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2 the marketing process


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the marketing process

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2 the marketing process

  1. 1. The marketing process
  2. 2. Marketing Orientation • Companies operate in a market which consists of a set of Controllable and uncontrollable variables. • Uncontrollable variables constitute the Environment, amongst other variables, which offers both opportunities and threats. • The companies marketing plans and it’s constituents are the controllable variables.
  3. 3. THE MARKETING PROCESS The Marketing Process consists of : • Analyzing marketing opportunities – Internal & External analysis: SWOT analysis – Analyzing the portfolio of the organization • GE Matrix & BCG Matrix • Ansoffs Matrix • Developing a Marketing Plan – Selecting Target Markets – Designing a Marketing Strategy – Developing the Marketing Mix – Managing the marketing effort – Defining control processes – Conducting marketing audit
  4. 4. CUSTOMER ORIENTATION Understanding the buyers Black Box • Who buys or uses -- Consumer profile • What does he buy -- Product / services • When does he buy -- Purchase cycle / Occasion • Where does he buy -- Distribution decisions • How does he buy -- Decision making process • Why does he buy -- Buying motivation
  6. 6. Marketing challenge • The marketing challenge is to carefully manage the uncontrollable variables so as to take advantage of the opportunities and avoid the threats while making use of the controllable variables. • According to Neil Borden: A marketing manager is a mixer of ingredients, one who is constantly engaged in fashioning creatively a mix of marketing procedures and policies in his efforts to produce a profitable result.
  7. 7. MARKETING MIX The 4 P’s of Marketing & The 4’C’s • Product Customer solution • Price Customer cost • Place Convenience • Promotion Communication Additional 3 P’s of Services Marketing • People • Processes • Physical evidence
  8. 8. Elements of the Marketing Mix PRODUCT PRICE PLACE PROMOTION Core product & its variant Design features Branding & extensions Packaging List price Discount & allowances Credit & payment norms Negotiation & Tendering Distribution channels Dealer management Transportation & Logistics Retailing & Franchising Market coverage Advertising Sales Promotion Public Relations Personal selling
  9. 9. DESIGNING A BUSINESS PORTFOLIO • Collection of businesses and products constitutes a business portfolio SBU—a unit of the company that has a separate mission/objectives • Organization’s must evaluate where to invest Companies need to evaluate SBU’s to decide on priorities of investment or focus • Analyze the current portfolio • Develop growth strategies
  10. 10. PORTFOLIO ANALYSIS--TOOLS • BCG Growth Share Matrix---evaluates a SBU in terms of it’s relative market share (compared to the leader) and the growth in the sector/industry • GE Model---an improvement over the growth share matrix using dimensions of market attractiveness and business strength
  12. 12. BCG -example SBU Market share of SBU Market share of next competitor Market growth rate Relative Market share of SBU A 20% 40% 10% 0.5 B 30% 10% 6% 3.0 C 12% 60% 12% 0.2 D 10% 40% 25% 0.25 E 20% 10% 20% 2.0
  13. 13. BCG example RELATIVE MARKET SHARE GROWTH RATE QUESTION MARKS ??? STARS CASH COWS DOGS C D E B H L H L A 30 `15 0 01x10x Rel Mkt Share A…..0.5 B…..3.0 C…..0.2 D…..0.25 E…..2.0
  14. 14. BCG MATRIX • Question Marks – Operate in high growth rate markets, have low relative market share – Require high infusion of funds – Usually enters the industry as a question mark • Stars – A successful ?? becomes a Star i.e achieves high relative market share in a high growth market – Needs to retain leadership, hence must keep investing • Cash Cows – Where market growth rate declines but business maintains high relative market share – Requires no/minimal infusion of funds • Dogs – In a declining market, business loses market share – Generates low or no profits
  15. 15. STRATEGIC OPTIONS: Assigning Resources • Build---Opportunity for a ? to expand the market & build market share/ increase relative market share • Hold---Preserve market share, especially if a cash cow with minimal or no investment • Harvest---Encash the opportunity by a gradual phase out process with no additional investment; capitalize on the short term opportunity. Cash cows or ?? can adopt before pulling out. May reduce future value of business. • Divest---Appropriate for ?? or Dogs, in favor of investing elsewhere. Opportunity to encash when the business is otherwise healthy & doing well.
  16. 16. STRATEGIES FOR GROWTH ANSOFF’S Product – Market Grid Existing products New Products Existing markets New Markets MARKET PENETRATION PRODUCT DEVELOPMENT MARKET DEVELO0MENT DIVERSIFICATION PURPOSE: To decide whether to deploy resources on existing/new Products, depending on the attractiveness of existing/new markets
  17. 17. MARKETING PLAN • Executive summary---a birds eye view of the plan • Table of contents • Current Marketing situation – Product – Market & Distribution – Competition • Opportunity & Threat analysis • Marketing Objectives • Marketing Strategy---4 P’s + STP • Action program – How will it be done—who will do it--what is to be done--what will it cost--when will it be done--where will it be done • Projected Profit & Loss statement and budgets • Controls • Contingency Plan
  18. 18. MARKETING PLAN • Contingency plan Tata Steel may have bagged Corus, but there’s a small part of the story that you probably aren’t aware of….. “In such a big acquisition, you always have to consider all the scenarios. What to do in case steel prices fell, in case coal prices rose, in case the bid for Corus failed…there was a Plan B” ….Mr. B. Muthuraman, MD Tata Steel*. * Economic Times, February 7,2007