intro marketing elearning

Marketing process and concepts

Laurence COGAN

Autumn 2009 – ESC 2nd Year

Sessions’ Organization: Syllabus

• Session 1: Introduction to marketing

• Session 2: Product policy (1)

• Session 3: Product policy (2)

• Session 4: Pricing Policy

• Session 5: Promotion policy

• Session 6: Communication policy

• Session 7: Case study Babolat

Final exam

Sessions’ Organization

• 7 sessions

• 4 marks

- One oral presentation

- A written report (25% of the mark)

- Case study (25% of the mark)

- A final exam (50% of the final mark)

Session 2: each group presents the brand of their choice (5 minutes)

Session 4: 2 groups present the product policy (15 minutes)

Session 5: 2 groups present the pricing policy (15 minutes)

Session 6: 2 groups present the distribution policy (15 minutes)

Session 7: Case study Babolat (each group responds to one question)

Final ReportEthnic & minority groups’ products

• Ethnic products: ‘ brand’s product or service targeting an ethnic group’.

• Exotic/foreign products

• Organic products

• Can also include minority groups’ products:– Disabled people– Children– Teenagers– Seniors…

Types of ethnic/exotic products

• Food

• Clothes

• Accessories & jewels

• Cosmetics

• Hair products

• Furniture

• Decor

• Others…

Lecture OutlineLecture Outline

Evolution of marketing conceptEvolution of marketing concept Core concepts of marketingCore concepts of marketing Marketing toolsMarketing tools

Marketing environmentMarketing environment

• According to you, what were the key marketing innovations of the last 30 years ?

Discussion

How can we define marketing?

ExerciseDefinition of marketing?

• You’re attending a business diner and the subject of the discussion is about the new marketing management policies

How would you define marketing?

MarketIntegratedmarketing

Profits throughCustomer satisfaction

Customerneeds

The marketing concept

CompanyExisting

productsSelling &

promotingProfits through

Sales volume

Startingpoint Focus Means Ends

The selling concept

Marketing & Sales Concepts

Definition

• American Marketing Association (AMA)

«Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of goods, ideas, and services to create exchanges that satisfy individual and organizational goals.»

BarteringFirst

1800

College coursesIn distribution

Début 1900

1930

First marketingtheories

1960

Marketingresearch

1970

Becomes a major Business fonction

1980 à 1990

Focus on customer& external environnement

Michael R. Czinkota and Masaaki Kotabe, Marketing Management, 2nd Edition

History of Marketing Thought

Marketingis not economics

Production Marketing StrategiesMain issues

• Products are costly• Demand is bigger than supply’s potential

Price : $ 825 on 1st October 1908Productivity in 1908 : 12H et 8 minutes to assemble a Ford T Productivity in 1980: 2 H et 35 minutes

Slogan : My customer can choose the colour of his car… as long as it’s black!

Ford TFord T

Lecture OutlineLecture Outline

Evolution of marketing conceptEvolution of marketing concept Core concepts of marketingCore concepts of marketing Marketing toolsMarketing tools

Marketing environmentMarketing environment

Products, services& experiences

Products, services& experiences

Needs, wants & demandsNeeds, wants & demands

MarketsMarkets

Value, satisfaction& quality

Value, satisfaction& quality

Exchange, transactions& relationships

Exchange, transactions& relationships

Core MarketingConcepts

Source: Principles of Marketing. by Kotler, Armstrong, Saunders and Wong

Needs, wants & demands

Needs

Difference between a consumer’s actual state & desired state:

• psychological needs• physiological needs

Demands

Needs backed up by

purchasing power & resources

Desires

Desire for a particular product used to satisfy a need and influenced by culture, society & personality

Maslow’s Hierarchy of Needs

Physiological

Safety

Love/Belonging

Esteem

Self-actualization

Drugs

Ex: diabetic

Vaccines, vitamins,Sleeping pills

New molecules Ex: DHEA, Viagra

Mobile phones

Be reachable everywhere

Ex: for young people

Show that you’re successful

• Products – Anything that can be offered to a market to satisfy a need or a want

ex. People, places, organizations

What can you satisfy customers’ demands & needs?

• Services – Activities or benefits offered for sale, that are essentially intangible

and don’t result in the owing of anything

ex. Banks, airflights, hair cuts, hotels.

Reliable equipment

Reasonable price

On time delivery

Financing possiblities

Attentive after sales service

Reliable equipment

Reasonable price

On time delivery

Financing possiblities

Attentive after sales service

Profitable price

On time payment

Profitable price

On time payment

Renault

trucks

Renault

trucks

Customer company

Customer company

Needs or recognition of a problem?

Desired state

Actual state

An opportunity arises :ADSL allows you…

With red fruit…Why pay more…The real luxury…

A Need appears :No more bread… 

Television doesn’t work… The flat is too small…

Friends use make-up…

Source : Solomon, 1996

Differences between Products & Benefits

“Customers don’t buy products,They seek to acquire benefits”

Michael R. Czinkota and Masaaki Kotabe, Marketing Management, 2nd Edition

PRODUCTS BENEFITS

• Physical attributes

• Example: 2 mm drill

• What customer wants

• Example: a 2mm hole

Delivery of customer satisfaction at a profit

Managing profitable customer relationships

Attracting new customers Retaining actual customers

Marketing doesn’t amount to « sales » or «  advertising »

What is marketing ?

Economic definitionPlace where buyers and sellersmeet to exchange their products

Marketing definitionPotential & actual customers

of a product

What is a market?

A market can be defined according to a product or a product line range in given time at a given place.

A market is made of all actorsinfluencing consumption patterns.

Definition of a Market

Why people buy products?

• Three basic reasons

– To satisfy needs

– To solve problems

– To make themselves feel good

Lecture OutlineLecture Outline

Evolution of marketing conceptEvolution of marketing concept Core concepts of marketingCore concepts of marketing Marketing toolsMarketing tools

Marketing environmentMarketing environment

Difference in terms of marketing strategy?In terms of Mix?

Segmentation Competitors’Analysis

Strategic MarketingGeneral Procedure

Perceived position

Implementation ofMarketing mix

Choice ofTarget market

Choice ofA difference

Chosen position

Resources & Capabilities

Source : Marion et al, 2003

Dividing a market into different customers groups :

The groups have to be as distinctive as possible and

might require separate products or mixes

In using pertinent segmentation criteria

What is market segmentation ?

Each group is composed of buyers with very similar needs, characteristics or

behaviour

Segmentation Targeting Positioning

Shampoo Market

• Segmentation according to the demand- according to the socio-demographic criteria (age, sexe, gender,

profession, social class…)- According to the type of hair (fine, greasy…) - Purchase location (hairdresser’s, supermarkets…)

• Segmentation by benefit required (volume, antidandruffs, aging hair…)

Helps to describe the customers (qualitatively & quantitatively)

ex: women aged 50 years + and buying their shampoo at the hairdresser’s

What is market targeting ?

Choose one or several segment(s)

According to itspotential :

VolumeValue

GrowthRevenue

…

According to itspotential :

VolumeValue

GrowthRevenue

…

According to the firm’s strenghts.

Resources, Capabilities :

PatentTechnology

BrandKnow-how

…

According to the firm’s strenghts.

Resources, Capabilities :

PatentTechnology

BrandKnow-how

…

Segmentation Targeting Positioning

Target Market – Choice of products Attractiveness-strenghts Matrix

Firm’s strenghts

Professionnals

Seg

men

t’s

attr

acti

ven

ess

Show-offs

Young People

Ex. : Mobile Phones

Source : Marion et al, 2003

Market Positioning

‘  Arranging for a product, a service, a company, an institution or even an individual, a distinctive and desirable

place relative to competing products in the mind of the target markets. Positioning is not what you do to a product.

Positioning is what you do in the mind of the prospect. What matters is how potential buyers see the product. ‘

Segmentation Targeting Positioning

Source : Ries & Trout, 1981

Positioning : 2 examples

‘Actimel is a new way for the whole family to start their morning which helps to reinforce the

body’s natural defense mechanisms’

  ‘Pouss’Mousse is a new line of modern soaps

which allows to clean one’s hands in an amusing way

for the entire family’

Implementation of target positioningThe marketing mix

Product

Price 5 € 20 €

Place Supermarkets Drugstores

Promotion

Ikea desired positioning

Vision: a good product range of designed home furnishing products sold at Ikea stores only at a reasonable price.

Desired market positioning: « IKEA offer a wide range of well designed, functional home furnishing products at prices so low that as many people as possible (especially young people) will be able to afford them. »

Marketing Mix Positioning at IKEA

• Product : an extensive & coherent product range. Flat-pack furniture, functional and appealing, good quality and reasonably priced (« democratic design »)

• Price: excellent value for money

• Distribution: IKEA stores are located at the outskirts of towns (first Show rooms)

• Communication: catalogue (main marketing tool)+ advertising campaigns (billboards) + TV ad

Physical distributionPhysical distribution

SuppliesSuppliesInventoryInventoryStorageStorage

TransportationTransportationWarehousingWarehousing

Distribution channelsDistribution channelsRetailersRetailers

DistributorsDistributorsWholesalersWholesalers

Export/importExport/import

Product MixProduct Mix

Product line rangeProduct line rangeDesign conceptDesign conceptColor appealColor appeal

StyleStylePackagePackage

Brand nameBrand nameService functionService function

WarrantiesWarranties

Price MixPrice Mix

Price structurePrice structurePayment termsPayment terms

CostsCosts

Communication MixCommunication Mix

AdvertisingAdvertisingSales catalogSales catalog

Field sales forceField sales forceTelephone salesTelephone salesPublic relationsPublic relations

Direct mailDirect mailSales promotionSales promotion

Premiums & discountsPremiums & discountsMerchandisingMerchandising

ResearchResearchElectronic interactionElectronic interaction

Marketing-MixMarketing-Mix

Leader in the capsule coffee market, Nespresso intends to redefine the way coffee is drunk at home, as well as in offices, restaurants and cafés. The idea is to give the consumers the opportunity to drink an excellent coffee.

Nespresso brand positioning

Nespresso: What else?

• Product policy- Selection of the best coffee beans- Technological innovation to allow a high quality blend- Accessories & peripheric services- Strong design

• Pricing policy- Coffee marchine from € 179 to €1,749, & capsules at 33c

• Distribution: exclusive

• Communication- A prestigious ambassador- Club Nespresso

Marketing strategy& environment

Laurence Cogan

- Opportunities- Threats

External analysisopportunities, threats, trendsuncertainties & strategic choices

Situation Analysis &Strategic Choices

- Strenghts- Weaknesses

Internal analysisstrenghts, weaknesses, problemsconstraints & strategic options

IdentificationOfStrategicoptions

Selection of the best strategy

Marketing Diagnostic Procedure

MACROMACRO

EXTERNAL MICROEXTERNAL MICRO

MARKET DIAG.MARKET DIAG. INT. DIAG.INT. DIAG.

DIAGNOSTICDIAGNOSTIC

INTERNAL

Goals MIX Variables

INTERNAL

Goals MIX Variables

O T S W

Organization’s environments

Global Environment

Privatisation

Deregulation

Technological

Political

SocioculturalDemographic

EconomicLegal

Natural

GeneralEnvironment

Publics

SuppliersBuyers

Potential competitors

Current competitors

Specific environmentMicroenvironment

Intermediaries

Organization

The environment is made of actors and forces affecting the management’s capacity The environment is made of actors and forces affecting the management’s capacity to develop and maintain a competitive advantage and successful relationships with to develop and maintain a competitive advantage and successful relationships with its customers.its customers.

Company’s specific environment

CustomersMarkets

Source: Marketing: An Introduction, by Kotler & Armstrong

The micro-environnement (specific environment) Forces that affect directly the decisions and actions of a company

CompetitorsCompetitors

CompetitorsCompetitors

CompetitorsCompetitors

CompetitorsCompetitors

Intermediaries

Inte

rmed

iarie

s Intermediaries

Intermediaries

SuppliersSuppliers

SuppliersSuppliers

Customers – Those who purchase a company’s goods or services

Competitors – Those who serve the target market with similar products or services against whom a company must gain a competitive advantage

Suppliers – Those who provide the resources necessary to produce goods and services – an important link in the “value delivery system”

Intermediaries – Help the company promote, sell, distribute goods to the final buyers (marketing & financial)

Publics – Any group that perceives itself having an interest in a company’s ability to achieve its objectives

Marketing’s Micro-environnement

Source: Marketing: An Introduction, by Kotler & Armstrong

Company’s general environment

DemographicDemographic

NaturalNatural

CulturalCultural Economic Economic

PoliticalPolitical

TechnologicalTechnological

Source: Marketing: An Introduction, by Kotler & Armstrong

The Macro-environnement The Macro-environnement (general environnement)(general environnement) Forces that affect directly the microenvironnement and indirectly the decisions and actions of a company

Laurence COGAN ESC Dijon 2nd Year

Executive SummaryQuick review of plan for quick management reviewExecutive SummaryQuick review of plan for quick management review

Current Marketing SituationAudit of market, product, competition & distributionCurrent Marketing SituationAudit of market, product, competition & distribution

SWOT AnalysisKey strenghts, weaknesses, opportunities & threatsSWOT AnalysisKey strenghts, weaknesses, opportunities & threats

Objectives and IssuesObjectives in terms of sales, market share and profitsObjectives and IssuesObjectives in terms of sales, market share and profits

Marketing StrategyBroad approach to achieve the plan’s objectivesMarketing StrategyBroad approach to achieve the plan’s objectives

Action ProgramsWhat will be done, by whom, when it will be done and how much it will costAction ProgramsWhat will be done, by whom, when it will be done and how much it will cost

BudgetsProfit & loss statement that forecast the financial outcomes of the planBudgetsProfit & loss statement that forecast the financial outcomes of the plan

ControlsHow the program of the plan will be monitored?ControlsHow the program of the plan will be monitored?

Contents of a Marketing Plan

Questions???