Chapter 1 %3b Defining Marketing

8/8/2019 Chapter 1 %3b Defining Marketing

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Marketing Management

Chapter 1 : Defining Marketing

Simi Grosman


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WHAT DO YOU WANT FROM THIS CLASS?WHAT DO YOU WANT FROM THIS CLASS?


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OBJECTIVESOBJECTIVES

In this lecture we will address the following questions:

1. Why marketing is important?

2. What is the scope of marketing

3. How does marketing fit within an organization4. What are some fundamental marketing concepts?

5. How has marketing management changed

6. What are the tasks necessary for successful

marketing management?


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DEFINITIONS : MARKETINGDEFINITIONS : MARKETING

Marketing is the process of planning and executing the conception,

pricing, promotion, and distribution of ideas, goods, and services to

create exchanges that satisfy individual and organizational goals.

Marketing Management is the art and science of choosing target markets

and getting, keeping, and growing customers through creating,

delivering, and communicating superior customer value.


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Copyright

2009 Pearson Education

Canada

1 - 5

Marketing Management Tasks

Develop market strategies and plans

Capture marketing insights

Connect with customers

Build strong brands

Shape market offerings

Deliver value

Communicate value

Create long-term growth


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Marketing according to Sergio Zyman

DEFINITIONSDEFINITIONS

Marketing is about systematically and thoughtfully

coming up with plans and taking actions that get more

people to buy more of your product more often so thatthe company makes more money

Forget the flair, forget the hype,,,,its a business


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Goods Physical goods constitute the bulk of production and marketing

efforts.

Services A growing portion of business activities are focused on the

production of services. The U.S. economy today consists of a 7030services to goods mix

Events Marketers promote time-based events such as trade shows, artistic

performances, and the Olympics

Experiences By orchestrating several services and goods, a firm can create and

market experiences such as Walt Disney Worlds Magic Kingdom.

What Can Be Marketed? Page 5What Can Be Marketed? Page 5 -- 88


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Places Cities, states, regions, and whole nations compete actively to attract

tourists, factories, and new residents

Properties Are intangible rights of ownership of either real property (real estate) or

financial property (stocks and bonds

Organizations Actively work to build a strong, favourable, and unique image in the minds

of their target publics.

Information

Can be produced and marketed as a product. Schools, universities, andothers produce information and then market it.

Persons Celebrity marketing is big business

What Can Be Marketed? Page 5What Can Be Marketed? Page 5 -- 88


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Marketplaces,Marketplaces, MarketspacesMarketspaces && MetamarketsMetamarkets Page 10Page 10

The marketplace is physical; the marketspace is digital

Mohan Sawhney ( Professor at Kellogg School ofManagement) has proposed the concept of metamarkets

to describe a cluster of complementaryproducts andservices that are closelyrelated in the minds ofconsumers but are spread across a diverse set ofindustries. An example is the automobile industrythatconsists of physical locations (car dealers) andmarketspace locations (Internet locations) thatconsumers use in deciding what car to purchase.


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Key Customer MarketsKey Customer Markets Page 10Page 10

A) Consumer Markets

Consumer goods and services such as soft drinks and cosmetics spend agreat deal of time trying to establish a superior brand image.

B)Business Markets

Companies selling business goods and services often face well-trained

and well-informed professional buyers who are skilled in evaluating

competitive offerings.C) Global Markets ( P.10 - Bombardier)

Companies face challenges and decisions regarding which countries to

enter, how to enter the country, how to adapt their products/services to

the country, and how to price their products.

D) Nonprofit and Governmental MarketsCompanies selling to these markets have to price carefully because

these organizations have limited purchasing power.


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The New Marketing RealitiesThe New Marketing Realities Page 15Page 15--1616

A) Changing technology.B) Globalization.

C) Deregulation.

D) Privatization.

E) Customer empowerment.F) Customization.

G) Heightened competition.

H) Industry convergence.

I) Retail transformation.J) Disintermediation.


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Copyright


Canada

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New Consumer Capabilities Page 17

A substantial increase in buying power

A greater variety of available goods and services

A great amount of information about practically anything

Greater ease in interacting and placing and receiving

orders

An ability to compare notes on products and services

An amplified voice to influence public opinion


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Copyright


Canada

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New Company Capabilities Page 17 -18

Internet

Market Research

Internal communications

Target marketing

Mobile marketing

Improved marketing mix

Production of differentiated goods & services

Internal & external training


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Core Marketing ConceptsCore Marketing Concepts Page 19Page 19 -- 2020

Production ConceptThe production concept holds that consumers will prefer products that

are widely available and inexpensive.

Product Concept

The product concept holds that consumers will favour those productsthat offer the most quality, performance, or innovative features.

Selling ConceptThe selling concept holds that consumers and businesses will ordinarily

not buy enough of the organizations products, therefore, the

organization must undertake an aggressive selling and promotion effort.


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Core Marketing ConceptsCore Marketing Concepts Page 19Page 19 -- 2020MarketingConcept

Marketing Concept

The marketing concept holds that the key to achieving organizational goals consistsof the company being more effective than competitors in creating, delivering, and

communicating superior customer value to its chosen target markets.

1) Reactive market orientationunderstanding and meeting consumers

expressed needs.

2) Proactive marketing orientationresearching or imagining latent

consumers needs through aprobe-and-learn process.a. Companies that practice both reactive and proactive marketing

orientation are implementing a total market orientation.

Holistic Marketing ConceptHolistic marketing can be seen as the development, design, and implementation of

marketing programs, processes, and activities that recognizes the breath andinterdependencies of their efforts. Holistic marketing recognizes that everything

matters with marketingthe consumer, employees, other companies, competition,

as well as society as a whole.


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Relationship MarketingRelationship Marketing Page 20Page 20--2121

Relationship marketing has the aim of building mutually satisfying long-term

relationships with key partiescustomers, suppliers, distributors, and othermarketing partners.

Relationship marketing builds strong economic, technical, and social ties among theparties.

Marketing must not only do customer relationship management (CRM) but also

partnership relationship management (PRM).

Four key constituents for marketing are:

a. Customers.b. Employees.

c. Marketing partners (channel partners).d. Members of the financial community.

The ultimate outcome of relationship marketing is the building of a unique company

asset called a marketing network.A marketing network consists of the companyand its supporting stakeholders(customers, suppliers, distributors, retailers, ad agencies, universityscientists,and others) with whom it has built mutuallyprofitable business relationships.


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The Ten Deadly Sins of MarketingThe Ten Deadly Sins of Marketing Page 21Page 21

Get To Know These or They Will Get You Every Time !!!


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Marketing Mix & Customer MixMarketing Mix & Customer Mix

The marketers task is to devise marketing activities and assemble fully

integrated marketing programs to create, communicate, and delivervalue for consumers

Robert Lauterborn suggests that the sellers 4Ps correspond to the

customers 4Cs:

The Four Ps

Product

Price

Place

Promotion

The Four Cs

Customer solution

Customer cost

Convenience

Communication


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Copyright 2009 Pearson Education Canada

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Internal Marketing

Internal marketing is the task of hiring, training, andmotivating able employees who want to serve customers

well.

Internal marketing is also about selling the management

team on your ideas & approach.

Page 25 Assessing which companydepartments arecustomer minded.


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Marketing Management Tasks

Developing marketing

strategies

Capturing marketing

insightsConnecting with

customers

Building strong brands

Shaping market

offerings

Delivering value

Communicating

value

Creating long-term

growth


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Functions of CMOs

Strengthening the brands

Measuring marketing effectiveness

Driving new product development based on customerneeds

Gathering meaningful customer insights

Utilizing new marketing technology


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Improving CMO Success

Make the mission and responsibilities clearFit the role to the marketing culture and

structure

Ensure the CMO is compatible with the CEO

Remember that showpeople dont succeedMatch the personality with the CMO type

Make line managers marketing heroes

Infiltrate the line organization

Require right-brain and left-brain skills

Source: Gail McGovern and John A. Quelch, The Fall and Rise of the CMO,Strategy+Business, Winter 2004. Reprinted by permission.


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HOWTHIS FITSINTO MARKETING?HOWTHIS FITSINTO MARKETING?


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HOWTHIS FITSINTO MARKETING?HOWTHIS FITSINTO MARKETING?


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Needs and

Wants

Target Market

Organizational

Goals

Business

ProcessesAsk

Marketing

Research

Business

Intelligence

Learn Database

management

Deliver desired

satisfactions:

SOLUTIONS

Transaction and

hopefully a relationship

Competitor

Competitor

Competitor

MARKETING CONCEPTMARKETING CONCEPT


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1.How can we spot and choose the right market segment(s)?

MARKETERS FAQsMARKETERS FAQs


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1.How can we spot and choose the right market segment(s)?


Market ResearchStudy market and find gaps / opportunitiesSpecialization

Target consumersFocus GroupsSurvey target audience

Competitive AnalysisAnalyze socio-economic trendsBuy competitive info from third parties


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2.How can we differentiate our offerings?



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2.How can we differentiate our offerings?



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3.How should we respond to customers who buy on price?



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3.How should we respond to customers who buy on price?


Drop pricesSalesModify product

Emphasize qualityRaise pricesLoyalty programsAmplify notion of valueLow prices are a bad thing People pay premium for value


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4.How can we compete against lower-cost, lower-price

competitors?



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4.How can we compete against lower-cost, lower-price

competitors?


Create perceived valueAdd features & functions

Branding


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5.How far can we go in customizing our offering for each

customer?



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6.How can we grow our business?



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6.How can we grow our business?


Find new marketsIntroduce new incentives

Expand product lineNew servicesLoyalty programs


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8.How can we reduce the cost of customer acquisition?



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9.How can we keep our customers loyal for longer?



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10.How can we tell which customers are more important?



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11.How can we measure the payback from advertising, sales

promotion, and public relations?



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12.How can we improve sales force productivity?



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13.How can we establish multiple channels and yet manage

channel conflict?



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14.How can we get the other company departments to be more

customer-oriented?



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Read Case Study on Page 28 and beprepared to discuss various tasks to

be considered

Zeus IncZeus Inc Atlas Camera Division P.28Atlas Camera Division P.28--3030


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MarketingChannels

PublicsSuppliers

Competitors

Price Product

PlacePromotion

Target

Consumer

Technological

Natural

Environment

Social-Cultural

EnvironmentPolitical-Legal

Environment

Demographic

Economic

Environment

THE COMPLETE FRAMEWORKTHE COMPLETE FRAMEWORK


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Suppliers

Interme-

diaries Customers

Upstream Downstream

The Value Chain

MARKETING VALUE CHAINMARKETING VALUE CHAIN

Marketing

FinanceSales

IT

HR

Manufac-

turing

Publics

CompetitorsCompetitors

Competitors

Your objective must be to

integrate a value chain that

delivers the best value

proposition to the market


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THE MARKETING PROCESSTHE MARKETING PROCESS

Situation

Analysis

SWOT

Analysis

Positioning

Map

Segmentation,

Targeting and

Positioning

Marketing

Mix Metrics

Feedback

Create value

for customers

and build

customer

relationships

Capture

value from

customers

in return

DivideChoose

Differentiate

Offer

Build

Nurture


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THE THREE PRINCIPLES OF MARKETINGTHE THREE PRINCIPLES OF MARKETING

PrinciplesOf

Marketing

CompetitiveCompetitive

or Differentialor Differential

AdvantageAdvantage

FocusFocus

Customer ValueCustomer Value

and the Value Equationand the Value Equation

Value =Value =Perceived BenefitsPerceived Benefits

PricePrice


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Does Marketing Create or SatisfyNeeds?

Take a position:

Marketing shapes consumer needs andwants.

versus

Marketing merelyreflects the needs andwants of consumers.

Class DiscussionClass Discussion


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Does Marketing Create or SatisfyNeeds?Pro: With the vast amount of information available to marketers today and

the emphasis on relational marketing, marketers are in more of a

position to suggest needs and wants to the public. Certainly, not all

consumers have all the needs and wants suggested by society today.

However, with the vast amount of exposure to these societal needs and

wants via the media, a substantial amount of consumers will, through

mere exposure, decide that they have the same needs and wants of

others. Marketers by their efforts increase peer pressure, and group

thinking, by showing examples of what others may have that they do

not. An individuals freedom to choose is substantially weakened by

constant and consistent exposure to a range of needs and wants of

others. Marketers should understand that when it comes to resisting thepressure to conform, that individuals are and can be weak in their

resolve. Marketers must take an ethical position to only market to those

consumers able to purchase their products.



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Does Marketing Create or SatisfyNeeds?

Con: Marketing merely reflects societal needs and wants. The perceptionthat marketers influence consumers purchasing decisions discounts an

individuals freedom of choice and their individual responsibility. With theadvent of the Internet, consumers have greater freedom of choice and

more evaluative criteria than every before. Consumers can and do make

more informed decisions than previous generations. Marketers can be

rightly accused of influencing wants, along with societal factors such as

power, influence, peer pressure, and social status. These societal factors

pre-exist marketing and would continue to exist if there was no marketingefforts expended.



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For Next ClassFor Next Class

1. Read Chapters 1&2

2. Well have a discussion and an in-class exercise about the 22Immutable Laws of Marketing.

Al Ries & Jack Trout

Harper Collins Publishers

Research information on the topic: go to the library, research over the

Internet, etc, and get a general idea of whats this about. Come

prepared to have a discussion in class about the topic. Students will

be asked to elaborate on one of the 22 Immutable Laws.

Documents

Chapter 1 %3b Defining Marketing