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MARKETING MANAGEMENT. 1 Defining Marketing for the 21 st Century. MARKETING MANAGEMENT. In this chapter we will address the following questions: What is the new economy like? What are the tasks of marketing? What are the major concepts and tools of marketing?

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Marketing management l.jpg

MARKETING MANAGEMENT

1

Defining Marketing

for the

21st Century


Marketing management2 l.jpg

MARKETING MANAGEMENT

In this chapter we will address the following questions:

What is the new economy like?

What are the tasks of marketing?

What are the major concepts and tools of marketing?

What orientations do companies exhibit in the marketplace?

How are companies responding to the new challenges?


Old economy vs new economy l.jpg

Old Economy VS New Economy

The old economy is based on the Industrial Revolution and on managing manufacturing industries

WHILE …

The new economy is based on the Digital Revolution and the management of information.


The new economy placed the following capabilities in the hands of consumer l.jpg

The New Economy placed the following capabilities in the hands of consumer:

Substantial increase in buying power

Greater variety of available goods and services

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


And placed the following capabilities in the hands of companies l.jpg

AND placed the following capabilities in the hands of companies:

Operate powerful new information and sales channels

Collect richer information about markets, customers, prospects, and competitors

Speed up internal communication among employees

Have two-way communications with customers and prospects

Send promotional tools easily and quickly

Able to customize offerings

Improve purchasing, recruiting, training and internal and external communication.

Maintain cost saving while improving accuracy and service quality.


Marketing and exchange l.jpg
Marketing and Exchange companies:

  • What is marketing?

    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 objectives


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Selling is only the tip of the iceberg companies:

“There will always be need for

some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed is to make the product or service available.”

Peter Drucker


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Goods companies:

Services

Events & Experiences

Persons

Places & Properties

Organizations

Information

Ideas

What is Exchanged in Marketing?


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4 companies: Types of Markets

  • Consumer Market: (consumption)

  • Business Markets: (saving/resell)

  • Global Markets: (different offering mix)

  • Nonprofit and Governmental Market: (bids)


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Marketing Concepts and Tools companies:

  • Market: a collection of buyers and sellers

  • Marketplace: a physical market (store)

  • Marketspace: a digital market (Internet: e.g., www.secondlife.com)

  • Metamarket: markets involving closely-related products and services (e.g., www.edmunds.com)

  • Marketer and Prospect: A marketer is someone seeking a response from another party, called the prospect.




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Marketing Concepts and Tools companies:

  • Needs: the basic human requirements

  • Wants: specific objects that might satisfy the need

  • Demand: wants for specific products backed by an ability to pay.

    Examples:

    An American needs food but wants a hamburger, French fries and soft drink.

    Many people want a Mercedes, only a few are able and willing to buy one.


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Marketing Debate companies:

  • Does Marketers Create or

  • Satisfy Needs?


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Marketing Concepts and Tools companies:

  • Product: a value proposition

  • Offering: intangible value proposition (a combination of products, services, information and experiences (Volvo)

  • Brand: is an offering from a know source

    Examples:

    McDonald

    Lexus



Marketing concepts and tools17 l.jpg
Marketing Concepts and Tools companies:

Value is a ratio between what customer gets and what he gives

Value = Benefits/Costs

How to increase value?

  • Raise benefits

  • Reduce costs

  • Raise benefits and reduce costs

  • Raise benefits by more than the raise of costs

  • Lower benefits by less than the reduction of costs


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Marketing Concepts and Tools companies:

  • Exchange: a process of obtaining a product/service from someone by offering something

    For exchange to occur, there must be:

    • Two parties

    • Each with something of value to the other

    • Capable of communication and delivery

    • Free to accept/reject the offer

    • Agreement to terms

      Example: Caterpillar


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Marketing Concepts and Tools companies:

  • Transaction: a trade of values between two or more parties.

  • Does Transaction differs from

  • Transfer


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Marketing Concepts and Tools companies:

  • Relationship: building mutually satisfying long-term relations with key parties (customers, suppliers, distributor) in order to earn and retain their business.

  • Network: building mutually profitable business relationships between the company and its supporting stakeholders.


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Marketing Concepts and Tools companies:

  • Marketing channels: a way/mean to reach target market.

    Three kinds of marketing channels:

    • Communication channels

    • Distribution channels

    • Service channels


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Marketing Concepts and Tools companies:

  • Supply Chain: longer channel stretching from raw materials to components to final products that are carried to final buyers.

  • Competition: all actual and potential rival offerings and substitutes that a buyer might consider.


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Marketing Concepts and Tools companies:

Four (4) levels of competition:

  • Brand competition: A company sees its competitors as other companies offering similar products and services to the same customers at similar prices.

  • Industry competition: A company sees its competitors as all companies making the same product or class of products.

  • Form competition: A company sees its competitors as all companies manufacturing products that supply the same services.

  • Generic competition: A company sees its competitors as all companies that compete for the same consumer dollars. (Example: Volkswagen)


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Marketing Concepts and Tools companies:

  • Marketing Environment: actors that impact the company’s offerings (task & broad environment).

  • Marketing Program: a numerous decisions on the mix of marketing tools to use.

  • Marketing Mix: a set of marketing tools the firm uses to pursue its marketing objectives in the target market.


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The Four Ps companies:


The four ps the four cs l.jpg
The Four Ps companies:The Four Cs

Marketing

Mix

Place

Product

Price

Promotion

Conven-

ience

Customer

Solution

Communication



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Marketing Management companies:

  • Marketing Management (Kotler):

    is the analysis, planning, implementation, and control of marketing programs designed to create, build, and maintain mutually beneficial exchanges and relationships with target markets for the purpose of achieving organizational objectives.


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Company Orientations to the Marketplace companies:(Marketing Management Philosophies)

  • Production concept: assumes consumers favor those products that are widely available and affordable. (Focus: wide distribution; high volume).

    2. Product concept: assumes consumers will favor those products that offer the most quality, performance, and features. (Focus: Superior product)


Company orientations to the marketplace cont l.jpg
Company Orientations to the Marketplace companies:, cont.

  • Selling concept: assumes that consumers will either buy or not enough of the organizations’ products unless the organization makes a substantial effort to stimulate the customer’s interest in the product. (Focus: needs of the seller)


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The purpose of marketing companies:

is to sell more stuff to

more people more often

for more money in order

to make more profit

Coca-Cola’s former

Vice president


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Company Orientations to the Marketplace companies:, cont.

4. Marketing concept: holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors. (Focus: different needs of buyers)


Marketing and selling concepts contrasted l.jpg

(a) The Selling Concept companies:

Starting

Point

Focus

Means

Example Ends

Selling

and

Promoting

e.g., Profits

through

Volume

Factory

Products

(b) The Marketing Concept

Integrated

Marketing

e.g., Profits

through

Satisfaction

Market

Customer

Needs

Marketing and Selling Concepts Contrasted


Theodore levitt s marketing myopia cont l.jpg
Theodore Levitt’s “Marketing Myopia,” cont. companies:

  • What is the difference between marketing and selling?

  • “The difference between marketing and selling is more than semantic. Selling focuses on the needs of the seller, marketing on the needs of the buyer. Selling is preoccupied with the seller’s need to convert the product into cash; marketing with the idea of satisfying the need of the customer ….”


Marketing concept four pillar l.jpg
Marketing Concept Four Pillar companies:

1. Target Market: tailored marketing programs

2. Customer Needs:

  • Giving customer what they need is not enough; companies must help customers learn what they want.

  • Stated, Real, Unstated, Delight & Secret Needs. (Inexpensive car example)

  • Responsive, Anticipated & Creative Marketer.

  • Market-driving firm VS Market-driven firm.

  • Make and sell VS Sense and respond Philosophy.

  • Why it’s important to satisfy target customers? (Customer retention)


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Marketing Concept Four Pillar companies:

3. Integrated Marketing: all company’s departments work together to serve the customer’s interests.

a. External marketing:

directed at people outside the company.

b. Internal marketing:

the task of hiring, training, and motivating able employees who want to serve customers well.

Which one is more important?

4. Profitability


Traditional organization chart l.jpg
Traditional Organization Chart companies:

Top

Management

Middle Management

Front-line people

Customers


Modern customer oriented organization chart l.jpg

Customers companies:

Front-line people

Middle management

Customers

Modern Customer-Oriented Organization Chart

Customers

Top

manage-

ment


What makes companies adopt marketing concept l.jpg
What makes companies adopt marketing concept? companies:

  • Sales decline

  • Slow growth

  • Changing buying patterns

  • Increasing competition

  • Increasing marketing expenditures


Company orientations to the marketplace cont40 l.jpg
Company Orientations to the Marketplace companies:, cont.

5. The customer concept:

  • Customer is the lifeblood of any company

  • Customer is the King



Company orientations to the marketplace cont42 l.jpg
Company Orientations to the Marketplace companies:, cont.

6. The societal marketing concept: to determine the needs, wants, and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.



How are companies responding to the new challenges l.jpg
How are companies responding to the companies: new challenges?

  • Reengineering

  • Outsourcing

  • E-Commerce

  • Benchmarking

  • Alliances

  • Partner-Suppliers

  • Market-central

  • Global and local

  • Decentralization


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