Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
BUAD 307—MARKETING FUNDAMENTALS MARKETING OVERVIEW AND STRATEGY BUAD 307 OVERVIEW AND STRATEGY Perner 2 Learning Objectives • Understanding – The scope and basic objectives of the marketing function – Customer value – The contrasting perspectives of the “Marketing Concept” and the “Selling Concept.” • Appreciating the need of firms for unique and specific strategies based on tradeoffs and, unique strengths, and market conditions BUAD 307 OVERVIEW AND STRATEGY Perner 3 2007 American Marketing Association (AMA) Definition Marketing: “The (1) activity, (2) set of institutions, and (3) processes for (4) creating, (5) capturing, (6) communicating, (7) delivering, (8) and exchanging (9) offerings that have (10) value for (11) customers, (12) clients, (13) partners, and (14) society at large.” (Numbering added.) BUAD 307 OVERVIEW AND STRATEGY Perner 4 ACTIVITY INSTITUTIONS PROCESSES MARKETING CREATION COMMUNICATION DELIVERY EXCHANGE CUSTOMERS OFFERINGS VALUE CLIENTS PARTNERS BUAD 307 OVERVIEW AND STRATEGY SOCIETY Perner 5 Value BENEFITS RECEIVED VALUE COST • Benefits—examples – Money – Time – Risk – Convenience • In delivery • In usage – – – – – – • Costs—examples Reliability Durability Performance Style/aesthetics Prestige Service component BUAD 307 OVERVIEW AND STRATEGY Perner 6 Customer Value, Part I • Value is the ratio of the benefits received (usually goods or services) to what is given up (usually money) • For a transaction to take place, the benefits received must usually be greater than the sacrifice • Note that a high price product may be a good value to the customer even if a high price is paid if the perceived benefits received are higher BUAD 307 OVERVIEW AND STRATEGY Perner 7 Customer Value, Part II • A low priced product may not represent value to a customer if the benefits received are perceived to be low, too. • Different customer segments will have different value perceptions • A product which is adapted to the needs of a particular segment can be very valuable to that segment even if the overall “quality” is not seen as superior by most other consumers • Cost may be in terms of money or other sacrifice BUAD 307 OVERVIEW AND STRATEGY Perner 8 Value: Implications • A low quality, low price product represents poor value for many customers • A very high benefit product at a high price can represent value for some segments • Customer segments differ in what they find valuable BUAD 307 OVERVIEW AND STRATEGY Perner 9 Steps Toward Value Orientation • Information sharing within the firm • Balance of cost and benefits (for the target segment—different balances for different types of customers) • Relationships with customers (as opposed to “one shot” transactions) BUAD 307 OVERVIEW AND STRATEGY Perner 10 STRATEGY • Strategy • Target markets • Related marketing mix: Product, distribution, promotion, and price • Counterintuitive realities • Marketing, strategy, and the organization • Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis BUAD 307 OVERVIEW AND STRATEGY Perner 11 Learning Objectives • Appreciate – The scope of strategic decisions – Tradeoffs that firms must make in their decisions – Cumulative and “spillover” effects of strategic decisions and the need for consistency – The need for industry balance and firm unit cash flow balance BUAD 307 OVERVIEW AND STRATEGY Perner 12 Strategy • Plan – To achieve desired objectives (e.g., profit, market share) – Based on available resources (e.g., financial, patents, trademarks, people, brand name/image , distribution channels) – Subject to choices made (e.g., willingness to take risk, short run vs. long run goals) BUAD 307 OVERVIEW AND STRATEGY Perner 13 MARKETING STRATEGY COMMON SENSE ENVIRONMENT COUNTERINTUITIVE REALITIES PRIORITIES/ OPPORTUNITY COSTS STRATEGY EXPERIMENTATION/ EXPRIENCE BUAD 307 RESOURCES OVERVIEW AND STRATEGY Perner 14 Counterintuitive Realities • A firm’s product should not necessarily appeal to the majority of customers—it is usually better to serve one segment well. • Large segments may not be attractive to serve—those attract a great deal of competition • It is usually not a good idea to closely imitate successful competitors • If a competitor lowers its price and takes market share away from you, the best response may be to raise your price BUAD 307 OVERVIEW AND STRATEGY Perner 15 Marketing Strategy: Sequence BUSINESS MISSION STATEMENT OBJECTIVES PRODUCT SITUATION/ SWOT ANALYSIS Adapted from text, p. 16. MARKETING STRATEGY IMPLEMENTATION EVALUATION CONTROL BUAD 307 OVERVIEW AND STRATEGY DISTRIBUTION PROMOTION PRICE Perner 16 REMINDER • It is tempting to try to enlarge market share by reaching out to new targets but – Compromises in product design, distribution, and positioning will tend to make the brand less attractive to the core segment – This will likely lead to increased competitive intensity BUAD 307 OVERVIEW AND STRATEGY Perner 17 Market Balance • Different firms should attempt to offer different forms of value, appealing to different customer segments— otherwise, competition is likely to degenerate into price competition BUAD 307 A WELL BALANCED GADGET INDUSTRY EASYTECH, LTD. EASE OF USE TROJAN CREATIONS, INC. PERFORMANCE MICROGEEKS, LTD. SMALL SIZE OVERVIEW AND STRATEGY BRUIN PRIDE, INC. LOW PRICE PATIENCE-IS-STUPID, INC. SPEED Perner 18 Examples of Objectives • Profit level • Profit growth • Total unit sales • Growth in unit sales • Growth in dollar sales • Total dollar sales • Brand perception by customers – Value – Quality – Innovativene ss – Reliability BUAD 307 • • • • • • • OVERVIEW AND STRATEGY Brand name recognition Brand name recognition by product category Product availability – Availability across retailers and other distributors – Store placement Percentage of products sold at full price Percentage of revenue from new products Affordability of product Elimination of unsafe product ingredients Perner 19 Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis STRENGTHS WEAKNESSES STRATEGY OPPORTUNITIES THREATS BUAD 307 OVERVIEW AND STRATEGY Perner 20 SWOT--Microsoft • Strengths • Weaknesses – New Products • Windows 7— powerful; opportunity to sell upgrades • Office 2010 applications – Technology – Market share – Barriers to entry – Brand name – Cash BUAD 307 – Zune – Bing (search engine) • Opportunities – Bing (search engine) – Windows 7 64 bits – Gaming • Threats – Economic fluctuations – Apple • Image • Design OVERVIEW AND STRATEGY Perner 21