1. http://mywebspace.wisc.edu/rkamath marketing 300 discussion section

2. http://mywebspace.wisc.edu/rkamath announcements?

3. http://mywebspace.wisc.edu/rkamath agenda – administrative stuff – marketing recap – market share – customer lifetime value – group exercise

4. http://mywebspace.wisc.edu/rkamath exams and makeup Exams on Monday, March 1 and Monday, April 12 5:40 – 6:30pm If you need a makeup, please respond to my email no later than Friday, 5:00pm.

5. http://mywebspace.wisc.edu/rkamath first discussion question due next week… if you choose to do it. 2-3 pages is expected length Use charts, tables, and bullet points as much as possible.

6. http://mywebspace.wisc.edu/rkamath Recap What is marketing?

7. http://mywebspace.wisc.edu/rkamath what is marketing? The process of planning and executing the development, pricing, promotion, and distribution of goods, and services to create exchanges that satisfy consumer and organizational goals. Short answer: Marketing is a process of value creation.

8. http://mywebspace.wisc.edu/rkamath COMPANY CONSUMER MARKETING

9. http://mywebspace.wisc.edu/rkamath last week What were we talking about?

10. http://mywebspace.wisc.edu/rkamath Recap Last week, we were thinking about developing a gum…

11. http://mywebspace.wisc.edu/rkamath Strategy What is strategy? What is the goal?

12. http://mywebspace.wisc.edu/rkamath market share Definition: the percentage of the overall dollar sales of a product category that a company has control of.

13. http://mywebspace.wisc.edu/rkamath market share total gum market ($5.2 billion / year) SuperMega Candy (30%) Wrigley (70%)

14. http://mywebspace.wisc.edu/rkamath current gum buyers potential gum buyers

15. http://mywebspace.wisc.edu/rkamath growing market share (current) total gum market ($5.2 billion / year) total gum market ($5.2 billion / year) SuperMega Candy (30%) Wrigley (70%) SuperMega Candy (50%) Wrigley (50%)

16. http://mywebspace.wisc.edu/rkamath growing the pie (potential) total gum market ($5.2 billion / year) total gum market ($10.4 billion / year) $450 million $900 million

17. http://mywebspace.wisc.edu/rkamath SWOT Analysis Strengths What are we good at? Weaknesses What are we bad at? Opportunities What can we do that we’re not doing? Threats What are some of the dangers we face?

18. http://mywebspace.wisc.edu/rkamath External Market Environment 4 External market forces - Economic - Technological - Political and legal - Cultural and social

19. http://mywebspace.wisc.edu/rkamath Economic Environment Economic - Is the market for our product category growing? - Do people have money to spend on our product?

20. http://mywebspace.wisc.edu/rkamath Technological Environment Technological - how have changes in technology changed demand and consumer expectations?

21. http://mywebspace.wisc.edu/rkamath Political and Legal Environment Political and Legal - Are there restrictions on how people can buy or use the product?

22. http://mywebspace.wisc.edu/rkamath Cultural and Social Environment Cultural and social - What is the public perception and common beliefs about our product category?

23. http://mywebspace.wisc.edu/rkamath Cultural and Social Environment

24. http://mywebspace.wisc.edu/rkamath Question Why would a company take back shoes bought 4 years ago? The value of a customer is often more than the cost of a pair of shoes. Why?

25. http://mywebspace.wisc.edu/rkamath Consider the shopping experience If you feel like a store is helping you and not trying to cheat you, you’re more likely to develop a positive attitude about the business. If you have a positive attitude about a business, you’re likely to want to keep doing business with them. Think of this as a relationship.

26. http://mywebspace.wisc.edu/rkamath Question Why would a company take back shoes bought 4 years ago? How much is it worth to keep a customer?

27. http://mywebspace.wisc.edu/rkamath Customer Lifetime Value Keeping a customer could be worth thousands of dollars, maybe even millions!

28. http://mywebspace.wisc.edu/rkamath Customer Lifetime Value In 1977, Debbi Fields opened the first Mrs. Fields Cookies…

29. http://mywebspace.wisc.edu/rkamath Customer Lifetime Value

30. http://mywebspace.wisc.edu/rkamath Customer Lifetime Value The first company she went to said… So she went with the second company.

31. http://mywebspace.wisc.edu/rkamath Customer Lifetime Value Moral: companies should do everything they can to keep every single customer …ummm, no.

32. http://mywebspace.wisc.edu/rkamath Meet Joe

33. http://mywebspace.wisc.edu/rkamath Customer Lifetime Value

34. http://mywebspace.wisc.edu/rkamath Customer Lifetime Value Dear Joe, Thanks but no thanks. Best, Bank of America

35. http://mywebspace.wisc.edu/rkamath Naturally Joe was upset.

36. http://mywebspace.wisc.edu/rkamath Customer Lifetime Value WHY WOULD THEY DO THIS TO ME???!

37. http://mywebspace.wisc.edu/rkamath Customer Lifetime Value What’s happening on the other side of the transaction?

38. http://mywebspace.wisc.edu/rkamath Customer Lifetime Value Hmmm. On average, Joe keeps $2.41 in his account... corporate jerk

39. http://mywebspace.wisc.edu/rkamath Customer Lifetime Value It costs me more than that just to mail him statements and to field his phone calls! corporate jerk sensible businessman

40. http://mywebspace.wisc.edu/rkamath Translation Joe has a negative lifetime value for Bank of America. Joe’s going to cost more money to keep than he’ll ever contribute. In addition, he’s probably going to be better served by some other company.

41. http://mywebspace.wisc.edu/rkamath Question How does all this relate to the 4 P’s? (Hint: What is the purpose of the 4 P’s?)

42. http://mywebspace.wisc.edu/rkamath Customer Lifetime Value Deciding who is worth trying to reach and who is worth keeping is tricky but important. We’ll learn more about this next week when we talk about SEGMENTATION

43. http://mywebspace.wisc.edu/rkamath Group Project Hopefully you read over the group project description. If not, read it ASAP! Take a few minutes to form teams of 4-6 people Share email addresses, phone numbers, etc.

44. http://mywebspace.wisc.edu/rkamath For next week Write a group policy with your group using the template on Learn@UW. Make sure to address all the major points: - rules of conduct - norms of interaction - what happens if… - Please take this seriously; it will save you from group problems - Bring a hard copy AND email it to me by next week!

45. http://mywebspace.wisc.edu/rkamath See You Next Week