SPRING Section.21 T/R 9:00-10:20 K-MEC 2-65 Teaching Fellow: Brian Sullivan TF office hours: Thurs 12:00-1:30

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1 B MARKETING CONCEPTS AND STRATEGIES Prfessr Geeta Menn Office: K-MEC 9-74; Office hurs: Tuesdays 12:30-1:30 pm and by appintment SPRING 2005 Sectin.21 T/R 9:00-10:20 K-MEC 2-65 Teaching Fellw: Brian Sullivan TF ffice hurs: Thurs 12:00-1:30 Sectin.22 T/R 10:30-11:50 K-MEC 2-65 Teaching Fellw: Marc Mehlman TF ffice hurs: Thurs 12:00-1:30 COURSE OVERVIEW This curse intrduces yu t the cncepts and skills essential in marketing strategy. In simple wrds, marketing is the part f business strategy that requires firms t satisfy cnsumer needs in a manner that makes their prducts and services attractive t cnsumers, while at the same time helping the firm achieve its bjectives. Withut custmers wh prvide revenue and prfit by buying a firm's prducts and services (this includes the "prducts" f nt-fr-prfit rganizatins), firms have n value - they eventually g ut f business and the rest f business strategy is pintless. Effective marketing strategy requires the firm t create a marketing mix where all elements f its marketing strategy wrk well, and wrk well with each ther. These elements include much mre than the fur P's yu may have heard abut - prduct, price, prmtin, and place. Fr simplicity this syllabus refers t a firm's ffering as a "prduct," but this can refer t a tangible prduct, a service, r even a behavir change - think f an institutin dedicated t reducing drunk driving r increasing literacy. It will als refer t "prfit," but keep in mind that many gvernment and nt-fr-prfit rganizatins measure "prfit" using nn-mnetary bjectives. COURSE OBJECTIVES The verall bjective f this curse is t equip yu with knwledge f marketing. We will take the perspective f a marketing manager wh needs t develp, evaluate and implement effective marketing strategies. The mre specific bjectives are: T acquire an understanding f basic marketing cncepts. T understand the strategic rle f marketing. T gain an understanding f the elements f the marketing mix and their interactin. T identify and address the key decisins facing marketing managers. T practice the prcess f analyzing a marketing situatin r pprtunity, frmulating market strategy, and develping and implementing a marketing plan. 1

2 REQUIRED READINGS Readings shuld be cmpleted befre the sessin fr which they are assigned. Yur curse readings cme frm the fllwing surces: Textbk: Marketing Management (2004, 2 nd editin), by Russell Winer. Case Packet: The assigned cases are available fr purchase at the NYU prfessinal bkstre. Outside Readings: I nrmally incrprate examples frm surces such as The Wall Street Jurnal, The New Yrk Times, and Business Week. These examples are prvided in an effrt t get students t pay mre attentin t current events as they relate t curse material. They may be used as a basis fr class discussin. Students will be respnsible fr understanding the cntents f these examples and handuts. Curse materials are available using Blackbard. G t and lg in with yur Stern ID and passwrd. Click n B (Marketing Cncepts & Strategies). It is an imprtant part f the curse and yu will want t refer t it frequently fr infrmatin n each sessin. The site cntains: Imprtant annuncements The curse syllabus Cpies f the Pwerpint slides we will use in class each day (I try t pst slides ne week prir t each lecture; please nte that slides I use fr case discussins will be psted nly after the class t encurage yu t think n yur wn.) Handuts fr that class Assignments due in that class perid YOUR COURSE GRADE Yur grade is a cmpsite f the fllwing (discussed in mre detail in the next sectin): Class Participatin 10% 5 Brief case recmmendatins (One-pagers) 10% Majr case assignments The New Beetle 15% TiV % Mary Kay Csmetics 20% Final Exam 30% If there is a prblem with the grade a student receives n an assignment: If a mistake has been made in the grading f an assignment r exam, please frmally write me a nte that describes the mistake made in the grading and submit that nte with the riginal graded dcument. Please nte that any request fr a reassessment f a judgment call made in the grading f any answer will result in the re-grading f the ENTIRE dcument. 2

3 COURSE COMPONENTS The curse uses a cmbinatin f lectures, class discussin, recent press articles, case studies, assignments and exams, as fllws: 1. Class Participatin Students in management educatin learn a lt frm each ther, drawing n different experiences, viewpints and pinins unique t each individual student. Class participatin is an imprtant part f marketing curses. Yu are expected t cntribute t class discussins f readings, cases and current events. Participatin will be mnitred and credit will be given based n the QUALITY f yur participatin in the curse. Yu dn t have t speak very frequently r in every class t earn the highest pssible class participatin grade. It is what yu say and hw it cntributes t the class discussin that matters, nt hw much yu say r hw ften yu say smething! It is imprtant fr yur classmates, and me, t knw wh yu are. Please help us ut by using yur desk name card during every class sessin in the semester. This helps yur classmates, and me, learn and remember wh yu are, and makes it easier t call n each ther by name. Please cme t class n time and make sure yu give yurself enugh time t settle dwn. Class will begin prmptly at the time it is suppsed t start. Remember, if yu're nt in class, yu may miss yur pprtunity t participate if yur name is called and this will lead t negative repercussins n yur class participatin grade. Fr the mst part, class participatin will be vluntary. Hwever, in rder t encurage a wider participatin, there will be days when I cme t class with a list f randmly generated names; I will then call upn these peple t answer questins in class these questins culd be small nes r big nes, but yu have t be in class in rder t participate, and this will cunt twards yur class participatin grade. Whenever yu knw in advance that yu will be absent, please let me knw. If yu miss class due t a pressing emergency, please prvide me with the necessary dcumentatin t excuse yur absence. In either case, be sure t btain cpies f ntes frm yur classmates t insure that yu d nt miss any imprtant material. In sum, in rder t maximize n yur class participatin grade: Attend class and be punctual Read the assigned chapters/cases and be prepared fr class Participate by ffering insightful cmments that mve the class discussin frward 2. Cases The cases describe real-life marketing prblems. They are interesting examples that help us discuss and apply marketing cncepts and strategies and give yu an pprtunity t make and justify marketing decisins. There is n "right" answer t a case, but there are many weak answers that are the result f inadequate analysis. We are usually nt cncerned with what happened t a firm after a case ends, but rather what we can learn by identifying the prblems in the case, and then using cncepts frm the curse t create effective marketing strategies that address them. The amunt yu learn frm a case depends n hw carefully yu read and analyze it. Yu are expected t read each case thrughly and cme t class ready t cntribute t case discussins. The syllabus cntains a set f issues and study questins fr each case that help fcus yur effrt 3

4 (see Appendix). Please read these carefully befre reading a case. Hwever, these questins will nt always cver every imprtant issue r every issue that we will discuss. 3. Brief Case Recmmendatins (a.k.a. One-Pagers) At the start f a class scheduled fr a case discussin, yu are required t hand in a brief (less than ne page, duble-spaced) recmmendatin fr any five f the seven cases that we discuss that are nt used fr written case assignments (see cases marked with an * in the curse utline n page 6 f this syllabus). These ne-pagers earn 10% f yur grade (i.e., 2% per case). They als help yu earn class participatin pints since by preparing them yu prepare yurself t cntribute mre t the class case discussin. In this ne-pager, yu have t: (i) describe what yu think are the tw r three majr prblems in the case, and (ii) make a recmmendatin fr each prblem. [Nte that yu are nt expected t answer the questins appended t this syllabus; these questins are meant fr guiding the case discussin in class. I get this questin several times frm students during the semester; if yu ask me this questin, I will take it as an indicatin that yu did nt read this syllabus!] The bjective f these ne-pagers is t get yu thinking in mre depth abut a case, and take a stand n the key issues, befre class begins. Beginning with an pinin helps create a mre interesting class case discussin, even if yu change yur pinin during class. Each ne-pager will be graded + (2%), (1.5%) r - (1%). On an average, I expect that mst peple will get a fr this ne-page assignment. Yu will get a + fr excellent perfrmance, and a - fr a belw-par, but acceptable, assignment. If yur ne-pager is unacceptable, yu will get a zer fr that assignment. Yu will be ntified f yur grade by yur TFs via within a week f submissin (please nte that there may be variatin in the feedback time depending n hw busy the TFs are as these cases cme in). Please make sure that these ne-pagers are yur wn wrk. Again, they are due at the start f class n exceptins! Please hand in hard cpies f yur ne-pagers. Sft, electrnic versins will nt be accepted!. 4. Majr Case Assignments Yu are respnsible fr cmpleting and submitting three majr case assignments. Each is an indepth analysis f a case. The three cases will give yu experience at applying what yu have learned in the curse t slve specific marketing prblems, and t cmbine different elements f the marketing mix t create marketing strategy and tactics, and make marketing decisins. They als give yu experience at describing and justifying yur decisins and the ratinale fr them in a clear and effective manner. Late assignments will nt be accepted. These cases are: The New Beetle (t be dne in grups f 3-5 students; wrth 15% f the grade) TiV 2002 (t be dne in grups f 3-5 students; wrth 15% f the grade) Mary Kay Csmetics (t be dne individually, r in grups f up t 5; wrth 20% f the grade) The assignment questins will be psted n the curse web site tw weeks befre they are due. Yu may discuss general cncepts in these assignments with yur classmates, if yu wish, but the specific analysis, recmmendatins and ratinale, and writing shuld be yur grup s wn wrk (New Beetle and TiV 2002) r yur wn r yur grup's (Mary Kay). 4

5 5. Exam The Final Exam earns 30% f yur grade. The exam will cver all material discussed in class and all reading assignments (textbk, class ntes, cases and ther supplementary reading material). The exam is pen-bk/pen-ntes, but rumr has it these external prps d nt help! Yu either knw yur material because yu have attended class, dne yur readings and kept up with yur assignments, r yu d nt. Yu may als bring a calculatr. CLASSROOM ETIQUETTE Out f respect fr the ther students in yur class, it is imprtant fr yu t fcus yur full attentin n the class, fr the entire class perid. While mst students d bserve prper decrum, it takes nly a few t bther the entire class, and Stern students have cmplained t the schl abut students wh use class time fr ther purpses r act in a disruptive manner. In a busy, electrnic age, prper class etiquette means bserving the fllwing standards: Arrive fr class n time. If fr sme reasn yu d need t arrive late r leave early, please let me knw in advance if pssible. Please enter and exit quietly by the rear dr. Turn ff yur cell phne. The nly material yu shuld have in frnt f yu is reading cncerned with the class. Reading f any ther material, such as newspapers r magazines, r ding wrk frm anther class, is nt acceptable. The nly reasn t use a laptp during class is t take class ntes. Yu shuld nt be cnnected t the internet r Stern wireless system during class, unless yu are specifically instructed t d s. Yu are nt permitted t use any srt f instant messaging during class. Any vilatin f these standards fr laptps will be cnsidered as very serius. Thank yu fr yur c-peratin in this very imprtant matter! 5

6 COURSE SCHEDULE SESSION DATE TOPIC READINGS (Cases in bld) & ASSIGNMENTS Curse Intrductin 1 T, 1/25 What is Marketing? Chapter 1 Cnsumer Decisin Making 2 R, 1/27 Individual Cnsumer Decisin Making I Chapter 4: pages T, 2/1 Individual Cnsumer Decisin Making II 4 R, 2/3 Organizatinal Decisin Making Chapter 5 CASE DISCUSSION Mediquip* 5 T, 2/8 The Hype abut Superbwl Advertising CASE DISCUSSION Calyx & Crlla* 6 R, 2/10 CASE DISCUSSION (cntinued) Identifying Segments and Prviding Value 7 T, 2/15 Segmentatin Strategies Chapter 2 & Chapter 4 (pages ) G t this website and d VALS survey: 8 R, 2/17 Psitining and Market Maps 9 T, 2/22 Prviding Custmer Value Chapters 6 & R, 2/24 CASE DISCUSSION The New Beetle Majr Case Assignment #1 Due Getting t Knw Yur Cnsumer thrugh Marketing Research 11 T, 3/1 Overview f Marketing Research; Chapter 3: pages Fcus Grup Discussins 12 R, 3/3 Cnsumer Surveys and Questinnaire Basics Chapter 3: pages Prduct Decisins 13 TBD Guest speaker Rheingld Beer 14 R, 3/10 CASE DISCUSSION TiV T, 3/15 R, 3/17 SPRING BREAK NO CLASS 15 T, 3/22 New Prduct Develpment Prcess Chapter 8 16 R, 3/24 TiV 2002 CASE DISCUSSION Majr Case Assignment #2 Due 17 T, 3/29 Managing Existing Prducts Chapter 7 18 R, 3/31 CASE DISCUSSION Kdak Funtime* Pricing Decisins 19 T, 4/5 Pricing Strategies CASE DISCUSSION Chapter 12 Cmputrn* 20 R, 4/7 Behaviral Pricing Issues Place (Distributin) Decisins 21 T, 4/12 Internatinal Marketing 22 Chapters 10 & 11 CASE DISCUSSION R, 4/14 Dell Online* 23 T, 4/19 CASE DISCUSSION Mary Kay Csmetics Majr Case Assignment #3 Due Prmtins Decisins 24 R, 4/21 The Prmtins Mix Chapters 9 & T, 4/26 Advertising Appeals Curse Wrap-Up 26 R, 4/28 Curse Review W, 5/4, 1:30-3:30 FINAL EXAM Yu have t chse five f these seven cases fr yur One-Pagers. 6

7 APPENDIX: CASE DISCUSSION QUESTIONS (Fr class discussin purpses nly; nt fr yur One-Pagers) CASE #1: CALYX & COROLLA Since the elements f the marketing mix are interdependent, it is imprtant t get an early verview f the entire set f marketing functins at a firm. Calyx & Crlla gives an excellent intrductin t the kinds f prblems and decisins that marketing addresses, the activities cvered by marketing strategy, and hw different elements f the marketing mix depend n each ther. It als gives yu an pprtunity fr sme initial experience at marketing decisin-making, t use several kinds f quantitative analyses that help yu make infrmed marketing decisins and justify them t thers. Dn't be cncerned if yu d nt yet understand all f the terminlgy in the case. We will spend tw sessins n this intrductry case. Tw general questins fr this case are: 1) What are the imprtant issues and decisins that C&C faces in this case, and which d yu think are mst imprtant? 2) What is C&C's current marketing strategy? Given this strategy and the marketing envirnment, what is the best way fr C&C t grw? Hw must C&C change its strategy t achieve this grwth, and what resurces will this require? T help yu think abut these tw questins frm the perspective f particular areas f marketing strategy, the fllwing questins address issues frm each f the majr cntent areas in the marketing mix. As yu think abut these questins, yu will n dubt see that C&C's strategy in ne area affects its strategy in thers - this dependence amng different elements f the marketing mix is a very imprtant part f marketing strategy. Cnsumer Decisin Making What are the cnsumer needs that C&C satisfies? Hw d these cmpare with needs satisfied by ther flwer sellers? Hw d cnsumers make the decisin t buy flwers frm C&C, and hw can C&C try t influence their decisin making prcess? Identifying Custmer Segments Hw wuld yu describe the target cnsumer segment fr C&C flwers? Is this the mst apprpriate target segment, and shuld the firm try t grw by expanding t reach ther segments? Hw much is an existing custmer "wrth" t C&C? A new custmer? Using Marketing Research D yu think C&C shuld g ahead with the Minneaplis/St. Paul test? 7

8 Prduct Strategy What is the "prduct" that C&C sells, and hw is it "psitined" (hw des it cmpare t cmpeting prducts and cnsumer needs)? Hw might yu describe this prduct in terms f cnsumer needs? What variety f prducts is included in C&C's existing prduct line? Hw can C&C decide which new prducts t add t this line as ne way t grw? What des the brand name "Calyx & Crlla" mean t cnsumers, and shuld C&C try t change this meaning? Pricing Strategy Hw des C&C decide what price t charge cnsumers fr its prducts? Hw much f this price ges t C&C, and hw is the rest divided amng the distributrs that C&C uses as partners? Hw much mre expensive are C&C flwers cmpared t flwers bught frm a flwer shp r sent thrugh FTD, and why might a cnsumer be willing t pay this higher price? Hw sensitive is C&C's prfit t changes in its csts fr: a) flwers, b) shipping, and c) catalgs? Cmmunicatin and Advertising Strategy What message is FTD cnveying in its cmmunicatins strategy and what is the bjective f this message? Hw are FTD and its member shps allcating their advertising budgets acrss the year and acrss different media, and what is the ratinale fr this allcatin? Why is it different fr FTD versus member shps? Hw is C&C currently allcating its cmmunicatins budget t different prgrams such as advertising and catalgs, and its prmtins budget t prmtins such as the Blmingdale's and Cntac tieins? What are the bjectives f each prgram? D yu think the present balance between advertising and prmtin expenditures is a gd ne? Evaluating Cnsumer Respnse t Imprve Marketing Strategy If C&C prceeds with the advertising test market in Minneaplis/St. Paul, hw can it determine if the results supprt that expanding this cmmunicatins prgram and budget t a reginal r natinal level will be prfitable, and that increasing the advertising budget is an effective way fr C&C t grw? Try t frame an answer t this questin in general terms, withut yet using calculatins. Fr Sessin 8 yu will be asked t use quantitative analysis t arrive at a specific answer. Shuld C&C wait until the test market is ver t set standards fr determining whether r nt it succeeded, r d this befre the test market begins? Hw can C&C determine whether it is charging the price that maximizes its prfits, and hw des cnsumers' price sensitivity affect this? Chsing Partners in Marketing Strategy Hw is C&C's distributin system different frm that used by ther flwer sellers, and why has C&C chsen this distributin system? Why des C&C rely n flwer sellers that it cannt cmpletely cntrl instead f grwing its wn flwers? Hw des C&C use persnal selling in its marketing strategy? 8

9 CASE #2: MEDIQUIP Half f the value f gds and services in mst industrialized cuntries are purchased by rganizatins rather than husehlds. These rganizatins include private businesses, gvernment agencies, and ntfr-prfit rganizatins. Firms selling t these rganizatins must understand hw they make purchase decisins. The Mediquip case prvides a gd illustratin f imprtant issues in rganizatinal purchasing, and the challenges faces by firms selling t rganizatins. Wh are the members f the buying center fr the CT scanner at Lhmann University Hspital? Is this buying center an fficial entity? Hw can Kurt Thaldrf try t find ut wh is in the buying center as quickly as pssible? Will everyne at LUH help him btain this infrmatin? D yu think it is pssible fr Thaldrf t knw precisely wh is in the buying center? Hw d the members f the buying center have different interests and bjectives? Where are the greatest areas f cnflict? Hw can Thaldrf btain this infrmatin? What aspects f Mediquip's CT scanner shuld Thaldrf emphasize t each member f the buying center? Can he emphasize different aspects t different peple withut being duplicitus? Is it Thaldrf's fault that LUH did nt buy a CT scanner frm Mediquip? Is there anything he shuld have dne differently? CASE #3: THE NEW BEETLE Majr Case Assignment #1 Questins T Be Annunced CASE #4: RHEINGOLD BEER Why did the riginal Rheingld brand succeed and then decline? Are any f these reasns, which describe events frm decades ag, relevant t the best marketing strategy fr Rheingld tday? D yu think New Yrk City needs a new beer brand? Wuld yu have prpsed reviving the brand name Rheingld fr a new beer, r wuld yu have created a new brand name? What d yu think f Rheingld s strategy f generating wrd-f-muth publicity by fcusing n selling the beer in trendy bars n Manhattan s Lwer East Side? At this stage, d yu think Rheingld shuld fcus mre n wrd-f-muth publicity r n advertising? Rheingld is fcusing n a target segment that is years ld. Why? Are there any ther ways that yu wuld define Rheingld s target segment? What d yu think the target segment shuld be? What is Rheingld ding t btain distributin in bars and in stres? D yu think it needs t make any change t this strategy? Wh are Rheingld s majr cmpetitrs in the beer market in the New Yrk City metrplitan area? What psitining has Rheingld chsen t differentiate itself frm these cmpetitrs? Wuld yu make any changes t this psitining? What are the biggest challenges that Rheingld faces in rder t succeed? Which f these 9

10 challenges are the mst imprtant and require the mst immediate attentin? Hw wuld yu recmmend Rheingld allcate its limited resurces t address these challenges? CASE #5: TIVO TiV is a case that tuches n issues f marketing strategy fr a new prduct, cnsumer behavir and ther cntemprary issues related t marketing in the infrmatin age. Please pay attentin t the fllwing questins when yu read the case: Why d firms need t develp new prducts? What is TiV's cmpetitin, and where are these prducts in the prduct life cycle? Which factrs affect hw quickly cnsumers are likely t adpt TiV? Which f these wrk in TiV's favr and which against it? Hw des the cmpetitin cmpare n these factrs? What kinds f cnsumers are mst likely t be Innvatrs and Early Adpters fr TiV, versus Early Majrity? What can TiV d t crss the "chasm" between these tw grups? Shuld its initial marketing effrts fcus n "crssing the chasm" t the latter, r attracting Innvatrs and Early Adpters? Hw shuld TiV psitin its prduct? Hw des yur answer t 1-3 affect this decisin? CASE #6: TIVO 2002 Majr Case Assignment #2 Questins T Be Annunced CASE #7: KODAK FUNTIME What are the reasns fr Kdak s the lss f market share? If Kdak maintained the status qu, what is yur assessment f the develpment f the market? What shuld Kdak s bjective be at this pint? Cnsider the trade-ffs between market share, prfitability and brand equity. Evaluate the general cncept f the Funtime prpsal and the implementatin details. What are sme f the ther actin plans that Kdak shuld pursue? Fr example, what abut a price cut n the flagship Gld Plus brand? CASE #8: COMPUTRON Hw far des Zimmermann have t cut price t have a chance? What is gained by bidding lw? What is lst by bidding lw? What is gained by bidding high? Hw d yu appraise the market cnditins? The cmpetitin? What is Knig s psitin (i.e., hw is the purchasing vice president likely t think abut the prblem)? 10

11 What is Zimmerman s psitin as manager f the Eurpean Sales Divisin? What shuld he d? CASE #9: DELL ONLINE Hw wuld yu judge Dell s nline success? What advantage des Dell derive frm its nline success? Is it a big deal? Hw substantial and sustainable are these advantages cmpared t its cmpetitrs? Which cmpetitrs shuld Dell wrry abut? Why? What recmmendatins d yu have fr Dell t imprve their peratins ver the internet? CASE #10: MARY KAY COSMETICS Majr Case Assignment #3 Questins T Be Annunced 11