Adv Topic Mrkting 9-2

8/3/2019 Adv Topic Mrkting 9-2

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IUNDERSTANDING MODERN

MARKETING

The Marketing Concept

Marketing Mix Model

Broadening Scope of Marketing

Marketing’s Role in the Organization

Creating Customer Value and Satisfaction

Relationship Marketing



“The underlying philosophy of modern marketing management(since the 1960’s) is the outward

focus on customers as the “Center of the Universe”



The Marketing Concept

Captured in terms such as: Customer orientation

Customer focused Customer driven

Customer centric

Customer satisfaction

Market driven

Exceed customerexpectations



Marketing Concept

Key Characteristics

Focus on customers

Profits = f (customer satisfaction)

Supply adjusts to will of demand

Assumes intense competitive environment

Long-term time horizon

Normative not descriptive model



Selling and MarketingConcepts Contrasted

Factory Existingproducts Selling andpromotion Profits throughsales volume

Targetmarket

Integratedmarketing

Profits throughcustomer

satisfaction

Customerneeds

Startingpoint Focus Means Ends

(b) The marketing concept

(a) The selling concept



Problems in Implementingthe Marketing Concept

Inertia, entrenchment (old ways die hard) Projection of own beliefs and values

Confusion of MC with superficial PR

Learning about customer needs difficult to

operationalize Information lost in organizational maze

Calls for integrated organization to supportmarketing effort

Requires continuous monitoring



Conclusion

Marketing concept ismore relevant than

ever as we enter the2nd decade of the 21st

century



Operational Model for

Implementing thePhilosophy of the Marketing

Concept is the:



The Marketing Mix Consists of Four Basic Strategic Variables

(the four “Ps”)

Product Strategy

Price Strategy Promotional Strategy

Place Strategy (Channels of

Distribution)



The role of marketingmanagement is to mix or

blend these four strategicvariables in such a way as

to meet the needs of...



THE TARGET MARKET

Target Market

Product Price Promotion Place



This process does

not take place in a

vacuum

E i t



Environment(Exogenous Variables)

Main Categories of Environmental Variables

Economic

Competitive

Technological

Socio-Cultural-Demographic

Legal-Political-Government



Illustrative Representation

of the Marketing Mix

P l a c e

InternalControllable

Variables

(endogenous)

Product

P r i c e

PromotionTargetMarket

Environment•Economic•

Competitive•Socio-Cultural-Demographic•Legal-Political-Govt•Technology

Th M k i Mi M d l P



Internal

ControllableVariables(endogenous) P

r o d u

c t

Price

P r o m o t i o n

TargetMarket

Environment•Economic•Competitive•Socio-Cultural-Demographic•Legal-Political-

Government•Technology

Place

The Marketing Mix Model PortraysMarketing Management as:

•Based on the marketing concept•Having a supply side anddemand side•Supply adapting to demand•Highly interactive•An open system•Requiring human direction

•Highly dynamic process•An extremely challenging managerial task•Universally applicable to

virtually any organization•Global in scope



Marketing’s BroadenedScope

Manufacturers Retailers

Accounting

Law

Organizations

Non-profits Universities

Government

People (political

candidates) Countries



Marketing as a StrategicComponent of the Organization

Marketing is elevated to a level

of strategic position in theorganization



Marketing-ManagementInextricably Tied to Decisions

Involving:

Future direction of the organization

Markets to be served

Creation of competitive advantage

Long term organizational performance



Therefore Strategic MarketingManagement Consists of at Least

Six Major Areas

1) Defining the organization’s business

2) Specifying the purpose of the organization

3) Identifying opportunities4) Formulating product/market strategies

5) Budgeting: financial, production, human resources

6) Monitoring, evaluating, and adapting



Defining the Organization’sBusiness

Type of customers (markets) to be served

Needs of those customers Means by which organization will meet the needs

Competitive advantage (attainment and sustained)



Production

Output and efficiency measures, e.g. output per

Man hour

Finance

ROI ROS

Profit

Cash Flow

Marketing

Sales Volume Margin

Market Share Customer Satisfaction

Specifying the Purpose of theOrganization

Aspirations of the organization andwhat it wishes to achieve ie.,

objectives and goals



Identifying OrganizationalOpportunities

External (environmental) opportunitiesmatched with internal (organizational)

capabilities

What do we do best? (distinctive competency)

What must we do? (success requirements)

What might we do? (environmental opportunity)

Formulating Product/Market



Formulating Product/MarketStrategies

MarketPenetration

MarketDevelopment

New Offering

Development

Diversification

EXISTING NEW

EXISTING

NEW

MARKETSOf f

ering

s

B dgeting Financial



Budgeting, Financial,Production, and Human

Resources

Financial implications and allocations relevantto the marketing plan

Revenue, expense, and profit projections

Cost allocations made

M it i E l ti d



Monitoring, Evaluating and Adapting Marketing Strategy

Marketing audit --comprehensive,systematic, independent, and periodic

examination of the organization’smarketing objectives and strategies to

identify problems and opportunities as wellas to recommend ways of improving

marketing performance



Customer Value andSatisfaction

Input Customer Costs

Output Customer Benefits= = CV

Note: Costs defined broadlyBenefits (customer’s viewpoint)



Customer Satisfaction

Customer’s perception of perceived

performance of offering relative to experience

Perceived performance below expectations = dissatisfied customer

Perceived performance meets expectations = satisfied customer

Perceived performance exceeds expectations = delighted customer



Relationship Marketing

The development and maintenance of long-term, cost effective relationships

with customers in order to retain theirpreference



Relationship Marketing Compared

to Transaction (Traditional)Marketing

Factor Transaction Marketing Relationship Marketing

Time orientation Short-term Long-term______________

Organizational goal Make sale Retain customers________

Customer service priority Relatively low Very high______________Customer contact Low to moderate Frequent_______________

Customer commitment Low High__________________

Seller-customer interaction Conflict manipulation Cooperation; trust________

Source of quality Mainly from production Company wide _______

Tools for Implementing



Tools for ImplementingRelationship Marketing

Affinity programs

Frequent-buyer/user programs

Database marketingPartnerships (strategic alliances

Co-marketing and co-branding

EDI (electronic data interchange)

VMI (vender-managed inventory)

QR (quick response)

Life-time value of customer analysis

Social Networks

Documents

Adv Topic Mrkting 9-2