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Understanding Marketing
Management
Professor Charles Trappey
September 13, 2007
Defining Marketing for
the 21st Century
• Marketing is everywhere
• Good marketing is an increasingly vital
ingredient for business success
• How might Samsung use a focus group to
design a new mobile phone?
The Importance of Marketing
• Many companies now have CMO’s
• But marketing is tricky and the C-level job
holders can bring either great fortune or
great disaster to the company. Can you
think of an example, of a famous or
infamous marketing person?
The Scope of Marketing
• Marketing deals with identifying and
meeting human and social needs.
• A shorter definition is “meeting needs
profitably.”
Frequently Asked Questions
1. How can we spot and choose the right
marketing segments? McDonalds
2. How can we differentiate our offerings?
Sogo
3. How should we respond to customers
who buy on price? Traditional market
4. How can we compete against lower-price,
lower-cost competitors? TSMC
FAQ’s Continued
5. How far can we go in customizing our
offering for each customer? Ford
6. How can we grow our business? Start-up
7. How can we build stronger brands? Acer
8. How can we reduce the cost of customer
acquisition? Fed-Ex
9. How can we keep our customers loyal for
longer? China Air
Exchange and Transactions
• Exchange is the core concept of marketing
where a desired product is obtained from
someone by offering something in return.
• Self-produce, beg, steal, or eschange
• A transaction is a trade of values between
two or more partiers: A gives X to B abd
receives Y in return.
• In a transfer, A gives X to B but does not
receive anything tangible in return.
What is Marketed?
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Goods
Services
Events
Experiences
Persons
Places
Properties
Organizations
Information
Ideas – every market offering includes a basic idea
Key Customer Markets
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Consumer Markets
Business Markets
Global Markets
Nonprofit and Governmental Markets
Who Markets?
• Marketers and prospects
• Marketers seek to influence the level,
timing, and composition of demand to met
the organization’s objectives. There are 8
demand states:
• Negative demand, non-existent demand,
latent demand, declining demand, irregular
demand, full demand, overfull demand,
and unwholesome demand.
New Consumer Capabilities
• Substantial increase in buying power
• Greater variety of goods and services
• A great amount of information about
practically anything
• A greater ease in interacting and placing
and receiving orders
• An ability to compare notes on products
and services
How Business and Marketing
are Changing
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Changing technology
Globalization
Deregulation
Privatization
Customization
Heightened competition
Industry convergence
Retail transformation
Disintermediation and reintermediation (brick
and click)
Ten Rules of Radical Marketing
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The CEO must own the marketing function
The marketing department must be small and flat and stay that
way.
Get face to face with the people that matter the most – the
customer.
Use market research cautiously.
Hire passionate missionaries not marketers.
Love and respect customers as individuals and not numbers on a
spreadsheet.
Create a community of consumers.
Rethink the marketing mix.
Celebrate common sense and compete with the larger
competitors with fresh and different marketing ideas.
Be true to the brand.
Company Orientation
Toward the Marketplace
• The Production Concept – consumers want inexpensive
and widely available products
• The Product Concept – consumers want quality,
performance and innovative features.
• The Selling Concept – Customers will ordinarily not buy
enough of the organizations products so therefore the
company must undertake an aggressive sales and
promotion effort.
• The Marketing Concept – customer centered sense and
respond. Selling focuses on the needs of the seller,
marketing on the needs of the buyer.
• Holistic Marketing is based on the development, design,
and implementation of marketing programs, processes,
and activities.
The Holistic Marketing Concept
Marketing Department, senior management, other departments
Communications, products and services, channels
Internal
Marketing
Integrated
Marketing
Holistic
Marketing
Socially
Responsible
Marketing
Ethics, environment, legal, community
Relationship
Marketing
Customers, channels, partners
Core Concepts
• Four P’s:
– Product, Price, Place, Promotion
• Four C’s:
– Customer solution, Customer cost,
Convenience, Communication
• Needs, wants, demands
Shifts in Marketing Management
• From marketing does the marketing to
everybody does the marketing
• From organizing by product units to
organizing by customer segments
• From making everything to buying more
goods and services from outside
• From using many suppliers to working with
fewer suppliers in a partnership
Marketing Management Tasks
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Developing marketing strategies and plans
Capturing marketing insights
Connecting with the customers
Building strong brands
Shaping the market offerings
Delivering value
Communicating value
Creating long term growth.
Chapter 2
Marketing Strategy And Plans
Marketing and Customer Value
The Value Delivery Process
• Choose the value (strategic marketing)
– Customer segmentation, market
selection/focus, value positioning
• Provide the value (tactical marketing)
– Product development, service development,
pricing, sourcing, making, distribution and
servicing
• Communicate the value (tactical marketing)
– Sales force, sales promotion, advertsing
The Value Chain
Support Activities
Firm infrastructure
Human Resource Management
Technology Development
Procurement
Inbound
logistics
MARGIN
Operations
Outbound
Logistics
Marketing
and Sales
Service
Core Competencies
• It is a source of competitive advantage and
makes a significant contribution to perceived
customer benefits
• It has applications in a wide variety of markets
• It is difficult or competitors to immitate
• Nike doesn’t make shoes, they have core
competencies in shoe design and shoe
merchandising
Holistic Marketing and
Customer Value
• Value exploration – how can a company
identify new value opportunities?
• Value creation – how can a company
efficiently create more promising new
value offerings?
• Value delivery – How can a company use
its capabilities and infrastructure to deliver
the new value offerings more efficiently?
The Central Role of
Strategic Planning
• Planning
– Corporate planning, division planning,
business planning, product planning
• Implementing
– Organizing, implementing
• Controlling
– Measuring results, Diagnosing results, Taking
corrective action
Corporate and Division
Strategic Planning
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Defining the corporate mission
Establishing strategic business units
Assigning resources to each SBU
Accessing growth opportunities
Defining the Corporate Mission
• Mission statements are at their best when
they reflect a vision for the next 20 years.
• Focus on a limited number of goals
• Stress the companies major policies and
values
• Define the major competitive spheres
within which the company will operate
Defining the Business
• Market definitions of a business are
superior to product definitions.
• Levitt also says to define your business in
terms of needs, not products.
Assessing Growth Opportunities
Organization and
Organizational Culture
Business Unit Strategic Planning
The Business Mission
SWOT Analysis
Goal Formulation
Strategic Formulation
Program Formulation and
Implementation
Feedback and Control
Contents of the Marketing Plan
• Please carefully study the Sample
Marketing Plan