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MKTG 436

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Chapter1

  1. 1. MKTG 436 Marketing Decisions Making
  2. 2. Course Description <ul><li>Reinforcing concepts you learned in Marketing Principles , you will analyze, evaluate and develop decisions pertaining to product, price, promotion and physical distribution ( the 4 P’s ) marketing programs. </li></ul><ul><li>Emphasis will be placed on analytical techniques and case studies to develop effective decision- making skills in the major functional areas of marketing. </li></ul>
  3. 3. Course Objectives <ul><li>Become familiar with individual topical areas of marketing management such as: pricing, forecasting, budgeting, advertising, market analysis and marketing strategies. </li></ul><ul><li>Understand how to assess and manage cost and profitability considerations in the evaluation and choice of marketing decisions. </li></ul><ul><li>Be able to understand the concept of marketing segmentation , and to utilize the analytical tools and techniques necessary to profitably segment a market. </li></ul><ul><li>Learn how the product-market structure is related to product benefits and consumer profiles. </li></ul><ul><li>Understand the relationship between business and marketing strategy and the preparation of the marketing plan. </li></ul><ul><li>Gain a fundamental knowledge of how to identify the market potential , industry sales, and company sales measurements needed for marketing decisions. </li></ul><ul><li>Learn the basic skills necessary to operate SPSS. </li></ul><ul><li>Understand how to estimate price elasticity and how to establish pricing objectives that implement chosen marketing strategies . </li></ul><ul><li>Be able to evaluate the overall effectiveness of an advertising program within the context of promotion and sales. </li></ul>
  4. 4. The Bottom-line is….. <ul><li>What decisions do Marketing Managers have to make in their work? </li></ul><ul><li>Why these decisions have to be made? </li></ul><ul><li>How are these decisions made and how effective they could be? </li></ul>
  5. 5. Market Orientation, Marketing Management, and The Marketing Planning Process Chapter 1
  6. 6. Overview <ul><li>In the middle 20 th century, the term marketing was viewed as more or less equivalent to the term selling . </li></ul><ul><li>As products became more sophisticated, competition increased, resulting in a business environment that was becoming increasingly complex. </li></ul><ul><li>More emphasis on Marketing Research to learn about buyers’ motives and preferences as firms sought to satisfy market needs. </li></ul><ul><li>Managers realize that they need to understand customer needs, its competition, and broad environment to assure long-term success. </li></ul>
  7. 7. Development of the Marketing Concept Production Concept Selling Concept Product Concept Marketing Concept
  8. 8. The Production Concept <ul><li>Assumes that consumers are interested primarily in product availability at low prices </li></ul><ul><li>Marketing objectives : </li></ul><ul><ul><li>Cheap, efficient production </li></ul></ul><ul><ul><li>Intensive distribution </li></ul></ul><ul><ul><li>Market expansion </li></ul></ul>
  9. 9. The Product Concept <ul><li>Assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features </li></ul><ul><li>Marketing objectives: </li></ul><ul><ul><li>Quality improvement </li></ul></ul><ul><ul><li>Addition of features </li></ul></ul>
  10. 10. The Selling Concept <ul><li>Assumes that consumers are unlikely to buy a product unless they are aggressively persuaded to do so </li></ul><ul><li>Marketing objectives : </li></ul><ul><ul><li>Sell, sell, sell </li></ul></ul><ul><li>Lack of concern for customer needs and satisfaction </li></ul>
  11. 11. The Marketing Concept <ul><li>Assumes that to be successful, a company must determine the needs and wants of specific target markets and deliver the desired satisfactions better than the competition </li></ul><ul><li>Marketing objectives : </li></ul><ul><ul><li>Make what you can sell </li></ul></ul><ul><ul><li>Focus on buyer’s needs </li></ul></ul>
  12. 12. Learning Outcomes <ul><li>Nature and causes of customer satisfaction and quality . </li></ul><ul><li>Importance of having a “ market orientation ” to deliver quality thereby maintaining customer satisfaction and competitive advantage. </li></ul><ul><li>How marketing managers use the market planning process in implementing a market orientation. </li></ul>We will examine the following in this chapter:
  13. 13. Customer Satisfaction and Quality <ul><li>A buyers’ degree of satisfaction with a product is the consequence of the comparison between the level of the benefits perceived and the level of benefits expected prior to purchase. </li></ul><ul><li>In order to deliver customer satisfaction an organization has to offer quality in its goods and services. </li></ul><ul><li>Traditionally, the term quality thought to mean defect-free products. Today, high quality means pleasing customers. </li></ul><ul><li>Truly quality-oriented view of customer satisfaction is one that provide a level of benefits that exceeds rather than just meet expectations. </li></ul>
  14. 14. 8 Dimensions of Quality <ul><li>Performance </li></ul><ul><li>Features </li></ul><ul><li>Reliability </li></ul><ul><li>Conformance </li></ul><ul><li>Durability </li></ul><ul><li>Serviceability </li></ul><ul><li>Aesthetics </li></ul><ul><li>Perceived quality </li></ul>In seeking to provide customer satisfaction, organizations can pursue any of the following dimensions of quality:
  15. 15. Quality, Satisfaction and Performance <ul><li>High quality results in superior business performance is supported by empirical research. </li></ul><ul><li>High profitability is a consequence of higher quality. High quality creates and maintains a high degree of customer satisfaction. </li></ul><ul><li>Quality allows a firm to increase its relative sales position in the market, which is positively related to return on investment. </li></ul><ul><li>Satisfied owners continued investments in human resource and equipment will lead to a virtuous circle of sustained high level of performance. Key is the adoption of a market orientation </li></ul>
  16. 16. Market Orientation <ul><li>Market orientation refers to an organizational perspective that encourages </li></ul><ul><ul><li>(1) the systematic gathering of market intelligence , </li></ul></ul><ul><ul><li>(2) dissemination of the intelligence across all organizational units and </li></ul></ul><ul><ul><li>(3) a coordinated, organizational wide responsiveness to the intelligence. </li></ul></ul><ul><li>Like Total Quality Management (TQM) – all departments and employees must commit to and share responsibility for quality. Marketing has a lead role in this process for identifying priority needs and customer concerns. </li></ul><ul><li>Measuring market orientation through a questionnaire survey using listed statements. </li></ul>
  17. 17. Market Orientation and Market Planning <ul><li>To implement a market orientation philosophy, firms must not only motivate employees, it must provide analytical tools and decision-making frameworks to generate and process marketing intelligence. </li></ul><ul><li>Examples of key actions to be taken: </li></ul><ul><ul><li>Decide which business opportunities can give the firm the best chance to create satisfied customers </li></ul></ul><ul><ul><li>Analyze customer decision making processes and identify various preference patterns in a market </li></ul></ul><ul><ul><li>Assess competitive advantages and competitor’s positions in a market </li></ul></ul><ul><ul><li>Measure market opportunities and assess impact of plans for enhancing customer satisfaction or competitive advantage on profitability </li></ul></ul><ul><ul><li>Applying knowledge from market intelligence to the design of market offering. </li></ul></ul>
  18. 18. Marketing Planning Process <ul><li>Planning is merely a systematic way for an organization to attempt to control its future. A plan is a statement of what the organization hopes to achieve, how to achieve it and when it will be achieved. </li></ul><ul><li>Marketing Planning is the systematic process for developing and coordinating marketing decisions . </li></ul><ul><li>Marketing Decisions are made at 2 levels – top management and middle management . So the marketing planning process operates at 2 levels. </li></ul>
  19. 19. Marketing Planning Process <ul><li>Corporate (top) management planning focuses on long-term direction of the organization regarding the markets and needs that will be served, whereas </li></ul><ul><li>Middle management planning specifies how the corporate marketing plan will implemented on a product-by-product basis by focusing on sales and profitability of products or brands. </li></ul><ul><li>Both planning levels should be interdependent </li></ul>
  20. 20. Basic Steps in Planning <ul><li>Conducting a situation analysis. </li></ul><ul><li>Establishing objectives. </li></ul><ul><li>Developing strategies and programs. </li></ul><ul><li>Providing coordination and control. </li></ul>
  21. 21. Conduct Situation Analysis Develop Strategies and Programs Establish Objectives Provide Coordination and Control Basic Steps in Market Planning
  22. 22. Basic Steps in Planning <ul><li>Conducting a situation analysis </li></ul><ul><ul><li>Understand current situation and trends affecting the future of the organization </li></ul></ul><ul><ul><li>Assess Problems (or Threats ) and Opportunities posed by buyers, competitors, costs and regulatory changes. </li></ul></ul><ul><ul><li>Identify Strengths and Weaknesses possessed by the firm </li></ul></ul><ul><li>Establishing objectives </li></ul><ul><ul><li>Having completed situation analysis, decision makers must then establish specific objectives that identifies the level of performance the organization hopes to achieve </li></ul></ul>
  23. 23. Basic Steps in Planning <ul><li>Developing strategies and programs </li></ul><ul><ul><li>To achieve stated objectives, decision makers must develop both strategies (long-term actions to achieve objectives) and programs (short-term actions to implement strategies) </li></ul></ul><ul><li>Providing coordination and control </li></ul><ul><ul><li>Some mechanism to ensure that strategies are effectively implemented through some form of coordination and control measures. </li></ul></ul>
  24. 24. Conclusion <ul><li>Marketing Concept </li></ul><ul><ul><li>Serves as starting point giving attention to customer needs as the basic purpose of a business. </li></ul></ul><ul><li>Market-oriented organization takes its lead from the market </li></ul><ul><ul><li>Understand customers and competitors, determine which customers and needs fit best with the organization’s capabilities and profit goals and develop their responses to the marketplace . </li></ul></ul><ul><li>A planning approach that deals with the problems involved in implementing the marketing concept </li></ul><ul><ul><li>Conducting situation analysis and setting objectives before developing strategies and programs improve chances for choosing the best marketing policies. </li></ul></ul><ul><ul><li>Planning takes place at 2 levels, top and middle management </li></ul></ul><ul><ul><li>Focus on market needs and quality can lead to outstanding performance. </li></ul></ul>
  25. 25. Marketing Decision Making (MKTG 436) <ul><li>Introduction and Overview ( Chapter 1 ) </li></ul><ul><li>Conducting situation analysis ( Chapters 3 to 6 ). </li></ul><ul><li>Establishing objectives and developing strategies and programs ( Chapters 8 to 10 ). </li></ul><ul><li>Providing coordination and control </li></ul><ul><li>Decision-Making using SPSS applications ( every lesson ) </li></ul><ul><li>See Figure 1-8 </li></ul>

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