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How are companies and marketers responding to the new challenges? THE NEW ECONOMY : THE NEW ECONOMY DIGITAL REVOLUTION HAS PLACED A WHOLE NEW SET OF CAPABILITIES IN THE HANDS OF CONSUMERS & BUSINESSES What consumers have today they didn’t have yesterday: Substantial increase in buying power Greater variety of available goods & services Greater amount of information Greater ease in interacting & planning & receiving orders Ability to compare notes on products & services Today’s companies have new set of capabilities : Today’s companies have new set of capabilities Websites can offer information & serve as sales channels Internet as information source & aid to marketing research Internet/Intranet speed up internal communication Facilitates communication thru’ emails Internet facilitates communication response to consumers Customise offerings Improve purchasing, recruitment, training Opens up supply chain management efficiencies Slide 4: THE COMPANIES AT GREAT RISK ARE THOSE THAT THAT FAIL TO MONITOR THEIR CUSTOMERS & COMPETITORS AND TO CONTINUOUSLY IMPROVE THEIR VALUE OFFERINGS MARKETING TASKS : MARKETING TASKS 3 stages of marketing practice: Entrepreneurial marketing Formulated marketing Interpreneurial marketing THE BOTTOM LINE IS THAT EFFECTIVE MARKETING CAN TAKE MANY FORMS. THERE WILL BE CONSTANT TENSION BETWEEN THE FORMULATED SIDE OF MARKETING & THE CREATIVE SIDE. Easier to learn formulated side Scope of marketing : Scope of marketing MARKETING IS TYPICALLY SEEN AS THE TASK OF CREATING, PROMOTING, AND DELIVERING GOODS & SERVICES TO CONSUMERS & BUSINESS. MARKETING MANAGERS SEEK TO INFLUENCE THE LEVEL, TIMING, AND COMPOSITION OF DEMAND TO MEET THE ORGANISATION’S OBJECTIVES DEMAND STATES & MARKETING TASKS : DEMAND STATES & MARKETING TASKS Demand Implies Marketing tasks Negative Dislike & avoid: Analyse reasons for eg. Vaccination dislike. Can marketing change attitudes None Unaware or Connect benefits of uninterested benefits of product with e.g. foreign with peoples natural language needs & interests Declining Companies Analyse cause. Can it be sooner or later revitalised? face. E.g. decline in college admissions Latent Unmet demands Assess market size & develop eg. R.O.systems offerings Slide 8: Demand Implies Marketing tasks Irregular Seasonal/daily: Synchromarketing Museums on weekdays Full Pleased with their Maintain it in the volume face of changing consumer preference & increasing competition Overfull Demarketing Unwholesome Campaign against Persuade people to give up some- cigarettes for eg. thing they like MARKETING 10 TYPES OF ENTITIES : MARKETING 10 TYPES OF ENTITIES PRODUCTS Physical products accounts for most countries’ production & marketing effort eBay world’s largest person-to-person on-line trading commmunity SERVICES As economies advance, growing proportion of their activities focused on production of services US 70:30 :: services:goods India 50:50 :: services:goods EXPERIENCES By orchestrating several services & goods, a firm can create, stage, & market experiences Walt Disney World’s Magic Kingdom MARKETING 10 TYPES OF ENTITIES (contd.) : MARKETING 10 TYPES OF ENTITIES (contd.) EVENTS Promote time-based events such as Olympics, company anniversaries, tradeshows, etc. PERSONS celebrity marketing is major business PLACES Compete actively to attract tourists, company headquarters, investment, and new residents PROPERTIES Intangible rights of ownership of either real property (real estate) or financial property (stocks & bonds) MARKETING 10 TYPES OF ENTITIES (contd.) : MARKETING 10 TYPES OF ENTITIES (contd.) ORGANISATIONS Actively work to build strong, favourable image in the minds of their target public Corporate identity programmes like “Let’s Make Things Better”, Phillips INFORMATION Can be produced & marketed as a product like schools & Universities IDEAS Every market offering includes a basic idea Charles Revlon of Revlon observed: “In the factory, we make cosmetics, in the store we sell hope” Social marketing busy promoting ideas such as “Say no to drugs”, say “Save Rainforest”,.. DECISIONS MARKETERS MAKE : DECISIONS MARKETERS MAKE Host of decisions, major ones: Product features How many salespeople to hire Ad budgets Questions vary in importance in different marketplace: Consumer markets Business markets Global markets Nonprofit & Governmental markets SOCIAL & MANAGERIAL DEFINITION OF MARKETING : SOCIAL & MANAGERIAL DEFINITION OF MARKETING MARKETING IS A SOCIETAL PROCESS BY WHICH INDIVIDUALS & GROUPS OBTAIN WHAT THEY NEED & WANT THROUGH CREATING, OFFERING, & FREELY EXCHANGING PRODUCTS & SERVICES OF VALUE WITH OTHERS. THERE WILL ALWAYS, ONE CAN ASSUME, BE NEEDED FOR SOME SELLING. BUT THE AIM OF MARKETING IS TO KNOW & UNDERSTAND THE CUSTOMER SO WELL THAT THE PRODUCT OR SERVICE FITS HIM & SELLS ITSELF. IDEALLY, MARKETING SHOULD RESULT IN A CUSTOMER WHO IS READY TO BUY. ALL THAT SHOULD BE NEEDED THEN IS TO MAKE THE PRODUCT OR SERVICE AVAILABLE- Peter Drucker, a leading management theorist AMERICAN MANAGEMENT ASSOCIATION : AMERICAN MANAGEMENT ASSOCIATION MARKETING IS THE PROCESS OF PLANNING & EXECUTING THE CONCEPTION, PRICING, PROMOTION, AND DISTRIBUTION OF IDEAS, GOODS, & SERVICES TO CREATE EXCHANGES THAT SATISFY INDIVIDUAL & ORGANISATIONAL GOALS. MARKETING MANAGEMENT AS THE ART & SCIENCE OF CHOOSING TARGET MARKETS & GETTING, KEEPING, & GROWING CUSTOMERS THROUGH CREATING, DELIVERING, & COMMUNICATING SUPERIOR CUSTOMER VALUE. MARKETING CONCEPTS & TOOLS : MARKETING CONCEPTS & TOOLS Defining marketing Core marketing concepts Slide 16: Target market Place Product Price Promotion Marketing information system Marketing planning system Marketing organization & implementation system Marketing control system Suppliers Competitors Publics Marketing intermediaries Demographic/Economic environment Technical/Physical environment Political/Legal environment Social/cultural environment Marketing Environment CORE MARKETING CONCEPTS : CORE MARKETING CONCEPTS Target markets & segmentation Marketplace, marketspace, and metamarket Marketers & prospects Needs, wants, & demands Product, offering, and brand Value & satisfaction Exchange & transactions Relationships & networks Marketing channels Supply chain Competition Marketing environment Marketing programme TARGET MARKETS & SEGMENTS : TARGET MARKETS & SEGMENTS Can’t satisfy every one Market segments identified, basis: Target markets Positioning Figure: A simple marketing system Communication Industry Goods/Services Market (a collection (a collection of sellers) Money of buyers) Information MARKETPLACE, MARKETSPACE, & METAMARKET : MARKETPLACE, MARKETSPACE, & METAMARKET Store of flows in a modern exchange economy Resources Resources Resource Money markets Money Taxes Services goods money Services, Manufacturers money government taxes consumer Markets taxes, goods markets services markets Services, Taxes, money goods Money Money Goods & services Intermediate goods & services markets Slide 20: Marketplace: Physical store Market space: Digital – Internet Meta market: Cluster of complementary products/serices: - closely related in minds ofconsumersa, but - spread across a diverse set of industries Automobile meta market: - automobile manufacturing, car dealers (new & old) - financing companies, insurance companies - mechanics, spare parts, service shops - auto magazines, classified auto ads in newspapers - auto sites in Internet IN PURCHASING A CAR, BUYER WILL GET INVOLVED IN MANY PARTS OF THIS METAMARKET, & THIS HAS CREATED AN OPPORTUNITY FOR META INTERMEDIARIES TO ASSIST BUYERS TO MOVE SEAMLESSLY THROUGH THESE GROUPS, ALTHOUGH THEY ARE DISCONNECTED INPHYSICAL SPACE Marketers & prospects : Marketers & prospects A MARKETER IS SOMEONE SEEKING RESPONSE ( attention, a vote, a donation) FROM ANOTHER PARTY, CALLED THE PROSPECT Slide 22: Needs, wants, & demand Product offerings & brands : Product offerings & brands Value proposition Brand VALUE & SATISFACTION : VALUE & SATISFACTION Value = Benefits = Functional benefits + Emotional benefits Costs Monetary costs+Time costs+Energy costs+Psyche c. The marketing can increase the value of the customer offering in several ways: Raise benefits Reduce costs Raise benefits & reduce costs Lower benefits by less than the reduction in costs Exchange and transactions : Exchange and transactions For exchange potential to exist, 5 conditions have to be satisfied: There are at least 2 parties Each party has something that may be of value to the other party Each party is capable of communication & delivery Each party is free to accept or reject the exchange offer Each party believes it is appropriate or desirable to deal with the other party Transaction is a trade of values between two or more parties: A barter transaction involves trading goods or services for other goods or services A transaction involves several services: - at least two things of value - agreed-upon conditions - a time of agreement - a place of agreement Transfer differs from transaction : Transfer differs from transaction Gifts, subsidies, and charitable contributions are all transfers Transferrer expects to receive something in exchange for gift, for example: - gratitude or seeing changed behaviour in the recipient - professional fund raisers provide benefits to doners, such as thank-you notes, doners magazine RELATIONSHIP & NETWORKS : RELATIONSHIP & NETWORKS TRANSACTION MARKETING IS PART OF A LARGER IDEA CALLED RELATIONSHIP MARKETING RELATIONSHIP MARKETING HAS THE AIM OF BUILDING MUTUALLY SATISFYING LONG-TERM RELATIONSHIPS WITH KEY PARTIES – CUSTOMERS, SUPPLIERS, DISTRIBUTORS – IN ORDER TO EARN & RETAIN THEIR BUSINESS. THE ULTIMATE OUTCOME OF RELATIONSHIP MARKETING IS THE BUILDING OF A UNIQUE COMPANY ASSET CALLED A MARKETING NETWORK. A MARKETING NETWORK CONSISTS OF THE COMPANY & ITS SUPPORTING STAKEHOLDERS (CUSTOMERS, EMPLOYEES, SUPPLIERS, DISTRIBUTORS, RETAILERS, AD AGENCIES,…) WITH WHOM IT HAS BUILT PROFITABLE BUSINESS RELATIONS. COMPETITION SHIFTS TO BETWEEN NETWORKS, BETTER NETWORK GAINS. Marketing channels : Marketing channels To reach a target market, the marketer uses 3 kinds of marketing channels: Communication channels Distribution channels Service channels Supply chain : Supply chain WHEREAS MARKETING CHANNELS CONNECT THE MARKET TO TARGET BUYERS, THE SUPPLY CHAIN DESCRIBES A LONGER CHANNEL STRETCHING FROM RAW MATERIALS TO COMPONENTS TO FINAL PRODUCTS THAT ARE CARRIED TO THE FINAL BUYER Marketing environment : Marketing environment Task environment Broad environment Marketing programme : Marketing programme THE MARKETING PROGRAMME CONSISTS OF NUMEROUS DECISIONS IN THE MIX OF MARKETING TOOLS TO USE. THE MARKETING MIX IS THE SET OF MARKETING TOOLS THE FIRM USES TO PURSUE ITS MARKETING OBJECTIVES IN THE TARGET MARKET MARKETING FOR THE NEW ECONOMY : MARKETING FOR THE NEW ECONOMY McCarthy’s four Ps of marketing Marketing-mix strategy Robert Laubertborn’s four Cs 4 Ps : 4 Ps Marketing Product Price Promotion Place Variety List price Sales promotion Channels Quality Discounts Advertising Coverage Design Allowances Sales force Assortments Features Payment period Public relations Locations Brand name Credit terms Direct marketing Inventory Packaging Transport Sizes Services Warranties Returns Marketing-mix strategy : Marketing-mix strategy company Distribution channels Target market Offering mix Product Servic prices Sales promotion Advertising Sales force Public relations Direct mail, Telemarketing & Internet Promotion mix CORRESPONDING FOUR Cs : CORRESPONDING FOUR Cs Four Ps Four Cs Product Customer solution Price Customer cost Place Convenience Promotion Communication COMPANY ORIENTATIONS TOWARD THE MARKETPLACE : COMPANY ORIENTATIONS TOWARD THE MARKETPLACE Production concept Product concept Selling concept Marketing concept Integrated marketing Customer concept Societal marketing concept Holistic marketing Production concept : Production concept Oldest concept Consumers prefer products widely available & inexpensive Management focus: - achieving high production efficiencies - low costs - mass distribution More appropriate in developing economies Also appropriate when consumer wants to expand market Product concept : Product concept Consumers favour products offering: - most quality, performance, or innovative features Assumes buyers admire well-made products, can evaluate quality & performance Danger: management might commit the “better” mousetrap fallacy: - better product would attract consumers Theodre Levitt called “Marketing Myopia”: - American Railroad business Selling concept : Selling concept Consumers & businesses on their own will not buy enough Hence need for aggressive selling & promotion Ssumes buying inertia Sergio Zyman, ex-Coca-Cola’s VP Marketing Unsought goods promoted most aggressively: - insurance, encyclopedia, non-profit areas, college admissions Political candidates to voters Also firms with overcapacity High risks: - bad-mouthing by those who don’t like it - bad news travels faster Marketing concept : Marketing concept MARKETING CONCEPT HOLDS THAT THE KEY TO ACHIEVING ITS ORGANISATIONAL GOALS CONSISTS OF THE COMPANY BEING MORE EFFECTIVE THAN COMPETITORS IN CREATING, DELIVERING, & COMMUNICATING SUPERIOR CUTOMER VALUE TO ITS CHOSEN TARGET MARKETS. IT CRYSATALISED IN THE MID -1950s & HAS BEEN EXPRESSED IN MANY COLOURFULL WAYS: “Meets needs profitably” “Finds wants & fills them” “Love the customer not the product” “Putting people firs” “Partners for profit” Contrast between sales & marketing concepts : Contrast between sales & marketing concepts Companies do best when they choose their market(s) carefully & prepare tailored marketing programmes Customer needs : Customer needs A COMPANY CAN DEFINE ITS TARGET MARKET BUT FAIL TO UNDERSTAND THE CUSTOMER’S NEEDS: Irridium Understanding customer needs & wants not all that simple: Some customers have needs they are not fully conscious of, or They don’t articulate their needs They use words requiring some interpretation Customers are notoriously lacking in foresight: 10 or 15 years ago, how many were asking for cell-phones, fax machines, Walkman’s, VCRs, video-cameras, CDs,… - making Sony market-driving, not market-driven company Integrated marketing : Integrated marketing WHEN ALL THE COMPANY’S DEPARTMENTS WORK TOGETHER TO SERVE THE CUSTOMER’S INTERESTS, THE RESULT IS INTEGRATED MARKETING: Integrated marketing takes place at two levels: Various marketing functions work together Marketing must be embraced by other departments To foster teamwork among all departments, company carries out: External marketing Internal marketing Traditional vs. modern company organisation chart : Traditional vs. modern company organisation chart Tradditional organistional (b) Modern organisational chart chart Top Customers manage- ment Middle management Front Line Front-line people Middle management Customers Top Manage- ment C U S T O M E R S C U S T O M E R S Yet most companies don’t accept marketing concept until… : Yet most companies don’t accept marketing concept until… Sales decline Sow growth Changing buying patterns Increasing competition Increasing marketing expenditure 3 hurdles in converting to marketing orientation: Organisational resistance Slow learning Fast forgetting Nature of threats : Nature of threats Marketing as an equal function initially Marketing as a more important function Customer as the controlling function & Marketing as the integrating function Customer concept : Customer concept Reasons to embrace the customer concept: Company’s assets have little value without the existence of customers Attracting & retaining customers key company tasks Customers attracted thru’ competitively superior offerings & retained thru’ satisfaction Marketing’s task: develop a superior offering & deliver customer satisfaction Customers satisfaction affected by performance of other departments Marketing needs to influence these other departments to cooperate in delivering customer satisfaction Move towards customistion (e.g., BMW): Stating point Focus Means Ends Individual Customers 1 – 1 marketing Profitable growth customer needs & integration & thru’ capturing values value chain customer share, loyalty & lifelong value Societal marketing : Societal marketing HOLDS THAT THE ORGANISTION’S TASKS IS TO DETERMINE THE EEDS, WANTS, & INTERESTS 7 TO DELIVER THE DESIRED SATISFACTION MOOORE EFFICIENTLY THAN COMPETITORS IN A WAY THAT PRESERVES OR ENHANCES THE CONSUMER’S WELL-BEING: For example Bodyshop Customer relationship marketing : Customer relationship marketing RELATIONSHIP MARKETING HAS THE AIM OF BUILDING MUTUALLY SATISFYING LONG-TERM RELATIONSHIPS WITH KEY PARTIES – CUSTOMERS, SUPPLIERS, DISTRIBUTORS & OTHER MARKETING PARTNERS – INORDER TO EARN & RETAIN THEIR BUSINESSES: Marketing must not only do customers relationship management, but also partner relationship management as well 4 key constituents of marketing are customers, employees, marketing partners, & members of the financial community How business & marketing are changing : How business & marketing are changing Major forcers have created new behaviours & challenges: Customers increasingly expect higher quality & service & some customization: - Perceive fewer real product differences & show less brand loyalty - Obtain extensive product information from the Internet, permits more intelligent shopping Brand manufacturers facing intense competition from domestic & foreign brands, resulting in rising promotion costs & shrinkage in profit margins: - Store brands competing Store-based retailers suffering: - “Category killers” - Catalogue houses - Home shopping TV - Direct mail Company responses & adjustments : Company responses & adjustments Reengineering Outsourcing E-commerce Benchmarking Alliances Partner-supplier Market-centred Global & local – Glocal Decentralised – “intrapreneurship” at local level Marketers responses to adjustments : Marketers responses to adjustments Customer relationship marketing Customer lifetime value Customer share Target marketing Customisation Customer database Integrated marketing communication Channels as partners Every employee a marketer Model-based decision making SUCCESSFUL COMPANIES WILL BE THOSE WHO CAN KEEP THEIR MARKETING CHNGING WITH THE CHANGES IN THEIR MARKETPLACE & MARKET SPACE Holistic marketing concept : Holistic marketing concept Based on development, design, & implementation of marketing programmes, processes & activities that recognize their breadth, & interdependencies Holistic marketing recognizes that “everything matters” with marketing & that a broad, integrated perspective is often necessary 4 components of holistic marketing: Relationship marketing Integrated marketing Internal marketing Social responsibility marketing Exhibit: Holistic Marketing Concept : Exhibit: Holistic Marketing Concept Senior management Products & Serices Marketing Other Communication Channels department departments Internal marketing Integrated marketing Holistic marketing Societal marketing Relationship marketing Legal Environment Community Customer Partner Ethics Channel You do not have the permission to view this presentation. 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