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MKT 304 Principles of Marketing

Marketing Strategy and Role

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Announcements• Those who missed last class to pick up

course outline and complete first in class exercise by today.

• Please register for the discussion forum if you have not done so. Of course, feel free to post comments and ideas.

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Marketing Evolution• Simple trade era (before Industrial Revolution)

– Trade of “surplus” output; – Focus: Sell surplus

• Production era (Industrial Revolution to 1920s)– “If we can make it, it will sell”;– Focus: Increase supply

• Sales era (1930s to 1950s)– Business success = sell, sell, sell … ;– Focus: Beat Competition

• Marketing department era (1950s)– Short-term marketing plan and limited integration;– Focus: Coordinate and Control

• Marketing company era (since 1960s)– Implementation of the marketing concept.– Focus: Long run customer satisfaction

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• The “Marketing Concept”The marketing concept means that an organization as a whole should seek to make a profit by serving the needs of it customers.

TheMarketingConcept

Customer Satisfaction

Total Company

Effort

Profit

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Take Customer’s Point of View

Take Customer’s Point of View

Take Customer’s Point of View

Take Customer’s Point of View

Customer May Not Dwell On

Value

Customer May Not Dwell On

Value

Customer May Not Dwell On

Value

Customer May Not Dwell On

Value

Where Does Competition Fit?

Where Does Competition Fit?

Costs Benefits Where Does Competition Fit?

Where Does Competition Fit?

Customer Value Builds

Relationships

Customer Value Builds

Relationships

The Marketing Concept & Customer Value

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Superior Customer Value

Superior Customer Value

Total Company Effort to Satisfy

Customers

Total Company Effort to Satisfy

Customers

Superior Customer Value

Superior Customer Value

Total Company Effort to Satisfy

Customers

Total Company Effort to Satisfy

Customers

Customer AcquisitionCustomer Acquisition

Customer SatisfactionCustomer

SatisfactionCustomer

SatisfactionCustomer

Satisfaction

Customer RetentionCustomer Retention

Customer AcquisitionCustomer Acquisition

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Putting It All Together

Customer RetentionCustomer Retention

Profitable Relationships with

Customers

Profitable Relationships with

Customers

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Marketing Management• MARKETING MANAGEMENT PROCESS--the process of (1) planning

marketing activities, (2) directing the implementation of the plans, and (3) controlling these plans.

• STRATEGIC (MANAGEMENT) PLANNING—the managerial process of developing and maintaining a match between an organization’s resources and its market opportunities.

Whole-CompanyStrategic

ManagementPlanning

Whole-CompanyStrategic

ManagementPlanning

Marketing PlanningSet Objectives

Evaluate OpportunitiesPlan Marketing StrategyDev plans & programs

Marketing PlanningSet Objectives

Evaluate OpportunitiesPlan Marketing StrategyDev plans & programs

Implement MarketingPlan(s) and Program

Implement MarketingPlan(s) and Program

Control MarketingPlan(s) and Program

Control MarketingPlan(s) and Program

Adjust Plansas Needed

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Marketing Strategy

• Target Market– A group of customers to appeal.

• Marketing Mix– Product;– Pricing;– Distribution (Place);– Promotion.

• Note: customer is not part of the marketing mix!

TheMarketing

Mix

TheMarketing

Mix

C

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Product Strategy

• Are there different types of customers in the market?

• What do these different segments want?

• Which segment should we target?

• How can we “position” our product toward this segment?

• How broad of an assortment of products should we offer?

• What are the appropriate quality levels?

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Pricing Strategy

• How price sensitive are potential customers?

• What are our competitors charging for similar products?

• What is the minimum price we need to charge to cover our variable costs of production and some of our fixed costs?

• What price level would be consistent with the desired positioning for our products?

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Distribution (Place) Strategy

• What channel should we use to distribute our products?

• What intensity should we deploy in the distribution of our products?

• How many “middlemen” should there be between us and our final customers?

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Promotion Strategy

• What should we communicate about our products to potential customers?– Eg: Attributes, Image, Technology etc

• How should we communicate to our potential customers?– Eg: Personal Selling, Mass Selling, Sales

Promotion

• What specific media should we use to communicate? – Eg: Sleep Country USA

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Attribute Promotion

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Marketing Mix & The Customer

Customer

Price

Place Promotion

Product

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In a Nutshell…………

ProductPhysical GoodsServiceFeaturesQuality LevelAccessoriesInstallationInstructionsWarrantyProduct LinesPackagingBranding

PlaceObjectivesChannel TypeMarket ExposureKinds of

MiddlemanKinds and

Locations of Stores

How to Handle Transporting and Storing

Service LevelsRecruiting

MiddlemenManaging

Channels

PromotionObjectivesBlendSalespeople Kind Number Selection Training MotivationAdvertising Targets Kinds of Ads Media Type Copy Thrust Who Prepares?Sales PromotionPublicity

PriceObjectivesFlexibilityLevel over

Product Life Cycle

Geographic TermsDiscountsAllowances

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Target Marketing

Pricing StrategyProduct Strategy

Promotion Strategy

Distributio

n (Place) S

trategy

Marketing MixMarketing Mix

Target MarketTarget Market

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Mass Marketing

Pricing Strategy

Product Strategy

Promotion Strategy

Distribution (Place) Strategy

Pricing Strategy

Product Strategy

Promotion Strategy

Distribution (Place) Strategy

Pricing Strategy

Product Strategy

Promotion Strategy

Distribution (Place) Strategy

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Target MarketTarget Market

+

Marketing Mix

Marketing Mix

Target MarketTarget Market

Marketing Mix

Marketing Mix

= Marketing Strategy

Marketing Strategy

+Time-

Related Details

Time-Related Details

Marketing Strategy

Marketing Strategy

Time-Related Details

Time-Related Details

Marketing Plan

Marketing Plan

+Other

Marketing Plans

Other Marketing

Plans

=

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

The Marketing Plan Guides Implementation and Control

Marketing Plan

Marketing Plan

Other Marketing

Plans

Other Marketing

Plans

A Firm’s Marketing Program

A Firm’s Marketing Program

=

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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Creative Strategy Planning Needed for Survival

2% 14% 14% 2%

(Well below average)

Poor Fair Good Exceptional

(Below average)

(Above average)

(Well above average)

Death-wish marketing

Best-practices marketing

68% (Average Marketing Program)

Failure

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A Marketing Success: Harley-Davidson

Course PacketLook for

the buzz

words:

customer

competition

company

product

price

distribution

promotion

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Facts of Harley Marketing• Customers: What are their demographics?Who are they?• 38, 53K, 60% married, 30% college, 95% male• “Rubbies” seeking individuality and escape from weekday pressures;• Competition: From?• Japanese firms, British Imports, California Company and Victor Bike;• Company: the up-and-downs in history?• 1903, great depression, WW2, 1950s,1960s, 1970s AMF, 1980s;• Product: What happened to the product? • Oil leaks and breakdowns• Restructuring?• Update equipment, improve production increase employee involvement, reduce cost, fewer employees,

cut in exec salaries, ties with suppliers, JIT deliveries• Current Harley?• Enhance quality, keep up with trends and customer needs, product lines of accessories and apparel, to

allow customized looks; • Price: What/why that level?• high-price, price inelasticity for exclusive image• Distribution(place):What was done? • carefully manages the number and location of dealers, help dealers design store layout and plan inventory

to meet local needs;• Promotion: What was done?• HOG rallies, Hog Tales magazine, printed ads to promote lifestyle

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Next Time

• Find a group of 5 if you have not got into any one or u can work alone

• Read Chapter 4• Think critically how any businesses around you

capitalize on the opportunities that are present.

See You Next Time!

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End Lecture 1a