Friday and Saturday we began BUS633, Creating and Maintaining Customer Satisfaction. This is our Marketing module.
It’s rumored that this module rivals the finance module for “most difficult class” in the first half of the program. When I got home both Friday and Saturday my head hurt. More than after any of the finance classes.
So I’m a little nervous.
Dr. Bond (whose brother, coincidentally is named James. James Bond) said that if we’re feeling overwhelmed by the sheer amount of work and uncertainty of a marketing strategy it means we’re no longer ignorant. That made me feel a little better, but I’m still a bit scared, especially because there’s a team project and I don’t want to let my team down.
Marketing is a comprehensive discipline. It can’t really stand alone, and it really ought to infect every area of an organization. Marketing, at its root, is about defining who you are, who you’re selling to, and what it is that you sell. At least that’s my current level of understanding.
The first part we talked about on Friday was easy. It was basic transactional economics: I will only sell you X if you value X less than you value the cost (currency or barter) I charge you for X, and if I value bartered stuff/currency more than product X. A $20 pair of shoes works as a transaction for any consumer who values those shoes at $21 or more, sold by a firm that values those same shoes at $19 or less. Simple market economics, right?
Here’s the new trick: the product isn’t really the thing you’re selling. Seriously. The product is a collection of benefits that the customer (usually the purchaser) receives as a part of the transaction. A customer hires a product to do a specific job or set of jobs.
If you’re selling bottled water the benefits may include quenching thirst, hydration, or even being healthy. For a particular brand the benefit may include looking trendy while I drink it. Benefits are functional, operational, financial or personal. And the value to the customer is the total value of all benefits minus the value any sacrifice needed in acquiring, possessing or using the product. Comcast cable, for instance, may seem like a great value until you spend 2 hours on the phone with customer service trying to solve what should have been a simple problem. A bargain electronic device may seem like a great deal to one person, but its quirky design that takes more instruction or use time may put off other potential customers. This is the value equation.
When you consider a product in terms of benefits and sacrifice, rather than a physical good, it makes more sense out of competition. Perrier water has direct product competition with other bottled mineral water, but also anything else that might quench your thirst from Gatorade to Diet Coke. Failing to consider real substitutes as a part of the competitive picture is narrow sighted and will cost a firm in the long run.
And product is just one of the four P’s of Marketing: Product, Place, Promotion and Price. These four are referred to as the “marketing mix” and a major consideration of all marketing strategies.
And all that is just a fraction of what we talked about on Friday and Saturday. See why my head hurts? I’ll have more posts on marketing over the next weeks, I’m sure, but this will give you a taste of where we’re starting with BUS633.