11 05 2010

Social and Not-For-Profit Marketing

Marketing Management Orientations until Now:

1) Production Concept. Aim of this concept is to reduce costs, especially production and distribution. Companies applying this concept believe that reduced costs would provide lower prices, and lower prices would lead to more sales.
2) Product Concept. Companies applying product concept mainly focus on the innovative and distinctive features and performances of product.
3) Selling Concept. Ultimate goal is selling. To achieve this goal, a lot of selling activity is performed. Price and performance has secondary importance.
4) Marketing Concept. Consumer needs are the central focus; products are presented according to them. Marketing is finding the right customers for your product and finding the right product for your customers.
5) Societal Marketing Concept. In this concept, companies aim profits while taking customer satisfaction into consideration in short term and human welfare in long term.

So, there are three things that must be involved for a company to implement ‘Societal Marketing Concept’:
a) Company (in terms of profit maximization)
b) Consumers (in terms of wants and satisfaction)
c) Society (in terms of human welfare)

Social Marketing:

Social marketing is using marketing methods and marketing mix in order to solve social issues. Aim is to affect individual behavior in society showing proper ways in order to enable social welfare. Avon is an example that uses social marketing. They try to make women aware of breast cancer by selling products specific to that issue. These products involve pins, bracelets, books, cloth bags, and mobile phone apparels. The profits made by the sales are donated to a special fund which is lent to hospitals, foundations, etc.

Not-For-Profit Marketing:

Marketing is used for the not-for-profit organizations. Universities are example to such organizations, as they use advertising not to increase profits but to increase the number of students that prefer that university. For instance, our university puts brochures in the newspapers in summer – especially during preference periods of prospective university students to make them aware of Izmir University of Economics and its advantages.

Cause-Related Marketing:

In such marketing, a company and a nonprofit organization together start a marketing activity to draw people’s attention to an issue. Cause-related marketing provides benefit to both company and the organization. It is beneficial for the company because it creates a positive public image and it also increases sales of the brand. On the other hand, it is beneficial to the organization because they will be able to reach new sources of funds which they deprive of in most cases, and they will obtain greater visibility. Here, it is important to note that we do not mean public image as for the companies, but the ability to draw attention to the issue for which they are founded. Live8 concerts are a great example to cause-related marketing. Instead of a company, put singers and bands; as they also want to increase their album sales, and have recognition. ‘Make Poverty History’ campaign supported the concert organizations and millions of people became aware of the serious poverty issue in Africa, remarkable numbers of African children starving to death.

In Our Opinion:
Again in this topic, you will gain insight into the issue. After listening to the lecture, you will find out that you have a narrow point of view to the subject. You will be surprised to see that there are so many concepts in marketing that seeks the welfare of the society.

The Global Marketplace

Understanding How International Factors Affect Marketing Decision:

Global Firm:
Although in Turkey ‘global firm’ is understood as a company which has partners both from within the country and from foreign countries, it is not defined so. Global firm is a firm which operates in more than one country.

Global Marketing Environment: Economic environment can be analyzed in two concepts: Industrial structure and income distribution. Companies should better understand the industrial structure of the countries that they will operate.

Industrial Structure:
  • Subsistence economies: Agricultural economies which are not attractive to marketers.
  • Raw material exporting economies: The economies are rich in one or more natural resources but poor in other ways.
  • Industrializing economies: Refer to the economies that only 10 – 20% is based on manufacturing.
  • Industrial economies: In this kind of economies, the country mainly exports the manufactured goods. Huge number of middle-class people exists in such countries.

Political-Legal Environment: Before entering, companies should analyze the attitudes of people toward international buying, government bureaucracy, political stability, monetary regulations.

Cultural Environment: Companies should better evaluate the cultural traditions, preferences and behavior. For example, McDonald's does not sell products containing veal (cow meat) in India.

Deciding Whether to Go Internalization:

Companies should consider deeply before going global; sometimes it can be better to stay local because domestic can be easier and safer, and there is no unstable currency issues. On the other hand, companies may be drawn to go international by a global competitor's attack. If domestic market’s growth is low, going global may provide with higher sales. The company needs to evaluate its abilities, the consumers, and business environments in other countries.

Deciding Which Markets to Enter:

The company should define international marketing policies and objectives, and sales volume goals; and then they should decide how many countries to target, the types of countries to enter. After that, they should screen and rank each of the possible international markets using several criteria, like market size, market growth, cost of doing business, competitive advantage of itself, and risk level.

Deciding on How to Enter the Market:
  • Exporting. Direct (through domestic export department or overseas sale branch) vs. indirect (through independent international marketing intermediaries)
  • Licensing. Having an agreement with a licensee in the foreign market
  • Contract Manufacturing. A company sets a contract with manufacturers in a foreign market to produce its products and provide its service.
  • Joint Ownership. A company joins investors in a foreign market to create a local business in which the company shares joint ownership and control
  • Direct Investment. Entering a foreign market by developing foreign based assembly or manufacturing facilities; lower costs, foreign government investment incentives, creating jobs may enhance image in the host country, control over operations.

Deciding on the Global Marketing Program:
  • Standardized Marketing Mix. Same marketing mixed elements are used in foreign countries that the company will operate in.
  • Adapted Marketing Mix. Changing the elements of marketing mix in order to adapt the international target market.

Product Strategies for the Global Market:
  • Straight product expansion. This is marketing a product without changing it. Take the product as it is and find customers for it. Cleaning products can be an example.
  • Product adaptation. In order to satisfy the needs and wants of local market, companies change the aspect of the product or simply create a new product. For example, Volkswagen produced Transporter just for Turkey.
  • Product invention. Creating new products or services for foreign markets.

Global Promotion Strategies:
  • Standardized global communication. Applying small modifications to the existing advertising themes while entering in a new country.
  • Communication adaptation. Fully changing the advertising message in order to adapt local markets.

Global Pricing Strategies:

Companies face with many problems during the processes of price escalation, pricing to foreign subsidiaries due to recent economic and technological forces and the Internet.

In our opinion:
By this chapter, you can understand the importance of understanding and analyzing the countries before you go global. And also you can see the biggest global companies’ success and how they become successful by seeing their strategies in their path to success.

10 05 2010

Sports Marketing

What is sports marketing?

“Sports marketing” is the use of marketing principles for or within the sports related environments. The main idea you can get from this definition is that, there are two dimensions of sports marketing:

  • Marketing through sports. In such marketing, the marketed products are nonsports products but the channels used to reach the target market are sports-related. Master Card sponsorship and advertisements in The Champions League and The World Cup can be accepted as a well-known advertisement.
  • Marketing of sports. This kind of marketing strategically aims marketing the pure sports goods to the target market. Continuing to the previous example, the advertisements of The Champions League or The World Cup through different media channels are good examples of marketing of sports.

Sports Products vs. Nonsports Products:
The essential point in establishing a strategic environment for either dimension of sports marketing is to make clear differentiation between sports and nonsports products.

  • Sports Products. There are three main categories of sports products:
  • Spectator Sports. In this category, the main marketing objective is to increase the ticket sales or in broader sense, to increase the ratings of the broadcasting of sports events.
  • Participation Sports. This category, unlike Spectator Sports, lacks the feeling of competition and involves the individuals into the sports experiences. The ‘participation’ notion comes from this.
  • Sporting Goods, Apparel, Athletic Shoes, and Sports-Related Products. Sporting goods are tangible products created for a specific sports activity. Apparel is a type of sports-related clothing; it may be either facilitating participation or due to supporting or fashion reasons. Athletic shoes form a distinguished category due to its various designs and being in everyone’s wardrobes. Sports-related products can be explained as souvenirs, or any type of goods that may be purchased during the participation in a sports activity; such as beer.
  • Nonsports Products. Marketers of nonsports products benefit from the sports environments.

Sponsorship Strategies:
In sponsorship integration, two parties set an official relationship through events, players, teams, and so on. However, there are levels of sponsorship strategies:

  • Traditional Sponsorship. The aim is to be able to use the logos and trademarks of the sports property and to settle a relationship in the customers’ minds of the target market of that sports property. In Turkey, we can show some major basketball teams as an example: Beşiktaş Cola Turka, Fenerbahçe Ülker, and Galatasaray Cafe Crown have sponsorship relations with Ülker and its sub brands.
  • Venue Naming Rights. Even if it seems like a type of traditional sponsorship, venue naming rights represent a special form of sponsorship because it is claimed that the sponsors receive a remarkably high value from naming values. The prospective stadium of Galatasaray SK, “Türk Telekom Arena” is one example while “Allianz Arena” is another, which is the stadium of FC Bayern München and TSV 1860 München.
  • Endorsements. It can be briefly explained as “personal sponsorships”. For example, Adidas is the personal sponsor of Lionel Messi while Nike is for Cristiano Ronaldo. But it does not have to be in such rivalry; for instance, Nike is the personal sponsor for both Roger Federer and Rafael Nadal.
  • Licensing. This is a type of sponsorship where the licensor gets only the rights to use sport property’s logos and trademarks during its on marketing efforts. “Official supplier” is one of the most common categories of licensing. The most popular example nowadays is that Turkish Airlines being the official supplier of FC Barcelona.

In Our Opinion:
Again, you will think that you have an idea about when you check out the syllabus. When you read the article and listen to the course, you will be surprised to see the variety of applications in sports marketing.

Guerilla Marketing, Buzz Marketing and Experiential Marketing

Guerilla Marketing is a form of marketing whose target markets exist in unexpected places; the product is marketed in a memorable and attractive manner. The aim of this marketing is to reach more people with a limited budget and a more effective message. Customers are shocked and surprised in guerilla marketing, so they can remember things that surprise them.

Some key elements of guerilla marketing:
  • Creativity
  • Unexpectedness
  • More with less

For example; MondoPasta is a German pasta firm. This firm utilized ships for amusing customers. To keep a place in its customers mind, it created that huge stickers of faces turned ships into permanent pasta slurpers. This technique is unique, highly visible, unexpected, and sort of shocking. It is very successful in attracting a lot of attention. This definitely broke traditional marketing rules.

Viral (Buzz) Marketing is marketing technique that encourages people to spread your message to others, to create difference in the short time. In viral marketing, the message quickly spreads like a virus from one person to another. You tell two friends, and then they tell two friends, because it is form of “word of mouth”. Social networks can play a key role in spreading your message. They can be very successful in reaching a large number of people rapidly.

Dove’s Evolution is one of the effective viral marketing. This firm demonstrates through video ‘Evolution’ which shows an ordinary women, being made up by make-up artists and photographed digitally by creating unrealistic expectation of what women looks like. The final part of advertisement is showed on a billboard and this model is saying “No wonder our perception of beauty is distorted”. This advertisement reached more people through social networks via video sharing.

Experiential Marketing:
Experiences occur when customer meets with a product and use it. They play a vital role while making the purchase decision. They provide greater interaction between firm and consumer. Firms focus on their customers with the help of the emotional appeals to affect their senses.

Experiential marketing differs from traditional marketing in four ways:
  • Experience of Customer
  • Focus on Consumption
  • Ecletic Methods
  • Rational and Emotional Animals
As an example; we can give Rainforest Cafe. This cafe is not just food. Different concepts are designed to engage and interact with customers. It provides a wild dining experience. Customers have meal in an experiential entertainment restaurant design.

In Our Opinion:
With a lot of different and original examples, this is one of the chapters that you will really enjoy while listening. This is the lecture that you will see how far you can push your limits in creativity. You will admire how companies can be creative with limited budgets.

Service and Relationship Marketing

What is CRM?

CRM stands for Customer Relationship Management. There are different definitions of CRM. In general; CRM is the establishment, development, maintenance, and optimization of long term mutually valuable relationship between consumers and organization.

CRM can be applied in two different levels: narrowly and tactically or broadly and strategically. Either way, there can be three different approaches:
  • CRM as a specific technology solution project
  • CRM as an integration with customer oriented technology solutions
  • CRM as a holistic approach to managing customer relationships and create shareholder value
In all these definitions, there are common keys factors like long term, mutually, and valuable relationship.

Why there is not a single definition of CRM?
CRM can be considered from different perspectives. These perspectives lead to different definitions. There are three perspectives of CRM:
  • Information technology (IT) perspective. Companies often buy software will help to achieve their business goals. IT based on customer management system and CRM has the payoffs associated with modern technology, such as speed, ease of use, power, and memory. For example, Migros and the affiliated retailers provide a card to its customers, named ‘MoneyCard’. According to your shoping habits, they provide you some discounts while they are able to gather data about their target customers.
  • Customer life cycle (CLC) perspective. The customer life cycle has similar points with the product life cycle. But CLC focuses on the creation of and delivery of lifetime value to the customer. Turkcell could be an example to this category as they try to maintain and improve the good relationships with their consumers which already exist. They serve their long-term customers with Turkcell Gold which brings about much more than a simple GSM.
  • Business strategy perspective. The business strategy should determine the competitive position which is interested in competitive market strategy that includes marketing orientation, value creation, and innovative IT. Dell is an example to it, it builds its operations from the beginning to the end according to customer wills. Customers can get products as they want.
What are the criteria for an interactive CRM processes?
  • The strategy development process. It is either business strategy or customer strategy. Business strategy provides the good business vision and it should have the competitive characteristics. Customer strategy should provide the customer loyalty, acquiring new customers, and retaining existing customer
  • The value creation process. Has three key elements which are determining what company provide for customers, determining what company receives from customers, and determine the maximizing the lifetime value of customer segments.
  • The multichannel integration process. Has the output of business strategy and value creation processes. IT focuses on the combination of sales force, outlets, telephony, direct marketing, electronic commerce and mobile commerce.
  • The information management process. Interested with collection, collation, and the shape of using customer data and information which provides associate memory of customers which includes IT system, analytical tools, front office and back office applications, and CRM technology market participants.
  • The performance assessment process. Protects the strategic aims of organizations and provide acceptable standard in term of CRM. It has two components: performance monitoring and shareholder results.

In Our Opinion:
In our previous marketing courses, we have all seen CRM but the first thing comes to our minds is cards like Boyner Anahtar or Migros MoneyCard. After listening to this lecture, you will see that CRM is a broad concept that is not limited to it, it is broader.

Marketing in the Digital Age

Significance of Online Marketing

Online marketing is the marketing of products and services via the Internet as its medium. In today’s global environment; to benefit from the new technologies, marketers should develop strategies which suit the Digital World.

Types of Internet Usage Among Companies
  • “Brick-and-mortar company” operates in real life only, uses Internet to provide information. Organizations like universities are example to this.
  • “Click-and-mortar company” provide sales both in real life and through Internet. Vatan Computer is an example to this.
  • “Click-only company” operates only online and you cannot contact in real life with such company. Idefix is an example to this, you can only buy those books online.

Marketing Strategies in the Digital Age
Even if they sound the same, there are major differences between these concepts which you should be aware of:
  • E-business: The conduct of business on the Internet, using Internet technologies to improve the productivity or profitability of a business. Electronic means and platforms are the elements of the whole structure.
  • E-commerce: Buying and selling of goods and services on the Internet is called E-commerce.
  • E-marketing: The application of marketing principles and techniques through the Internet is called E-marketing.

E-commerce is advantageous to both buyers and sellers. Buyers would prefer e-commerce due to its convenience first of all; buyer does not have to seek for the good, by e-commerce, it is much easier to find and purchase it. It is also easy and more private. The sales happen only between seller and the buyer. In addition, there would be a greater scale of products in e-commerce, because real stores cannot hold too many inventories in stocks but e-commerce type businesses have fewer limitations in inventory concept. Comparing is also easier for buyer, in terms of price, amount, quality, and so on; but a buyer cannot quickly compare the goods in two different stores.

On the other hand, seller has its own benefits in e-commerce. The most important among all is reduced costs. Reduced number of retailers, logistics activities, transportation creates reduced costs. In addition, it is easier to build relationships with buyers because a seller can take more effective feedback through the Internet. Speed also increases because it is easier to reach the buyers. Since the retailer is reduced from the supply chain, and the buyer is in direct contact with the seller; we can say that another advantage of sellers is global access.

The four major e-commerce domains

B2C: Defined as the retailing part of e-commerce on the Internet. Web sites of the companies are the examples.
B2B: Creates a community where sellers can interact with their own trading partners. Alibaba.com is an example of this.
C2C: Helps consumers exchange goods or information such as Gittigidiyor and Blogs.
C2B: Allow consumers to all necessary information about sellers, promotions, products, etc. NeKadar.com is a good example of C2B.

Setting up for E-Marketing

Companies have a variety of ways to build up E-commerce. Creating websites, placing online ads and promotions, creating or using web communities and using e-mail are the options to set up for e-marketing. For sure, e-marketing is an effective and beneficial tool but this does not change the fact that it is challenging, too. Besides legal and ethical issues, online privacy and security concerns combined with the difficulty in navigating the web, only a few B2C companies managed to make profit at the desired level.

Search Engine Marketing

With the increasing popularity of Google and such search engines, Search Engine Marketing concept is introduced. The concept is defined as a form of Internet marketing that seeks to promote websites by increasing their visibility in search engine result pages through the use of search engine optimization. It provides increased visibility for the companies for the reason that whenever people have a question on their minds, they ask Google.

In Our Opinion:
It is obvious that we are all aware of Internet commerce, and most of us already buy or sell things through the Internet. Therefore, when you see the topic in the syllabus, you will think about such concepts but the most important thing in this chapter is search engine marketing.

Tourism Marketing

What is tourism?

Tourism includes all of the travelling and staying activities of people which are outside of their normal living place. These activities can be for business, health, leisure etc. and time period of this experiential service should be less than one year.

Motivation is the most crucial driver of tourism activities of customers. It can be explained as “feeling a driving force against or towards an object”. As a tension occurs between the current situation and the ideal situation, a person is motivated.

Tourism Marketing is the managerial process of anticipating and satisfying existing and potential visitors’ wants more effectively then competitive suppliers or destinations. The management of exchange is driven by profit, community gain, or both; either way long-term success depends on a satisfactory interaction between consumer and supplier. It also means securing environmental and societal needs as wee as core consumer satisfaction. They can no longer be regarded as mutually exclusive.

There are two important aspects of tourism: It is perishable and it is experiential. Perishability means that tourism services should be consumed as soon as they are produced. It is also experiential because people have specific experiences when they consume it. Here, ‘word of mouth’ also gains importance.

Tourist Typologies:

  • Amusement; main aim is fun.
  • Change; main aim is to escape from routine everyday life, to relax.
  • Interest; main aim is to search for interesting vistas.
  • Rapture; main aim is self-discovery.
  • Dedication; main aim is authenticity.

Segmentation of Tourism Marketing:
  • Demographic. Young vs. old tourists. For example, a company may divide its potential customers to young and old regarding the age 30. It may take people under 30 as ‘young tourists’ while over 30 ‘old tourists’.
  • Geographic. Italian vs. American tourists.
  • Benefit Segmentation. Tourists motivated by rest and relaxation vs. action and challenges.
  • Behavioral. Skiers vs. Sightseers.
  • Psychographic. High income tourists vs. low income tourists. For example, tourism agency company may try to provide tours abroad to high income tourists, and for low income tourists, they may serve domestic tours.

Requirements for Effective Tourism Segmentation:

  • Differentiable
  • Measurable
  • Accessible
  • Substantial
  • Actionable

Importance of segmentation in tourism:

To gain competitive advantage, companies should specify on different types of tourism. For example, at Olympos, there is a hotel which name is Kadir’s Tree Houses. This hotel has not swimming pool, luxury beds. They have bungalows and tree houses. Generally, old people do not prefer it but many young people stay in this hotel. This situation adds a value against their competitors.

In Our Opinion:
In this chapter, you will be able to see further about tourism marketing even if you think you have a basic idea. Before listening to this chapter, when you hear the term ‘Tourism Marketing’, simply hotels or summer resorts will come to your mind. But after knowing much more about the concept, you will be aware of the fact that tourism marketing also covers museums, historical sites, and so on.