Beruflich Dokumente
Kultur Dokumente
5
Subject Name: Marketing for
Customer
Value
Faculty Name:
Dr. Noor Firdoos Jahan
Professor, Department of Marketing,
RVIM
Module 1
ESSENTIALS OF MARKETING
Importance of marketing, Core
marketing concepts, Company
orientation towards market place,
Marketing management tasks,
Marketing strategies and plans,
SWOT analysis, Marketing
environment, Competitive dynamics
What is
Marketin
g?
What Is Marketing?
A Philosophy
An Attitude
A Perspective
A Management
Orientation
A Set of Activities,
including:
Products
Pricing
Promotion
Distribution / Place
Definition Of Marketing
American Marketing
Association
Simply put
Marketing is the delivery of customer
satisfaction at a profit.
Goals
Attract new customers by promising
superior value and keep and grow current
customers by delivering satisfaction.
inexpensive car).
2. Real needs
3. Unstated needs
4. Delight needs
5. Secret needs
What is Marketed?
Goods
Services
Events
Experiences
Persons
Places
Properties
Organizations
Who Markets?
Marketers and Prospects
A marketer is someone who seeks a
response-a attention, a purchase, a
vote, a donation from another party
called prospect. If two parties are
seeking to sell something to each
other, we call them both marketers.
WHAT IS MARKET ?
Consumer Markets
Business Markets
Global Markets
Non Profit and Government Markets
Marketplaces,
Marketspaces and
Metamarkets
WHAT IS MARKETING ?
Marketing is the management
process which identifies,
anticipates, and supplies customer
requirements efficiently and
profitably.
In other words, it is the process of
understanding, creating, and
delivering profitable value to
targeted customers better than the
competition.
Communication
Goods & Services
Market
Industry
Money
Information/Feedback
WHEN :Customer
Customer Value
Customer Value
The ratio of benefits to the sacrifice necessary
to obtain those benefits
Customer Satisfaction
Customer Satisfaction
The feeling that a product has met or exceeded
the customers expectations.
Cultivate relationships,
NOT one-time transactions
Relationship Marketing
Relationship Marketing
The name of a strategy
that entails forging long-term partnerships with
customers, both individuals and firms.
Relationship Marketing
Who are your customers
Requirements
Requirements
for
for
Building
Building
Relationships
Relationships
Customer-oriented personnel
Empowered employees
Teamwork
Communication
Communicationand
andDelivery
Delivery
Freedom
FreedomtotoAccept
Acceptor
orReject
Reject
Desire
DesiretotoDeal
DealWith
WithOther
OtherParty
Party
IMPORTANCE OF
MARKETING - Society
1. Marketing helps to achieve, maintain
and raise the standards of living
-
IMPORTANCE OF
MARKETING Business
Firms
1. Marketing Generates Revenue, by
generating sales & thereby profits
2. Marketing helps decision making
process (what, when & how much to
produce, store or transport)
3. Helps change management &
innovations
Marketing in Practice
Box 1.1: Improving CMO Success
1.
2.
3.
4.
5.
6.
7.
8.
Internet
Marketing research
Internal communication
External communication
Personalization of messages
Rewards and promotions
Mobile marketing
Personalization of products
Savings from using the internet
Online training products
Copyright 2012 Pearson
Education
1-38
Company Orientation
Toward
the Marketplace
Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept
Company
Produce more & more
Produce
Sell
Consumers
Produce
Quality
Products
Sell
Consumers
Consumers
Produce it
Market it
Focus
Production
Sales
Sales
Marketing
Marketing
What do customers
want and need?
Societal
Societal
Market Orientation
Everybody.
Through intensive
promotion.
Through coordinated
marketing and interfunctional activities.
Relationship Marketing
Relationship Marketing
building mutually satisfying long-term
relationships
with key parties, in order to earn and
retain their business.
Integrated Marketing
Integrated Marketing
Four Ps
Product
Price
Place
Promotion
SIVA
Integrated Marketing
Internal Marketing
Internal Marketing ensuring that
everyone in the organization
embraces appropriate marketing
principles, especially senior
management
Performance Marketing
Performance Marketing
Financial Accountability
Social Responsibility Marketing
Social Initiatives
Cause marketing
Corporate philanthropy
Marketing Management
Tasks
Delivering value
Communicating value
Marketing Management
Tasks
Marketing Memo: Marketers Frequently Asked Questions
Functions of CMOs
Strengthening the brands
Measuring marketing effectiveness
Driving new product development
based on customer needs
Gathering meaningful customer
insights
Utilizing new marketing technology
Copyright 2012 Pearson
Education
1-62
Negative Demand
No Demand
Latent Demand
Falling Demand
Irregular Demand
Full Demand
Overfull Demand
Un-wholesome Demand
Marketing task
Conversional Mktg.
Stimulational Mktg.
Developmental Mktg.
Remarketing
Synchro-marketing
Maintenance Mktg.
Demarketing
Counter-marketing
Marketing Management
Tasks
1. Conversional Marketing
-
It is a rare condition
2. Stimulational Marketing
-
e.g. Mushrooms
3. Developmental Marketing
-
4. Remarketing
-
5. Synchro Marketing
-
Seasonal products
6. Maintenance Marketing
-
Established products
7. Demarketing
-
8. Counter Marketing
-
Trends in Marketing
Developing Marketing
Strategies and Plans
3 Vs approach to
Marketing
Holistic Marketing
Orientation and Customer
value
Key management questions
are:
Value exploration How a company identifies new
value opportunities?
Value creation How a company efficiently creates
more promising new value offerings?
Value delivery How a company uses its capabilities
and infrastructure to deliver the new value offerings
more efficiently?
Levels of a Marketing
Plan
Strategic
Target marketing
decisions
Tactical
Product features
Promotion
Value proposition
Pricing
Analysis of
Sales channels
marketing
opportunities
Service
Evaluating a Marketing
Plan
Is the plan simple?
Is the plan specific?
Is the plan realistic?
Is the plan complete?
Corporate Mission
This seeks to embody the entire goals
of the organization and the objective of
its existence.
It seeks to provide a sense of purpose,
direction and opportunity
For e.g. e-bays mission:
to provide a global trading platform
where practically anyone can trade
practically anything.
Motorola
The purpose of Motorola is to honorably
serve the needs of the community by providing
products and services of superior quality at a
fair price to our customers; to do this so as to
earn an adequate profit which is required for
the total enterprise to grow; and by doing so,
provide the opportunity for our employees and
shareholders to achieve their personal
objectives.
eBay
Product
Market
Missouri-Pacific
Railroad
We run a railroad
Xerox
We make copying
equipment
We improve office
productivity
Standard Oil
We sell gasoline
We supply energy
Columbia Pictures
We make movies
We entertain
people
Establishing Strategic
Business Unit
SBU:
It is a company within a company
The business is differentiated from the
rest of the company
It has its own set of competitors
It is a separate profit centre
Characteristics of SBUs
Large companies normally manage quite different
businesses, each requiring its own strategy. GE has
classified its business into 89 strategic business units,
SBU has three characteristics:
It is a single business or collection of related
businesses
It has its own set of competitors
It has a manager responsible for strategic planning
and profitability
Assigning Resources to
Eachmodels
SBU
Several investment planning
provide ways to
make
This analyses
GE Model Usage
The 9 cells of the matrix are grouped
into 3 broad categories:
The favorable category (1,2,3)
The organisation should build and grow
these businesses
The GE model
High
Medium
Industry/
market
attractivene
ss Low
Ii
iii
Strong
Average
Weak
Competitive Strengths
High
Winners
A
Winners
B
C
Question
Marks
Industry Attractiveness
D
Winners
E
Medium
Average
Businesses
F
Losers
Losers
G
Low
Profit
Producers
Strong
Losers
Average
Weak
BCG Sections
Stars
Business with a high market share and
high growth rate
Generate huge sums of money
Require huge sums of money to cope
with growth
Cash Cows
Businesses with low growth but high
market share
Generate huge sums of money at low
cost
Are used to develop and promote new
businesses (they are milked)
SBU strategies
Build
Hold
Harvest
Divest
STRATEGIC BUSINESS
UNIT PLANNING PROCESS
Business Mission
Each business unit needs to define its specific within
the broader company mission. Thus, a televisionstudio-lighting-equipment company might define its
mission as, To target major television studios and
become
their
vendor
of
choice
for
lighting
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
CONDUCT SWOT
Analysis for use in the
Marketing Planning
Process
BENEFITS OF A SWOT
ANALYSIS
The main advantages of conducting a SWOT analysis:
Little or no cost
Anyone who understands your business can perform a SWOT
analysis
When you don't have much time to address a complex situation
FACTORS CONSIDERED
IN A SWOT ANALYSIS
Internal Factors
Changes in spending on other parts of the companys
marketing and promotional mix
Changes in what is happening in different territories or
markets
Changes in sales management practices
Changes in number of salespeople supervised by one
person
External Factors
Intensity of competition
Total market potential
Concentration of potential high-volume buyers
Geographic distribution of customers
PROCEDURES FOR
CONDUCTING A SWOT
ANALYSIS
Step 1 Information collection In the here and
now
List all strengths that exist now. Then in turn, list
all weaknesses that exist now. Be realistic but
avoid modesty!
You can conduct one-on-one interviews. Or get
a group together to brainstorm. A bit of both is
frequently best.
Youll first want to prepare questions that relate
to the specific company or product that you are
analyzing. Youll find some questions and issues
below to get you going.
When facilitating a SWOT search for insight
through intelligent questioning and probing
PROCEDURES FOR
CONDUCTING A SWOT
ANALYSIS (contd)
Step 2 What might be
List all opportunities that exist in the future.
Opportunities are potential future strengths.
Then in turn, list all threats that exist in the
future. Threats are potential future
weaknesses.
Step 3 Plan of action
Review your SWOT matrix with a view to
creating an action plan to address each of the
four areas.
Goal Formulation
Strategic Formulation:
Porters Generic Strategies
Overall cost leadership. Firms work to achieve the
lowest production and distribution costs so they can
underprice competitors and win market share.
Differentiation. The business concentrates on
achieving superior performance in an important
customer benefit area valued by a large part of the
market.
Focus. The business focuses on one or more narrow
market segments,gets to know them intimately,
and pursues either cost leadership or differentiation
within the target segment.
Strategic Formulation :
Marketing Alliances
Product or service alliances One company
licenses another to produce its product, or two
companies jointly market their complementary
products or a new product.
Promotional alliances One company agrees to
carry a promotion for another companys product or
service
Logistics alliances One company offers logistical
services for another companys product.
Pricing collaborations One or more companies
join in a special pricing collaboration.
The Marketing
Environment
Case Study
McDonalds Challenges and
Reactions
Challenges
Shifting consumer lifestyles
Low ratings of food and
service quality
Atmosphere not upscale
Image of being unclassy,
uncultured and uncool to
younger target markets
Marketing Initiatives
Focus on core competency of
consistent products and reliable
service
Upscale alternative including
McCafe and Bistro Gourmet
Healthier food options with
elimination of supersize and
introduction of Go Active! Adult
Happy Meal
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketing
intermediaries
4. Customers
5. Competitors
6. Publics
3 - 141
Marketing must
consider other parts
of the organization
including finance,
R&D, purchasing,
operations and
accounting
Marketing decisions
must relate to
broader company
goals and strategies
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketing
intermediaries
4. Customers
5. Competitors
6. Publics
3 - 142
Marketers must
watch supply
availability and
pricing
Effective partnership
relationship
management with
suppliers is essential
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketing
intermediaries
4. Customers
5. Competitors
6. Publics
3 - 143
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketing
intermediaries
4. Customers
5. Competitors
6. Publics
3 - 144
Consumer
Business
Reseller
Government
International
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketing
intermediaries
4. Customers
5. Competitors
6. Publics
3 - 145
Conducting
competitor analysis
is critical for success
of the firm
A marketer must
monitor its
competitors
offerings to create
strategic advantage
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketing
intermediaries
4. Customers
5. Competitors
6. Publics
3 - 146
Financial
Media
Government
Citizen-action
Local
General
Internal
The Macroenvironment
Macroenvironmental Forces
Demographic
Economic
Natural
Technological
Political
Cultural
3 - 147
Demographic Environment
Demographic Environment:
The study of human populations in
terms of size, density, location, age,
gender, race, occupation and other
statistics
3 - 148
Demographic Environment
Changing age structure of the U.S.
population is the single most
important demographic trend
Baby boomers, Generation X, and
Generation Y are the key groups
3 - 149
Demographic Environment
Key Generations
Baby Boomers
Generation X
Generation Y
3 - 150
Demographic Environment
Key Generations
Baby Boomers
Generation X
Generation Y
3 - 151
Demographic Environment
Key Generations
Baby Boomers
Generation X
Generation Y
3 - 152
Natural Environment
Natural Environment:
Involves the natural resources that are
needed as inputs by marketers or that
are affected by marketing activities
Trends
Shortages of raw materials
Increased pollution
Increased government intervention
3 - 153
Technological Environment
The most dramatic force shaping our
destiny
Rapidly changing force which creates
many new marketing opportunities but
also turns many existing products
extinct
3 - 154
Political Environment
Consists of laws, government agencies
and pressure groups that influence or limit
various organizations and individuals in a
given society
Legislation affecting businesses worldwide has
increased
Laws protect companies, consumers and the
interests of society
Increased emphasis on socially responsible
actions
3 - 155
Cause-Related Marketing
Marketers create link between brand and
charitable organization
Demonstrates social responsibility
Helps build positive brand image
Examples include General Mills Box Tops
for Education, Tang and Mothers Against
Drunk Driving, Eddie Bauer and local
schools
3 - 156
Cultural Environment
Made up of institutions and other
forces that affect a societys basic
values, perceptions, preferences and
behaviors.
3 - 157
Society
Identify with
brands for selfexpression
Patriotism on the
rise
Nature
Others
lifestyles of health
and sustainability
(LOHAS) consumer
segment
Organizations
Universe
Trend of decline in
trust and loyalty to
companies
Includes religion
and spirituality
3 - 158
Responding to the
Marketing Environment
3 - 159
Competitive Dynamics
Competitive Dynamics
Ongoing actions and responses taking place
between all firms competing within a market for
advantageous positions.
2. Threat Analysis
Threat Analysis
A firms awareness of its closest competitors and the
kinds of competitive actions they might be planning.
Competitor Analysis
Is the first step to understanding competitive rivalry
and identifying who your direct competitors are
Involves collecting competitive intelligence
Focuses on trying to predict competitors behavior
The question: To what extent are firms competitors?
2 components to assess
Market Commonality
Resource Similarity
Direct competitors have high market commonality & high
resource similarity
Market Commonality
Market Commonality
The number of markets with which the firm and a
competitor are jointly involved and the degree of
importance of the individual markets to each
Each industry composed of various markets which
can be subdivided into segments
Example: Automobile industry
Resource Similarity
Resource Similarity
Extent to which firms tangible/intangible
resources are comparable to competitors
in type and amount.
Can result in similar strengths and
weaknesses and similar strategies being
pursued.
The more similar the types and amounts of
resources the more direct the competition
is between two firms.
3. 3 Drivers of
Competitive
Actions/Responses
Awareness
Extent competitors recognize degree of
mutual interdependence that results from
market commonality and resource similarity
Greatest when firms have highly similar
resources
Affects the extent to which the firm
understands the consequences of its
competitive actions and responses
A lack of awareness
3 Drivers of Competitive
Actions/Responses
Motivation
Ability
First Mover
Firms that take an initial competitive
action.
Generally possess the resources and
capabilities that enable them to be
pioneers in new products, new markets or
new technologies.
Can earn above average profits until
competitors respond
Gain customer loyalty, helping to create a
barrier to entry by competitors
Advantage depends upon difficulty of imitation
Second Mover
Firms that respond to a First Movers actions
Second Movers frequently imitate First Movers
Speed of response often dictates success
Should evaluate customers response before
moving
Fast Second Movers can capture some of
initial customers and develop some brand
loyalty
Avoid some of the risks associated with First
Move
Must possess necessary capabilities to imitate
Summary Of Movers
First Mover Incentives
Firm that takes an initial competitive action to
build or to defend its competitive advantages
or to improve its market position
Second Movers
Late Movers
Quality
Customer perception that the firm's goods or
services perform in ways that are important to
customers, meeting or exceeding expectations
Lower quality = lower attack/response likelihood
Large firms
Initiate more competitive actions with more
strategic actions during a given period
Tend to limit the types of competitive actions
used
Actors Reputation
Actors Reputation
Slow-Cycle Markets
Markets in which the firm's competitive
advantages are shielded from imitation for long
periods of time, and in which imitation is costly
Build a one-of-a-kind competitive advantage
which creates sustainability
Once a proprietary advantage is developed,
competitive behavior should be oriented to
protecting, maintaining, and extending that
advantage
Fast-Cycle Markets
Markets in which the firm's capabilities that contribute to
competitive advantages are not shielded from imitation
and where imitation is often rapid and inexpensive.
Competitive advantages are not sustainable in fast-cycle
markets.
Focus: learning how to rapidly and continuously
develop new competitive advantages that are superior to
those they replace (creating innovation ).
Continually try to move on to another temporary
competitive advantage before competitors can respond to
the first one.
Standard-Cycle Markets
Markets where firms competitive advantages are
moderately shielded from imitation and where
imitation is moderately costly.
Competitive advantages partially sustained as
quality is continuously upgraded.
Seek to serve many customers and gain a large
market share.
Gain brand loyalty through brand names.
Careful operational control / manage a consistent
experience for the customer.
Competitive Strategies/
Strategies to compete
Having a competitive advantage is
necessary for a firm to compete in the
market
But what is more important is whether the
competitive advantage is sustainable
A firm must identify its position relative to
the competition in the market
By knowing if it is a leader, challenger,
follower or nicher, it can adopt appropriate
strategies to compete
Defense Strategy
A market leader should generally adopt a
defense strategy
Six commonly used defense strategies
Position Defense
Mobile Defense
Flanking Defense
Contraction Defense
Pre-emptive Defense
Counter-Offensive Defense
Market Challenger
Strategies
Frontal Attack
Seldom work unless
The challenger has sufficient firepower (a 3:1 advantage) and staying
power, and
The challenger has clear distinctive
advantage(s)
Flank attack
Attack the enemy at its weak
points or blind spots i.e. its
flanks
Ideal for challenger who does
not have sufficient resources
e.g. In the 1990s, Yaohan
attacked Mitsukoshi and Seibus
flanks by opening numerous
stores in overseas markets
Encirclement attack
Attack the enemy at many
fronts at the same time
Ideal for challenger having
superior resources
e.g. Seiko attacked on fashion,
features, user preferences and
anything that might interest the
consumer
Bypass attack
By diversifying into unrelated
products or markets neglected
by the leader
Could overtake the leader by
using new technologies
e.g. Pepsi use a bypass attack
strategy against Coke in China
by locating its bottling plants in
the interior provinces
Guerrilla attack
By launching small, intermittent
hit-and-run attacks to harass and
destabilize the leader
Usually use to precede a stronger
attack
e.g. airlines use short promotions
to attack the national carriers
especially when passenger loads
in certain routes are low
Market-Follower Strategies
Theodore Levitt in his article,
Innovative Imitation argued that a
product imitation strategy might be
just as profitable as a product
innovation strategy
e.g.
Product innovation--Sony
Product-imitation--Panasonic
Market-Follower Strategies
(contd)
Each follower tries to bring distinctive advantages to
Market-Nicher Strategies
Smaller firms can avoid larger
firms by targeting smaller
markets or niches that are of
little or no interest to the larger
firms
e.g. Logitech--mice
Microbrewers--special beers
Market-Nicher Strategies
(contd)
Nichers must create niches, expand
the niches and protect them
e.g. Nike constantly created new
niches--cycling, walking, hiking,
cheerleading, etc
Multiple Niching
[A] firm should `stick to its niching
but not necessarily to its niche. That
is why multiple niching is preferable
to single niching. By developing
strength in two or more niches the
company increases its chances for
survival.
Philip Kotler
Example of Nicher:
Challenger Superstore
Challenger Superstore is a discount retailer
of computers and accessories
It opened its first overseas store in Bangkok
at a cost of 90 million baht (S$3.7 million)
In October 2000, it closed its Bangkok store
after failing to pay rent amounting to
about 6 million baht
Discussion: Why do you think Challenger
failed in Thailand?