Session 2 Marketing Management MBA 10

1. Part 1: Understanding Marketing Management > Company Orientation towards the Marketplace > Fundamental Marketing Concepts, Trends and Tasks > Marketing & Customer Value Class Presentation | Session 2 | 19 Aug 2010

2. Company Orientations toward the marketplace Different approaches companies use for marketing Production Product Selling Marketing Holistic Marketing MG 220 Marketing Management 2

3. Company Orientations toward the marketplace The Production Concept Consumers will favor products that are “widely available” & “inexpensive” Focus on “Production” The Product Concept Consumer will favor those products that offer the most quality, performance or innovation Focus entirely on “Product development” What if: not priced, distributed, advertised and sold properly? MG 220 Marketing Management 3

4. Company Orientations toward the marketplace The Selling Concept Customers (consumers & businesses), if not engaged, will not buy enough Aggressive selling & promotion is required Practiced with unsought goods The Marketing Concept Replace product-centred “make-and-sell” with “sense-and-respond” Reactive market orientation Proactive market orientation MG 220 Marketing Management 4

5. Company Orientations toward the marketplace The Holistic Marketing Concept “Everything matters” Based on the development, design and implementation of marketing programs, processes, and activities that recognizes their breadth and interdependenices 4 Components Relationship marketing Integrated marketing Internal marketing Social responsibility marketing MG 220 Marketing Management 5

6. Company Orientations toward the marketplace MG 220 Marketing Management 6

7. Company Orientations toward the marketplace MG 220 Marketing Management 7

8. Company Orientations toward the marketplace MG 220 Marketing Management 8

9. Company Orientations toward the marketplace MG 220 Marketing Management 9

10. Fundamental Marketing ConceptsCore Concepts Needs Basic Human Requirements Wants Needs which are directed to a specific object Demands Wants for specific products backed by ability to pay (acquire) MG 220 Marketing Management 10

12. Quality

13. Affordable, Branded

14. A good discount deal

16. Fundamental Marketing ConceptsCore Concepts Offering Positioning is “crafted” into an offering Brands An offering from a known source MG 220 Marketing Management 13

17. Fundamental Marketing ConceptsCore Concepts Value ‘perceived’ tangible and intangible benefits and costs to customers Satisfaction Fulfillment of a need *WRONG* Person’s comparative judgments resulting from a product’s perceived performance If performance < expectations: dissatisfied/dissapointed If performance>=expectations: satisfied/delighted MG 220 Marketing Management 14

18. Fundamental Marketing ConceptsCore Concepts Marketing Channels Communication channels interacting with target buyers Distribution channels display, sell or deliver Service channels facilitating transactions with buyers MG 220 Marketing Management 15

19. Fundamental Marketing ConceptsCore Concepts Supply Chain Marketing Channel: Marketer to target buyer while Supply Chain: A complete value delivery system From Raw materials to components to final buyers MG 220 Marketing Management 16

20. Fundamental Marketing ConceptsCore Concepts Competition all the actual and potential rival offerings and substitutes that a buyer might consider Coke’s competition (?) MG 220 Marketing Management 17

21. Fundamental Marketing ConceptsCore Concepts Marketing Environment Task Environment Immediate actors involved in producing, distributing and promoting the offering Broad Environment Demographic Environment Economic Environment Physical Environment Technological Environment Political-legal Environment Social-cultural Environment MG 220 Marketing Management 18

22. Fundamental Marketing ConceptsCore Concepts Marketing Planning A Process consisting of: Analyzing marketing opportunities Selecting target markets Designing marketing strategies Developing marketing programs Managing the marketing effort MG 220 Marketing Management 19

23. Fundamental Marketing ConceptsShifts in Marketing Management From Marketing does the marketing to everyone does the marketing From organizing by product units to organizing by customer segments From Making everything to buying more goods and services from outside From using many suppliers to working with few “partners” From relying on old market positions to uncovering new ones From emphasizing tangible assets to emphasizing intangible assets From building brands through advertising to building brands through performance and integrated communication MG 220 Marketing Management 20

24. Fundamental Marketing ConceptsShifts in Marketing Management From attracting customers through stores and salespeople to making products available online From selling to everyone to trying to be the best firm serving well-defined target markets From focusing on profitable transactions to focusing on Customer Lifetime Value From a focus on gaining market share to a focus on building customer share From being Local to being “Glocal” From focusing on financial scorecard to focusing on marketing scorecard From focusing on shareholders to focus on stakeholders MG 220 Marketing Management 21

25. Fundamental Marketing ConceptsMarketing Management Tasks Developing Marketing Strategies and Plans Capturing Marketing Insights Connecting with customers Building strong brands Shaping the Market Offerings Delivering value Communicating value Creating Long-term growth MG 220 Marketing Management 22

26. Marketing & Customer ValueThe Value Delivery Process MG 220 Marketing Management 23

27. Marketing & Customer ValueThe Value Delivery Process MG 220 Marketing Management 24

28. Marketing & Customer ValueThe Value Chain A tool for identifying ways to create more customer value Every firm is a synthesis of activities performed to design, produce, market, deliver and support its product Primary Activities (producing & marketing) Support Activities (management of firm) MG 220 Marketing Management 25

29. Marketing & Customer ValueThe Value Chain Firm should estimate its competitors’ costs and performances as ‘benchmarks’ against which it compares its own costs and performance Success depends on ‘core business processes’ Market sensing Offering realization Customer Acquisition Customer Realization Fulfillment management MG 220 Marketing Management 26

30. Marketing & Customer ValueThe Value Chain MG 220 Marketing Management 27

31. Marketing & Customer ValueCore Competences Outsource the less critical Focus on Core Competency Characteristics of Core Competency: A Source of competitive advantage Has Application in a wide variety of markets Difficult for competitors to imitate MG 220 Marketing Management 28

32. Marketing & Customer ValueA Holistic Marketing Orientation & Customer Value MG 220 Marketing Management 29 Customer Company Partners Designing Developing Delivering

33. Marketing & Customer ValueThe Central Role of Strategic Planning All the successful brands: Focus on Customers Respond effectively to changing customer needs Have well-staffed marketing departments And all other departments in their organizations understand: “CUSTOMER IS THE KING” MG 220 Marketing Management 30

34. Marketing & Customer ValueThe Central Role of Strategic Planning Levels in Strategic Planning [Typical] Corporate Level Division Level Business Unit Level Product Level Marketing Plan is central instrument for directing and coordinating marketing effort Strategic marketing plan Lays out target markets & value proposition Tactical marketing plan Specifics of marketing activities MG 220 Marketing Management 31

35. Marketing & Customer ValueThe Central Role of Strategic Planning MG 220 Marketing Management 32

36. Part 1: Understanding Marketing Management > Corporate and Division Strategic Planning > Business Unit Strategic Planning > Product Planning: The Nature and Contents of a Marketing Plan Class Presentation | Session 3 | 23 Aug 2010