Principles of Marketing Notes Week 3 January 26, 2016- Test 1
January 28, 2016
∙ NOT IN THE BOOK- Value creation/ value appropriation Hover board- there are a lot of brands out there (a lot of knock offs came out quickly.)
Value of creation- creating products with value value appropriation- three main groups- firm, society and competitors
You have to decide how you appropriate value back (and if you want to)
Jonas Salks left $7 billion on the table because he didn’t patent his vaccine- did this on purpose
∙ Value creation influences the potential magnitude
of the advantage……value appropriation influences the amount of the advantage the firm is able to capture and the length
of time the advantage persists
∙ Another Example of this- Johnson and Johnson- Tylenol- a lot of times companies move on to something else when generic brands hit the market. Tylenol didn’t do this- they made the brand so recognizable that this is the brand we go to
∙ Pediatric Easy Dosing System- MeDirect- created by Michael Jerome. He patent his product
∙ Wikipedia- they get their money from donations because they believed information should be available to everyone. They could have used ads but they did not. We also discuss several other topics like What is required to make atp?
∙ Air Jordans- Secondary market- the price goes up a lot from what Nike sold them for when people re-sell them to collectors. Nike could figure out which shoes will go for extreme prices and set the prices for the shoes- but instead they allow the secondary market to occur.
∙ Is marketing more related to value creation or value appropriation? Typically marketing from a firm standpoint as a value of appropriation tool. Value creation- R&D, Supply and chain Coordination, Co-creation Don't forget about the age old question of What are the major evolutionary trends?
Value appropriation- patents, branding, advertising. Basically firms have to figure it out
∙ Marketing strategy- Specifies a target market and a marketing mix
Target Market-a fairly homogenous group of
Customers to whom a company wants to appeal.
∙ Marketing mix: The controllable variables the
company puts together to satisfy the target
∙ Target- Verifying some element of the mix for a target market (rifle approach)
Mass- Aiming at “everyone” Aiming at “everyone” with the same ∙ mix (shotgun approach)
∙ Coke uses target marketing- they develop several variation of products. (if they did mass marketing they would just have coke)
∙ Is there anyone who engages in mass-marketing? Google decent example- electric company- but there are no great examples for the most part.
∙ Why do companies engage in targeted marketing? We hope that incremental amount of money that it takes to target will be off set by the profit that can be brought in.
∙ Making marketing accountable- Customer lifetime value total stream of purchases a customer may contribute over their lifetime (i.e. length of relationship)
∙ Customer equity- the expected profitability FROM A FIRMS CUSTOMERS OVER SOME PERIOD OF TIME- you can now calculate how much your customers are worth- these calculations can change the equity We also discuss several other topics like What does the monroe doctrine state?
If you want to learn more check out How does variety of lean protein affect eating pattern?
We also discuss several other topics like What is relative frequency and cumulative frequency?
We also discuss several other topics like Why does the landscape look the way it does?
∙ The Marketing Mix (the 4 P’s) - Product, price, place, promotion- how to make a product more attractive to customers you have to try to find the perfect combination of these 4 P’s. This idea came from a goods kind of economy- we are now a serive economy