1. Oklahoma State University
MARKETING MANAGEMENT
Stephen J. Miller
Oklahoma State University
MKTG 5133-MG 720
Lecture Week 2

2. Old Economy vs. New Economy
Organize by product units
Focus on profitable transactions
Look primarily at financial scorecard
Focus on shareholders
Marketing does the marketing
Focus on customer acquisition
Measure sales
Organize by customer segments
Focus on customer lifetime value
Look also at marketing scorecard
Focus on stakeholders
Everyone does the marketing
Focus on customer retention/growth
Measure customer satisfaction

3. Customer Perceived Value
The organization will succeed through profitably providing delivered value to the customer that exceeds that of competitors. CPV represents the difference between total customer value and total customer cost as judged by the customer.

4. Customer Delivered Value Components

5. Customer Lifetime Value (CLV)
The present value of the stream of future profits expected over the customer’s lifetime purchases. The question: Is it profitable to seek, attract, serve, and retain a given customer or group of customers?

6. Typical CLV Assessment Factors
Product design/innovation
Promotion
Post-sale service
Margins
Lifetime sales
Goodwill to others

7. Credit Card Profitability

8. Customer Relationship Management
The process of managing detailed information about individual customers and carefully managing all the customer “touchpoints” with the aim of yielding CLV through customer loyalty

9. Attracting and Retaining Customers
Five levels of investment in customer relationship building
Basic marketing
Reactive marketing
Accountable marketing
Proactive marketing
Partnership marketing

10. Strategic Market Planning
A managerial process of developing and maintaining a viable fit between the organization's objectives, skills and resources and its changing marketing opportunities.

11. Strategic Business Unit
A business unit within the organization that can be planned independently, has a defined set of competitors, and possesses decision making autonomy.

12. The Boston Consulting Group’s Growth-Share Matrix
20%-
18%-
16%-
14%-
12%-
10%-
8%-
6%-
4%-
2%-
Market Growth Rate
Stars 5 4 3 ?
Question marks 2 1
Cash cow 6
Dogs 8 7
10x x 2x 1.5x 1x
Relative Market Share
.5x .4x .3x .2x .1x

13. SBU Options
Build
Hold/Defend
Harvest
Divest

14. MARKET ATTRACTIVENESS Selectivity/earnings
The GE Model
Strong
Medium
Weak
BUSINESS STRENGTH
1.00
2.33
3.67
5.00
MARKET ATTRACTIVENESS
5.00
3.67
2.33
1.00
Low
Medium
High
Relief
valve
Invest/grow
Selectivity/earnings
Harvest/divest
Flexible
diaphragms
Fuel
pumps
Aerospace
fittings
Clutches
Hydraulic
Joints

15. Intensive Sales Growth Options
1. Market
penetration
strategy
Current
markets
Existing
products
3. Product
development
strategy
New
products
2. Market
development
strategy
New
markets
(Diversification
Strategy)

16. Organizational Integration
Horizontal
Vertical