Download unit_1_notes_2 - KV Institute of Management and Information

Marketing Management
Introduction to marketing
Marketing is understood to mean the sale and purchase of goods and services but it is too
narrow viewable to Understand it so. The term 'marketing' is much wider in nature and scope.
It is not limited only to needs, sale and purchase of goods and services. It means the entire
process of satisfying the needs of consumers. It starts with the discovery of needs and Wants
of the consumers, and it continues 'till the wants are satisfied.
Marketing is the process of planning and executing the conception, pricing, promotion, and
distribution of ideas, goods, and services to create exchanges that will satisfy individual and
organizational objectives. Marketing is not only about providing products or services but also
about providing changing benefits to the changing needs and demands of the customer.
Marketing is thus the sum total of all the activities and processes including creating,
communicating, delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large.
Definition of marketing
According to William J. Stanton, "Marketing is a total system of interacting business activities
designed to plan, price, Promote and distribute want-satisfying products and services to the
present and potential customers".
According to Prof. Malcolm McNair, "Marketing is the creation and delivery of
standard of living to the society".
According to Theodore Levitt, "Marketing is getting and keeping the customer".
According to Cundiff and Still, "Marketing is the business process by which products are
matched to the market and through which the transfers of ownership are affected".
.
According to American Marketing Association (new definition), "Marketing is an
organizational function and a set of processes for creating, communicating and delivering
value to customers and for managing customer relationships in ways that benefit the
organisation and its stakeholders".
Nature of Marketing
The nature of marketing is as follows:
1.Specialised Business Function: In the early days, the selling function did not call for any
specialised skills as the sales Could have been effected on the production - basis. The
management of a firm, therefore, has to develop a particular organization with a view to
absorbing new ideas, new approaches and new market demands.
2.Socially Desirable Function: It requires constant interaction with the various strata of
society. It Manipulating the factors of production, distribution, promotion and price, and
also in influencing Consumption and consumer attitudes.
3.Integrative Function: It integrates and combines the other business functions like
production, finance, Etc., with a view to accomplishing the organizational objectives.
4.Reflects the Business Mission: Marketing reflects the business mission of a firm before
the public and society.
5.Adaptation to Environment Variables: It is said that change is the only basic law of
economics. The art of distributing the products and services among the various claimants,
has one basic law, i.e., change
6.Universal Function: It has a universality in the sense that it can be applied to both profitmotive and organisations. A profit-seeking business unit is dependant on marketing. The
institutions like hospital, Or political association also practice marketing in popularizing the
services offered by them.
7.Management Function: Marketing is a management function like management of other
functions such as Finance, personnel, etc. The business policies, strategies and programmes
related to marketing are mass Functions. These are needed to be planned,organised,
directed, coordinated, and controlled so as Marketing objectives.
8.Consumer orientation: In marketing each and every things is related to consumer needs
organization develop the product according to consumer needs.
Scope of Marketing
Marketing is typically seen as the task of creating, promoting, and delivering businesses. In
fact, marketing people are involved in ten types of entities in marketing. The scope of
marketing is as follows:
1)Goods: Physical goods constitute the bulk of most countries' production and marketing
effort. In developing nations, goods - particularly food, commodities, clothing, and housing are the mainstay of the economy.
2)Services: As economies advance, growing proportions of their activities focused on the
production of services. Services include the work of airlines, hotel, car rental firms, barbers
and beauticians, maintenance and repair people, dog kennels and dog therapists, as well as
professionals Working within or for companies, such as accountants, lawyers, engineers,
doctors, software programmers, and management consultants. Many market offerings consist
of a varied mix of goods and services.
3)Experiences: By orchestrating several services and goods, one can create, stage, and market
experiences.
4)Events: Marketers promote time-based events, such as the Olympics, company
anniversaries, major trade events, and artistic performances. There is a whole profession of
meeting planners who work out the details and stage it to come off perfectly.
5)Persons: Celebrity marketing has become a major business, Years ago, someone seeking
fame would hire a to plant stories in newspapers and magazines. Today every major film star
has an agent, a personal manager, public relations agency. Artists, musicians, CEOs,
physicians, high-profile lawyers and financiers, professionals are drawing help from celebrity
marketers.
6)Places: Places - cities, states, regions, and whole nations . Compete actively to attract
tourists, factory headquarters, and new residents. Place marketers include economic
development specialists, real estate commercial banks, local business associations, and
advertising and public relation agencies.
7)Properties: Properties are tangible rights of ownership of either real property (real estate) or
financial property (stock and bonds) Properties are bought and sold, and this occasion a
marketing effort. Real estate agents work for owners or seekers to sell or buy residential or
commercial real estate.
8)Organization: Organisations actively works to build a strong, favorable image in the mind
of their publics. It can be seen that corporate identity ads by companies seeking more public
recognition.
9)Information: Information can be produced and marketed as a product. This is essentially
what schools and universities produce and distribute at a price to parents, students, and
communities.
10)Ideas : Every market offering includes a basic idea at its core. Products and services are
platforms for delivering some idea or benefit. Marketers search hard for the core need they are
trying to satisfy. For example, a church must decide Whether to market itself as a place of
worship or a community center; the design of the church will be different depending on the
choice.
Core Concepts of Marketing
Marketing thinking starts with the customer's needs. Today the customer is in the driver's seat.
It is also because often change in the demand supply equation. The marketing has the core
basic concepts (also known as customer and market place concepts) as its elements given
below:
1. Needs, Wants and Demands: Consumers are motivated by their desire to satisfy
complex needs, and these should have the starting point for all marketing activity.
Need refers to something that is deep-rooted in an individual's personality.
Wants are desires for specific satisfied of these deeper needs. For example, for satisfying the
hunger need the person may want a Chinese food, South Indian food etc. Although people's
needs are few, their wants are many. Human want Are continually shaped and reshaped by
social forces and institutions. Wants are the form taken by human needs as they are reshaped
by culture and individual personality.
Demands are wants for specific products that are backed by an ability qualification and
willingness to buy them. Wants become demands when supported by purchasing' power. The
marketer must not only be interested in knowing how people may want their product but also
how many actually have the purchasing power to purchase.
2. Product : Product is a bundle of attributes. For example, take a T-Shirt, it can give warmth,
it can protect from the sun's rays, or it can make a statement about the wearer's attitude. It can
be a gift or a 'status symbol'.
3. Utility: Utility is a concept within economics that is related to marketing. Utility is a
measure of the relative satisfaction from, or desirability of, consumption of various goods and
services. Given this measure, one may speak meaningfully of increasing or decreasing utility,
and thereby explain economic behavior in terms of attempts to increase one's utility.
Richard Buskirk has presented an idea that marketing is an activity that creates following
utilities:
i) Form Utility: The usefulness of a product that results from its form; converting raw
materials into finished products. Product planning and development activities create form
utility.
ii) Time Utility: Making a product available when consumers want to purchase it. After
production goods are stored by the manufacturer, wholesalers, retailers, etc., until such time,
the demand of the product is created and such goods are made available to the customer at the
time when they are needed or demanded.
iii) Place Utility: Making a product available in a location convenient for customers, the flow
of goods through different distribution channels from producer to consumer from the place of
abundant to the place or where they are Needed creates place utility.
iv) Ownership Utility: It refers to the orderly transfer of legal title to the product and/or
service/s from the seller to the buyer via a sales transaction. Goods may be lying in a reliable
state with the producer or the manufacturer or their agent until some other person needs them.
4. Value: Value may be best defined from the customer's perspective as a trade-off between
the benefits received versus the price paid. Value is created when the product and user come
together within a particular use situation.
5. Cost and Satisfaction: Customer satisfaction is the attitude-like feeling of a customer
towards a product or service and it has been used. It is generally described as the full meeting of
one's expectations a dissatisfied customer is very likely to switch brands.
Cost is the consumer's estimate of the product's overall capacity to satisfy his or her needs as
determined according to the lowest possible cost of acquisition, ownership and use.
Customer satisfaction depends on a product's perceived performance in delivering value
relative to a buyer's expectations. If performance exceeds expectations, the buyer is delighted
1) Smart companies aim to delight customers by promising only what they can deliver, then
delivering more than Promise.
2)The aim of successful companies today is total customer satisfaction.
3)Customer delight creates an emotional affinity for a product or service, not just a rational
preference, and this create high customer loyalty.
4)Quality has a direct impact on product or service performance. Quality is defined in terms of
customer satisfaction.
6. Exchange and Transaction: The essence of marketing is a transaction a-exchange-intended
to satisfy human need and wants. Marketing emerges when people decide to satisfy needs and
wants through exchange Five conditions should be satisfied for exchanger takeplace:
Two or more parties should participate (buyer and seller).
ii) Each party must have something of value that the other party
desires.
iii) Each party should be capable of communication and delivery.
iv) Each party should be free to accept or reject the offer.
v) Each party should believe that it is appropriate or desirable to deal with the other party.
7)Relationship and Networks: Relationship marketing is an integrated effort to identify,
maintain, and build a network with individual customers and to continually strengthen the
network for the benefit of both the sides, through interactive, individualized, and value added
contacts over a long period of time.
8)Markets: The term 'market' has traditionally been used to describe a place where buyers and
sellers gather to exchange Goods and services, e.g., a fruit and vegetable market or a stock
market.
According to Philip Kotler, "A market consists of all the potential customers sharing a
particular need or wants who might be willing and able to engage in exchange to satisfy that
need or want".
9)Marketers: Marketers are the persons whose duties include the identification of the goods
and services desired by a set of Consumers, as well as the marketing of those goods and
services on behalf of a company.
The person that sells goods or services in or to a market especially, the one that markets a
specified commodity is called a marketer.
Functions of Marketing
Functions of Exchange: The process of the passing of goods into the customer's hands is
called the functions of exchange. This process can be divided into buying, assembling and
selling.
i)Buying: It is the first step in the process of marketing, A manufacturer has to buy raw
materials for production wholesaler has to buy goods to sell them to the retailer; a
retailer has to buy goods to be sold to the consumer.Buying involves transfer of
ownership of goods from seller to buyer.
ii) Assembling: Assembling means the creation and maintenance of the stock of goods,
purchased from different sources.
iii) Selling: Selling and buying are complementary to each other. Marketing efforts
evolve around the buying selling functions. In business, the selling function is very
important. The primary objective of marketing is to sell products at a profit.
By selling, the ownership is transferred to the buyer.
Functions of Physical Supply: The second group of marketing process is the
physical supply. These are the functions that are related with creation of place and time
utilities. Physical transfer of goods from the manufacturer to consumer takes place by
means of the following functions:
i)Transportation : Marketing system requires an economical and effective transportation
system.gsystem transportation increases the value of goods by the creation of place
utility.
ii) Storage and Warehousing: When production is seasonal but consumption is
permanent or when production continuous but consumption is seasonal, storage becomes
necessary. Storage involves holding and preserving goods between the time of their
production and the time of their consumption. It facilitates a steady flow commodities in
the market. Warehouses can be maintained in central places from where the distribution
can be according to the needs of the consumers.
iii) Choosing and Motivating Channels of Distribution: A channel of distribution is a
group of individual organizations that direct the flow of products from producers to customers.
Channels of distribution should products available at the right time, in the right place, and in
the right quantity..
Facilitating Functions: These functions make the marketing process easy and include
financing, pricing, risk-bearing standardisation and market information, etc.
i)Financing: It is very difficult to carry on marketing activities smoothly without the
availability of adequate and cheap finance. Commercial Banks, Cooperative Credit Societies,
and Government Agencies arrange for short term, medium term, and long term finance to
facilitate marketing. Trade credit is also one of the important sources of finance.
ii) Pricing: Pricing is also an important function which is closely related to selling. Price
policy of the concern directly affects the profit element and therefore, its successful
functioning.
iii)Risk-Bearing: In marketing, there arise numerous risks - damages to goods, physical
loss, changes in economic values of goods, mismanagement, credit losses, etc. These are more
or less inherent in the marketing process.
iv) Standardization: standardization is related to the division of commodities into distinct
groups. The standard is used in providing certain basic qualities of the goods for their use.
Standard is a specification. Standards are fixed on physical characteristics of products. The
standardised products possess uniform characteristics. For example, shape, weight, size, etc.
v)Market Information: The desired success of marketing depends on correct and timely
decision. These decisions are based on market information or market intelligence. Modern
marketing must have information of size, location, characteristics of markets, etc.
vi) Managing Products: The marketing function is responsible for forecasting and
managing the rate of supply and distribution of the firm's existing products. Of equal
importance will be its ability to determine what new products should be developed by the firm.
Marketing versus selling
Marketing is simply The act of 'bringing the product to market'. Selling on the other hand is the
final step which leads to close a sale, convert a prospective buyer into a customer, or making a
conversion. Selling is inward-looking. Marketing is outward looking.
Basis of
Difference
Selling
Marketing
Emphasis on product.
Emphasis on consumer needs and
wants.
Company manufactures the
Company first determines customers
Approach
product first and then decides to
need and wants and then decides on
sell it
how to deliver a product.
In marketing, customers satisfaction
Primary and
In selling the primary motive is sales
and delight is the primary objectives
secondary
and secondary motives is to satisfy
and secondary motive is meeting the
motives
companies need
buyers expected needs and wants.
Management is sales orientation.
Management is profit- oriented
Orientation
Planning is short term orientation in Planning is long-term oriented, in
Planning
terms of today product and markets. terms of new products,tomorrow’s
markets, and future growth.
Stresses need and want of buyers
Need priority Streeses needs of a seller.
Views business as a good producing Views business as a consumer
Philosophy
process.
satisfying process.
Emphasis on staying with existing
Emphasis on innovation in every
technology and reducing cost.
sphere, on providing better value to the
Technology
customers by adopting a superior
technology.
Different departments work as
All department of a business operate in
Work
highly separate watertight
an integrated manner, the sole purpose
compartments.
being generation of consumer
Delegation
satisfaction.
Cost determines price.
Consumer determines price, price
Price
determines cost.
Determination
Selling views customers as the last
Marketing views the customers as the
Customers
link in business.
very beginning.
Narrow in scope
Wider in scope
Scope
Emphasis
Meaning and definition of Marketing management
According to Cundiff and Still, "Marketing management as a branch of broad area of
management. Marketing management
Is concerned with the direction of purposeful activities towards the attainment of marketing
goals". There are three kinds of goals:
1)Satisfaction of customer's needs,
2)Increase in sales volume, and
3)Increase in organisational profits.
All these goals are interrelated.
Marketing Environment
Marketing Environment is Dynamic: The marketing environment is constantly changing in
nature. Due to the many and varied influences operating; there is dynamism in the environment
causing it to continuously change its shape and Character.
Marketing Environment is Multi-Faceted: What shape and character an marketing environment
assumes
Types of Marketing Environment
There are certainly various factors that have both positive as well negative impacts over
marketing function of a comp
These environmental factors can be broadly grouped into two parts as:
1)Internal environment/ Controllable elements, and
2)External environment/Uncontrollable elements.
Internal Marketing Environment: Controllable Factors
Internal environment refers to factors existing within a marketing firm. The internal factors are
generally regardedcontrollable factors or elements because the company has control over these
factors; it can alter or modify such factors its personnel, physical facilitis, organisation and
fnctional means, such as marketing mix, to suit the environment. Controllable elements ar eligible
to controlling the operation of an organization.
1. Top management :the organizational structure , the composition of board of director,
extent of professionalization of management etc. Factors like the amount of support the top
management enjoys from different levels of employees, shareholders and
Board of Directors has an important influence on the marketing decisions and their
implementation.
2. Finance and Accountmg: Finance is concerned with funding and using funds to carry out
the marketing plan. Financial Factors like financial policies, financial position and capital
structure - important internal environment affecting business performances, strategies and
decisions. Accounting has to measure revenues and costs to help marketing archive-objective.
3. Research and Development: The R&D department focuses on designing safe and
attractive products. R & D and technological capabilities, determine a company's ability to
innovate and compete.
4. Manufacturing: Manufacturing is responsible for producing the desired quality and
quantity of products. Physical assets and facilities like the production capacity, technology and
efficiency of the productive apparatus, distribution logistics etc., are among the factors which
influence the competitiveness of a firm.
5. Purchasing: Purchasing worries about getting supplies and materials. Purchasing means
the procurement of goods and services from external agencies.
6. Company Image and Brand Equity: The image of the company matters while raising
finance,. Forming joint ventures or other alliances, soliciting marketing intermediaries,
entering purchase or sale contracts, launching new products etc. Brand equity is also relevant
External Marketing Environment: Uncontrollable Factors
The external marketing environment refers to the factors existing outside the marketing firm. The external or
environmental factors such as the economic factors, socio- cultural factors, government and legal factors,
demographic factors, socio-culture factors, government and legal factors, demographic factors, geo-physical
factors etc., are, therefore, generally regarded as uncontrollable factors or elements.
in several of these cases.
The external marketing environment
1.
2.
Micro environment
Macro environment
Micro-environment refers to the company's immediate environment i.e., those environmental
factors that are in its proximity. These factors influence the 'Company's non-capability to
produce and serve the market. These are also the groups of people who affect the company's
prospects directly. These factors are:
1. Suppliers : the supplier to a firm can also alter its competitive position and marketing
capabilities.
2. Market intermediaries : every producer / manufactures has to appoint a number of
intermediaries in assising him in promoting, selling and distributing the goods and services to
ultimate consumers.intermediary nay be a business firm or individual.
3. Customers: The customers of a company may be of five kinds:
i) Ultimate Consumers: They may be individuals and householders who buys products for the
final consumption's
ii) Industrial Consumers: Industrial consumers are organisations which buy goods and
services for producing other goods and services for the purpose of other earning profits or
fulfilling other objectives.
iii) Resellers: These are intermediaries who purchase goods ~with a view to resell them at a
profit.
iv)Government and Other Non-Profit Customers: These customers purchase goods and
services to those for who they are produced, for their consumption in most of the cases.
v)International Customers: These are individuals and organizations of other countries who
buy goods and service either for consumption or for industrial use. Such buyers may be
consumers, producers, resellers and governments.
vi) Internal customers: They may be employees and workers of the any organization who
they support for organizations growth.
4. Competitors: competitors are those who sell the goods and service of the same and
similar description, in the same market. Competitors are to be identified and closely monitored.
5. Public: It is the duty of the company to satisfy the people. A public is defined as “any
group that has an actual or potential interest in or impact on a company’s ability to achieve its
objectives.”
Macro Environment
Macro environment refers to those factors, which are not concerned for the immediate
environment. These factors are external to the company and are quite uncontrollable.
The following are the macro environmental factors that affect the company's marketing
decisions:
1)Demographic Environment: The first macro-environmental force that marketer monitor is
population because people make up the markets. Marketers are keenly interested in the size and
growth rate of population in different cities, regions, and nations; age distribution and ethnic
mix; educational levels; household patterns; and regional characteristics and movements.
2)Physical Environment: Components of physical forces are earth's natural renewal and nonrenewal resources. Natural renewal forces are forests, food products from agriculture or sea etc.
Non-renewable natural resources are finite such as oil, coal, minerals etc. For example, India
does not have enough petroleum reserves and imports petrol and other products.
3)Economic Environment: The economic environment consists of macro-level factors related
to the means of production and distribution of wealth that have an impact on the business of an
organization. Economic factors affect the spending power of people. Further economic
development and growth affects the product choice of customers. For example, recently with a
drop in interest rates the banking industry is finding it hard to mobilize small savings and stock
markets are fast emerging as a better investment option for investors.
4)Technological Environment: The technological environment consists of those factors
related to knowledge applied, the materials and machines used in the production of goods
and services that have an impact on the business organization. For example electronic
manual typewriter was replaced by electronic typewriter and later by computer.
5)Social and cultural environment : social responsibility concept has crept into marketing
literature as an alternative to the marketing concept. There are some core- cultural values,
which are found in our society deep rooted and stable and hence change very little.
6)International environment : international environment is particularly important for
industries directly depending on imports or exports and import – competing industries.Eg.
Recession in foreign market.
Marketing's Relationship with other Functions
Functions within an organization
The marketing function within any organization does not exist in isolation. Therefore it's
important to see how marketing connects with and permeates other functions within the
organization. This is considered how marketing interacts with research and development,
production/operations/logistics, human resources, IT and customer service. Obviously all
functions within your organization should point towards the customer i.e. they are customer
oriented from the warehouseman that packs the order to the customer service team member
who answers any queries might have. These other functions and their relationship with
marketing.
Research and development
Research and development are the engine within an organization which generates new ideas,
innovations and creating new products and services. For example, cell phone/mobile phone
manufacturers are in an industry that is ever changing and developing, and in order to survive
manufacturers need to continually research and develop new software and hardware to
compete in a very busy marketplace. Think about cell phones that were around three or four
years ago which are now completely obsolete. The research and development process delivers
new products and is continually innovating.
Innovative products and services usually result from a conscious and purposeful search for
innovation opportunities which are found only within a few situations. Peter Drucker (1999)
Research and development should be driven by the marketing concept. The needs of
consumers or potential consumers should be central to any new research and development in
order to deliver products that satisfy customer needs (or service of course). The practical
research and development is undertaken in central research facilities belonging to companies,
universities and sometimes to countries. Marketers would liaise with researchers and engineers
in order to make sure that customer needs are represented. Manufacturing processes themselves
could also be researched and developed based upon some aspects of the marketing mix. For
example logistics (place/distribution/channel) could be researched in order to deliver products
more efficiently and effectively to customers.
Production/operations/logistics
As with research and development, the operations, production and logistics functions within
business need to work in cooperation with the marketing department.
Operations include many other activities such as warehousing, packaging and distribution. To
an extent, operations also include production and manufacturing, as well as logistics.
Production is where goods and services are generated and made. For example an aircraft is
manufactured in a factory which is in effect how it is produced i.e. production. Logistics is
concerned with getting the product from production or warehousing, to retail or the consumer
in the most effective and efficient way. Today logistics would include warehousing, trains,
planes and lorries as well as the technology used for real-time tracking.
Obviously marketers need to sell products and services that are currently in stock or can be
made within a reasonable time limit. An unworkable scenario for a business is where marketers
are attempting to increase sales of a product whereby the product cannot be supplied. Perhaps
there is a warehouse full of other products that our marketing campaign is ignoring.
Human resources
Human Resource Management (HRM) is the function within your organization which
overlooks recruitment and selection, training, and the professional development of employees.
Other related functional responsibilities include well-being, employee motivation, health and
safety, performance management, and of course the function holds knowledge regarding the
legal aspects of human resources.
HR manager would help with scoping out the job, a person's profile, a job description, and
advertising the job. HR would help to score and assess application forms, and will organize the
interviews. They may offer to assist at interview and will support to make your job offer. May
also use HR to organize an induction for your new employee. Of course there is the other side
of the coin, where HR sometimes has to get tough with underperforming employees. These are
the operational roles of HR.
The human resources Department also has a strategic role. Moving away from traditional
personnel management, human resources sees people as a valuable asset to your organization.
Say they will assist with a global approach to managing people and help to develop a
workplace culture and environment which focuses on mission and values.
They also have an important communications role, and this is one aspect of their function
which is most closely related to marketing. For example the HR department may run a staff
development programme which needs a newsletter or a presence on your intranet. This is part
of your internal marketing effort.
IT (websites, intranets and extranets)
To define it need to consider elements such as computer software, information systems,
computer hardware , and programming languages. For our part is marketers we are concerned
with how technology is used to treat information i.e. how we get information, how we process
it, how we store the information, and then how we disseminate it again by voice, image or
graphics. Obviously this is a huge field but for our part we need to recognise the importance of
websites, intranets and extranets to the marketer. So here's a quick intro.
A website is an electronic object which is placed onto the Internet. Often websites are used by
businesses for a number of reasons such as to provide information to customers. So customers
can interact with the product, customers can buy a product, more importantly customers begin
to build a long-term relationship with the marketing company. Information Technology
underpins and supports the basis of Customer Relationship Management (CRM), a term which
is investigated in later lessons.
An intranet is an internal website. An intranet is an IT supported process which supplies up-todate information to employees of the business and other key stakeholders. For example
European train operators use an intranet to give up-to-date information about trains to people
on the ground supporting customers.
An extranet is an internal website which is extended outside the organization, but it is not a
public website. An extranet takes one stage further and provides information directly to
customers/distributors/clients. Customers are able to check availability of stock and could
check purchase prices for a particular product. For example a car supermarket could check
availability of cars from a wholesaler.
Finance department
The marketing department will need to work closely with the finance department to ensure
that:
There is an adequate budget to meet the needs for research, promotion and distribution. The
finance department has a whole organization brief to ensure that all the business operates
within its financial capabilities. They will want all departments to work within their allocated
budgets. Like all departments, marketing may wish to overspend if profitable marketing
opportunities emerge over the year. The marketing department is likely to concentrate on sales
volume and building market share, while the finance department may be more focused on cash
flow, covering the costs and paying back investment as quickly as possible.
Global Marketing
Denotes the use of advertising and marketing on a global basis.Marketing is at the threshold of
a new and exciting era: e-business, e-commerce and e-marketing.Business has two basic
functions: marketing and innovation (Drucker)More stakeholders (customers, employees,
media).
Companies need a new set of guidelines, values and insightMarketing is too important to be
left to the Marketing Department. (David Packard)
Lower marketing and advertising costs in planning and control. Lower advertising production
costs.
Exploiting your best ideas on a worldwide basis.
Global Marketing
Deciding How to Enter a Market
Indirect Export-Through export and Through others.
Direct Export-Handle own exports.
Licensing-License a foreign company to use trademark, manufacturing processes, trade secret,
or other item for a fee or royalty.
Direct Investment- Direct ownership.
Joint Ventures-- Join with local investors to create venture. Coca-Cola and Nestle joined forces
in “ready to drink” coffee and tea.
Whirlpool formed a venture with Dutch electronic group Philip’s on white-goods business to
leapfrog into European market.
Direct Investment--Ultimate form is direct ownership of foreign-based assembly or
manufacturing facilities.
Can buy part or full interest in a local company.
Global Marketing-An endless process or principle:
Customer attraction
Customer satisfaction
Customer retention.
The CEO is also the Chief Marketing Officer.
Marketing Challenges
Technological advances, rapid globalization, and continuing social and economic shifts are
causing marketplace changes.Major marketing developments can be grouped under the theme
of Connecting.
1. Via Technology:
Advances in computers, telecommunications, video-conferencing, etc. are major forces.
Databases allow for customization of products, messages and analysis of needs.
The Internet
Facilitates anytime, anywhere connections
Facilitates CRM
Creates marketplaces
2. With customers
Selective relationship management is key.
Customer profitability analysis separates winners from losers.
Growing “share of customer”
Cross-selling and up-selling is helpful.
Direct sales to buyers are growing.
3.
-
With marketing partners
Partner relationship management involves:
Connecting inside the company
Connecting with outside partners
Supply chain management
Strategic alliances
4.
-
With the world
Globalization
Competition
New opportunities
Greater concern for environmental and social responsibility
Increased marketing by nonprofit and public-sector entities
Social marketing campaigns