The Role of Marketing and Marketing Management

1
The Role of Marketing and Marketing Management

• 10/9, 2007

2
Marketing A Guiding Corporate Philosophy or A
Function of Business?

• As An Exchange Process
• Marketing is the process of planning and
  executing the conception, pricing, promotion, and
  distribution of ideas, goods, services to create
  exchanges that satisfy individual and
  organizational goals (American Marketing
  Association)
• As A Societal Process
• Marketing activities facilitate the flow of
  products from producers to customers

3
Exchange and Transaction

• Exchange is the act of obtaining a desired object
  from someone by offering something in return
• Transaction refers to a trade between two parties
  that involves at least two things of value,
  agreed-upon conditions, a time of agreement, and
  a place of agreement

4
For-profit and Nonprofit Exchanges

• For-profit exchanges are the goal of businesses
  that seek to generate revenues over and above
  their costs
• Nonprofit organizations may sell products at a
  profit, then use the profits to cover the
  organizations they may also seek other goals
  such as blood donations, votes for political
  candidates, reduced smoking, recycled packaging,
  or volunteer time for needy children or the
  elderly. costs

5
Why Marketing?
Shareholder Value
Capital Market Region
Organizational survival and growth
Current and potential profits
Competitors
Competitors
Attract and retain customers
Product Market Region
Customer Value
Firm
6
Types of Customers

• Organizational buyers purchase good and services
  for businesses, government agencies, and other
  institutions, such as hospitals and schools.
• Consumers buy goods and services for their own
  use or for gifts to others

7
Business Markets Business Buyer Behavior

• The business market is vast and involves far more
  dollars and items than do consumer markets.
• Business buyer behavior refers to the buying
  behavior of the organizations that buy goods and
  services for use in the production of other
  products and services that are sold, rented, or
  supplied to others.

8
Business Markets

• Nature of the Buying Unit
• Business purchases involve more decision
  participants.
• Business buying involves a more professional
  purchasing effort.

• Market Structure and Demand
• Contains far fewer but larger buyers.
• Customers are more geographically concentrated.
• Business demand is derived from consumer demand.

9
Types of Decisions and the Decision Process
Business buyers usually face more complex buying
decisions.
Business buying process tends to be more
formalized.
Buyers and sellers are much more dependent on
each other.
10
Needs, Wants, and Demands

• Needs describe basic human requirements
• These needs become wants when they are directed
  to specific objects
• Demands are wants for specific products backed by
  an ability to pay
• Companies must measure not only how many people
  want their products but also how many would
  actually be willing and able to buy it

11
This Is a Need

• Needs - state of felt deprivation including
  physical, social, and individual needs.

12
Types of Needs

• Physical
• Food, clothing, shelter, safety
• Social
• Belonging, affection
• Individual
• Learning, knowledge, self-expression

13
This Is a Want

• Wants - form that a human need takes, as shaped
  by culture and individual personality.

14
This Is Demand
Demand
15
Need / Want Fulfillment

• Needs and Wants Fulfilled through a Marketing
  Offer
• Some combination of products, services,
  information, or experiences offered to a market
  to satisfy a need or want.

16
Marketing Management
Finding and increasing demand, also changing or
reducing demand, such as in demarketing.
Demand Management
17
Marketing As An Organizational Process

• The Marketing Concept
• The organization exists to identify and to
  satisfy the needs of its customers
• Satisfying customer needs is accomplished through
  an integrative effort throughout the organization
• The organizational focus should be on long-term
  as opposed to short-term success
• The Strategic Marketing Concept
• The corporations mission is to seek a
  sustainable competitive advantage by meeting
  customer needs

18
Different Roles for Marketing

• The nature of the marketing function varies
  significantly from company to company
• Most small business dont establish a formal
  marketing group at all. Their marketing ideas
  come from managers, the sales force, or an
  advertising agency. Such businesses equate
  marketing with selling.
• As companies become larger and more successful,
  executives recognize that there is more to
  marketing than setting the four Ps. They
  determine that effective marketing calls fro
  people skilled in segmentation, targeting, and
  positioning.
• Once the marketing group tackles higher-level
  tasks like segmentation, it starts to work
  closely with other departments. The company
  starts to think in terms of developing brands,
  rather than products, and brand managers become
  powerful players in the organization. The
  marketers believe its essential to transform the
  organization into a marketing-led company.

19
The Scope of Marketing
A product is anything that can be offered to a
market to satisfy a want or need

• Services
• Events
• Places
• Organizations
• Ideas

• Physical Products
• Experiences
• Persons
• Properties
• Information

20
Defining the Business
Who is being satisfied? Customer groups
What is being satisfied?
Customer needs
Definition of Business
How are customer needs being satisfied? Distincti
ve Competencies
21
Marketing Planning Sequence
Update historical data
Collect current situation data
Data analysis
Develop objectives, strategies, programs
Develop financial document
Negotiate final plan
Measure progress toward objectives
Audit
22
Marketing Plan

• A marketing plan is a written document containing
  the guidelines for the business centers
  marketing programs and allocations over the
  planning period
• The Objectives
• To define the current situation facing the
  product
• To define problems and opportunities facing the
  business
• To establish objectives
• To define the strategies and programs necessary
  to achieve the objectives
• To pinpoint responsibility for achieving product
  objectives
• To encourage careful and disciplined thinking
• To establish a customer-competitor orientation

23
Components of the Marketing Plan

• Executive Summary
• Situation Analysis
• Summary of Opportunities and Problems
• Objectives
• Product/Brand Strategy
• Supporting Marketing Programs
• Financial Documents
• Monitors and Controls
• Contingency Plan

24
The Executive Summary

• It focuses on the objectives, strategies, and
  expected financial performance
• If the plan is being used as a business plan for
  a new product or service, the Executive Summary
  is crucial and should include other relevant
  information such as the business model, the
  amount of money needed from investors, how the
  money will be spent, key management, and a
  summary of the financial projections

25
Situation Analysis

• Market Description
• Category/Competitor Definition
• Category Analysis
• Customer Analysis
• Competitor Analysis
• Full description of new products, including all
  pertinent test data and comparisons with
  competition
• Planning assumptions

26
Summary of Opportunitiesand Problems

• Key exploitable market opportunities
• Key problems that should be addressed by this plan

27
Objectives

• Quantitative and qualitative
• Corporate objectives (if appropriate)
• Divisional objectives (if appropriate)
• Marketing objective(s)
• Volume and Profit
• Time Frame
• Secondary Objectives (e.g., brand equity,
  customer)
• Program (Marketing Mix)

28
Product/Brand Strategy

• Customer target(s)
• Competitor target(s)
• Product/service features
• Core strategy
• Value proposition
• Product positioning

29
Supporting Marketing Programs

• Integrated marketing communications plan
• Advertising
• Promotion
• Sales
• Price
• Channels
• Customer management activities
• Website
• Marketing Research
• Partnerships/joint ventures

30
Financial Documents/Monitors and Controls

• Financial Documents
• Budgets
• Pro forma statements
• Monitors and controls
• Marketing Metrics
• Secondary Data
• Primary data

31
The Evolution of Marketing

• The Production Concept
• The Product Concept
• The Sales (Selling) Concept
• The Marketing Concept
• The Societal Marketing Concept

32
Principles of Marketing Management

• Customer Principle
• Competitor Principle
• Proactive Principle
• Cross-Functional Principle
• Continuous Improvement Principle
• Stakeholder Principle
• Synergy Principle

33
Synergy

• A system is a combination of component parts in
  dynamic interaction with one another the joint
  effects of their combined parts are referred to
  as synergy.
• Consistency Requirement Compelmentarity
  Requirement ? Synergy
• The 3 Ms Management Marketing Marketplace

34
Principles of Consistency and Complementarity
Purity
Consistency
Mild
Unscented
White
Complementarity
35
Interactions Among the 3 Ms
Firm
SBUs
Product Services
Management
Product
Internal Environment
Price
Macro Environment
Operating Environment
Distribution
Promotion
Marketing
Marketplace
36
Why Cant Sales and Marketing Get Along?

• Economic
• The need to divide the total budget
• Pricing
• Promotion costs
• Performance assessment
• Cultural
• Different people who spend their time in
  different ways

37
Changing the Rules of the Marketing Game

• Strategies are being created on the assumption
  that buyers do not know what they want but
  instead learn what they want
• Under the conventional view of customers, how
  they perceive, value, and select brands are the
  essential rule of the game
• If buyers learn what they want, then brand
  perceptions and preferences are outcomes of the
  learning process
• The emerging concept suggest that marketing is
  part learning-gaining an understanding of what
  buyers know now and of the process of buyer
  learning-and part teaching-playing a role in the
  buyer learning process.
• It is about being market driven and market
  driving