Module 1


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Module 1

  1. 1. Chapter One The Concept of Marketing
  2. 3. Overview of the Course <ul><li>How to use the marketing function to develop a competitive advantage </li></ul><ul><li>What is competitive advantage: </li></ul><ul><ul><li>defined as the ability of a firm to develop and maintain distinctive competencies that enable it to capture a larger share of the market and earn higher than average profits </li></ul></ul>
  3. 4. Definition of Marketing <ul><ul><li>Identifying evolving consumer preferences, then capitalizing on them through the creation, promotion and delivery of products and services that satisfy the corresponding demand. This is done by solving the right customers’ problems, giving them what they want or need at the time and place of their choosing, and at the price they are willing to pay. </li></ul></ul>
  4. 5. Competitive Advantage <ul><li>Distinctive competencies: </li></ul><ul><ul><li>Management knowledge </li></ul></ul><ul><ul><li>Culture </li></ul></ul><ul><ul><li>Location </li></ul></ul><ul><ul><li>Access to resources </li></ul></ul><ul><ul><li>Exceptional employees </li></ul></ul><ul><ul><li>Special patents </li></ul></ul><ul><ul><li>Access to capital </li></ul></ul><ul><ul><li>Brand name </li></ul></ul>
  5. 6. Restaurant Zum See <ul><li>There are 40 mountain restaurants in the Zermatt area. </li></ul><ul><li>The market for these restaurants is hikers and skiers. </li></ul><ul><li>The only way to get to the restaurant in the summer is to hike 30 minutes up the mountain from Zermatt or hike 20 minutes down from the nearest gondola. </li></ul><ul><li>In the winter one reaches the restaurant on skis or snowshoes. </li></ul><ul><li>All the supplies for the restaurant are brought in by tractor during the summer and on a motorized snow sled in the winter. </li></ul><ul><li>The employees get to the restaurant by hiking and sliding down on a wooden sled. </li></ul>
  6. 7. Restaurant Zum See (cont.) <ul><li>On the side of a mountain and not easily accessible </li></ul><ul><li>Seating 165 customers </li></ul><ul><li>Turns over its tables, on average 1.5 times daily during its summer and winter seasons. </li></ul><ul><li>Open from December through April in the winter and July through September in the summer. </li></ul>
  7. 8. Restaurant Zum See (cont.) <ul><li>Why do people walk by other restaurants to get to the Restaurant Zum See? The answer to this question is the heart of this class. This restaurant provides a prism through which we can illustrate the framework of the book. </li></ul>
  8. 9. Restaurant Zum See (cont.) <ul><li>One way to categorize the different actions that Max and Greta Mennig and other firms take to gain a competitive advantage is to examine the functional areas of the firm. </li></ul>
  9. 10. Restaurant Zum See (cont.) <ul><li>These functional areas are known as the value-chain activities because they entail all the activities an organization undertakes in order to transform raw materials into the final product or service that the customer buys. </li></ul>
  10. 11. Value Chain <ul><li>Primary activities that enable creation of the project </li></ul><ul><ul><li>Manufacturing </li></ul></ul><ul><ul><li>Marketing </li></ul></ul><ul><li>Secondary activities that enable primary activities to take place </li></ul><ul><ul><li>Infrastructure </li></ul></ul><ul><ul><li>R&D </li></ul></ul><ul><ul><li>Materials Management </li></ul></ul><ul><ul><li>Human Resources </li></ul></ul>
  11. 12. Value Chain — Marketing <ul><li>Efficiency </li></ul><ul><li>Quality </li></ul><ul><li>Innovation </li></ul><ul><li>Customer responsiveness </li></ul><ul><li>Size </li></ul><ul><li>Value </li></ul><ul><li>Why not price? </li></ul>
  12. 13. The Concept of Marketing <ul><li>Marketing is the integration of all the professional disciplines required to determine the nature of consumer demand, then develop, promote, and deliver the products and services that will satisfy that demand. </li></ul>
  13. 14. Purpose of a Business <ul><li>It is the customer who determines what a business is. </li></ul><ul><ul><li>For it is the customer, and he alone, who is willing to pay for a good or for a service. </li></ul></ul><ul><ul><li>What the business thinks it produces is not of first importance—especially not to the future of the business and to its success. </li></ul></ul><ul><ul><li>What the customer thinks he is buying, what he considers “value,” is decisive—it determines what a business is, what it produces, and whether it will prosper.* </li></ul></ul><ul><li> * Drucker, P.F. (1954). The practice of management (p. 37). New York: Harper & Row. </li></ul>
  14. 15. Solving Customers’ Problems <ul><li>Customers have problems and need solutions </li></ul><ul><li>Customers are attracted to product or service features </li></ul><ul><li>Customers want to achieve a certain image, aspiration, or dream </li></ul><ul><li>Customers don’t always know what they want, but know what they don’t want </li></ul><ul><li>Customers do not know they have a problem but purchase anyway </li></ul><ul><li>Customers have needs that warrant solutions that have costs; a trade-off situation </li></ul>
  15. 19. Solving Customers’ Problems (cont.) <ul><li>Customers experience simultaneous production and consumption </li></ul><ul><ul><li>The solution needs to meet the expectation to create value and satisfy the customer </li></ul></ul><ul><ul><li>If the solution does not meet the expectation, the result is an unsatisfied customer </li></ul></ul>
  16. 20. Customer Satisfaction Measurement <ul><li>Does the company you work with measure customer satisfaction? </li></ul><ul><li>How often? </li></ul><ul><li>How do you measure satisfaction? </li></ul><ul><li>What do you do with the results? </li></ul><ul><li>How would you interpret the diagram on the next slide? </li></ul>
  17. 22. Management Orientations <ul><li>Operations Orientation </li></ul><ul><li>Product/Service Orientation </li></ul><ul><li>Selling Orientations </li></ul><ul><li>Bottom-Line Orientation </li></ul><ul><li>Marketing Orientation </li></ul>
  18. 23. Marketing Leadership <ul><li>Opportunity </li></ul><ul><li>Planning </li></ul><ul><li>Control </li></ul>
  19. 25. Marketing Is Everything <ul><li>Knowledge-based marketing </li></ul><ul><ul><li>Mastering technology to better know competition and customers </li></ul></ul><ul><li>Experience-based marketing </li></ul><ul><ul><li>Spending time with customers to design feedback loops for improved product/service intelligence </li></ul></ul>