Chapter 1 Paradigm a world view Customer is the heart of our universe We don t sell products we sell benefits Marketing the activity set of institutions and processes for creating communicating delivering and exchanging offerings that have value for customers clients partners and society at large Marketing entails processes that focus on delivering value and benefits to customers not just selling goods services and ideas Exchange people giving up something in order to receive the thing they would rather have It does not require money Four Competing Philosophies Influence an Organization s Marketing Processes Production Orientation focuses on the internal capabilities of the firm rather than on desires and needs of the marketplace Means management assesses its resources and asks what can they do best or what they can design Ex Field of Dreams If we build it they will come Sales Orientation based on the ideas that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits Marketing means selling things and making money Lack of understanding of the needs and wants of the marketplace Marketing Orientation assume that a sale does not depend on an aggressive sales force but rather on a customer s decision to purchase a product Involves obtaining information about customers competitors and markets Tries to provide value to customers Marketing Concept articulates the marketing orientation States that the social and economic justification for an organization s existence is the satisfaction of customer wants and needs while meeting organizational objectives Satisfy the consumer at a profit company wide effort Societal Marketing Orientation extends the marketing concept by acknowledging that some products that customers want may not really be in their best interests or in the best interest of the society as a whole Organization exists not only to satisfy the customer s wants and needs and to meet organizational objectives but also to also preserve and enhance the individual and societies long term best interests Customer Value relationship between benefits and the sacrifice necessary to obtain those benefits Marketers that care about customer value will offer products that perform earn trust avoid unrealistic pricing give the buyer facts and offer organization wide commitment in service as well as co creation Customer Satisfaction the customer s evaluation of a good or service in terms of whether that good or service has met their needs and expectations Failure to meet needs and expectations results in dissatisfaction with the good or service Relationship Marketing strategy that focuses on keeping and improving relationships with current customers Assumes people want an ongoing relationship rather than switching frequently among providers in their search for value Empowerment the delegation of authority given when marketing oriented firms are giving employees more authority to solve customer problems on the spot Teamwork entails collaborative efforts of people to accomplish common objectives The Firm s Business Sales Oriented defines its business in terms of goods and services Misses opportunities to serve customers whose wants can be met through a wide range of product offerings Targets products at everybody or the average customer Seeks to achieve profitability through sales volume and convince customers to buy even if they are mis matched for the product Place higher premium on making the sale rather than the relationship Generate sales through intense promotional activities Market Oriented defines its business in terms of the benefits its customers seek Does not mean offering customers everything they want Aims at specific groups of people o Recognizes different customer groups and how they want different features or benefits Analyzes the market Recognizes that promotion decisions are only one of 4 basic marketing mix decisions that need to be made Recognizes that the 4 P s is important individually Recognize marketing is not just a responsibility of the marketing department Chapter 2 Strategic Planning managerial process of creating and maintaining a fit between the organization s objectives and resources and the evolving market opportunities Goal is long run profitability and growth Strategic Business Units SBUs large companies may manage a number of very different businesses Each SBU has its own rate of return on investment growth potential and associated risks Requires its own strategies and funding There are several tools available that a company or an SBU can use to manage the strategic direction of its portfolio of businesses Asnoff s Opportunity Matrix explores 4 options to match products with markets 1 Market Penetration increase market share among existing customers Ex trying to introduce Philadelphia cream cheese to be eaten on things besides bagels 2 Market Development attracting new customers to existing products Finding new uses for old products stimulate additional sales among existing customers while bringing in new buyers Ex McDonalds opening up restaurants in China Russia Italy etc 3 Product Development the creation of new products for the present market Knowledge of target audience is important Ex McDonalds introducing yogurt parfaits and salads to give current customers healthier options 4 Diversification increasing sales by introducing new products into new markets Ex CVS launched cosmetic store called Beauty 360 Management must find a balance among the SBUs that yields the overall desired growth and profits with an acceptable level of risk Use the Boston Consulting Group Model Portfolio Matrix classifies each SBU by its present or forecast growth and market share Assumes market share and profitability are closely linked Breaks SBUs into 4 categories 1 Stars fast growing market leaders Ex iPad by Apple Large profits but need lots of cash to finance fast growth 2 Cash Cows SBU that generates more cash than it needs to maintain its market share Low growth market but the product has a dominant market share Ex personal computers and laptops 3 Problem Children also called a question mark shows rapid growth but poor profit margins Low market share in a high growth industry Need a great deal of cash and without it they will become dogs 4 Dogs low growth potential and a small market share Most dogs eventually leave the marketplace After classifying the company in the matrix it has to allocate future resources
View Full Document
Unlocking...