Marketing Management Defining Marketing for the Twenty-First Century
The Chartered Institute of Marketing ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably’
Adcock et al The right product, in the right place, at the right time, and at the right price’
Kotler 1980 Marketing is the human activity directed at satisfying human needs and wants through an exchange process’
Kotler 1991 ‘Marketing is a social and managerial process by which individuals and groups obtain what they want and need through creating, offering and exchanging products of value with others’
Objectives • Understand the new economy. • Learn the tasks of marketing. • Become familiar with the major concepts and tools of marketing. • Understand the orientations exhibited by companies.
Objectives • Learn how companies and marketers are responding to new challenges.
The New Economy • Consumerbenefits from the digital revolution include: • Increased buying power. • Greater variety of goods and services. • Increased information. • Enhanced shopping convenience. • Greater opportunities to compare product information with others.
The New Economy • Firmbenefits from the digital revolution include: • New promotional medium. • Access to richer research data. • Enhanced employee and customer communication. • Ability to customize promotions.
Change Bigness Govt. Interference Organization Competition Diversification Information Globalization Science & Tech Challenges of Today’s Organization
Goods Services Experiences Events Persons Places Properties Organizations Information Ideas What Can Be Marketed?
Product Goods Places Services Ideas Information Product Persons Experiences Organizations Properties Events
Marketing Defined • Kotler’s Social Definition: “Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.”
Marketing Defined • The AMA Managerial Definition: “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 objectives.”
Target markets and market segmentation Marketplace, market-space, metamarkets Marketers & prospects Needs, wants, demands Product offering and brand Value and satisfaction Exchange and transactions Relationship and networks Marketing channels Supply chain Competition Marketing environment Marketing program Core Marketing Concepts
Core Marketing Concepts • Target markets & segmentation • Differences in needs, behavior, demographics or psychographics are used to identify segments. • The segment served by the firm is called the target market. • The market offering is customized to the needs of the target market.
Core Marketing Concepts • Needs describe basic human requirements such as food, air, water, clothing, shelter, recreation, education, and entertainment. • Needs become wants when they are directed to specific objects that might satisfy the need. (Fast food) • Demands are wants for specific products backed by an ability to pay.
Core Marketing Concepts • A Product is any offering that can satisfy a need or want, while a brand is a specific offering from a known source. • When offerings deliver value and satisfaction to the buyer, they are successful.
Enhancing Value • Marketers can enhance the value of an offering to the customer by: • Raising benefits. • Reducing costs. • Raising benefits while lowering costs. • Raising benefits by more than the increase in costs. • Lowering benefits by less than the reduction in costs.
Core Marketing Concepts • Exchange involves obtaining a desired product from someone by offering something in return. Five conditions must be satisfied for exchange to occur. • Transaction involves at least two things of value, agreed-upon conditions, a time of agreement, and a place of agreement.
Core Marketing Concepts • Relationship marketing aims to build long-term mutually satisfying relations with key parties, which ultimately results in marketing network between the company and its supporting stakeholders.
Marketing Channels Communication channels Distribution channels Service channels Deliver messages to and receive messages from target buyers. Includes traditional media, non-verbal communication, and store atmospherics. Core Marketing Concepts
Marketing Channels Communication channels Distribution channels Service channels Display or deliver the physical products or services to the buyer / user. Core Marketing Concepts
Marketing Channels Communication channels Distribution channels Service channels Carry out transactions with potential buyers by facilitating the transaction. Core Marketing Concepts
Core Marketing Concepts • A supply chain stretches from raw materials to components to final products that are carried to final buyers. • Each company captures only a certain percentage of the total value generated by the supply chain.
Marketing Mix • The marketing program is developed to achieve the company’s objectives. Marketing mix decisions include: • Product: provides customer solution. • Price: represents the customer’s cost. • Place: customer convenience is key. • Promotion: communicates with customer.
Marketing Mix Mkt Mix Price Product Placement Promotion
Marketing Mix • Price List Price Discounts Allowances Payment Period • Promotion Sales Promotion Advertising Sales Force Public Relations Publicity • Place Channels Coverage Assortments Locations Inventory Transport • Product Product Variety Quality Design Features Brand Name Packaging Sizes Services Warranties Returns
Competing Marketing Concepts • The orientation or philosophy of the firm typically guides marketing efforts. Several competing orientations exist: • Production concept • Product concept • Selling concept • Marketing concept • Societal marketing concept
Competing Marketing Concepts Production Concept Product Concept Marketing Concept Marketing Concepts Selling Concept Societal Marketing
The Marketing Concept • Achieving organizational goals requires that company be more effective than competitors in creating, delivering, and communicating customer value. • Four pillars of the marketing concept: • Target market • Customer needs • Integrated marketing • Profitability
Changes in the Marketplace • Globalization, technological advances, and deregulation have created many challenges: • Customers • Brand manufacturers • Store-based retailers • Both companies and marketers have been forced to respond and adjust.
Levels of Competition • Four levels of competition can be distinguished by the level of product substitutability: • Brand competition • Industry competition • Form competition • Generic competition
Levels of Competition Brand Competition Industry Form Generic
Marketing Environment • Task Environment • Broad Environment
Organization’s Environment Macro or Far Environment Near or Operating Environment Economic Factors Technological Factors Partners Customers ORGANIZATION Clients Suppliers Political Factors Social Factors Competitors
Task Environment • Company • Suppliers • Distributors • Dealers • Target Customers • Competitors
Broad Marketing Environment • The following forces in the Broad Environment have a major impact on the Task Environment: • Demographics • Economics • Natural environment • Technological environment • Political-legal environment • Social-cultural environment
Demographic Environment • Population Age Mix • Population Growth • Ethnic Group • Education Status • Household Patterns
Economic Environment • Income Distribution Subsistence Economies Raw Material Exporting Economies Industrializing Economies Industrialized Economies • Savings, Debt and Credit Availability
Natural Environment • Shortage of Raw Materials • Increased Energy Costs • Increased Pollution Levels • Changing Role of Government
Technological Environment • Accelerating Technological Change • Innovation Opportunities • Varying R&D Budgets • Regulations of Technological Change
Political-Legal Environment • Legislation Regulating Business • Growth of Special Interest Groups
Social-Cultural Environment • Beliefs • Values • Norms • Subculture
SWOT Analysis • Strengths (Internal) • Weaknesses (Internal) • Opportunities (External) • Threats (External)
SWOT Analysis SWOT Analysis
Contents of the Marketing Plan • Executive Summary • Current Marketing Situation • Opportunity and issue analysis • Objectives • Marketing strategy • Action programs • Financial projections • Implementation controls
Marketing Strategy • Segmentation • Positioning • Product Management • Pricing • Distribution • Marketing Communications • Marketing Research
Market Segmentation • Market Segment It consist of a large identifiable group within a market with similar wants purchasing power, geographical location and buying attitudes or habits
Levels of Segmentation • Niche Marketing • Local Marketing • Individual Marketing