Download Introduction to Marketing

Agenda for Day One
1. Welcome and Introduction
2. Discuss course outline & work program
3. Presentation of Learning Effectiveness
Research
4. Introduction to the subject
Most People Learn …….
Percentage of material/thing learnt
Learning activity
10%
Of what they read
20%
Of what they hear
30%
Of what they see
50%
Of what they see and hear
70%
Of what they talk over with others
80%
Of what they use and do in real life
95%
Of What they teach someone else
Source: Attributed to William Glasser; quoted by Association for Supervision &
Curriculum Development Guide 1998.
Ashesi Learning Goals
Ethics and Civic Engagement
• An Ashesi student is an ethical, responsible and engaged
member of his/her community.
• Demonstrates concern for others
• Has the courage to be ethical
• Does the right thing when nobody is looking
Critical thinking and Quantitative Reasoning
• An Ashesi student is able to apply critical thinking and
quantitative reasoning to approach complex problems.
• Demonstrates skills in data analysis and modeling
• Sees things from multiple perspectives
• Has awareness of a broad range of concepts and ideas that have
personal, local and global significance
Ashesi Learning Goals
Communication
• An Ashesi student is an excellent communicator in a
Leadership and Teamwork
• An Ashesi student is adept at leading and functioning in teams.
• Demonstrates confidence and humility
• Has good interpersonal skills and engages fully with members of
a team
• Is organized and able to plan and follow through on complex
projects
• Innovative and Action Oriented
• An Ashesi student takes intellectual risks and demonstrates an
entrepreneurial spirit.
Ashesi Learning Goals
Curious and Skilled
• An Ashesi student is inquisitive and confident, has breadth of
knowledge, and has attained a high level of mastery in their
chosen field.
• Probes deeply and continuously in their chosen field
• Keeps an open mind
• Shows confidence but never feels he/she knows it all
• Demonstrates awareness of global and multicultural issues
Technology Competence
• An Ashesi student is an effective and flexible user of
technology.
Ashesi University
COURSE TITLE : MARKETING
SEMESTER : FIRST, 2010/2011
MODULE 1: Introduction to Marketing
Lecturer: Ebow Spio
Learning Objectives
1. Define marketing and outline the steps in the marketing
process
2. Explain the importance of understanding customers and
the marketplace
3. Identify the key elements of a customer-driven marketing
strategy and discuss the marketing management
orientations that guide marketing strategy
4. Describe the major trends and forces that are changing the
marketing landscape in this age of relationships
5. Explain companywide strategic planning in its four steps
6. Discuss how to design business portfolios and develop
growth strategies
1-2
Learning Objectives
7. Explain content and process for developing and implementing a marketing
plan/strategy
8.
Appreciate the benefits of marketing to consumers, firms and society
9.
Know the criticisms leveled against marketing
10.
Have an idea of Marketing activities
Defining Marketing
• “Marketing is a social and managerial process buy which individuals and
groups obtain what they need and want through creating and exchanging
products and value with others” (Kotler et al. 2003)
• “Marketing is the management process which identifies, anticipates and
supplies customer requirements efficiently and profitably” (Chartered
Institute of Marketing)
• “Marketing is the process of planning and executing the conception,
pricing, promotion and distribution of ideas, goods and services to create
exchange and satisfy individual and organisational objectives” (AMA
2004).
• “Marketing is the process of achieving corporate goals through meeting
and exceeding customer needs better than the competition” (Jobber
2003).
• “Marketing is an organizational function and a set of processes for
creating, communicating, and delivering value to customers and for
managing customers relationships in ways that benefit the organization
and its stakeholders”
Defining Marketing
Marketing is the delivery of customer satisfaction
at a profit.
The goal of Marketing
• Attract new customers by promising superior
value
• Keep and grow current customers by delivering
satisfaction.
The Marketing Process
1.
2.
3.
4.
5.
Understand the marketplace and customer wants and
needs
Design a customer-driven marketing strategy
Construct a marketing plan that delivers superior value
Build profitable relationships and create customer
satisfaction
Capture value from customers to create profit and
customer equity
1-5
Understanding the Marketplace
and Customer Needs
Customer Needs, Wants, and Demands
Needs are states of deprivation
• Physical—food, clothing, warmth, safety
• Social—belonging and affection
• Individual—knowledge and self-expression
Wants are the form that needs take as they are shaped
by culture and individual personality
Demands are wants backed by buying power
1-6
Understanding the Marketplace
and Customer Needs
Market Offerings—Products, Services, and Experiences
Market offerings are some combination of products,
services, information, or experiences offered to a
market to satisfy a need or want
Exchange is the act of obtaining a desired object from
someone by offering something in return
Relationships consist of actions to build and maintain
desirable relationships
1-8
Understanding the Marketplace
and Customer Needs
Markets are the set of actual and potential buyers of a product
Marketing system consists of all of the actors (suppliers,
company, competitors, intermediaries, and end users) in
the system who are affected by major environmental forces
• Demographic
• Economic
• Physical
• Technological
• Political–legal
• Socio-cultural
1-12
Designing a Customer-Driven Marketing Strategy
Marketing Management
Marketing management is the art and science of
choosing target markets, and building profitable
relationships with them
• What customers will we serve?
• How can we best serve these customers?
1-13
Designing a Customer-Driven Marketing Strategy
Selecting Customers to Serve
Market segmentation: Dividing the markets into
segments of customers
Target marketing: Which segments to go after
1-14
Designing a Customer-Driven Marketing
Strategy
Choosing a Value Proposition
The value proposition is the set of benefits or
values a company promises to deliver to
customers to satisfy their needs
1-17
Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations
•
•
•
•
•
Production concept
Product concept
Selling concept
Marketing concept
Societal concept
1-18
Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations
Production concept is the idea that consumers will
favor products that are available or highly affordable
“If we can make, it will sell” is management thinking
characteristic of the production concept.
• Run a risk of focusing narrowly on own internal
operations.
1-19
Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations
Product concept is the idea that consumers will favor
products that offer the most quality, performance,
and features for which the organization should
therefore devote its energy to making continuous
improvements
The product concept also can lead to marketing myopia.
For instance, railroad management once thought
that users wanted trains rather than transportation
and overlooked the growing challenge of airlines,
buses, trucks, and automobiles.
1-20
Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations
Selling concept is the idea that consumers will not buy
enough of the firm’s products unless it undertakes a
large scale selling and promotion effort.
• Typically practiced with unsought goods—
• Firms practice the selling concept when they have
overcapacity
• The aim is to sell what they make rather than make
what the market wants.
• It focuses on creating sales transactions rather than
on building long-term, profitable relationships with
customers.
1-21
Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations
Marketing concept is the idea that achieving
organizational goals depends on knowing the needs
and wants of the target markets and delivering the
desired satisfactions better than competitors do.
Expression of Marketing Concept
• “We’re not satisfied until you are” (GE);
• “Let us exceed your expectations” (Celebrity Cruise Lines).
• “To do all in our power to pack the customer’s dollar full of value, quality,
and satisfaction.” JC Penney
• “I do not consider a sale complete until goods are worn out and the
customer still is satisfied. We will thank anyone to return goods that are not
perfectly satisfactory. . . . Above all things we wish to avoid having a
dissatisfied customer.” L.L. Bean (www.llbean.com
1-22
THE MARKETING CONCEPT
Customer Satisfaction
Total Company Effort
The Marketing
Concept
Profit (or another
Measure of long term
Success) as an
Objective
Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations
Societal marketing concept is the idea that a company
should make good marketing decisions by
considering consumers’ wants, the company’s
requirements, consumers’ long-term interests, and
society’s long-run interests.
The societal marketing concept questions whether the pure
marketing concept is adequate in
• an age of environmental problems,
• resource shortages
• rapid population
• worldwide economic problems
• Neglected social services
1-23
Preparing an Integrated Marketing Plan and
Program
Integrated marketing program is a comprehensive plan
that communicates and delivers the intended value to
chosen customers
The marketing mix is the set of tools the firm uses to
implement its marketing strategy.
• The Marketing Mix is a term used to describe the
combination of tactics used by a business to achieve its
objectives by marketing its products or services
effectively to a particular target customer group.
• It is also referred to as the 4 Ps. i.e. Product, Price,
Promotion and Place, or the 7 Ps the 4 Ps with the
addition of People, Process and Physical Evidence.
1-24
Preparing an Integrated
Marketing Plan and Program
Marketing Mix
Product
the need-satisfying offering of a firm. Marketing is about identifying,
anticipating and satisfying Customer needs. You need to be sure that your
products and services continue to meet your customers. needs.
Place
making goods and services available in the right quantities
and locations when customers want them.
Your choice will impact on your pricing and your promotion decisions.
Price
the amount of money that is charged for "something" of value
Promotion
communicating information between seller and potential buyer or others in
the channel to influence attitudes and behavior.
Preparing an Integrated
Marketing Plan and Program
Marketing Mix
People
The people employed in your organisation will determine the quality of service
your customers receive. This is truer for services, but also impacts on
businesses making tangible products. Happy, skilled and motivated staff make
happy customers.
Process
The processes involved in delivering your products and services to the
customer have an impact on the way in which your customers perceive you.
Physical Evidence
Physical evidence is a term used to describe the type of image that your
business portrays through its physical presence, namely its premises, the
appearance of its staff, its vehicles, etc.
Building Customer Relationships
Customer Relationship Management
(CRM)
Customer relationship management is the overall
process of building and maintaining profitable customer
relationships by delivering superior value and
Satisfaction
Customer perceived value is the difference between
total customer value and total customer cost
Customer satisfaction is the extent to which a product’s
perceived performance matches a buyer’s expectations
1-26
The New Marketing Landscape
Major Developments
•
•
•
•
Digital age
Globalization
Ethics and social responsibility
Not-for-profit marketing
1-37
Companywide Strategic
Planning
Companywide Strategic Planning
Strategic Planning
Defining Strategy
“The determination of the basic long-term goals and objectives of
an enterprise and the adoption of courses of action and the
allocation of resources necessary for carrying out these goals.”
Alfred Chandler, Strategy and Structure, (MIT Press, 1962), Page 13.
Strategic planning is the process of developing and maintaining a
strategic fit between the organization’s goals and capabilities and its
changing marketing Opportunities
2-4
Companywide Strategic Planning
Strategic Planning
Companywide Strategic Planning
Types of Strategy
Companywide Strategic Planning
Defining a Market-Oriented Mission
Strategic Vision : Concerns a firm’s future
business path - “where we are going” .
Mission statement: The organization’s purpose, what it
wants to accomplish in the larger environment
Market-oriented mission statement: Defines the
business in terms of satisfying basic customer needs
2-5
Examples: Vision Slogans
Levi Strauss & Company
“We will clothe the world by marketing the most appealing and
widely worn casual clothing in the world.”
Nike
“To bring innovation and inspiration
to every athlete in the world.
Greenpeace
“To halt environmental abuse and
promote environmental solutions.”
Companywide Strategic Planning: Defining
Marketing’s Role
Setting Company Objectives and Goals
Business objectives
The targets which appear in a brand’s profit and loss statement,
including volume, revenue , gross margin and improve firm’s
competitive position such as market share
Marketing objectives
The targets relating to the marketing deliverables which enable a
brand to achieve its business objectives (e.g. market share,
consumer penetration, distribution coverage). Whenever possible,
these should be set relative to competitors.
2-6
Companywide Strategic Planning: Defining
Marketing’s Role
Designing and Analyzing the Business Portfolio
The business portfolio is the collection of businesses
and products that make up the company
Analyzing the current business portfolio is the process
by which management evaluates the products and
businesses making up the company
2-7
Companywide Strategic Planning: Defining
Marketing’s Role
Steps in Analyzing the Current Business Portfolio
1. Identify key businesses making up the company
2. Assess the attractiveness of its various SBUs
3. Decide how much support each SBU deserves
2-9
Companywide Strategic Planning: Defining
Marketing’s Role
Steps in Analyzing the Current Business Portfolio
Identify key businesses making up the company
• Strategic business unit (SBU) is a unit of the company that
has a separate mission and objectives that can be planned
separately from other company businesses
• Company division
• Product line within a division
• Single product or brand
2-10
Companywide Strategic Planning: Defining
Marketing’s Role
Steps in Analyzing the Current Business Portfolio
Assess the attractiveness of various SBUs and decide
how much support each deserves
2-11
Companywide Strategic Planning:
Defining Marketing’s Role
Steps in Analyzing the Current Business Portfolio
The Boston Consulting Group Growth – Share Matrix
is a portfolio planning method that evaluates a
company’s strategic business units in terms of their
market growth rate and relative share
Key Assumptions
• Market growth has an adverse effect on cash flow because of
the investment in such assets as manufacturing facilities,
equipment and marketing needed to finance
• Market share has a positive effect on cash flow as profits are
related to Market Share
The Boston Consulting Group Growth
– Share Matrix
15%
Stars
Market
Growth
Rate
Problem Children
or Question Marks
7%
Cash Cows
Dogs
0
10
1
Relative Market Share
0
Companywide Strategic Planning:
Marketing’s Role
Defining
Analyzing the Current Business Portfolio
The Boston Group Approach
Stars are high-growth, high-share businesses or products requiring heavy
investment to finance rapid growth. They will eventually turn into cash
cows.
Cash cows are low-growth, high-share businesses or products that are
established and successful SBUs requiring less investment to maintain
market share
Question marks are low-share business units in high-growth
markets requiring a lot of cash to hold their share
Dogs are low-growth, low-share businesses and products that may
generate enough cash to maintain themselves but do not promise to be
large sources of cash
2-13
Companywide Strategic Planning: Defining
Marketing’s Role
Analyzing the Current Business Portfolio
Problems with Matrix Approaches
•
•
•
•
Difficulty in defining SBUs and measuring market
share and growth
Time consuming
Expensive
Focus on current businesses, not future planning
2-15
Product Strategies for Growth : The
Ansoff Matrix
Products
Existing
Existing
New
Market Penetration or
Expansion
Product Development
Market Development
Diversification
Markets
New
Companywide Strategic Planning:
Defining Marketing’s Role
Developing Strategies for Growth and Downsizing
Product/market expansion grid is a tool for identifying
company growth opportunities through market
penetration, market development, product
development, or diversification
Product/market expansion grid strategies
• Market penetration
• Market development
• Product development
• Diversification
2-16
Product Strategies for Growth : The
Ansoff Matrix
Market Penetration is gaining/ winning competitors customers through buying
competitors or more effective use of promotion, distribution or by cutting prices.
Increase sales to current market segments without changing the product
Market Expansion/Development: Growth strategy that identifies and develops new
market segments for current products by converting non-users of it products. Lapsed
users can also be targeted. You can also increase usage rate.
Product Development option involves development of new or modified products for
the existing markets. This can be done through product line extensions to give
existing customers greater choice, product replacement e.g. car market where a new
model replaces an old one, through innovation (replace of old with fundamentally
different one)
Market Development entails the promotion of new uses of existing products to new
customers or marketing of existing products ( and their current uses) to new market
segment
Diversification : Growth strategy through starting up or acquiring businesses outside
the company’s current products and markets Development of new products for new
markets
Marketing Strategy & Managing Marketing
Effort
Marketing Strategy
Marketing strategy is the marketing logic by which the
business unit hopes to achieve its marketing objectives
Developing Strategy and Managing the marketing
effort requires:
• Analysis
• Planning
• Implementing
• Controlling
2-24
Marketing Strategy & Managing the Marketing
Effort
Marketing Analysis
Analysis is the complete analysis of the company’s
situation in a SWOT analysis that evaluates the
company’s:
• Strengths
• Weaknesses
• Opportunities
• Threats
2-34
Marketing Strategy & Managing the Marketing
Effort
Marketing Analysis
Strengths include internal capabilities, resources, and positive
situational factors that may help to serve company customers and
achieve company objectives
Weaknesses include internal limitations and negative
situational factors that may interfere with company
Performance
Opportunities are favorable factors or trends in the external
environment that the company may be able to exploit to its
advantage
Threats are unfavorable factors or trends that may present
challenges to performance
2-35
Marketing Strategy & Managing the Marketing
Effort
Marketing Planning
Planning is the development of strategic and marketing
plans to achieve company objectives
Marketing strategy consists of the specific strategies
for target markets, positioning, the marketing mix,
and marketing expenditure levels
2-37
Marketing Strategy & Managing the Marketing
Effort
Marketing Planning : Strategy
Market segmentation is the division of a market into distinct
groups of buyers who have distinct needs, characteristics, or
behavior and who might require separate products or marketing
mixes
Market segment is a group of consumers who respond in
a similar way to a given set of marketing efforts.
Target marketing is the process of evaluating each market segment’s
attractiveness and selecting one or more segments to enter
Market positioning is the arranging for a product to occupy a clear,
distinctive, and desirable place relative to competing products in the
2-25
minds of the target consumer
Marketing Strategy & Managing the Marketing
Effort
Marketing Planning : Strategy
Marketing mix is the set of controllable tactical
marketing tools—product, price, place, and
promotion, people, process, physical evidence (i.e.
last relates more to service
organization/products)—that the firm blends to
produce the response it wants in the target market
2-28
Marketing Strategy & Managing the Marketing
Marketing Implementation
Implementing is the process that turns marketing plans into
marketing actions to accomplish strategic marketing objectives
Successful implementation depends on how well the company
blends its people, organizational structure, decision and reward
system, and company culture into a cohesive action plan that
supports its strategies
2-39
Marketing Strategy & Managing the Marketing
Effort
•
•
•
•
Marketing Implementation
Marketing Department Organization
Functional
Geographic
Product
Market or customer management
2-40
Marketing Strategy & Managing the Marketing
Effort
Marketing Control
Controlling is measuring and evaluating results and taking
corrective action as needed
Operating control involves checking ongoing performance
against annual plan and taking corrective action as needed
Strategic control involves looking at whether the company’s
basic strategies are well matched to its opportunities
Marketing audit is a comprehensive, systematic, independent,
and periodic examination of a company’s environment,
objectives, strategies, and activities to determine problem
areas and opportunities
2-45
Measuring and Managing Return on
Marketing Investment
Return on Marketing Investment
(ROI)
Return on marketing investment (ROI) is the net
return from a marketing investment divided by
the costs of the marketing investment.
Marketing ROI provides a measurement of the
profits generated by investments in marketing
activities.
Customer-Centered Measures
• Customer acquisition
• Customer retention
• Customer lifetime value
2-48
Marketing Strategy & Managing the Marketing
Effort
Market Planning
•
•
•
•
•
•
•
Sections of a marketing plan include:
Executive summary
Current marketing situation
Threats and opportunities
Objective and issues
Action programs
Budgets
Controls
2-38
The Role of Marketing
Consumers
• Provide consumers with goods and services that
satisfy their needs, desires and expectations
Firms
• Attract Customers
• Retain Customers Profitably
• Efficient use of resources
• Path to sustainable profitable growth
• Key to competing in a liberalized market
The role of Marketing
Society
• Economic Growth and development through
research and innovation
• Value to Society : Competition drives down
price and increases value to society
• Higher Standard of Living: Products & Services
that satisfy customers lead to employment and
higher income
Criticisms of Marketing
• Marketing Encourages People to Purchase
What is They Do Not Need
• Marketers Embellish Product Claims
• Marketing Discriminates in Customer Selection
• Marketing Contributes to Environmental Waste
• Marketing Encroaches on Customers’ Right to
Privacy
Marketing Activities
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•
•
•
•
•
•
•
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Marketing research
Market analysis
Setting strategy
Planning
Developing new products
Managing product portfolios
Managing and protecting brands
Designing marketing channels
Managing marketing channels
•
•
•
•
•
•
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Liaising with Agencies
Recruiting and training staff
Setting promotional objectives
Designing promotional mix
Analysing competitor activity
Managing customer service
Ensuring customers are satisfied
Evaluating and reviewing
activities and plans
Marketing Management Framework
Opportunities
Impediments
& Solutions
Target
Segment
Corporate
Objectives
Marketing
Objectives
Sources
of
Volume/
Business
Position
Product
Price
Place
Promotion
Physical Ev.
Process
People
Execute
Evaluate