chapter 1 %3b defining marketing
TRANSCRIPT
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Marketing Management
Chapter 1 : Defining Marketing
Simi Grosman
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WHAT DO YOU WANT FROM THIS CLASS?WHAT DO YOU WANT FROM THIS CLASS?
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OBJECTIVESOBJECTIVES
In this lecture we will address the following questions:
1. Why marketing is important?
2. What is the scope of marketing
3. How does marketing fit within an organization4. What are some fundamental marketing concepts?
5. How has marketing management changed
6. What are the tasks necessary for successful
marketing management?
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DEFINITIONS : MARKETINGDEFINITIONS : MARKETING
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 goals.
Marketing Management is the art and science of choosing target markets
and getting, keeping, and growing customers through creating,
delivering, and communicating superior customer value.
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Copyright
2009 Pearson Education
Canada
1 - 5
Marketing Management Tasks
Develop market strategies and plans
Capture marketing insights
Connect with customers
Build strong brands
Shape market offerings
Deliver value
Communicate value
Create long-term growth
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Marketing according to Sergio Zyman
DEFINITIONSDEFINITIONS
Marketing is about systematically and thoughtfully
coming up with plans and taking actions that get more
people to buy more of your product more often so thatthe company makes more money
Forget the flair, forget the hype,,,,its a business
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Goods Physical goods constitute the bulk of production and marketing
efforts.
Services A growing portion of business activities are focused on the
production of services. The U.S. economy today consists of a 7030services to goods mix
Events Marketers promote time-based events such as trade shows, artistic
performances, and the Olympics
Experiences By orchestrating several services and goods, a firm can create and
market experiences such as Walt Disney Worlds Magic Kingdom.
What Can Be Marketed? Page 5What Can Be Marketed? Page 5 -- 88
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Places Cities, states, regions, and whole nations compete actively to attract
tourists, factories, and new residents
Properties Are intangible rights of ownership of either real property (real estate) or
financial property (stocks and bonds
Organizations Actively work to build a strong, favourable, and unique image in the minds
of their target publics.
Information
Can be produced and marketed as a product. Schools, universities, andothers produce information and then market it.
Persons Celebrity marketing is big business
What Can Be Marketed? Page 5What Can Be Marketed? Page 5 -- 88
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Marketplaces,Marketplaces, MarketspacesMarketspaces && MetamarketsMetamarkets Page 10Page 10
The marketplace is physical; the marketspace is digital
Mohan Sawhney ( Professor at Kellogg School ofManagement) has proposed the concept of metamarkets
to describe a cluster of complementaryproducts andservices that are closelyrelated in the minds ofconsumers but are spread across a diverse set ofindustries. An example is the automobile industrythatconsists of physical locations (car dealers) andmarketspace locations (Internet locations) thatconsumers use in deciding what car to purchase.
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Key Customer MarketsKey Customer Markets Page 10Page 10
A) Consumer Markets
Consumer goods and services such as soft drinks and cosmetics spend agreat deal of time trying to establish a superior brand image.
B)Business Markets
Companies selling business goods and services often face well-trained
and well-informed professional buyers who are skilled in evaluating
competitive offerings.C) Global Markets ( P.10 - Bombardier)
Companies face challenges and decisions regarding which countries to
enter, how to enter the country, how to adapt their products/services to
the country, and how to price their products.
D) Nonprofit and Governmental MarketsCompanies selling to these markets have to price carefully because
these organizations have limited purchasing power.
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The New Marketing RealitiesThe New Marketing Realities Page 15Page 15--1616
A) Changing technology.B) Globalization.
C) Deregulation.
D) Privatization.
E) Customer empowerment.F) Customization.
G) Heightened competition.
H) Industry convergence.
I) Retail transformation.J) Disintermediation.
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Copyright
2009 Pearson Education
Canada
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New Consumer Capabilities Page 17
A substantial increase in buying power
A greater variety of available goods and services
A 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
An amplified voice to influence public opinion
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Copyright
2009 Pearson Education
Canada
1 - 13
New Company Capabilities Page 17 -18
Internet
Market Research
Internal communications
Target marketing
Mobile marketing
Improved marketing mix
Production of differentiated goods & services
Internal & external training
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Core Marketing ConceptsCore Marketing Concepts Page 19Page 19 -- 2020
Production ConceptThe production concept holds that consumers will prefer products that
are widely available and inexpensive.
Product Concept
The product concept holds that consumers will favour those productsthat offer the most quality, performance, or innovative features.
Selling ConceptThe selling concept holds that consumers and businesses will ordinarily
not buy enough of the organizations products, therefore, the
organization must undertake an aggressive selling and promotion effort.
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Core Marketing ConceptsCore Marketing Concepts Page 19Page 19 -- 2020MarketingConcept
Marketing Concept
The marketing concept holds that the key to achieving organizational goals consistsof the company being more effective than competitors in creating, delivering, and
communicating superior customer value to its chosen target markets.
1) Reactive market orientationunderstanding and meeting consumers
expressed needs.
2) Proactive marketing orientationresearching or imagining latent
consumers needs through aprobe-and-learn process.a. Companies that practice both reactive and proactive marketing
orientation are implementing a total market orientation.
Holistic Marketing ConceptHolistic marketing can be seen as the development, design, and implementation of
marketing programs, processes, and activities that recognizes the breath andinterdependencies of their efforts. Holistic marketing recognizes that everything
matters with marketingthe consumer, employees, other companies, competition,
as well as society as a whole.
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Relationship MarketingRelationship Marketing Page 20Page 20--2121
Relationship marketing has the aim of building mutually satisfying long-term
relationships with key partiescustomers, suppliers, distributors, and othermarketing partners.
Relationship marketing builds strong economic, technical, and social ties among theparties.
Marketing must not only do customer relationship management (CRM) but also
partnership relationship management (PRM).
Four key constituents for marketing are:
a. Customers.b. Employees.
c. Marketing partners (channel partners).d. Members of the financial community.
The ultimate outcome of relationship marketing is the building of a unique company
asset called a marketing network.A marketing network consists of the companyand its supporting stakeholders(customers, suppliers, distributors, retailers, ad agencies, universityscientists,and others) with whom it has built mutuallyprofitable business relationships.
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The Ten Deadly Sins of MarketingThe Ten Deadly Sins of Marketing Page 21Page 21
Get To Know These or They Will Get You Every Time !!!
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Marketing Mix & Customer MixMarketing Mix & Customer Mix
The marketers task is to devise marketing activities and assemble fully
integrated marketing programs to create, communicate, and delivervalue for consumers
Robert Lauterborn suggests that the sellers 4Ps correspond to the
customers 4Cs:
The Four Ps
Product
Price
Place
Promotion
The Four Cs
Customer solution
Customer cost
Convenience
Communication
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Copyright 2009 Pearson Education Canada
1 - 19
Internal Marketing
Internal marketing is the task of hiring, training, andmotivating able employees who want to serve customers
well.
Internal marketing is also about selling the management
team on your ideas & approach.
Page 25 Assessing which companydepartments arecustomer minded.
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Copyright 2009 Pearson Education Canada
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Marketing Management Tasks
Developing marketing
strategies
Capturing marketing
insightsConnecting with
customers
Building strong brands
Shaping market
offerings
Delivering value
Communicating
value
Creating long-term
growth
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Copyright 2009 Pearson Education Canada
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Functions of CMOs
Strengthening the brands
Measuring marketing effectiveness
Driving new product development based on customerneeds
Gathering meaningful customer insights
Utilizing new marketing technology
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Copyright 2009 Pearson Education Canada
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Improving CMO Success
Make the mission and responsibilities clearFit the role to the marketing culture and
structure
Ensure the CMO is compatible with the CEO
Remember that showpeople dont succeedMatch the personality with the CMO type
Make line managers marketing heroes
Infiltrate the line organization
Require right-brain and left-brain skills
Source: Gail McGovern and John A. Quelch, The Fall and Rise of the CMO,Strategy+Business, Winter 2004. Reprinted by permission.
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HOWTHIS FITSINTO MARKETING?HOWTHIS FITSINTO MARKETING?
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HOWTHIS FITSINTO MARKETING?HOWTHIS FITSINTO MARKETING?
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Needs and
Wants
Target Market
Organizational
Goals
Business
ProcessesAsk
Marketing
Research
Business
Intelligence
Learn Database
management
Deliver desired
satisfactions:
SOLUTIONS
Transaction and
hopefully a relationship
Competitor
Competitor
Competitor
MARKETING CONCEPTMARKETING CONCEPT
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1.How can we spot and choose the right market segment(s)?
MARKETERS FAQsMARKETERS FAQs
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1.How can we spot and choose the right market segment(s)?
MARKETERS FAQsMARKETERS FAQs
Market ResearchStudy market and find gaps / opportunitiesSpecialization
Target consumersFocus GroupsSurvey target audience
Competitive AnalysisAnalyze socio-economic trendsBuy competitive info from third parties
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2.How can we differentiate our offerings?
MARKETERS FAQsMARKETERS FAQs
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2.How can we differentiate our offerings?
MARKETERS FAQsMARKETERS FAQs
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3.How should we respond to customers who buy on price?
MARKETERS FAQsMARKETERS FAQs
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3.How should we respond to customers who buy on price?
MARKETERS FAQsMARKETERS FAQs
Drop pricesSalesModify product
Emphasize qualityRaise pricesLoyalty programsAmplify notion of valueLow prices are a bad thing People pay premium for value
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4.How can we compete against lower-cost, lower-price
competitors?
MARKETERS FAQsMARKETERS FAQs
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4.How can we compete against lower-cost, lower-price
competitors?
MARKETERS FAQsMARKETERS FAQs
Create perceived valueAdd features & functions
Branding
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5.How far can we go in customizing our offering for each
customer?
MARKETERS FAQsMARKETERS FAQs
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6.How can we grow our business?
MARKETERS FAQsMARKETERS FAQs
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6.How can we grow our business?
MARKETERS FAQsMARKETERS FAQs
Find new marketsIntroduce new incentives
Expand product lineNew servicesLoyalty programs
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8.How can we reduce the cost of customer acquisition?
MARKETERS FAQsMARKETERS FAQs
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9.How can we keep our customers loyal for longer?
MARKETERS FAQsMARKETERS FAQs
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10.How can we tell which customers are more important?
MARKETERS FAQsMARKETERS FAQs
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11.How can we measure the payback from advertising, sales
promotion, and public relations?
MARKETERS FAQsMARKETERS FAQs
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12.How can we improve sales force productivity?
MARKETERS FAQsMARKETERS FAQs
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13.How can we establish multiple channels and yet manage
channel conflict?
MARKETERS FAQsMARKETERS FAQs
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14.How can we get the other company departments to be more
customer-oriented?
MARKETERS FAQsMARKETERS FAQs
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Read Case Study on Page 28 and beprepared to discuss various tasks to
be considered
Zeus IncZeus Inc Atlas Camera Division P.28Atlas Camera Division P.28--3030
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MarketingChannels
PublicsSuppliers
Competitors
Price Product
PlacePromotion
Target
Consumer
Technological
Natural
Environment
Social-Cultural
EnvironmentPolitical-Legal
Environment
Demographic
Economic
Environment
THE COMPLETE FRAMEWORKTHE COMPLETE FRAMEWORK
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Suppliers
Interme-
diaries Customers
Upstream Downstream
The Value Chain
MARKETING VALUE CHAINMARKETING VALUE CHAIN
Marketing
FinanceSales
IT
HR
Manufac-
turing
Publics
CompetitorsCompetitors
Competitors
Your objective must be to
integrate a value chain that
delivers the best value
proposition to the market
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THE MARKETING PROCESSTHE MARKETING PROCESS
Situation
Analysis
SWOT
Analysis
Positioning
Map
Segmentation,
Targeting and
Positioning
Marketing
Mix Metrics
Feedback
Create value
for customers
and build
customer
relationships
Capture
value from
customers
in return
DivideChoose
Differentiate
Offer
Build
Nurture
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THE THREE PRINCIPLES OF MARKETINGTHE THREE PRINCIPLES OF MARKETING
PrinciplesOf
Marketing
CompetitiveCompetitive
or Differentialor Differential
AdvantageAdvantage
FocusFocus
Customer ValueCustomer Value
and the Value Equationand the Value Equation
Value =Value =Perceived BenefitsPerceived Benefits
PricePrice
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Does Marketing Create or SatisfyNeeds?
Take a position:
Marketing shapes consumer needs andwants.
versus
Marketing merelyreflects the needs andwants of consumers.
Class DiscussionClass Discussion
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Does Marketing Create or SatisfyNeeds?Pro: With the vast amount of information available to marketers today and
the emphasis on relational marketing, marketers are in more of a
position to suggest needs and wants to the public. Certainly, not all
consumers have all the needs and wants suggested by society today.
However, with the vast amount of exposure to these societal needs and
wants via the media, a substantial amount of consumers will, through
mere exposure, decide that they have the same needs and wants of
others. Marketers by their efforts increase peer pressure, and group
thinking, by showing examples of what others may have that they do
not. An individuals freedom to choose is substantially weakened by
constant and consistent exposure to a range of needs and wants of
others. Marketers should understand that when it comes to resisting thepressure to conform, that individuals are and can be weak in their
resolve. Marketers must take an ethical position to only market to those
consumers able to purchase their products.
Class DiscussionClass Discussion
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Does Marketing Create or SatisfyNeeds?
Con: Marketing merely reflects societal needs and wants. The perceptionthat marketers influence consumers purchasing decisions discounts an
individuals freedom of choice and their individual responsibility. With theadvent of the Internet, consumers have greater freedom of choice and
more evaluative criteria than every before. Consumers can and do make
more informed decisions than previous generations. Marketers can be
rightly accused of influencing wants, along with societal factors such as
power, influence, peer pressure, and social status. These societal factors
pre-exist marketing and would continue to exist if there was no marketingefforts expended.
Class DiscussionClass Discussion
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For Next ClassFor Next Class
1. Read Chapters 1&2
2. Well have a discussion and an in-class exercise about the 22Immutable Laws of Marketing.
Al Ries & Jack Trout
Harper Collins Publishers
Research information on the topic: go to the library, research over the
Internet, etc, and get a general idea of whats this about. Come
prepared to have a discussion in class about the topic. Students will
be asked to elaborate on one of the 22 Immutable Laws.