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Marketing Management


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ME 201
Strategic Management of an Engineering Enterprise
PSU, Urdaneta City

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Marketing Management

  1. 1. A Global Perspective in Marketing Management Engr. Arnold Mariñas Discussant ME 201 Strategic Management of Engineering Enterprise
  2. 2. What is Marketing?Selling?Advertising?Promotions?Making products available in stores?Maintaining inventories? All of the above, plus much more! 2
  3. 3. Marketing = ?Marketing is the process of planning and executing theconception, pricing, promotion, and distribution of ideas,goods, services to create exchanges that satisfyindividual and organizational goals American Marketing Association 3
  4. 4. Marketing = ?Marketing management is the art and science ofchoosing target markets and getting, keeping, andgrowing customers through creating, delivering, andcommunicating superior customer value. 4
  5. 5. Simple Marketing System Communication Goods/services Industry Market(a collection (a collection of sellers) of Buyers) Money Information 5
  6. 6. Marketing = ? Marketing is the sum of all activities that take you to a sales outlet. After that sales takes over. Marketing is all about creating a pull, sales is all about push. Marketing is all about managing the four P’s –  product  price  place  promotion 6
  7. 7. The 4 Ps & 4Cs Marketing Convenience Mix Product Place Customer Solution Price Promotion Communication Customer Cost 7
  8. 8. Difference Between - Sales & Marketing ?Sales trying to get the customer to want what the company producesMarketing trying to get the company produce what the customer wants 8
  9. 9. Scope – What do we market  Goods  Services  Events  Experiences  Personalities  Place  Organizations  Properties  Information  Ideas and concepts 9
  10. 10. Core Concepts of MarketingBased on : Needs, Wants, Desires / demand Products, Utility, Value & Satisfaction Exchange, Transactions & Relationships Markets, Marketing & Marketers. 10
  11. 11. Core Concepts of Marketing 11
  12. 12. Core Concepts of Marketing Need – food ( is a must ) Want – Pizza, Burger, French frys ( translation of a need as per our experience ) Demand – Burger ( translation of a want as per our willingness and ability to buy ) Desire – Have a Burger in a five star hotel 12
  13. 13. In order to understand Marketing let us begin with the Marketing Triangle Customers Company Competition 13
  14. 14. Who is a Customer ? CUSTOMER IS . . . . . Anyone who is in the market looking at a product /service for attention, acquisition, use or consumption that satisfies a want or a need 14
  15. 15. Customer –CUSTOMER has needs, wants, demands and desiresUnderstanding these needs is starting point of the entire marketingThese needs, wants arise within a framework or an ecosystemUnderstanding both the needs and the ecosystem is the starting point of a long term relationship 15
  16. 16. 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 16
  17. 17. Customers - Problem Solution As a priority , we must bring to our customers“WHAT THEY NEED”We must be in a position to UNDERSTAND theirproblemsOr in a new situation to give them a chance to AVOIDthe problems 17
  18. 18. Customer looks for ValueValue = Benefit / CostBenefit = Functional Benefit + Emotional BenefitCost = Monetary Cost + Time Cost + Energy Cost + Psychic Cost 18
  19. 19. 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 20
  20. 20. 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 21
  21. 21. The Strategic-Planning, Implementation,and Control Process 22
  22. 22. Business Strategic-Planning Process External Environment (Opportunity & Threat analysis) Business Goal Mission Formulation Internal Environment (Strength/ Weakness analysis) 23
  23. 23. Strategy Formulation Environmental Analysis Competitor Internal Analysis Customer Supplier Technology Know-How Regulatory Manufacturing Know-How Social/ Political Marketing Know-How Distribution Know-How Logistics Opportunities & Threats Strength & Weaknesses Identity Core Competencies Identify opportunity Fit internal Competencies with external opportunities 24 Firm Strategies
  24. 24. The Marketing PlanA written document that acts as a guidebook of marketing activities for the marketing manager 25
  25. 25. 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 26
  26. 26. The Marketing Process Business Mission Statemen t Objectives Situation or SWOT Analysis Marketing Strategy Target Market Strategy Marketing Mix Product Place/Distribution Promotion Price Implementation Evaluation, Control 27
  27. 27. Marketing Environment
  28. 28. Why a product like radio declinedand now once again emerging asan entertainment medium ? 29
  29. 29. What Were the Drivers of This Change ? Technology ? Government policy ? Other media substitutes ? 30
  30. 30. Why Market Leaders Suffered ? HMT vs. Titan HLL vs. Nirma Bajaj vs. Honda boom, then bust and now resurgence Market leadership today cannot be taken for granted.New and more efficient companies are able to upstage leaders in a much shorter period. 31
  31. 31. FactorsInfluencingCompany’sMarketingStrategy 32
  32. 32. External Marketing EnvironmentExternal Environment Social Social Ever-Changing is not controllable Change Change Marketplace Demographics Demographics Economic Economic Product Product Physical / Natural ConditionsDistribution ConditionsDistributionPromotion Promotion Price Price Competition Competition Target Market Political & Political & Legal Factors Legal Factors Technology Technology Environmental Scanning 33
  33. 33. The macro-environment is the assessment of the external forces that act upon the firm and its customers, that create threats & opportunities 34
  34. 34. Product 35
  35. 35. Product is Anything that is offered to the market forattention, acquisition, use or consumption that satisfies a want or a need 36
  36. 36. Types of Products PRODUCTS Consumer Industrial Services Products Products 37
  37. 37. Product Items, Lines, and Mixes A specific version of a product A specific version of a product that can be designated as a that can be designated as aProduct ItemProduct Item distinct offering among an distinct offering among an organization’s products. organization’s products. A group of closely-related A group of closely-relatedProduct LineProduct Line product items. product items. All products that an All products that an Product Mix Product Mix organization sells. organization sells. 38
  38. 38. Product MixWidth – how many product lines a company hasLength – how many products are there in a product lineDepth – how many variants of each product exist within aproduct lineConsistency – how closely related the product lines are inend use 39
  39. 39. Gillette’s Product Lines & Mix Width of the product mix Depth of the product lines Blades and Writing razors Toiletries instruments Lighters Fusion – 5 blade Mach 3 Turbo Mach 3 Series Paper Mate Cricket Sensor Adorn Flair S.T. Dupont Trac II Toni S.T. Dupont Atra Right Guard Swivel Silkience Double-Edge Soft and Dri Lady Gillette Foamy Super Speed Dry Look Twin Injector Dry Idea Techmatic Brush Plus 40
  40. 40. What is a Service? Defining theEssenceAn act or performance offered by one party to another(performances are intangible, but may involve use ofphysical products)An economic activity that does not result in ownershipA process that creates benefits by facilitating a desiredchange in customers themselves, or their physicalpossessions, or intangible assets 41
  41. 41. Some Industries - Service Sector Banking, stock broking Lodging Health care Restaurants, bars, Education catering Wholesaling and retailing Insurance Laundries, dry-cleaning News and entertainment Repair and maintenance Transportation (freight and Professional (e.g., law, passenger) architecture, consulting) 42
  42. 42. Classification of Services Pure Intangible Banking Service Good Transportation Major Service with Minor Product Business Hotels Product = Service Computers Major Product with Minor Services Materials / Components Pure Tangible Product 43
  43. 43. Major Characteristic of Services 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 44
  44. 44. The Marketing MixThe conventional view of the marketing mix consisted of four components (4 Ps): Product, Price, Place/ distribution and Promotion.Generally acknowledged that this is too narrow today; now includes , Processes, Productivity [technology ]People [employees], Physical evidenceMarketers today are focused on virtually all aspects of the firm’s operations that have the potential to affect the relationship with customers. 45
  45. 45. The “8Ps” of Integrated Service Managementvs. the Traditional “4Ps” ► Product elements ► Place, cyberspace, and time ► Process ► Productivity and quality ► People ► Promotion and education ► Physical evidence ► Price and other user outlays 46
  46. 46. The Give and Get of Marketing 47
  47. 47. Great Words on Marketing1. “The purpose of a company is ‘to create a customer…The only profit center is the customer.’”2. “A business has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results: all the rest are costs.”3. “The aim of marketing is to make selling unnecessary.”4. “While great devices are invented in the Laboratory, great products are invented in the Marketing department.”5. “Marketing is too important to be left to the marketing department.” 48
  48. 48. 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 49
  49. 49. Marketers and MarketsMarketers are focused on stimulating exchanges with customers who make up markets – B2C or B2B.The market is comprised of people who play a series of roles: decision makers, consumers, purchasers, and influencers.It is absolutely essential that marketers have a detailed understanding of consumers, their needs and wants.Much happens before and after the sale to affect customer satisfaction 50
  50. 50. Stages of Customer Interaction 51
  51. 51. What Changed in Marketing… Old Economy New Economy• Organize by product units • Organize by customer segments• Focus on profitable transactions • Focus on customer lifetime value• Look primarily at financial • Look also at marketing scorecard scorecard• Focus on shareholders • Focus on stakeholders• Marketing does the marketing • Everyone does the marketing• Build brands through advertising • Build brands through performance• Focus on customer acquisition • Focus on customer retention• No customer satisfaction • Measure customer satisfaction and measurement retention rate• Over-promise, under-deliver • Under-promise, over-deliver 52
  52. 52. Myth 1 – The larger the range of products, the more customer-centric I am. Mythbuster – The range of products has emerged from being competition-centric. 53
  53. 53. Myth 2 – Better technology (read CRM) leads tobetter customer service. Mythbuster – Technology alone does not deliver, helps people do. 54
  54. 54. Myth 3 – Launch a product and the customer will startusing instantly. - Give a customer a card and he will learn how to play with it immediately Mythbuster – Customers need To be educated too… 55
  55. 55. Myth 4 – The only way to get a customer is fromcompetition. Mythbuster – Customers are not only present where competition is. 56
  56. 56. Myth 5 – Just advertise and - You will sell. Mythbuster – Advertising will only sell, Not retain customers. 57
  57. 57. Myth 6 – No difference between marketing & selling Mythbuster – “Selling focuses on the needs of the seller; marketing on the needs of the buyer. 58
  58. 58. Myth 7 – In the absence of relationships ‘trust’ buildsfinancial brands Mythbuster – Trust is not a differentiator at all… it is the very minimum that the customer expects!! 59
  59. 59. So what will the differentiators be : • Technology ? • Brand ? 60
  60. 60. The real differentiator of customer – centricity in acommoditised world of financial products - Customer Service ! 61
  61. 61. References:• Marketing Management: An Asian Perspective 4th ed. By P. Kotler, S. Leong, C, Tan• Basic Marketing- A Global Managerial Approach W. Perrault• Handbook of Industrial Engineering 62
  62. 62. Thank You 63