How To Develop An Integrated Marketing Plan For Tylenol


(Human welfare)

Consumers (Want satisfaction)

Company (Profits)

A Johnson & Johnson does, a big provider of health-care and other products, this well. Its concern for societal interests is summarized in a company document called "Our Credo," which stresses honesty, integrity, and putting people before profits. Under this credo, Johnson & Johnson would rather take a big loss than ship a bad batch of one of its products.

Consider the tragic tampering case in which eight people died in 1982 from swallowing cyanide-laced capsules of Tylenol, a Johnson & Johnson brand. Although Johnson & Johnson believed that the pills had been altered in only a few stores, not in the factory, it quickly recalled all of its product and launched an information campaign to instruct and reassure consumers. The recall cost the company $100 million in earnings. In the long run, however, the company's swift recall of Tylenol strengthened consumer confidence and loyalty, and today Tylenol remains one of the nation's leading brands of pain reliever.

Johnson & Johnson management has learned that doing what's right benefits both consumers and the company. Says former CEO Ralph Larsen, "The Credo should not be viewed as some kind of social welfare program . . . it's just plain good business. If we keep trying to do what's right, at the end of the day we believe the marketplace will reward us." Thus, over the years, Johnson & Johnson's dedication to consumers and community service has made it one of America's most admired companies and one of the most profitable.11

Preparing an Integrated Marketing Plan and Program (p36)

The company's marketing strategy outlines which customers the company will serve and how it will create value for these customers. Next, the marketer develops an integrated marketing program that will actually deliver the intended value to target customers. The marketing program builds customer relationships by transforming the marketing strategy into action. It consists of the firm's marketing mix, the set of marketing tools the firm uses to implement its marketing strategy.

The major marketing mix tools are classified into four broad groups, called the four Ps of marketing: product, price, place, and promotion. To deliver on its value proposition, the firm must first create a need-satisfying market offering (product). It must decide how much it will charge for the offering (price) and how it will make the offering available to target consumers (place). Finally, it must communicate with target customers about the offering and persuade them of its merits (promotion). The firm must blend all of these marketing mix tools into a comprehensive integrated marketing program that communicates and delivers the intended value to chosen customers. We will explore marketing programs and the marketing mix in much more detail in later chapters.

Building Customer Relationships (pp 36-45)

The first three steps in the marketing process—understanding the marketplace and customer needs, designing a customer-driven marketing strategy, and constructing marketing programs—all lead up to the fourth and most important step: building profitable customer relationships.

Our Credo

We believe our first responsibility Is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality We must constantly strive to reduce our costs in order to maintain reasonable prices. Customers' orders must be serviced promptly and accurately. Our suppliers and distributors must hove an opportunity to moke a fair profit.

We dre responsible to our employees, the men and women who workwlth us throughout the world. Everyone must be considered as an individual. We must respect thetr dignity dnd recognize their merit. Ihey must have a sense of security in their jobs.

Compensation must be fair ond adequate, and working conditions clean, orderly and safe. We must be mindful of woys to help our employees fulfill their family responsibilities. Employees must feel free to make suggestions and complaints. There must be equal opportunity for employment, development and advancement far those qualified. We must provide competent monagement, and their actions must be Just and ethicci. We ore responsible to the communities in which we live and work and to the world community as well. Wemustbegood clttens — support good works and charities and bear our fair share of taxes. We must encourage civic improvements and better health and educdtion. We must maintain in good order the property we ore privileged to use, protecting the environment and natural resources:

Our final responsibility Is to our stockholders. Business must make a sound profit. We must experiment with new ideds. Research must be cortled on. Innovative programs developed and mistakes paid for. New equipment must be purchased, new facilities provided and new products launched. Reserves must be credted to provide for odverse times. When we operate according to these principles, the stockholders should realize o fair return.

The societal marketing concept: Johnson & Johnson's Credo stresses putting people before profits.

I The customer-driven Comment | marketing strategy discussed in the last section outlines which customers the company will serve (the target market) and how it will serve them (the value proposition). Now, the company develops marketing plans and programs—a marketing mix—that will actually deliver the intended customer value. ,

Author I

Doing a good job with Comment | the first three steps ¡n the marketing process sets the stage for step four, building and managing lasting customer relationships.

Customer relationship management

The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

Customer-perceived value

The customer's evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers.

Customer satisfaction

The extent to which a product's perceived performance matches a buyer's expectations.

Customer Relationship Management

Customer relationship management is perhaps the most important concept of modern marketing. Some marketers define customer relationship management narrowly as a customer data management activity (a practice called CRM). By this definition, it involves managing detailed information about individual customers and carefully managing customer "touch-points" in order to maximize customer loyalty. We will discuss this narrower CRM activity in Chapter 4 when dealing with marketing information.

Most marketers, however, give the concept of customer relationship management a broader meaning. In this broader sense, customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, keeping, and growing customers.

Relationship Building Blocks: Customer Value and Satisfaction

The key to building lasting customer relationships is to create superior customer value and satisfaction. Satisfied customers are more likely to be loyal customers and to give the company a larger share of their business.

Customer Value. Attracting and retaining customers can be a difficult task. Customers often face a bewildering array of products and services from which to choose. A customer buys from the firm that offers the highest customer-perceived value—the customer's evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers.

Consider the "premium denim" trend that has recently sent the price of jeans skyrocketing. In the United States, for example, a pair of Paige Premium Denim jeans, for instance, starts at $169. A woman who buys a pair of Paige jeans gains a number of benefits. Owner and designer Paige Adams-Geller uses the knowledge she learned as a jeans model to design jeans from the female perspective. Says Paige, "Most of us weren't blessed with perfect genes but we're bringing you the next best thing: perfect jeans." Her denim "will lift the derriere, lengthen your legs, and slenderize your hips and thighs—all with an uncompromising commitment to feminine detail and quality." In all, says Paige, her jeans are a real value—they will fit you better and last longer. When deciding whether to purchase a pair, customers will weigh these and other perceived values of owning Paige jeans against the money and psychic costs of acquiring them.

Customers often do not judge values and costs "accurately" or "objectively." They act on perceived value. For example, as compared to a pair of less expensive jeans that you'd pull off the shelf at Gap, do Paige jeans really provide superior quality and that perfect fit and look? If so, are they worth the much higher price? It's all a matter of personal value perceptions but for many women the answer is yes. One woman notes that, for her, premium jeans always seem to fit just right, making the price irrelevant. "I work, so I have the money to buy them," she says. "I think they're worth it."12

Customer Satisfaction. Customer satisfaction depends on the product's perceived performance relative to a buyer's expectations. If the product's performance falls short of expectations, the customer is dissatisfied. If performance matches expectations, the customer is satisfied. If performance exceeds expectations, the customer is highly satisfied or delighted.

Outstanding marketing companies go out of their way to keep important customers satisfied. Most studies show that higher levels of customer satisfaction lead to greater customer loyalty, which in turn results in better company performance. Smart companies aim to delight customers by promising only what they can deliver, then delivering more than they promise. Delighted customers not only make repeat purchases, they become willing marketing partners and "customer evangelists" who spread the word about their good experiences to others (see Real Marketing 1.1).13 For companies interested in delighting customers, exceptional value and service are more than a set of policies or actions—they are a compa-nywide attitude, an important part of the overall company culture. For example, year after year, Ritz-Carlton, an operator of luxury hotels in more than 20 countries, ranks at or near

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  • stephan
    How to develop an integrated marketing plan for Tylenol?
    7 years ago

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