Session 4


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CBT Course, Session 4
RAC Cairo Al Orouba

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Session 4

  1. 1. It’s time to create what you want to be a part of
  2. 2. Big Picture A Place to Your thoughts Think Shape Stretch Land Fly
  3. 3. Course Overview Business Marketing
  4. 4. Creating and Capturing Customer Value
  5. 5. Creating and Capturing Customer Value • What Is Marketing? • Understand the Marketplace and Customer Needs • Designing a Customer-Driven Marketing Strategy • Preparing an Integrated Marketing Plan and Program • Building Customer Relationships • Capturing Value from Customers • The Changing Marketing Landscape Topic Outline
  6. 6. What Is Marketing? Marketing is a process by which companies create value for customers and build strong customer relationships to capture value from customers in return
  7. 7. What Is Marketing? The Marketing Process
  8. 8. Understanding the Marketplace and Customer Needs • Customer needs, wants, and demands • Market offerings • Value and satisfaction • Exchanges and relationships • Markets Core Concepts
  9. 9. Understanding the Marketplace and Customer Needs •States of deprivation •Physical—food, clothing, warmth, safety •Social—belonging and affection •Individual—knowledge and self-expression Needs •Form that needs take as they are shaped by culture and individual personalityWants •Wants backed by buying power Demands Customer Needs, Wants, and Demands
  10. 10. Understanding the Marketplace and Customer Needs • Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want • Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs
  11. 11. Understanding the Marketplace and Customer NeedsCustomer Value and Satisfaction Expectations Customers • Value and satisfaction Marketers • Set the right level of expectations • Not too high or low
  12. 12. Understanding the Marketplace and Customer Needs Markets are the set of actual and potential buyers of a product
  13. 13. Designing a Customer-Driven Marketing Strategy Market segmentation refers to dividing the markets into segments of customers Target marketing refers to which segments to go after Selecting Customers to Serve
  14. 14. Designing a Customer-Driven Marketing Strategy Demarketing is marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but to reduce or shift it Selecting Customers to Serve
  15. 15. Designing a Customer-Driven Marketing Strategy Choosing a Value Proposition The value proposition is the set of benefits or values a company promises to deliver to customers to satisfy their needs
  16. 16. Designing a Customer-Driven Marketing Strategy Production concept Product concept Selling concept Marketing concept Societal concept Marketing Management Orientations
  17. 17. Designing a Customer-Driven Marketing Strategy Production concept is the idea that consumers will favor products that are available or highly affordable Marketing Management Orientations
  18. 18. Designing a Customer-Driven Marketing Strategy Product concept is the idea that consumers will favor products that offer the most quality, performance, and features. Organization should therefore devote its energy to making continuous product improvements. Marketing Management Orientations
  19. 19. Designing a Customer-Driven Marketing Strategy Selling concept is the idea that consumers will not buy enough of the firm’s products unless it undertakes a large scale selling and promotion effort Marketing Management Orientations
  20. 20. Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Marketing concept is the idea that achieving organizational goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do
  21. 21. Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Societal marketing concept is the idea that a company should make good marketing decisions by considering consumers’ wants, the company’s requirements, consumers’ long-term interests, and society’s long- run interests
  22. 22. Designing a Customer-Driven Marketing Strategy
  23. 23. The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing strategy.It includes product, price, promotion, and place. Integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers. Preparing an Integrated Marketing Plan and Program
  24. 24. Building Customer Relationships • The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction Customer Relationship Management (CRM)
  25. 25. Building Customer Relationships Customer Relationship Levels and Tools Basic Relationships Full Partnerships
  26. 26. Building Customer Relationships • Relating with more carefully selected customers uses selective relationship management to target fewer, more profitable customers • Relating more deeply and interactively by incorporating more interactive two way relationships through blogs, Websites, online communities and social networks The Changing Nature of Customer Relationships Basic Relationships
  27. 27. Partner relationship management involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers Building Customer Relationships Full Partnerships
  28. 28. Capturing Value from Customers
  29. 29. Capturing Value from Customers • Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage Creating Customer Loyalty and Retention
  30. 30. The New Marketing Landscape Digital age Rapid globalization Ethics and social responsibility Not-for-profit marketing Major Developments
  31. 31. So, What Is Marketing? Pulling It All Together
  32. 32. Company and Marketing Strategy Partnering to Build Customer Relationships
  33. 33. Company and Marketing Strategy • Companywide Strategic Planning: Defining Marketing’s Role • Designing the Business Portfolio • Planning Marketing: Partnering to Build Customer Relationships • Marketing Strategy and the Marketing Mix • Managing the Marketing Effort • Measuring and Managing Return on Marketing Investment Topic Outline
  34. 34. Companywide Strategic Planning Steps in Strategic Planning
  35. 35. Companywide Strategic Planning • The mission statement is the organization’s purpose, what it wants to accomplish in the larger environment • Market-oriented mission statement defines the business in terms of satisfying basic customer needs Defining a Market-Oriented Mission We help you organize the world’s information and make it universally accessible and useful.
  36. 36. Companywide Strategic Planning Company Product-Oriented Definition Market-Oriented Definition We sell books, videos, CDs, toys, consumer electronics and other products online We make the Internet buying experience fast, easy, and enjoyable— we’re the place where you can find and discover anything you want to buy online Disney We run theme parks We create fantasies— a place where dreams come true and America still works the way it’s supposed to Nike We sell athletic shoes and apparel We bring inspiration and innovation to every athlete* in the world (* if you have a body, you are an athlete)
  37. 37. Companywide Strategic Planning Business objectives • Build profitable customer relationships • Invest in research • Improve profits Marketing objectives • Increase market share • Create local partnerships • Increase promotion Setting Company Objectives and Goals
  38. 38. Companywide Strategic Planning The business portfolio is the collection of businesses and products that make up the company Portfolio analysis is a major activity in strategic planning whereby management evaluates the products and businesses that make up the company Designing the Business Portfolio
  39. 39. Companywide Strategic Planning Strategic business unit (SBU) is a unit of the company that has a separate mission and objectives that can be planned separately from other company businesses • Company division • Product line within a division • Single product or brand Analyzing the Current Business Portfolio
  40. 40. Companywide Strategic Planning Identify key businesses (strategic business units, or SBUs) that make up the company Assess the attractiveness of its various SBUs Decide how much support each SBU deserves Analyzing the Current Business Portfolio
  41. 41. Companywide Strategic Planning:
  42. 42. Companywide Strategic Planning Developing Strategies for Growth and Downsizing Product/Market Expansion Grid Strategies Market penetration Market development Product development Diversification
  43. 43. Companywide Strategic Planning Developing Strategies for Growth and Downsizing Product/market expansion grid strategies
  44. 44. Companywide Strategic Planning Market penetration is a growth strategy increasing sales to current market segments without changing the product Market development is a growth strategy that identifies and develops new market segments for current products Developing Strategies for Growth and Downsizing
  45. 45. Companywide Strategic Planning Product development is a growth strategy that offers new or modified products to existing market segments Diversification is a growth strategy through starting up or acquiring businesses outside the company’s current products and markets Developing Strategies for Growth and Downsizing
  46. 46. Companywide Strategic Planning Downsizing is the reduction of the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy Developing Strategies for Growth and Downsizing
  47. 47. Marketing Strategy and the Marketing Mix
  48. 48. Marketing Strategy and the Marketing Mix Developing an Integrated Marketing Mix
  49. 49. Managing the Marketing Effort
  50. 50. Managing the Marketing Effort Marketing Analysis – SWOT Analysis
  51. 51. Managing the Marketing Effort Market Planning—Parts of a Marketing Plan Executive summary Marketing situation Threats and opportunities Objective and issues Marketing strategy Action programs Budgets Controls
  52. 52. Measuring and Managing Return on Marketing Investment Return on Marketing Investment (Marketing ROI) Return on marketing investment (Marketing ROI) is the net return from a marketing investment divided by the costs of the marketing investment. Marketing ROI provides a measurement of the profits generated by investments in marketing activities.
  53. 53. Analyzing the Marketing Environment
  54. 54. Analyzing the Marketing Environment • The Company’s Microenvironment • The Company’s Macroenvironemnt • Responding to the Marketing Environment Topic Outline
  55. 55. The Marketing Environment The marketing environment includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with customers
  56. 56. The Marketing Environment Microenvironment consists of the actors close to the company that affect its ability to serve its customers, the company, suppliers, marketing intermediaries, customer markets, competitors, and publics
  57. 57. The Company’s Microenvironment Actors in the Microenvironment
  58. 58. The Company’s Microenvironment • Top management • Finance • R&D • Purchasing • Operations • Accounting The Company
  59. 59. The Company’s Microenvironment • Provide the resources to produce goods and services • Treated as partners to provide customer value Suppliers
  60. 60. The Company’s Microenvironment Help the company to promote, sell and distribute its products to final buyers Marketing Intermediaries
  61. 61. The Company’s Microenvironment Resellers Physical distribution firms Marketing services agencies Financial intermediaries Types of Marketing Intermediaries
  62. 62. The Company’s Microenvironment • Firms must gain strategic advantage by positioning their offerings against competitors’ offerings Competitors
  63. 63. The Company’s Microenvironment Publics • Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives – Financial publics – Media publics – Government publics – Citizen-action publics – Local publics – General public – Internal publics
  64. 64. The Company’s Macroenvironment
  65. 65. The Company’s Macroenvironment Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics • Demographic environment is important because it involves people, and people make up markets • Demographic trends include age, family structure, geographic population shifts, educational characteristics, and population diversity Demographic Environment
  66. 66. The Company’s Macroenvironment • Generation X includes people born between 1965 and 1976 – High parental divorce rates – Cautious economic outlook – Less materialistic – Family comes first – Lag behind on retirement savings Demographic Environment
  67. 67. The Company’s Macroenvironment • Millennials (gen Y or echo boomers) include those born between 1977 and 2000 – Comfortable with technology – Includes • Tweens (ages 8–12) • Teens (13–19) • Young adults (20’s) Demographic Environment
  68. 68. The Company’s Macroenvironment Generational marketing is important in segmenting people by lifestyle of life state instead of age Demographic Environment
  69. 69. The Company’s Macroenvironment More people are: • Divorcing or separating • Choosing not to marry • Choosing to marry later • Marrying without intending to have children • Increased number of working women • Stay-at-home dads Demographic Environment
  70. 70. The Company’s Macroenvironment Economic environment consists of factors that affect consumer purchasing power and spending patterns • Industrial economies are richer markets • Subsistence economies consume most of their own agriculture and industrial output Economic Environment
  71. 71. The Company’s Macroenvironment • Changes in income • Value marketing involves ways to offer financially cautious buyers greater value—the right combination of quality and service at a fair price Economic Environment
  72. 72. The Company’s Macroenvironment • Ernst Engel—Engel’s Law • As income rises: – The percentage spent on food declines – The percentage spent on housing remains constant – The percentage spent on savings increases Economic Environment Changes in Consumer Spending Patterns
  73. 73. The Company’s Macroenvironment Natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities • Trends – Shortages of raw materials – Increased pollution – Increase government intervention – Environmentally sustainable strategies Natural Environment
  74. 74. The Company’s Macroenvironment Technological Environment • Most dramatic force in changing the marketplace • Creates new products and opportunities • Safety of new product always a concern
  75. 75. The Company’s Macroenvironment Political environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society Political Environment
  76. 76. The Company’s Macroenvironment • Legislation regulating business – Increased legislation – Changing government agency enforcement • Increased emphasis on ethics – Socially responsible behavior – Cause-related marketing Political Environment
  77. 77. The Company’s Macroenvironment Cultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, and behaviors Cultural Environment
  78. 78. The Company’s Macroenvironment Core beliefs and values are persistent and are passed on from parents to children and are reinforced by schools, churches, businesses, and government Secondary beliefs and values are more open to change and include people’s views of themselves, others, organization, society, nature, and the universe Cultural Environment Persistence of Cultural Values
  79. 79. Responding to the Marketing Environment Uncontrollable • React and adapt to forces in the environment Proactive • Aggressive actions to affect forces in the environment Reactive • Watching and reacting to forces in the environment Views on Responding