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transcript
Marketing ManagementBM 4804
Warin ChotekorakulSession 1, 2003
Ch. 1 Defining marketing for the 21st century
The questions that we should be able to respond after completing the chapter: What is the new economy like? What are the tasks of marketing? What are the major concepts and tools of
marketing? What orientations do companies exhibit in
the marketplace? How are companies and marketers
responding to the new challenges?
What is the new economy like? What is the old economy?
Based on the “Industrial Revolution” and on managing “manufacturing” industries
Goal: efficiency Hierarchical management being used
New economy Based on the “Digital Revolution” and
the management of “information” Substantially differentiated,
customized, and personalized Less hierarchical management—Why?
What is the new economy like? (2)
What are the tasks of marketing?
3 stages that a company might pass: Entrepreneurial marketing Formulated marketing Intrepreneurial marketing
Question: Each of the three stages requires the same marketing tasks?Yes
Marketing is the task of creating, promoting, and delivering goods and services to consumers and businesses.
What are the tasks of marketing? (2)
Demand States and Marketing Tasks
Negative demand: occurs when the market dislikes the product Marketing Task: to analyze why the market
dislikes the product, and how to change the beliefs and attitudes
No demand: occurs when target market is unaware of the
product Marketing Task: to connect the benefits of the
product with the needs
Latent demand: A strong need that cannot be satisfied by
any existing product Marketing task: to measure the size of
the potential market and develop effective pdt
Declining demand: Decreasing demand for the product Marketing task: to reverse the declining
demand through creative remarketing
Demand States and Marketing Tasks 2
Irregular demand: Demand varies on a seasonal, daily basis Marketing task: to find ways to alter the
same pattern of demand called “Synchromarketing”
Full demand: Occurs when a company is satisfied with the
volume of business Marketing task: to maintain current demand
level facing the changing consumer preferences and increasing competition
Demand States and Marketing Tasks 3
Overfull demand: Occurs when demand level is higher than a
company can handle Marketing task: to find ways to reduce the
demand called “Demarketing” : General and Selective demarketing
Unwholesome demand: For unwholesome products e.g. handguns,
cigarettes, X-rated movies/websites Marketing task: to get people who like these
things to give them up
Demand States and Marketing Tasks 4
What are the major concepts and tools of marketing?
Definitions of Marketing: Social:Social: Marketing is a societal process
by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.
Managerial:Managerial: Marketing is the art of selling products
What are the major concepts and tools of marketing? (2)
Marketing Management: the ways to achieve desired responses from other parties
Definition of Marketing Management The art and science of choosing target
markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value
Core Marketing Concepts Segmentation and Target markets:
Segmentation or Market Segmentation isSegmentation or Market Segmentation is the process of dividing a market into groups whose valuations of products are similar within groups and who differ across those groups
Market Segment isMarket Segment is a group of actual or potential customers who can be expected to respond in a similar way to a product or service offer
Core Marketing Concepts (2)
Segmentation and Target markets (2): Market Targeting isMarket Targeting is the process of
selecting segments to serve and identifying customers in target segments by evaluating the attractiveness of segments
Target Market isTarget Market is is a market that the
company chooses to serve effectively and profitably
Marketplace, Marketspace, and Metamarket: MarketplaceMarketplace is physical (shopping in a store) MarketspaceMarketspace is digital (shopping on the net) MetamarketMetamarket is a group of complementary
pdts and services that are closely related in the minds of consumers but are spread across a diverse set of industries e.g. home ownership market
Core Marketing Concepts (3)
Marketers and ProspectsMarketers and Prospects Needs, Wants, and Demands:Needs, Wants, and Demands:
NeedsNeeds are the basic human requirements
WantsWants are specific objects that might satisfy the need
DemandsDemands are wants plusplus ability and WTP Censure: marketer cannot create needs,
but can influence wants.
Core Marketing Concepts (4)
Product, Offering, and Brand:Product, Offering, and Brand: Why does a customer buy a product
(car)?
Core Marketing Concepts (5)
If so, we can call them as Value Value Proposition.Proposition. What is the difference between
“product and offering”? Is offering a subset of product?
Brand enables a customer to know the offering comes from what company
Value, Cost, and Satisfaction:Value, Cost, and Satisfaction: How do consumers choose among the
many products that might satisfy a given need?
Core Marketing Concepts (6)
The guiding concept is valuevalue.
Value is the consumer’s estimate of the product’s overall capacity to satisfy his or her needs. Value is the combination of Quality, Service, and Price (QSP) or Customer Value Triad
Core Marketing Concepts (7)
Value, Cost, and Satisfaction (2):Value, Cost, and Satisfaction (2): How to measure Value? Value = Benefits/Costs
Exchange and Transaction:Exchange and Transaction: Exchange is the act of obtaining a desired product from someone by offering something in return.
Exchange is the defining concept underlying marketing.
Core Marketing Concepts (8)
Exchange and Transaction (2):Exchange and Transaction (2): A transaction is a trade of values between two or more parties. Two types: Monetary VS Barter transactions
Transaction = Transfer/ Relationships and Networks:Relationships and Networks:
Relationship Marketing: aim to build up L-T, trusting, and “win-win” relationships with customers, distributors, dealers, and suppliers
RM brings down costs on transaction and time
Relationships and Networks (2):Relationships and Networks (2): The final outcome of RM is the building
of a unique company asset called a marketing network.marketing network.
Marketing Network consists of the company and its supporting stakeholdersstakeholders..
Core Marketing Concepts (9)
3 types of marketing channels: Communication channels:Communication channels: to deliver
and receive messages from target buyers Distribution Channels:Distribution Channels: to display, sell, or
deliver the physical products or services to buyer or user
Service channels:Service channels: to facilitate transactions
Core Marketing Concepts (10)
Channels
CommunicationChannels 1. Monologue
2. Dialogue
Service Channels Facilitating
Organizations such as banks,
Insurance companies
DistributionChannels 1. Warehouse
2. TransportationVehicle
3. TradeChannels
31. Wholesaler RRRRRRRR32
33. Distributor 34. Agent
Supply Chain: Supply Chain: Describes a longer channel stretching
from raw mat to components to final products that are carried to final buyers
Core Marketing Concepts (11)
Competition: Competition: Brand Competition
Industry competition
Form competition
Generic competition
Marketing Environment:Marketing Environment: Task (micro) environment (main
actors) Broad (macro) environment
Core Marketing Concepts (12)
Marketing Program/Plan:Marketing Program/Plan: To achieve the company’s objectives
Marketing mix:Marketing mix: set of marketing tools used to pursue marketing objectives in the target market
Marketing Program/Plan (2):Marketing Program/Plan (2): Robert introduced that the sellers’ 4
Ps correspond to the customers’ 4 CsFour PsFour Ps Four CsFour Cs
ProductProduct Customer solutionCustomer solution
PricePrice Customer costCustomer cost
PlacePlace ConvenienceConvenience
PromotionPromotionCommunicationCommunication
Core Marketing Concepts (13)
6 company directions The production concept The product concept The selling concept The marketing concept The customer concept The societal marketing concept
What orientations do companies exhibit in the marketplace?
The concept holds that consumers will favor favor those products that are widely widely available and inexpensive.available and inexpensive.
The assumption holds in 2 types of situations: Where the demand for a product exceeds demand for a product exceeds
supplysupply (in 3rd World countries) Where the product’s cost is high and has to
be brought down through increased productivity to expand the marketto expand the market
1. The Production concept1. The Production concept
2. The Product concept2. The Product concept The concept holds that consumers will
favor favor those products that offer the most the most quality, performance, or innovative quality, performance, or innovative features.features.
The companies get little or no customer little or no customer inputinput, and very often they will not examine competitors’ products.
Planned Obsolescence Strategy e.g. Lancer VS Lancer Cedia by Mitsubishi
The product concept leads to “marketing myopia”“marketing myopia” (Levitt, 1975) which means managers often view their market from a narrow, product-a narrow, product-oriented perspectiveoriented perspective, and this may result in missed opportunities.result in missed opportunities.
For example, railroad management.
2. The Product concept (2)2. The Product concept (2)
3. The Selling concept3. The Selling concept The concept holds that consumers, if
left alone, will ordinarily not buy not buy enoughenough of the organization’s products.
Thus,Thus, the company must undertake an aggressive sellingaggressive selling and promotion effort.
For companies with unsought productsunsought products, or when companies have overcapacity.overcapacity.
Inside-out approachInside-out approach
4. The Marketing concept4. The Marketing concept The concept holds that the job is not
to find the right customers for your product, but the right product for your customers (outside-in approach).
Satisfying needs of the customers
3 Types of marketing orientation: Reactive market orientation:
understanding and meeting customers’ expressed needs
Proactive marketing orientation: concentrating on customers’ latent needs
Total market orientation: combination of the above two
4. The Marketing concept 4. The Marketing concept (2)(2)
Points to study from Marketing Concept
5 Types of Needs: Stated needs: Real needs: Unstated needs: Delight needs: Secret needs:
A fast laptop
High performance, Accurate result
Good service
Mouse and mouse pad
Smart, savvy consumers
Points to study…(2) 3 types of marketing on basis of
countering to customer’s needs: Responsive Marketing Anticipative Marketing Creative Marketing
Integrated Marketing: all the company’s departments work together to serve the customer’s interests
External Marketing: marketing directed at people outside the company
Internal Marketing: marketing directed at employees of the company
Points to study…(3)
5. The customer concept Outside-in approach One-to-one marketing To capture a larger (market) share
of each customer’s expendituresQuestion: Is customer share the
same idea as market share?
6. The societal marketing concept
The concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.
e.g., the Body Shop
When to Review Marketing Plan
Sales decline Slow growth Changing buying pattern Increasing competition Increasing marketing expenditures
Company Responses and Adjustment
Re-engineering Outsourcing E-commerce Benchmarking Partner-supplier Alliances Market-centered Global and local Decentralized
Marketer Responses and Adjustments Relationship marketing Customer lifetime value Customer share Target marketing Individualization Customer database Integrated marketing communication Channel as partner Every employee a marketer Model-based decision
Takeaways from Ch.1 The old VS the new economies The marketing tasks (and for diff DD
states) Major marketing concepts and tools 6 Types of orientations Company and marketer responses in
the new economy