Strategic Marketing Management

1. Marketing Management
Lecture 2

2. Who is a Customer ??
2
Anyone who is in the market looking at a product /
service for attention, acquisition, use or consumption
that satisfies a want or a need
CUSTOMER IS . . . . .

3. Customer –
 CUSTOMER has needs, wants, demands and desires
 Understanding these needs is starting point of the entire marketing
 These needs, wants …… arise within a framework or an ecosystem
 Understanding both the needs and the ecosystem is the starting point of a long
term relationship
3

4. How Do Consumers Choose Among
Products & Services?
 Value - the value or benefits the customers gain from
using the product versus the cost of obtaining the
product.
 Satisfaction - Based on a comparison of
performance and expectations.
 Performance > Expectations => Satisfaction
 Performance < Expectations => Dissatisfaction
4

5. Customers - Problem Solution
 As a priority , we must bring to our customers
“WHAT THEY NEED”
We must be in a position to UNDERSTAND their
problems
Or in a new situation to give them a chance to
AVOID the problems
5

6. Customer looks for Value
Value = Benefit / Cost
Benefit = Functional Benefit + Emotional Benefit
Cost = Monetary Cost + Time Cost + Energy Cost
6

7. 8
Strategic Marketing
Strategic marketing management is concerned with
how we will create value for the customer
Asks two main questions
 What is the organization’s main activity at a
particular time? – Customer Value
 What are its primary goals and how will these be
achieved? – how will this value be delivered

8. Strategic Planning
 Strategic Planning is the managerial process of
creating and maintaining a fit between the
organization’s objectives and resources and the
evolving market opportunities.
 Also called Strategic Management Process
 All organizations have this
 Can be Formal or Informal
9

9. 10
The Strategic-Planning, Implementation,
and Control Process

10. Business Strategic-Planning Process
11
External environment
(Opportunity &
Threat analysis)
Internal Environment
(Strength/ Weakness analysis)
Goal FormulationBusiness Mission

11. Strategy Formulation
12
Environmental Analysis
Internal AnalysisCompetitor
Customer
Supplier
Regulatory
Social/ Political
Technology Know-How
Manufacturing Know-How
Marketing Know-How
Distribution Know-How
Logistics
Strength & Weaknesses
Identity Core Competencies
Opportunities & Threats
Identify opportunity
Fit internal Competencies with external opportunities
Firm Strategies

12. The Marketing Plan
 A written document that acts as a guidebook of marketing activities for the
marketing manager
13

13. 14
CONTENTS of MARKETING PLAN
Business Mission Statement
Objectives
Situation Analysis (SWOT)
Marketing Strategy
 Target Market Strategy
 Marketing Mix
 Positioning
 Product
 Promotion
 Price
 Place – Distribution
 People
 Process
Implementation, Evaluation and Control

14. 15
The Marketing Process
Business
Mission
Statemen
t
Objective
s
Situation
or SWOT
Analysis
Implementation
Evaluation, Control
Target Market
Strategy
Marketing Strategy
Product
Promotion
Place/Distribution
Price
Marketing Mix

15. Why a product like radio declined
and now once again emerging as
an entertainment medium ?
16
Marketing Environment

16. What Were the Drivers of This Change ?
 Technology ?
 Government policy ?
 Other media substitutes ?
17

17. Why Market Leaders Suffered ?
 HMT vs. Titan
 HLL vs. Nirma
 Bajaj vs. Honda
 Dot.com boom, then bust and now revival
 Market leadership today cannot be taken for granted.
New and more efficient companies are able to
upstage leaders in a much shorter period.
18

18. 19
Factors
Influencing
Company’s
Marketing
Strategy

19. 20
Demographics
Social
Change
Economic
Conditions
Political &
Legal Factors
Technology
Competition
Environmental
Scanning
Target Market
Product
Distribution
Promotion
Price
External Environment
is not controllable Ever-Changing
Marketplace
External Marketing Environment
Physical / Natural

20. 21
The macro-environment
is the assessment of the external forces that act upon the
firm and its customers, that create threats & opportunities

21. 22
Anything that is offered to the market for
attention, acquisition, use or consumption that
satisfies a want or a need
Product is . . . . .

22. Types of Products
23
Consumer
Products
Industrial
Products
PRODUCTS
Services

23. Product Items, Lines, and Mixes
24
Product Item
Product Line
Product Mix
A specific version of a product
that can be designated as a
distinct offering among an organization’s products.
A group of closely-related
product items.
All products that an
organization sells.

24. Product Mix
Width – how many product lines a company has
Length – how many products are there in a product line
Depth – how many variants of each product exist within a
product line
Consistency – how closely related the product lines are in
end use
25

25. What is a Service? Defining
the Essence
An act or performance offered by one party to another
(performances are intangible, but may involve use of physical
products)
An economic activity that does not result in ownership
A process that creates benefits by facilitating a desired
change in customers themselves, or their physical
possessions, or intangible assets
26

26. Some Industries - Service Sector
 Banking, stock broking
 Restaurants, bars,
catering
 Insurance
 News and entertainment
 Transportation (freight
and passenger)
 Health care
 Education
 Wholesaling and
retailing
 Laundries, dry-cleaning
 Repair and maintenance
 Professional (e.g., law,
architecture, consulting)
27

27. Classification of Services
28Pure Tangible Product
Materials / Components
Computers
Major Product with
Minor Services
Product = Service
Major Service with
Minor Product
Business Hotels
Good Transportation
Banking
Pure Intangible
Service

28.  Intangibility – Services are intangibility cannot be seen,
tasted, felt, heard or smelled before purchase.
 Inseparability - Services are produced and consumed
simultaneously.
 Variability or Heterogeneity – Services are highly variable
 Perishability – Services cannot be stored.
 Non Ownership - Services are rendered but there is no
transfer of title
29
Major Characteristic of Services

29. The Give and Get of Marketing
30

30. Drivers of Customer Satisfaction
 Many aspects of the firm’s value proposition
contribute to customer satisfaction:
 The core product or service offered
 Support services and systems
 The technical performance of the firm
 Interaction with the firm and it employees
 The emotional connection with customers
 Ability to add value and to differentiate as a firm
focuses more on the top levels
31

31. Stages of Customer Interaction
32

32. What Changed in Marketing…
• Organize by product units
• Focus on profitable transactions
• Look primarily at financial
scorecard
• Focus on shareholders
• Marketing does the marketing
• Build brands through advertising
• Focus on customer acquisition
• No customer satisfaction
measurement
• Over-promise, under-deliver
33
• Organize by customer segments
• Focus on customer lifetime value
• Look also at marketing scorecard
• Focus on stakeholders
• Everyone does the marketing
• Build brands through performance
• Focus on customer retention
• Measure customer satisfaction and
retention rate
• Under-promise, over-deliver
Old Economy New Economy