What Is Marketing? Marketing: typically seen as the task of creating, promoting, and delivering goods and services to consumers and businesses. Marketing is a process by which companies create value for customers and build strong customer relationships to capture value from customers in return Marketing management is the art and science of choosing target markets and building profitable relationships with them • What customers will we serve? • How can we best serve these customers?
Company Orientations Toward the Marketplace The Customer/Marketing Concept
Marketing of today • Everyone does the marketing • Build brands through performance, not just advertising • Customer retention rather than customer acquisition • From none to in-depth customer satisfaction measurement • From over-promise, under-deliver to under-promise, over-deliver • Marketing practices are changing: • Designing an Attractive Website • Placing Ads and Promotions Online • Building a Revenue and Profit Model • Customer Relationship Marketing • Reduce rate of customer defection • Increase longevity of customer relationship • Enhance growth potential through cross-selling and up-selling • Make low profit customers more profitable or terminate them
Business Unit Strategic Planning The Business Strategic-Planning Process
The Marketing Process Steps in the Planning Process (marketing process) • Analyzing Market Opportunities • Developing Marketing Strategies • Planning Marketing Programs • Managing the Marketing Effort • Annual-plan control • Profitability control • Strategic control
Marketing Strategy • Marketing strategy is a firm’s overall program for selecting and satisfying a target market through a careful balance of the elements of the marketing mix • Marketing Strategy • Positioning • Product Management • Pricing • Distribution • Marketing Communications • Marketing Research • Factors influencing marketing strategy: • Organisational objectives and resources • Attitude to change and risk • Market structure and opportunities • Competitor strategies
Marketing Strategy Strategic planning and analysis • Situation analysis • Internal analysis • Determine if company is production orientated (sells what it makes) or market (makes what it can sell) orientated (customer, competitor, integrated decision making) – p 90 • Strengths and weaknesses of organisation • Balance scorecard = internal abilities • Vision, long term and short term objective
Marketing Strategy A SWOT analysis is a method of studying organizational resources and capabilities to assess the firm’s strengths and weaknesses and scanning its environment to identify opportunities and threats
Marketing Strategy Strategic planning and analysis Growth opportunities and strategies can be identified by using the Ansoff Growth Matrix Three cells: • Market penetration (current products in current markets) • Market development (current products in new markets) • Product development (new products in current markets)
Marketing Strategy Strategic planning and analysis 2. Customer analysis • Segmentation (i.e. Geographic, demographic) • Target (i.e. Undifferentiated, customized) • Positioning – value hierarchy and customer satisfaction • Competition analysis – chosen brand
Marketing Strategy Strategic planning and analysis 3. Industry analysis • Macro-environment (past and future/ opportunity and treat) - PESTLE analysis • Industry attractiveness – Porter’s 5 Forces
Marketing Strategy Strategic planning and analysis 4. Competitor analysis • 2 steps: • Competitor analysis to identify, assess and select key competitors • Consider if competitor is rival or future collaboration partner • Determine competitive marketing strategies
Contents of a Marketing Plan Contents of the Marketing Plan • Executive Summary • Current Marketing Situation • Opportunity and issue analysis • Objectives • Marketing strategy • Action programs • Financial projections • Implementation controls
Importance of environmental scanning • The environment is continually changing, so purposeful scanning by management is necessary to keep abreast of change • Scanning is necessary to determine which factors in the environment pose a threat to the enterprise’s present goals and strategy • Scanning is also necessary to determine which factors in the environment present opportunities for the more effective attainment of the goals of the enterprise by modifying its present strategy • Enterprises that scan the environment systematically are more successful than those that do not.
Developing Marketing Information Marketing research is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization Consists of 4 steps:
Forecasting & demand measurement • Market Demand - The marketer’s first step in evaluating marketing opportunities is to estimate total market demand. • Market Forecast - Only one level of industry marketing expenditure will actually occur. The market demand corresponding to this level is called the market forecast. • Market Potential - The market forecast shows expected market demand, not maximum market demand • Company Demand - is the company’s estimated share of market demand at alternative levels of company marketing effort in a given time period. • Company Sales Forecast - is the expected level of company sales based on a chosen marketing plan and an assumed marketing environment. • Company Sales Potential - is the sales limit approached by company demand as the company marketing effort increases relative to that of competitors.
Estimating current demand • Total Market Potential • Area Market Potential • Market-Buildup Method • Multiple-Factor Index Method • Industry Sales and Market Shares • Estimating Future Demand • Survey of Buyers’ Intentions • Composite of Sales Force Opinions • Expert opinion • Past Sales Analysis • Market Test Method
Characteristics Affecting Consumer Behaviour Factors Influencing Consumer Behaviour
The Buyer Decision Process Buyer Decision Making Process Consumer processes information to arrive at brand choices Consumer buys the most preferred brand due to attitudes of others or Unexpected situational factors Satisfaction or dissatisfaction due to consumer’s expectations and product’s perceived performance. Customer satisfaction is a key to building profitable relationships with consumers
Purchasing/ Procurement process 8 stages:
Market Segmentation To be useful, market segments must be: Requirements for Effective Segmentation
Market Segmentation Market segmentation is the division of a market into distinct groups of buyers who have distinct needs, characteristics, or behaviour and who might require separate products or marketing mixes Market segment is a group of consumers who respond in a similar way to a given set of marketing efforts
Differentiation and Positioning Product position is the way the product is defined by consumers on important attributes —the place the product occupies in consumers’ minds relative to competing products • Perceptions • Impressions • Feelings
Differentiation and Positioning Identifying a set of possible competitive advantages to build a position by providing superior value from: Choosing a Differentiation and Positioning Strategy
Marketing Mix & an Integrated Marketing Program The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing strategy. It includes product, price, promotion, and place. Integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers.
Branding A Brand is a promise to deliver specific benefits associated with products or services to consumers Brand is the name, term, sign, or design—ora combination of these—that identifies the maker or seller of a product or service Brand equity is the differential effect that the brand name has on customer response to the product and its marketing
Branding Brandis the company’s promise to deliver a specific set of features, benefits, services, and experiences consistently to the buyers Brand represents the consumer’s perceptions and feelings about a product and its performance.
Branding For the manufacturer For the consumer Represents Ownership Delivers a Promise Distinguishes from Competitors Offers Consistency Adds Value