1st Meeting

MARKETING IN A CHANGING WORLD: CREATING CUSTOMER

VALUE AND SATISFACTION

A. WHAT IS MARKETING?

More than any other functions, deals with

customers

Creating customer value and satisfaction are

the heart of modern marketing thinking and

practice

The simplest definition is the delivery of

customer satisfaction at a profit.

The twofold goal of marketing is to attract

new customers by promising superior value and

to keep current customers by delivering

satisfaction.

B. MARKETING DEFINED

Definition by Kotler and Armstrong: “a social and

managerial process by which individuals and groups obtain

what they need and want through creating and exchanging

products and value with others”.

Need → a state of felt deprivation

Want → the form taken by a human need as

shaped by culture and individual personality

Demands → human wants that are backed by

buying power

Product → anything that can be offered to a

market for attention, acquisition, use or

consumption that might satisfy want or need.

It includes physical objects, services,

persons, places, organizations and ideas.

Service → any activity or benefit that one

party can offer to another that is essentially

intangible and does not result in the

ownership of anything.

Customers value → the difference between the

values the customer gains from owning and

using a product and the costs of obtaining the

product.

Exchange → the act of obtaining a desired

object from someone by offering something in

return

Transaction → a trade between two parties that

involves at least two things of value, agreed-

upon conditions, a time of agreement, and a

place of agreement.

Relationship marketing → the process of

creating, maintaining, and enhancing strong,

value-laden relationships with customers and

other stakeholders.

Market → the set of all actual and potential

buyers of a product or service.

C. MARKETING MANAGEMENT

Definition: “ the analysis, planning, implementation,

and control of programs designed to create, build and

maintain beneficial exchanges with target buyers for the

purpose of achieving organizational objectives”.

Marketing management seeks to affect the

level, timing, and nature of demand in a way

that helps the organization achieves its

objectives (demand management).

D. MARKETING MANAGEMENT PHILOSOPHIES

1. The Production Concept

This concept is one of the oldest

philosophies that guides sellers

This concept holds that consumers will

favor products that are available and

highly affordable → management should

focus on improving production and

distribution efficiency.

2. The Product Concept

This concept holds that consumers will

favor products that offer the most

quality, performance, and innovative

features → organization should devote

energy to making continuous product

improvements.

This concept can lead to marketing myopia.

3. The Selling Concept

This concept holds that consumers will not

buy enough of the organization's product

unless it undertakes a large-scale selling

and promotion effort.

The concept is typically practiced with

unsought goods.

Most firms practice the selling concept

when they have overcapacity.

4. The Marketing Concept

This concept holds that achieving

organizational goals depends on

determining the needs and wants of target

markets and delivering the desired

satisfactions more effectively and

efficiently than do competitors.

5. The Societal Marketing Concept

This concept holds that organization

should determine the needs, wants, and

interests of target markets. It should

then deliver superior value to consumers

in a way that maintains or improves the

consumer's and the society's well-being.

The societal Marketing Concept questions

whether the pure marketing concept is

adequate in an age of environmental

problems, resource shortages, rapid

population growth, worldwide economic

problems, and neglected social services.

The societal Marketing Concept calls on

marketers to balance three considerations

in setting their marketing policies:

company profits, consumer wants, and

society's interests.

DISCUSSING THE ISSUES

1. Discuss the concept of customer value and its

importance to successful marketing. How are the

concepts of customer value and relationship

marketing linked?

2. Identify the biggest difference between the

marketing concept and the production, product, and

selling concepts. Discuss which concepts are

easier to apply in the short run. Predict which

concept you believe can offer the best long-term

success.

2nd Meeting

STRATEGIC PLANNING AND THE MARKETING PROCESS

All companies must look ahead and develop long-

term strategies to meet the changing conditions in

their industries. Each company must find the game

plan that makes the most sense given its specific

situation, opportunities, objectives and

resources. The hard task of selecting an overall

company strategy for long-run survival and growth

is called strategic marketing.

A. STRATEGIC PLANNING

The process of developing and maintaining a

strategic fit between the organization's goals

and capabilities and its changing marketing

opportunities. It involves defining a clear

company mission, setting supporting

objectives, designing a sound business

portfolio and coordinating functional

strategies.

Benefits:

1. It encourages management to think ahead

systematically

2. It forces the company to sharpen its objectives

and policies

3. It leads to better coordination of company

efforts

4. It provides clearer performance standard for

control.

A.1. DEFINING THE COMPANY MISSION

A mission statement is a statement of the

organization's purpose – what it wants to

accomplish in th larger environment.

Traditionally, companies have defined

their business in product term or in

technological terms. But mission

statement should be market-oriented

(defines business in terms of satisfying

basic customer needs).

Good mission statement:

1) not to broadly or to narrow

2) realistic

3) specific

4) fit the market environment

5) based on its distinctive competencies

6) should be motivating (however, one

recent study found that 'visionary

companies' set a purpose beyond making

money).

A.2. SETTING COMPANY OBJECTIVES AND GOALS

The company's mission needs to be turned

into detailed supporting objectives for

each level of management.

Each manager should have objectives and be

responsible for reaching them.

The firm's mission is translated into a

set of objectives for the current period

The objectives should be as specific as

possible

B. DESIGNING THE BUSINESS PORTFOLIO

Business portfolio: the collection of

businesses and products that make up the

company

The best business portfolio is the one that

best fits the company's strengths and weakness

to opportunities in the environment.

B.1. ANALYZING THE CURRENT BUSINESS PORTFOLIO

Portfolio analysis: a tool by which

management identifies and evaluates the

various businesses that make up the

company.

Strategic business unit (SBU) : a unit of

the company that has a separate mission

and objectives and that can be planned

independently from other company

businesses

The Boston Consulting Group Approach

(BCG): classifies all SBUs according to

the growth-share matrix.

B.2. DEVELOPING GROWTH STRATEGIES

It involves identifying businesses and

products the company should consider in

the future.

Product/market expansion grid: a portfolio-

planning tool for identifying company

growth opportunities through market

penetration, market development, product

development or diversification.

B.3. PLANNING FUNCTIONAL STRATEGIES

B.3.1. Marketing's Role in Strategic

Planning

Marketing provides a guiding philosophy

-the marketing concept- which suggest

company strategy should revolve around

serving the needs of important consumer

groups

Marketing provides inputs to strategic

planners by helping identify attractive

market opportunities and by assessing

the firm's potential to take advantage

of them.

Within individual business units,

marketing designs strategies for

reaching the unit's objectives.

B.3.2. Marketing and the Other Business

Functions

Marketing play an important role in

delivering customer value and

satisfaction.

However, marketing cannot do this

alone.

Because consumer value and satisfaction

are affected by the performance of

other functions, all departments must

work together to deliver superior value

and satisfaction.

Marketing plays an integrative role to

help ensure that all departments work

together toward this goal.

DISCUSSING THE ISSUE

Using the product/market expansion grid,

illustrate the process that a company can use to

evaluate a portfolio. Pick an example for your

demonstration that is different from the one used

in the text. Be sure your example covers all

cells.

3rd Meeting

THE MARKETING PROCESS

A. THE MARKETING PROCESS

The process of (1) analyzing marketing

opportunities; (2) selecting target markets; (3)

developing the marketing mix; and (4) managing the

marketing effort.

Factors Influencing Company Marketing Strategy

(Kotler & Armstrong, 1999)

Market segmentation

The process of dividing a market into distinct

groups of buyers on the basis of needs,

characteristics, or behavior who might require

separate products or marketing mix.

Market targeting

The process of evaluating each market segment's

attractiveness and selecting one or more segments

to enter.

Market Positioning

Arranging for a product to occupy a clear,

distinctive, and desirable place relative to

competing products in the minds of target

consumers. Formulating competitive positioning for

a product and a detailed marketing mix (the set of

controllable tactical marketing tools_product,

price, place and promotion_ that the firm blends

to produce the response it wants in the target

market).

The Four Ps of the Marketing Mix

(Kotler & Armstrong, 1999)

B. MANAGING THE MARKETING EFFORT

Marketing analysis

The company must analyze its markets and marketing

environment to find attractive opportunities and

to avoid environmental threats. It must analyze

company strengths and weaknesses, as well as

current possible marketing actions to determine

which opportunities it can pursue.

Marketing planning

It involves deciding on marketing strategies that

will help the company attain its overall strategic

objectives. A detailed marketing plan is needed

for each business, product or brand.

Marketing implementation

The process that turns marketing plans into

marketing actions in order to accomplish

strategic-marketing objectives. Successful

marketing implementation depends on how well the

company blends its people, organization structure,

decision and reward systems, and company culture

into a cohesive action program that supports its

strategies.

Marketing control

It involves evaluating the results of marketing

strategies and plans and taking corrective action

to ensure that objective attained.

Discussing the issue

Marketing management's job is to attract and

build relationships with customers by creating

customer value and satisfaction. Their success

will depend on successfully adapting and using

the firm's micro and macro environment. In the

20....the ….company was very successful on a

variety of fronts. If you were in charge of

marketing at ….what would you do with respect

to the company's micro and macro environment

to ensure success in the next decade? Outline

your plan.

DEVELOPING MARKETING OPPORTUNITIES AND STRATEGIES

(Marketing Research and Information System)

A. The Marketing Information System