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Things that Matter
Marketing and Customers - Overview Stage by Stage Breakdown
Stage 1
Marketing Concepts and principles
Stage 2
Markets and Customers
Stage 3
The Customer Revolution
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Things that Matter
Marketing and Customers
Purpose and Objectives
• To develop an understanding of marketing principles
• To understand the interfaces between customers and organisations and the link between
marketing and customer development
• To practice techniques in analysing marketing concepts
• To apply marketing principles in developing a business case
• To understand the relationship between marketing, strategic development, financial
management, people and internal processes and alignments
• To start to apply the principles of marketing to our work at each level within RoadTek
• To further develop an understanding customer service
• To enhance the development of a customer oriented culture in RoadTek
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Things that Matter
Marketing and customers - Session Outline Stage 1
Introduction and Outline
Current Understanding and Strategic Fit
Moments of Truth
Marketing Strategy
Plan Development
Where to from here?
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The Marketing Process
Market Opportunity
Analysis
Marketing Strategy
Target Market
Strategy
Marketing
Objectives
Marketing Mix:
Product; Place; Promotion; Price
Environmental Scanning
Organisation Mission
Implementation
Evaluation
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Stage 1 Session
Marketing Concepts
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Production–Oriented and Marketing-Oriented
Managers have different views of the Market
A Production-oriented manager sees
everyone as basically similar and
practices “mass marketing”
A Marketing-oriented manager
sees everyone as different and
practices “target marketing”
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Three Management Orientations
• The orientations of most organisations can be
charactertised into one of three classifications:
 Production orientated
 Sales orientated
 Marketing orientated
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Production Orientation
• A production orientation organisation assumes that
consumers will respond favourably to good products that
are reasonably priced.
• The production orientation has the following
characteristics:
 Inward looking
 Traditional
 Conservative
 Paternalistic
 Finds change difficult
e.g.“You can have any colour as long as its black”
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Sales Orientation
• Assumes that consumers will normally buy enough of your
offerings unless they are prompted with a substantial promotion or
selling effort.
• They use selling techniques that “HELP” consumers discover
unrealised needs and wants.
• Sales orientation has the following characteristics:
 Inward looking
 Aggressive
 Short Term Solutions
 Volume driven – customer induced to buy more
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Sales Orientation (continued)
• Examples of this approach – the car salesman who thinks:
 Customer satisfaction is secondary to getting the sale
 Goods are sold not bought
 There are unlimited customers, therefore dissatisfaction
is not important, therefore business is not an issue.
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Marketing Orientation
• The marketing orientation approach holds that – The key task of an
organisation is to determine the needs – wants and preferences of
the target market and to adapt the organisation to delivering the
required products or services more satisfactorily than its
competitors.
• The marketing orientated organisation displays the following
characteristics:
 Customer Needs are Foremost
 Integrated Organisational approach
 Outward Looking
 Change Oriented
 Responsive – Flexible
 Profit Driven e.g. McDonalds’ International Operation
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Marketing Orientation
• Marketers do not try to create needs and wants – recognise they
pre-exist.
• They do, however, along with other influencers fashion and foster
needs and wants. This issue is a matter of perspective.
• Marketing means that you must focus on your customers and
concentrate on identifying and satisfying their needs. However, in
an increasingly competitive world it will be necessary to adopt a
competitor orientation as well as a customer orientation.
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Marketing Myopia
•
Railroads did not stop growing because the need for passenger and freight transportation
declined. That grew. The railroads are in trouble today not because the need was filled by
others (cars, trucks, airplanes, even telephones), but it was not filled by the railroads
themselves. They let others take customers away from them because they assumed
themselves to be in the railroad business rather than in the transportation business ….
•
Today TV is a bigger business than the old narrowly defined movie business ever was.
Had Hollywood been customer-oriented (providing entertainment), rather than productoriented (making movies), would it have gone through the fiscal purgatory that it did?
I doubt it …
•
The difference between marketing and selling is more than semantic. Selling focuses on
the needs of the seller, marketing on the needs of the buyer. Selling preoccupied with the
seller’s need to convert his product into cash; marketing with the idea of satisfying the
needs of the customer by means of product and the whole cluster of things associated with
creating, delivering, and finally consuming it.
Source: Theodore Levitt, “Marketing Myopia”, Harvard Business Review July, August 1960, Copyright, 1960 by the President and
Fellows of Harvard College all rights reserved.
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Marketing is:
 A Total Organisational Concept
 Incorporated in a Strategic Plan
 Aimed at a Target Market
 Based on a Marketing Mix
 To Satisfy Customers Needs
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Marketing
• Is an activity performed by:
 Individuals
 Business
 Non-profit Organisations
that satisfies needs and wants through exchange.
• Exchange is the concept basic to all marketing.
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The Marketing Environment
Organisation
Resources
Customer
Wants & Needs
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The Marketing Environment (continued)
The Organisation
The Customer
Income
Product
Price
Promotion
Delivery
Location
The
Other
Wants
Needs
Personality
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Classes of Consumer Characteristics
•
Serve as the most common bases for Market Segmentation
 Geographic Variables
- Region
- Density
- Climate (Seasons)
 Demographic Variables
- Age – Sex – Education – Income (AIOs)
 Psychographics
- Activities, Interests, Opinions
 Social Cultural
- Religion – Class
 User Behaviour
- User rate – Brand loyalty
 User Situation
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Classes of Consumer Characteristics (continued)
•
Factors that define Purchase or Use
 Availability of Time
 Purpose - Gift
 Availability of Credit
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Marketing Concepts
Market Strategy – 4P’s
Price
Promotion
Product
Place
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Elaboration of the Market Mix
Quality
Features and options
Physical
Style
Brand Name
Packaging
PRODUCT
Sizes
Before sales and services
Service
During sales services
After sales services
Guarantees, warranties and return policies
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Elaboration of the Market Mix (continued)
Quantity discounts
Basic Price
Promotional allowances
PRICE
Transportation allowances
Price Modifiers
Credit terms
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Elaboration of the Market Mix (continued)
Transportation
Logics
Warehousing
Inventory levels
PLACE
Market coverage
Locations
Channels
Types (agents, brokers, wholesalers, retailers)
Terms
Motivation and management
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Elaboration of the Market Mix (continued)
Advertising
PROMOTION
Salesforce
Sales promotion
Publicity
Budget
Message
Execution
Media
Timing
Size
Structure
Compensation and motivation
Call planning
Budget
Types (trade shows, point of sale displays, samples
Timing
Budget
Events
Ideas
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Product Life Cycle
Losses/Investment ($)
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BCG Growth – Share Matrix
20%
STRONG
STAR
PROBLEM
CHILD
CASH COW
DOG
10%
WEAK
HIGH
Objective: Create Balance
1.0
LOW
Compare to nearest competitor
Relative Market Share
0.1
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Market Attractiveness/Business Position Matrix
High
Medium
Low
Strong
Medium
Business Strength
The area of each circle represents the relative dollar sales on the
matrix
Weak
High overall attractiveness
Medium overall attractiveness
Low overall attractiveness
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ANSOFF (Growth) Matrix
Products/
Services
Same
New
Same
Market
Penetration
Product
Development
New
Market
Development
Diversification
Markets/
Clients
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Possible Pricing Objectives
Target Return
Profit Oriented
Maximise profits
Pricing Objective
Sales Oriented
Dollar or Unit
Sales Growth
Growth in
Market Share
Status Quo
Meeting
Competition
Non-price
Competition
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Pricing
Objectives
Demand
Price Flexibility
Costs
Competition
Price of Other
Products in line
Price
Setting
Mark-up Chain
in Channels
Discounts and
Allowances
Legal
Environment
Geographic
Pricing Terms
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Apparent Strategy
Who are the
competitors
Market Segmentation
Competitive Forces
Competitive
Advantages
How do they
compete?
Performance
Assumptions
Why are they
doing it?
Structure, systems,
skills and values
Commitment
Strategic Thrusts
What are they
likely to do?
Implications:
• Response options
• Areas of vulnerability to be exploited
• Competitive reactions to be our move
Signals?
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Marketing Plan – Flow Chart Example
Fight world hunger
Business Mission
Increase agricultural productivity
Business Objectives
Research new fertilisers
Improve profits to support research
Marketing Objectives
Marketing Strategy
Increase sales
Reduce costs
Increase market share
in domestic market
Enter new foreign
markets
Increase productivity availability
and promotion
Cut price and call on
on large farms
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