2292 Midterm (3/7)

• Serving stakeholders of the business
• Simple idea that employee attitudes are leading indicators for the customer satisfaction which leads to value creation
• Think of it like a "three-legged" stool. All 3 legs need to be there and equal or else it falls over

• Anyone who can affect or is affected by a decision
• Culture (employees)
• Customers
• Cash (financial stakeholders)
• Community

• Talent: 'getting the right people on the bus, the wrong people off the bus'
• -- Provide proper tools, training, and leadership
• Commitment: best leaders create commitment
• -- "Committed" employees = Satisfied Customers. "Happy" or "loyal" employees doesn't mean satisfied customers
• Culture is a leg of the stool
• Values 
• Reward Systems

• Segmentation
• -- Dividing the market into groups of potential customers (called segments)
• -- Clustering in groups are differ from one another are homogeneous within
• -- Based on benefits sought by customers
• -- Based on observable characteristics of customers
• Target
• -- Evaluating each market segment's attractiveness
• -- Selecting one or more of the market segments to enter
• Positioning
• -- The marketer's effort to identify a unique selling proposition for the product to a segment
• -- Arranging for a product or service to occupy clear, distinctive, and attractive positioning

• Who are the customers?
• What is the set of needs that the product fulfills?
• Why is the product the best option to satisfy those needs?

Are the ideal customer because they are satisfied and loyal

Are what you want to avoid in a business because they talk about the hated or loved companies regardless of the topic of conversation

Are very satisfied but not very loyal like McDonald's

Are people who aren't very satisfied but have to be loyal like your cable provider because it was harder to switch carriers

Social media controls what you think about a brand rather than the advertisements

• The third leg of the stool
• Financial stakeholders are the shareholders in public companies, bankers, bond holders, and private investors
• Financial statements are comprised of the income statement, balance sheet, and cash flow
• Cash Flow is the most important because if you run out of cash you're done
• It's also the one you see the least because income statements are necessary for taxes and it's hard to hide cash

• An economic system characterized by private or corporate ownership of capital goods; investments that are determined by private decision; prices, production, and the distribution of goods that are determined mainly by competition in a free market
• An economic system that provides the legal ability of individuals to own the means of production in order to create goods and services for a profit

• To establish the rule of law so informed and voluntary trades can take place
• Vigorously enforce laws against the use of force, fraud, and criminal collusion and use tort law to hold people liable for harm they cause others

• Historically the merits of free enterprise and the obligations of success were intertwined
• Initiative, hard work, entrepreneurialism
• +
• Self-restraint, personal integrity, concern for those who depend on you

• National wealth began to increase and poverty began to fall
• Where it didn't take hold, people remained impoverished
• Where it was rejected, poverty increased

• Poland was more capitalist so over the last 25 years- 
• Poland's economy has grown twice as fast
• Poland's GDP is now twice that of Ukraine yet with 15% fewer people
• Poland has half the share of its population living under the poverty line as does Ukraine

• Explains why capitalism has an image problem
• There has been a segregation of capitalism with virtue and a deterioration of the sense of stewardship

• Rise of collusive capitalism- people on top take care of each other at shareholder expense; government enabled collusion leading to corruption
• Fortunes made in financial markets- making money via secret financial instruments; or insider trading

• It should be possible to revive a national consensus affirming that "Capitalism embraces the best and most essential things about American life"
• If done correctly, capitalism will create national wealth and reduce poverty and expand the ability of Americans to earn success; to pursue happiness

• Return to "conducting business" with virtue
• Success is not "bad"
• Remind the most successful of their obligations for stewardship

• Based on:
• benefits sought by customers
• observable characteristics of customers

• Understand the benefits that customers seek
• Segment the market and develop prototypical customer profiles based on the customer benefits
• Find the observable values most likely to discriminate among the benefit segments to identify membership in specific segments
• One complication is that there can be multiple acceptable benefit segment schemes

• Involves evaluating each market segment's attractiveness and selecting one or more of the market segments to enter.
• The key is to understand differentiation. It involves collecting and comparing data.

A good positioning statement reflects a competitive differentiation