Download Marketing Management - Olin Business School

Marketing Management
Fall 98
Introduction
Ambar G. Rao
John M. Olin School of Business
Agenda
• What is Marketing?
– Marketing Process
– Marketing Analysis & Planning
– A Framework for Marketing Analysis
• A Preview of the Course
– Syllabus
– What to expect?...And what is expected?
• Segmentation and Positioning
Some Perspective
Marketing and History
“In well-ordered states, storekeepers and salesmen are commonly
those who are weakest in bodily strength and, therefore, of little
use for any other purpose.” - Plato
“Merchants are to be accounted vulgar; for they can make no
profit except by a certain amount of falsehood.” - Cicero
“Advertising ... is a meretricious endeavor in which
psychological appeals to ‘fear’ and ‘shame’ are developed to
bamboozle the public into purchasing essentially worthless
packaged goods at bloated prices.” - Thorstein Veblen
Some Perspective
A Modern View
“Corporate leaders nationwide are discovering that their most
powerful competitive weapon is marketing -- the development,
pricing, distribution, and promotion of products.” - Newsweek
“Marketing is now central to success at any company in any
business, and it is going to make the difference between
winners and losers.” - Stephen Greyser, Harvard Business
School
“Stop being a company with its face towards the CEO and ass
towards the customer” Jack Welch, CEO, G.E.
Why the change over the ages?
• Changing approaches to business over time
–
–
–
–
the production concept
the product concept
the sales concept
the marketing concept
• Why is Marketing one of the most critical components
of modern business?
Key Issues in the Business Environment
• Customer Satisfaction - markets are saturated and we cannot
rely on pent up demand to make profits.
– Must provide greater quality and value to smarter shoppers.
– From mass marketing to segments of one.
– Increase speed of innovation, diffusion and distribution.
• Globalization
– Global brands, different positioning or similar positioning in
different countries?
– New ideas developed in country A, designed in country B,
manufactured in country C and sold in country D.
• Environmental and Health Care Concerns
– Must address concerns of better educated and better
informed consumers.
What is Marketing
• A M A Definition:
– Marketing is a social and managerial process by which
individuals and groups obtain what they need and want
through creating, offering and exchanging products of value
with each other
• Key
– Customer needs and wants
– Demand and a market where demand can be met
– Choice, based on maximizing utility (or value)
RAO’s Definition of Marketing
Marketing = Romance + Finance
Analysis Framework
Company Analysis
Competitor
Analysis
Marketing Analysis
Product
Competing
Firms
Price
Promotion
Distribution
Product Market
Customer
Analysis
Consumers
Key Principles
Successful marketing strategy entails:
• Designing products, services, and programs that
emphasize attributes which:
• For which customers have value
• Provide a sustainable differential advantage
over competitors.
What does this mean?
• Sound customer analysis, while important, is not sufficient.
• Competitors will also be striving to develop product and services
that embody attributes important to customers.
• Whatever attributes that our product or service embodies, must
not only be important to customers,
BUT
• must also yield some differential advantage over competitors.
• Successful marketing strategy requires sound competitive
analysis in addition to customer analysis.
Elements of Marketing Analysis (3 C’s)
• Customer Analysis
– Consumer Behavior (Perceptions, preferences, purchase,
usage)
– Market Characteristics (Size, growth)
• Competitor Analysis
– Industry Structure Analysis (Entry/exit barriers, buyers,
sellers, substitutes)
– Competitor Response Profiles (Capabilities, current and
anticipated future actions)
• Company Analysis
– Economic Analysis (Costs, break-even, profitability)
– Company Fit (Strengths/weaknesses, resources, mission)
Steps in Formulating Marketing Strategy
1 Examine the situation and identify the marketing
problems/opportunities
– Short-term vs. Long-term
2 Search for a strategy to achieve short-term and longterm goals
– Areas for marketing action are
• Product, Price, Promotion, Place
– Strategy should be
• Integrative and Consistent across the 4 P’s
• Robust to alternative scenarios
3 Implement and Monitor