lesson 1 marketing management. subject detail unit 7: strategic marketing management – unit code:...
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Lesson 1
Marketing Management
Subject Detail
• Unit 7: Strategic Marketing Management– Unit code: Y/602/2065
– QCF Level 7: BTEC Professional– Credit value: 10
– Guided learning hours: 30
Learning Outcome
• Understand the principles of strategic
marketing management
Introduction to Marketing
Miss Mary Lynn Mundell
What Is Marketing?
Simple definition: Marketing is the management process responsible for identifying, anticipating, and satisfying customer requirements profitably.” (CIM,2001)
Goals: 1. Attract new customers by promising superior value. 2. Keep and grow current customers by delivering satisfaction.
Marketing Defined
• Marketing is the activity, set of instructions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
OLD view of marketing:Making a sale—“telling and
selling”
NEW view of marketing:
Satisfying customer needs
Why is Marketing Important?
Shifting Business Paradigms
Sellers’ markets
Buyers’ markets
The Marketing Process
A simple model of the marketing process:• Understand the marketplace and customer needs
and wants.• Design a customer-driven marketing strategy.• Construct an integrated marketing program that
delivers superior value.• Build profitable relationships and create customer
delight.• Capture value from customers to create profits and
customer quality.
Needs, Wants, and Demands
Need: State of felt deprivation including physical, social, and individual needs.
• Physical needs: Food, clothing, shelter, safety• Social needs: Belonging, affection• Individual needs: Learning, knowledge, self-expressionWant: Form that a human need takes, as shaped by
culture and individual personality.
• Wants + Buying Power = Demand
Need/ Want Fulfillment
Needs & wants are fulfilled through a Marketing Offering:
• Products:– Persons, places, organizations, information, ideas.
• Services:– Activity or benefit offered for sale that is essentially
intangible and does not result in ownership.
• Experiences:– Consumers live the offering.
Customer Value and Satisfaction
Dependent on the product’s perceived performance relative to a buyer’s expectations.
Care must be taken when setting expectations:• If performance is lower than expectations, satisfaction is low.• If performance is higher than expectations, satisfaction is
high.Customer satisfaction often leads to consumer loyalty.Some firms seek to DELIGHT customers by exceeding
expectations.
Marketing ManagementThe art and science of choosing target markets and
building profitable relationships with them.• Requires that consumers and the marketplace be
fully understood.• Aim is to find, attract, keep, and grow customers by
creating, delivering, and communicating superior value.
Marketing Management
Marketing managers must consider the following, to ensure a successful marketing strategy:
1. What customers will we serve?— What is our target market?
2. How can we best serve these customers?
— What is our value proposition?
Choosing a Value Proposition
The set of benefits or values a company promises to deliver to consumers to satisfy their needs.
• Value propositions dictate how firms will differentiate and position their brands in the marketplace.
The Marketing Concept
The marketing concept:• A marketing management philosophy that holds that
achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfaction better than competitors.
Customer Perceived Value
Customer perceived value:– “Customer’s evaluation of the difference between
all of the benefits and all of the costs of a marketing offer relative to those of competing offers.” (Armstrong & Kotler)
– Perceptions may be subjective – Consumers often do not objectively judge values
and costs.Customer value = perceived benefits – perceived sacrifice.
The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market.
• Product: Variety, features, brand name, quality, design, packaging, and services.
• Price: List price, discounts, allowances, payment period, and credit terms.
• Place: Distribution channels, coverage, logistics, locations, transportation, assortments, and inventory.
• Promotion: Advertising, sales promotion, public relations, and personal selling.
The Marketing Mix
Marketing Strategy
Customer-Driven Marketing Strategy
Requires careful customer analysis.To be successful, firms must engage in:• Market segmentation• Market targeting• Differentiation• Positioning
Segmentation:• The process of dividing a market into distinct groups
of buyers with different needs, characteristics, or behavior who might require separate products of marketing programs.
Targeting:• Involves evaluating each market segment’s
attractiveness and selecting one or more segments to enter.
Market Segmentation and Targeting
Differentiation and PositioningDifferentiation:• Creating superior customer value by actually
differentiating the market offering.Positioning:• Arranging for a product to occupy a clear, distinctive,
and desirable place relative to competing products in the minds of target consumers.
Market Segmentation
Key segmenting variables:• Geographic• Demographic• Psychographic• Behavioral
Different segments desire different benefits from products.Best to use multivariable segmentation bases in order to identify
smaller, better-defined target groups.
Market Segmentation
Why Segment?:• Meet consumer needs more precisely• Increase profits• Segment leadership• Retain customers• Focus marketing
communications
Evaluating Market Segments
Segment size and growth:• Analyze current segment sales, growth rates, and expected
profitability.Segment structural attractiveness:• Consider competition, existence of substitute products, and
the power of buyers and suppliers.Company objectives and resources:• Examine company skills and resources needed to succeed in
that segment.• Offer superior value and gain advantages over competitors.
Market Targeting
Market targeting involves:• Evaluating marketing segments.
– Segment size, segment structural attractiveness, and company objectives and resources are considered.
• Selecting target market segments.– Alternatives range from undifferentiated marketing to
micromarketing.• Being socially responsible.
Differentiation and Positioning
A product’s position is:• The way the product is defined by consumers on
important attributes—the place the product occupies in consumers’ minds relative to competing products.
• Perceptual positioning maps can help define a brand’s position relative to competitors.
Differentiation and Positioning
Identifying possible value differences and competitive advantages:
• Key to winning target customers is to understand their needs better than competitors do and to deliver more value.
Competitive advantage:• Extent to which a company can position itself as
providing superior value.– Achieved via differentiation.
What's next?
Weekly Program
• 1.1 discuss the role of strategic marketing in an organisation
• 1.2 explain the processes involved in strategic marketing
• 1.3 evaluate the links between strategic marketing and corporate Strategy
Today’s Objective
• 1.1 Discuss the role of strategic marketing in
an organisation
Main issues to discuss LO 1• Role of strategic marketing:
key definitions of strategic marketing from the Chartered Institute of Marketing and key authors (eg Hugh Davidson; Peter Doyle; Philip Kotler; Malcolm McDonald);• role and importance of strategic marketing
in an organisation; concepts; systematic approach; sequencing and scheduling of activities; integration of activities; resource requirements; timescaling; onitoring and control elements• Processes:
strategic marketing planning processes (eg Peter Doyle, Malcolm McDonald) including strategic marketing analysis, marketing strategy objective setting, perceptual mapping, factor analysis, option evaluation, choice,
• formulation, implementation and control
Links to corporate strategy: the nature of strategy and marketing links to
corporate strategy eg Michael Porter; links to mission statement, organisational structure,
corporate responsibility and ethics; dynamic strategy (Carpenter and Sanders); knowledge management systems
Focus on Strategic Marketing
Marketing - Definition
• The management process responsible for identifying, anticipating and satisfying customer requirements profitably
Strategic Marketing
• Strategic marketing focuses on how to develop competitive advantage through the drivers of shareholder value. Delivering value to your business requires insight into your changing marketplace and decisions regarding how to match your organisation’s distinctive capabilities with promising value opportunities. Being able to do this is the key for many marketers to increase their influence in the organisation
FIGURE 2-1 The three levels of strategyin organizations: corporate, business unit, and functional
• Strategy Issues in Organizations
Goals or Objectives
• Profit
• Sales
• Market Share
• Quality
• Customer Satisfaction
• Employee Welfare
• Social Responsibility
ORGANIZATIONS AND THEIRLEVELS OF STRATEGY
THE STRATEGIC MARKETING PROCESS
Strategic Marketing Process
• How do we allocate our resources to get wherewe want to go?
• How do we convert our plans to actions?
• How do our results compare with our plans,and do deviations require new plans?
Marketing Plan
FIGURE 2-4 The strategic marketing process
• Strategic Marketing Process:The Planning Phase
Step 1: Situation (SWOT) Analysis
• Situation Analysis
• SWOT Analysis
Opportunities
Strengths
Threats
Weaknesses
THE STRATEGIC MARKETING PROCESS
FIGURE 2-5 Ben & Jerry’s: a SWOT analysis to get it growing again
Ben & Jerry’s One Sweet Whirled CampaignWhat is the impact of a SWOT analysis?
• Strategic Marketing Process:The Planning Phase
Step 2: Market-Product Focus and Goal Setting
• Market Segmentation
• Set Marketing and Product Goals
• Select Target Markets
• Find Points of Difference
• Position the Product
THE STRATEGIC MARKETING PROCESS
• Strategic Marketing Process:The Planning Phase
Step 3: Marketing Program
• Product Strategy
• Price Strategy
• Promotion Strategy
• Place (Distribution) Strategy
THE STRATEGIC MARKETING PROCESS
FIGURE 2-6 Elements of the marketing mix that comprise a cohesive marketing program
• Strategic Marketing Process:The Implementation Phase
Obtaining Resources
Designing the Marketing Organization
Developing Schedules
THE STRATEGIC MARKETING PROCESS
FIGURE 2-7 Organization of a typical manufacturing firm showing a breakdown of the marketing department
• Strategic Marketing Process:The Implementation Phase
Executing the Marketing Program
• Marketing Strategy
• Marketing Tactics
THE STRATEGIC MARKETING PROCESS
• Strategic Marketing Process:The Control Phase
Comparing Results With Plans to IdentifyDeviations
Acting on Deviations
• Planning Gap
• Exploiting a Positive Deviation
• Correcting a Negative Deviation
THE STRATEGIC MARKETING PROCESS
MARKETING VERSUS BUSINESS PLANS
SUPPLEMENTALLECTURE
FIGURE A-1 Elements in typical marketing and business plans targeted at different audiences
FIGURE 2-A Results of good and bad marketing planning and implementation
FIGURE 2-E Gantt chart for scheduling the term project
Profit
Profit is the reward to a business firm for the risk it undertakes in offering a product for sale. It is also the money left over after a firm’s total expenses are subtracted from its total sales.
Profit is the reward to a business firm for the risk it undertakes in offering a product for sale. It is also the money left over after a firm’s total expenses are subtracted from its total sales.
Mission is a statement of the organization’s scope, often identifying its customers, markets, products, technology, and values.
Mission is a statement of the organization’s scope, often identifying its customers, markets, products, technology, and values.
Mission
Organizational culture is a set of values, ideas, and attitudes that is learned and shared among the members of an organization.
Organizational culture is a set of values, ideas, and attitudes that is learned and shared among the members of an organization.
Organizational Culture
Goals or objectives convert the mission into targeted levels of performance to be achieved, often by a specific time.
Goals or objectives convert the mission into targeted levels of performance to be achieved, often by a specific time.
Goals or Objectives
Market share is the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself.
Market share is the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself.
Market Share
The strategic marketing process is the approach whereby an organization allocates its marketing mix resources to reach its target markets.
The strategic marketing process is the approach whereby an organization allocates its marketing mix resources to reach its target markets.
Strategic Marketing Process
A marketing plan is a road map for the marketing activities of an organization for a specified future period of time, such as one year or five years.
A marketing plan is a road map for the marketing activities of an organization for a specified future period of time, such as one year or five years.
Marketing Plan
Situation analysis involves taking stock of where a firm or product has been recently, where it is now, and where it is headed in terms of the organization’s plans and the external factors and trends affecting it.
Situation analysis involves taking stock of where a firm or product has been recently, where it is now, and where it is headed in terms of the organization’s plans and the external factors and trends affecting it.
Situation Analysis
SWOT analysis is an acronym describing an organization’s appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats.
SWOT analysis is an acronym describing an organization’s appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats.
SWOT Analysis
Market segmentation involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action.
Market segmentation involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action.
Market Segmentation
Points of difference are those characteristics of a product that make it superior to competitive substitutes.
Points of difference are those characteristics of a product that make it superior to competitive substitutes.
Points of Difference
A marketing strategy is the means by which a marketing goal is to be achieved, usually characterized by a specific target market and a marketing program to reach it.
A marketing strategy is the means by which a marketing goal is to be achieved, usually characterized by a specific target market and a marketing program to reach it.
Marketing Strategy
Marketing tactics are detailedday-to-day operational decisions essential to the overall success of marketing strategies.
Marketing tactics are detailedday-to-day operational decisions essential to the overall success of marketing strategies.
Marketing Tactics