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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 l.jpg

Session 1- 09.13.04


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:




Distribution (Place)


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


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Defining the Business Mission Responsibility

  • 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 Responsibility


Characteristics of a Good Mission Statement:

Fit Market Environment

Distinctive Competencies



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 Responsibility

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 Responsibility

“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.”


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CRM Responsibility

  • 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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Requirements Responsibilityfor

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 Responsibility

  • 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 Responsibility

The total combined customer lifetime values of all customers.

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


Key Concepts

  • Attracting, retaining and growing customers

  • Building customer relationships and customer equity

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Customer relationship levels and tools Responsibility

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


Key Concepts

  • Attracting, retaining and growing customers

  • Building customer relationships and customer equity

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Building Long-Term Relationships Responsibility

  • Customer-oriented personnel

  • Effective training programs

  • Empowered employees

  • Teamwork

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Strategic Planning Responsibility

  • 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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Strategic Planning



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The Marketing Plan Responsibility

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

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Why Write a Marketing Plan?

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Marketing Objective performance

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

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performance 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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SWOT Analysis performance

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

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S performance

Things the company does well.



Things the company does not do well.


Conditions in the external environment that favor strengths.



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 performance

  • 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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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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Sub-Notebooks and Hand-Held Computer

Integrated phone/Palm devices





Laptop and Personal Computers




BCG Portfolio Matrix Example

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Build performance

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


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


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


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

Strategies for Resource Allocation

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Developing Growth Strategies performance

Product/ Market Expansion Grid







1. Market


3. Product


4. Diversification

2. Market




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

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 performance

Identifying the



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 performance

Strategy a Company


Depends on Its

Industry Position

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The segmentation process divides the total market into performance 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 performance

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 performance


Amount of money

that consumers

have to pay to

Obtain the product



combination that a

company offers a

target market





Activities that

persuade target

customers to buy

the product


Company activities

that make the

product available