1 lecture 1 marketing: concept conceptorientationenvironment an overview of marketing management-i
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LECTURE 1LECTURE 1MARKETING:MARKETING:
CONCEPTCONCEPT
ORIENTATIONORIENTATION
ENVIRONMENTENVIRONMENT
AN OVERVIEW OF MARKETING MANAGEMENT-I
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Definitions of MarketingDefinitions of Marketing
The management The management
process responsible for process responsible for
anticipating and anticipating and
satisfying customer satisfying customer
requirements profitablyrequirements profitably
(Chartered Institute (Chartered Institute
ofof
Marketing)Marketing)
The process of The process of
defining, anticipating defining, anticipating
and and
creating customer needscreating customer needs
and of organizing the and of organizing the
company’s assets and company’s assets and
resources to satisfy themresources to satisfy them
for the greater profit of for the greater profit of
the customer and the the customer and the
firm firm (Anon)(Anon)
What marketing is notWhat marketing is not
““A sophisticated form of selling done A sophisticated form of selling done by graduates”by graduates”
““Advertising, sales promotion, selling, Advertising, sales promotion, selling, PR, direct mail, market research”PR, direct mail, market research”
““What the marketing department What the marketing department does”does”
““A process which increases costs”A process which increases costs”““An irrelevance to what I do”An irrelevance to what I do”
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Some definitionsSome definitions
CUSTOMERCUSTOMER Person or Person or organisation who organisation who actually buys the actually buys the product or serviceproduct or service
BUYERBUYER Same as customer Same as customer but more B2Bbut more B2B
CLIENTCLIENT A customer for whom A customer for whom a service is a service is performedperformed
CONSUMERCONSUMER The person who The person who ultimately consumes ultimately consumes or uses the end or uses the end productproduct
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Some definitionsSome definitions
PROSPECTPROSPECT A potential customerA potential customer
MARKETMARKET The actual or The actual or potential customers potential customers for a given product or for a given product or serviceservice
STAKEHOLDERSTAKEHOLDER Anyone with a stake Anyone with a stake in the organisationin the organisation
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3 Levels of Marketing3 Levels of Marketing 11stst Level: Tactical Output Level: Tactical Output
(promotional literature, advertising – (promotional literature, advertising – WHAT THEY SEEWHAT THEY SEE))
22ndnd Level: Management Process Level: Management Process (allocation of resources – WHAT WE (allocation of resources – WHAT WE
DO)DO) 33rdrd Level: Marketing Orientation Level: Marketing Orientation
(a philosophical approach to doing (a philosophical approach to doing business which puts customer at the business which puts customer at the heart of the enterprise – HOW WE ACT)heart of the enterprise – HOW WE ACT)
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MarketingOrientation
Integrated customer
focus
Long run profitsthrough customer
satisfaction
SalesOrientation
Push! Push!Sell! Sell!by promotion
Short term gains in profit via sales increases
Evolution of the Marketing Evolution of the Marketing ConceptConcept
ProductionOrientation“Any colour you
like, as long as it’s black”
Profits throughproduction controls
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TheThe Marketing ConceptMarketing Concept
Marketing ConceptThe achievement of corporate goals through
meeting and exceeding customer needs better than the competition
Customer orientationCorporate activities are focused upon
providing customer satisfaction
Integrated effortAll staff accept the responsibility for
creating customer satisfaction
Goal achievementThe belief that corporate goals can
be achieved through customer satisfaction
Marketing concept
The achievement of corporate goals through meeting and exceeding customer needs better than the
competition
Customer orientation
Corporate activities are focused upon providing customer satisfaction
Integrated effort
All staff accept the responsibility for creating
customer satisfaction
Goal achievement
The belief that corporate goals can be achieved
through customer satisfaction
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VMVVMV
What are What are Vision, Mission and Vision, Mission and ValuesValues??
What part does each of the above play What part does each of the above play in helping a company achieve its in helping a company achieve its goals?goals?
Watch the video clip of a well-known Watch the video clip of a well-known organisation, and work out their VMVorganisation, and work out their VMV
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VMVVMV
IssueIssue Possible Possible DescriptionsDescriptions
What are we What are we here for?here for?
PurposePurposeMissionMissionAimAim
Where are Where are we going?we going?
VisionVisionGoal, destinationGoal, destinationStrategic IntentStrategic Intent
What beliefs What beliefs will guide our will guide our behaviour?behaviour?
Values, credibilityValues, credibilityEthos, principlesEthos, principlesGuidelines, rulesGuidelines, rules
?
Review - the marketing conceptReview - the marketing concept
BUYER(consumer)Satisfaction
SELLER(provider)Profit
SOMETHING OF VALUE
SOMETHING OF VALUE
money, credit, donations, labour, goods
goods, services, ideas
Exchange process
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The Marketing EnvironmentThe Marketing Environment
Company
Microenvironment
Macroenvironment
Legal
Political
Technological
Social
Economic
Suppliers Customers
Distributors
Competitors
VMV
S W
O T
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WHY scan the environment?WHY scan the environment?
““Assessing the potential impact of likely changes in Assessing the potential impact of likely changes in the environment offers organisations an advantage the environment offers organisations an advantage over their competitors by enabling decision-makers to over their competitors by enabling decision-makers to narrow their range of options.narrow their range of options.
It is clear that, in a dynamic & complex business It is clear that, in a dynamic & complex business environment, attempting to forecast sometimes environment, attempting to forecast sometimes discontinuous trends is fraught with difficulty…..discontinuous trends is fraught with difficulty…..
However, However, to do nothing is even more dangerousto do nothing is even more dangerous for an organisation, as is over-reliance on internal for an organisation, as is over-reliance on internal sources of information, rather than sources of information, rather than external channels”external channels”
Scanning the environment
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Model 1 - Model 1 - Using Using PEST/PESTEL analysis to PEST/PESTEL analysis to
scan thescan the “MACRO” environment “MACRO” environment
ORGANISATIONORGANISATION
Legal
Political
Social
Ecological
Technological
Economic
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Some possible PEST factorsSome possible PEST factors Political / LegalPolitical / Legal
1.1. Deregulated marketsDeregulated markets2.2. Taxation policyTaxation policy3.3. International trade policyInternational trade policy4.4. Joint Ventures legislationJoint Ventures legislation
Social / Social / EcologicalEcological1.1. Population demographicsPopulation demographics
(household size, no of cars)(household size, no of cars)2.2. Income distributionIncome distribution3.3. Level of environmental Level of environmental
concernconcern4.4. Attitudes to work & leisureAttitudes to work & leisure5.5. Education levelsEducation levels
EconomicEconomic 1.1. Business cycleBusiness cycle2.2. Interest rates / inflationInterest rates / inflation3.3. Unemployment levelUnemployment level4.4. Raw materials availabilityRaw materials availability5.5. Disposable incomeDisposable income
TechnologicalTechnological1.1. Govt spending on researchGovt spending on research2.2. Speed of take-up of new Speed of take-up of new
technologytechnology3.3. Barriers to entry Barriers to entry 4.4. Impact of InternetImpact of Internet5.5. Merging of “ unrelated” Merging of “ unrelated”
sectors e.g. banks & sectors e.g. banks & telecommstelecomms
Note: EXAMPLES ONLY!
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Model 2 – Using 5 Forces analysis to scan the “MICRO” environment
IndustryIndustryCompetitorsCompetitors
Intensity ofIntensity ofRivalryRivalry
BuyersSuppliers
NewEntrants
Substitutes
Threat ofThreat ofNew EntrantsNew Entrants
Threat ofThreat ofSubstitutesSubstitutes
BargainingBargainingPower ofPower ofSuppliersSuppliers
BargainingBargainingPower ofPower ofBuyersBuyers
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5 Forces example: 5 Forces example: (Mobile phones)(Mobile phones)
StrongAirtel
RelianceVodaphone
WeakCost of licence
High barrier to entryHuge cost to 3G New functions?
StrongCustomers have many competing offers, some
including airtime, some not.
Cheap deals throughInternet
WeakNokia
MotorolaEricsson
Competing stronglyFor share of
Mature market
MediumCustomers returning to
land linesConvergence with PDAs
Location technology
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Basic information we needBasic information we need Who are they?Who are they? Who could they/should Who could they/should
they be? they be? How are their How are their
needs/expectations needs/expectations met?met?
How loyal are they?How loyal are they? How do they rate the How do they rate the
company – company – product/price/serviceproduct/price/service
How do they rate the How do they rate the company in relation to company in relation to the competition?the competition?
What relevant broad What relevant broad macro changes are macro changes are taking place?taking place?
Who are they and what Who are they and what are their objectives?are their objectives?
Are they likely to Are they likely to change?change?
What is happening to What is happening to market share?market share?
Can we compare our Can we compare our profitability with their profitability with their profitability?profitability?
What are their strengths What are their strengths and weaknesses?and weaknesses?
How do customers rate How do customers rate the competition in the competition in relation to our relation to our company?company?
What will provoke the What will provoke the biggest retaliation from biggest retaliation from the competition?the competition?
CUSTOMERS COMPETITORS
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Internal analysisInternal analysis
What are we doing right?What are we doing right?What are we doing wrong?What are we doing wrong?What are our internal strengths?What are our internal strengths?What are our internal weaknesses?What are our internal weaknesses?
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Use the preceding steps to help complete the SWOT.Use the preceding steps to help complete the SWOT. SWOT should come at end of Marketing Audit and SWOT should come at end of Marketing Audit and
summarize it.summarize it. Highlight the key issues from the SWOT, - summary Highlight the key issues from the SWOT, - summary
of the issues and implications for the company.of the issues and implications for the company.
• Should provide a Should provide a succinct, interesting and readablesuccinct, interesting and readable summary of the state of the business and the external factors summary of the state of the business and the external factors and trends impacting on it.and trends impacting on it.
• Beware! Inherent simplicity of the technique is often its Beware! Inherent simplicity of the technique is often its undoingundoing
• Can become vague, confused, irrelevant, lacking in directionCan become vague, confused, irrelevant, lacking in direction• A strength is only a truly a strength if you are stronger than A strength is only a truly a strength if you are stronger than
your competitors on that attributeyour competitors on that attribute
Bringing Macro/Micro/Internal information Bringing Macro/Micro/Internal information together - Marketing Audit Summary – together - Marketing Audit Summary –
Model 3 - Model 3 - SWOTSWOT
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An example of a SWOTAn example of a SWOT
• StrengthsStrengths• Strong market research Strong market research
teamsteams• Distribution networkDistribution network• Strong financial resourcesStrong financial resources• Service ReputationService Reputation
• OpportunitiesOpportunities• Deregulated markets for Deregulated markets for
utilities utilities • Competitors prices rising Competitors prices rising
due to currency fluctuationdue to currency fluctuation• Strategic alliance Strategic alliance
possibilitiespossibilities
• Weaknesses Weaknesses • Admin costs 20% Admin costs 20%
higher in UK than higher in UK than elsewhereelsewhere
• Major competitors Major competitors more innovativemore innovative
• Little synergy between Little synergy between divisionsdivisions
• ThreatsThreats• EC widening may bring EC widening may bring
in low cost competitorsin low cost competitors• Business activity in Business activity in
world economy world economy starting to slowstarting to slow
Effective use of SWOTEffective use of SWOT
STRENGTHS WEAKNESSES
OPPORTUNITIES THREATS
MatchingStrategies
ConversionStrategies
ConversionStrategies
Model 4Model 4 - The - The Marketing PlanMarketing Plan
Corporate objectives
Marketing audit
SWOT
Marketing objectives/strategies
Alternative plans/mix
Programmes
Measure/review
Assumptions
Estimate results
FEEDBACK
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10 benefits for you from Marketing 10 benefits for you from Marketing PlanningPlanning
1.1. Hitting the Hitting the bestbest customer targets customer targets2.2. Winning new customersWinning new customers3.3. Expanding marketsExpanding markets4.4. Beating the competitionBeating the competition5.5. Keeping abreast of market developmentsKeeping abreast of market developments6.6. Using resources to best advantageUsing resources to best advantage7.7. Improving internal communicationsImproving internal communications8.8. Minimising threats to Reduce risk and Minimising threats to Reduce risk and
surprisesurprise9.9. Identifying company strengths Identifying company strengths
and weaknessesand weaknesses10.10. Achieving consistencyAchieving consistency
It looks like hard work – why bother?