomers’needsandwants.Inturn,thisdeeperunderstandingwouldenableGarmintoproactivelyofferimprovedproductusesornewproductsthatarelikelytointerestitscustomers.Bysatisfyingcustomersonanongoingbasis,Garminincreasestheirloyaltyandstrengthenstherelationshipovertime.
IfGarmintrackedusageoftheStreetPilot,customersmightbeconcernedaboutinvasionofprivacyandcommercialuseoftheinformation.Garmincouldrespondtosuch
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