D Whitney BMGT350 Fall 2012 Chapter 1 What is marketing All activities to acquire and retain customers o Create and deliver some offering of value o Exchange some offering of value o Communicate Guiding functional area of most organizations o Without marketing there is no customer or revenue Activities and processes are both an art and a science Four Marketing Management Philosophies Production Focuses on internal capabilities of the firm rather than needs of marketplace o If we build it they will come o Focus on the firm s talents o Falls short bc does not consider whether the goods and services produced most efficiently also meet the needs of the marketplace Sales assumes customers will only buy is aggressive sales techniques are used o Example cutting prices deals like Toyota example in book o Marketing means selling things and collecting money o Lack of understanding of the needs of marketplace Marketing Focuses on satisfying customer needs and wants while meeting objectives o What do our customers need What might they want o Distinguish products from competitors bc focuses on customer needs o What produced isn t primary concern o Market oriented aggressive sales force but rather on a customer s decision to purchase a product firms that assume a sale does not depend on an o Example Amazon Apple whereas Western Union failed bc concentrated on telegraph services rather than telecommunications Societal Focuses on satisfying customer needs and wants while enhancing societal well being o How can we benefit society o Preserve or enhance individuals and society s long term best interest o Example Eco friendly products Sales vs Market Orientations Compared by 1 Organization s focus 2 Firm s business 3 Those to whom product is directed 4 Firm s primary goal 5 Tools used to achieve those goals Differences in Firm s Business o Sales focused on current set of products o Market focused on identifying needs and wants of customers encourages innovation Differences in Targeting o Sales Mass market target all o Market target various market segments each with different needs Differences in Organizational Focus o Sales inward focus on firm s revenue and profitability goals via aggressive sales tactics o Market outward focus on customers which often results in maximizing revenue and profits Provide customer value Create satisfied customers Build relationships with customers Providing Customer Value Satisfaction and Relationships with Customers Create Products that Perform Earn Trust Avoid Unrealistic Pricing Give Buyers Facts Provide Quality Service Company Wide Other ways to build relationships with customers Financial Bonds Loyalty programs Stable pricing for most loyal Social Bonds Sense of community Special treatment or privileges Structural Bonds more common in B2B Shared equipment and or software ordering systems Joint investment Chapter 2 Strategic Planning for Competitive Advantage Strategic Market Planning Creating maintaining a fit between organization s objectives resources and evolving market opportunities Goal is long term profitability and growth Key Element of Marketing Strategy Strategic Opportunities for Growth Ansoff s Opportunity Matrix Boston Consulting Group s BCG Model Ansoff s Opportunity Matrix BCG Portfolio Matrix Evaluating Current Product Mix Typical Strategic Options Build hold harvest divest Stars Hold on to the product doing well high market share and high growth Cash cows high market share but low growth existing product with a large target audience Problem children low market share but high growth new products Dogs Not performing well should sell at all Helps companies identify how much of their entire product mix budget should be allocated to different products Options Harvest use money in short term not thinking about long term for problem children and dogs Build problem children and stars Hold cash cows dogs and stars Divest Marketing Planning Designing activities relating to marketing objectives and the changing market environment Marketing plan document that acts as a guidebook of marketing activities for the marketing manager a written Business Mission Statement Establishes boundaries for all subsequent decisions objectives and strategies Should focus on the market s organization is attempting to serve rather than on the good or service offered SWOT or Situation Analysis Environmental scanning social demographic economic technological political legal and competitive o Need to analyze aspects of marketing environment when identifying external threats opportunities SWOT Should Be Integrated into Marketing Strategy Planning o Identify recommended changes to marketing that leverage or exploit o Identify recommended changes to marketing that will improve upon current strengths your current weaknesses o Identify which opportunities logically make the most sense for your business Pick opportunities that enable you to leverage current strengths and avoid threats o Identify ways to defend against potential threats EXAMPLE Competitive Advantages Cost Price Advantage Product Service Advantage Strong brand name awareness attitudes personality image etc Better distribution reliability warranty etc Try to create a sustainable competitive advantage Setting Marketing Objectives Any recommended change to marketing should have an objective Example If recommending to increase usage of social media Why What do you hope to achieve Characteristics of Good Objectives Realistic Keep in mind competition Measurable Quantitative Time Specific Deadline Compare to a Benchmark Know current baseline Sample Objective For males 45 55 we want to increase the HTC s unaided brand awareness from 55 to 65 by December 31st Other common marketing objectives Sales Objectives sales volume sales growth rates market share Customer Readiness Objectives Brand Awareness Brand Preference Purchase Intention Trial Rate Customer Objectives Reduce Complaints Increase Satisfaction Reduce Acquisition Costs Increase New Customers Lower Churn Rate Increase Retention Rate Targeting and Positioning Strategy Selecting Target Market do market opportunity analysis Positioning target market for its product brand or organization marketers try to create an image or identity in the minds of their Example Age gender Once Segmentation is complete evaluate each segment on these criteria Fit of the segment with company s goals mission Company s Strengths Weaknesses with that segment Resources necessary to market
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