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Session 1- 09.13.04 Marketing: Introduction, Strategy and Competition Professional Selling Marketing Research Advertising Retail Buying Distribution Management Product Management Product Development Wholesaling Why Study Marketing?

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Session 1- 09.13.04

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Session 1 09 13 04 l.jpg

Session 1- 09.13.04

Marketing:

Introduction, Strategy and Competition


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  • Professional Selling

  • Marketing Research

  • Advertising

  • Retail Buying

  • Distribution Management

  • Product Management

  • Product Development

  • Wholesaling

Why Study Marketing?

  • 1/4th to 1/3rd of the civilian workforce in the U.S. performs marketing activities

  • Fast route up the corporate ladder


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Why Study Marketing?

  • Half of every dollar spent pays for marketing costs

  • Better-informed consumers

  • Demand for customer satisfaction


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All of the above, plus much more!

What is Marketing?

  • Personal Selling?

  • Advertising?

  • Making products available in stores?

  • Maintaining inventories?


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A Philosophy

An Attitude

A Perspective

A Management Orientation

A Set of Activities, including:

Products

Pricing

Promotion

Distribution (Place)

plus

What is Marketing?


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Marketing Definitions

  • “A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.”

  • “The delivery of Customer Satisfaction at a profit.”


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Marketing Definitions

American Marketing Association Definition

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and servicesto create exchanges that satisfy individual and organizational goals.


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Key Concepts in Marketing

  • Needs, Wants and Demands.

    • From deprivation to buying power.

  • Products and Services

    • Anything that might satisfy a need or a want. Marketing Myopia ?

  • Value and Satisfaction

    • Gain minus cost.

    • Product’s perceived performance matches expectations.


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Marketing Importance in a Practical Situation…

You have just purchased a tennis racquet factory that has been shut down for the last few years.

The automated equipment and computer system are in excellent shape, and the personnel needed to run the factory are readily available.

But before jumping into production, what questions need to be asked and answered? What plans need to be made? Which of these plans concern marketing?


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… A Significant Role and Many Questions to Answer.

  • What are the needs of tennis players?

  • Do they need more or different styles of tennis racquets?

  • How many different categories of tennis players are there? What kind of racquet does each category need? (Handles, sizes, shapes, weights, and prices are factors.) Which category of player does this firm want to sell to?

  • Estimate how many people are in this chosen category. How many of them will be playing over the next five years? How often will they buy a new racquet?

  • When will these customers buy? (Are there seasons or trends?)

  • Where are these customers located? Where do they shop for tennis racquets?

  • What price are these customers willing to pay? Does this price leave a profit for the company?

  • How will the company communicate with potential customers? What type of promotion will reach them?

  • How will the racquets be packaged? What type of warranty will they carry? How will the firm provide customer service?

  • How many other companies are making racquets? What kinds and what prices of racquets do competitors offer?

  • What is the industry as a whole projected to do in the next five to ten years?


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Production concept

Product concept

Selling concept

Marketing concept

Marketing Management

Management Orientations

  • Societal marketing concept


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* Selling:

Focus on the needs of the seller

* Marketing:

Focus on the needs of the buyer

Selling Vs. Marketing


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* Selling:

Preoccupied converting product into cash

* Marketing:

Preoccupied with satisfying the needs of the customer

Selling Vs. Marketing


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* Selling:

Increase profits through sales volume

* Marketing:

Use an integrated marketing strategy to profitably satisfy customer needs

Selling Vs. Marketing

back


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Example of a Company Policy Statement Stressing Social Responsibility


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Defining the Business Mission

  • Answers the question, “What business are we in and where are we going?”

  • Focuses on the market(s) rather than the good or service

  • Strategic Business Units may also have a mission statement


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Market Oriented

Realistic

Characteristics of a Good Mission Statement:

Fit Market Environment

Distinctive Competencies

Specific

Motivating

Defining the Company’s Business and Mission

A Mission Statement is a Statement of the Organization’s Purpose.


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Coke’s Mission Statement

The Coca-Cola Company exists to benefit and refresh everyone it touches.The basic proposition of our business is simple, solid and timeless. When we bring refreshment, value, joy and fun to our stakeholders, then we successfully nurture and protect our brands, particularly Coca-Cola. That is the key to fulfilling our ultimate obligation to provide consistently attractive returns to the owners of our business.


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PepsiCo’s Mission Statement

“PepsiCo’s overall mission is to increase the value of our shareholders’ investment. We do this through sales growth, cost controls and wise investment of resources. We believe our commercial success depends upon offering quality and value to our consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to our investors while adhering to the highest standards of integrity.”

http:\\www.pepsico.com


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CRM

  • CRM– Customer relationship management . . .“is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.”


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Requirementsfor

Building Relationships

Who are your customers

What do customers value

What do they want to buy

How do they prefer to interact

Relationship Marketing


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CRM

  • It costs 5 to 10 times MORE to attract a new customer than it does to keep a current customer satisfied.

  • Marketers must be concerned with the lifetime value of the customer.


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Customer equity

The total combined customer lifetime values of all customers.

Measures a firm’s performance, but in a manner that looks to the future.

CRM

Key Concepts

  • Attracting, retaining and growing customers

  • Building customer relationships and customer equity


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Customer relationship levels and tools

Target market typically dictates type of relationship

Basic relationships

Full relationships

Customer loyalty and retention programs

Adding financial benefits

Adding social benefits

Adding structural ties

CRM

Key Concepts

  • Attracting, retaining and growing customers

  • Building customer relationships and customer equity


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Building Long-Term Relationships

  • Customer-oriented personnel

  • Effective training programs

  • Empowered employees

  • Teamwork


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Strategic Planning

  • Strategic planning is defined as:

    • “The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.”


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EVOLVING MARKET OPPORTUNITIES

RESOURCES & OBJECTIVES

Strategic Planning

LONG RUN PROFITABILITY AND GROWTH

Plus


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The Marketing Plan

A written document that acts as a guidebook of marketing activities for the marketing manager.


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  • Provides a basis for comparison of actual and expected performance

  • Provides clearly stated activities to work toward common goals

  • Serves as a reference for the success of future activities

  • Allows entry into the marketplace with awareness

Marketing

Plan

Why Write a Marketing Plan?


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Marketing Objective

A statement of what is to be accomplished through marketing activities.


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“Our objective is to increase market share by 40% and to obtain customer satisfaction ratings of at least 90% in 2003.”

Marketing Objectives

Marketing Objectives Must Be:

  • Realistic

  • Measurable

  • Time specific

  • Consistent with Organization’s Priorities


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Examples of Marketing Objectives


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SWOT Analysis

Identifying internal strengths (S)and weaknesses (W) and also examining external opportunities (O) and threats (T)


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S

Things the company does well.

Internal

W

Things the company does not do well.

O

Conditions in the external environment that favor strengths.

External

T

Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.

©South-Western College Publishing

SWOT Analysis


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Looking at the Business Portfolio

  • The business portfolio is the collection of businesses and products that make up the company.

  • The company must:

    • analyze its current business portfolio or Strategic Business Units (SBU’s)

    • decide which SBU’s should receive more, less, or no investment

    • develop growth strategies for adding new products or businesses to the portfolio


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MARKET SHARE DOMINANCE

HIGH LOW

MARKET GROWTH RATE

LOW HIGH

BCG Portfolio Matrix

High growth

Market leaders

Require cash

Large profits

High growth

Low market share

Need cash

Poor profit margins

$

Low growth

High market share

High cash flow

Low growth

Low market share

Minimal cash flow


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MARKET SHARE DOMINANCE

HIGH LOW

Sub-Notebooks and Hand-Held Computer

Integrated phone/Palm devices

MARKET GROWTH RATE

PROBLEMCHILD

LOW HIGH

STAR

Laptop and Personal Computers

MainframeComputer

CASH COW

DOG

BCG Portfolio Matrix Example


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Build

Provide financial resources if SBU (Problem Child) has potential to be a Star.

Hold

Preserve market share if SBU is a successful Cash Cow. Use cash flow for other SBUs.

Harvest

Increase short-term cash return. Appropriate for all SBUs except Stars.

Divest

Get rid of SBUs with low shares in low-growth markets.

Strategies for Resource Allocation


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Developing Growth Strategies

Product/ Market Expansion Grid

Existing

Products

New

Products

Existing

Markets

1. Market

Penetration

3. Product

Development

4. Diversification

2. Market

Development

New

Markets


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Can be Difficult, Time-Consuming, & Costly to Implement

Difficult to Define SBU’s & Measure Market Share/ Growth

Problems With Matrix Approaches

Focus on Current Businesses, But Not future Planning

Can Lead to Unwise Expansion or Diversification


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Steps in Analyzing Competitors

Identifying the

company’s

competitors

Assessing competitor’s

objectives, strategies,

strengths and weaknesses,

and reaction patterns

Selecting which

competitors to

attack or avoid


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Marketing Strategies for Competitive Advantage

Strategy a Company

Adopts

Depends on Its

Industry Position


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The segmentation process divides the total market into market segments.

Target marketing determines which segment(s) are pursued.

The strategic market positioningfor the product is then determined.

The Marketing Process

Key Elements

  • Analyzing marketing opportunities

  • Selecting target markets

  • Developing the marketing mix

  • Managing the marketing effort


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The Marketing Mix

A unique blend of product, distribution, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market.


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Developing the Marketing Mix

Price

Amount of money

that consumers

have to pay to

Obtain the product

Product

“Goods-and-service”

combination that a

company offers a

target market

Target

Customers

Intended

Positioning

Activities that

persuade target

customers to buy

the product

Promotion

Company activities

that make the

product available

Place


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