Appendix: Transcripts

Chapter 9.1 The Marketing Mix: Applied to the Golf Industry

Video: Value Creation Through the Marketing Mix by Waterbergh Management

Value Creation Through the Marketing Mix
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[Text on screen: “Value Creation Through marketing. McGraw Hill education. iSeeit!”]

NARRATOR: The Hernandez family is dropping their youngest daughter, Gabby, off for her freshman year at college. But before the proud parents say their goodbyes, they decide to head down the block to grab a cup of coffee. It sounds like a simple proposition. But for the Hernandez family and billions of other consumers, a cup of coffee means different things to different people.

Gabby loves a good independent coffee spot that utilizes artisanal beans. Her mom, Marsha, prefers a coffee chain like Starbucks that delivers a consistent experience no matter what city she’s in. And Gabby’s dad just wants a plain cup of decaf. To him, coffee is best when it’s plain, hot, and cheap– three consumers, three very different ideas about the value of that cup of joe.

Value looks at what the customer gets relative to what they give up. If the customer gets back more than what he gives up, that’s a successful value exchange. But if the customer gets back less than what he gave up, well, he’s not likely to make a return visit. Creating value is essential. In fact, it is the fundamental purpose of marketing.

Businesses depend on the right marketing mix comprised of the four P’s to create the maximum value for their target customers.

[Text on screen: Product, price, place, promotion]

Gabby thinks of coffee in terms of an experience. She enjoys independent coffee places that cultivate a cozy vibe, offer free Wi-Fi [PLACE], and use only local artisanal beans [PRODUCT]. She knows her coffee is going to take longer to make and cost more [PLAIN COFFEE $3.00: PRICE]. But in Gabby’s mind, she’s getting back more than what she’s giving up. It’s a positive value exchange.

When Marsha thinks about coffee, she sees the value in a business model like $5– high quality coffee drinks made to order quickly conveniently [FOOD MART FIVEBUCKS EXPRESS: PLACE] and consistently [COFFEE: PRODUCT] for what she considers a fair price [PRICE], whether she’s inside her local grocery store or visiting someone on the other side of the country. Gabby’s dad, however, has no interest in all that fancy stuff. He’s happy refilling his travel mug for $0.25 [REFILLS ONLY 25 CENTS WITH PURCHASE: PROMOTION] at his local donut shop [PLACE] and moving on with his day. It’s no frills, just straight drip [PRODUCT] that’s priced right [PRICE] and hits the spot.

Each family member relies on promotions to become aware of the different value propositions coffee marketers offer, as well as the availability of product attributes and benefits that matter to them. So the definition of value shifts depending on what each customer is looking for. It’s up to every business, whether they provide a good, service or idea, to maximize value and satisfy their customers’ needs by creating their own special blend of the four P’s.

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[Text on screen: “McGraw Hill Education. iSeeit!”]