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Marketing Management Marketing Management 101 101 Professor Enrique Soriano Professor Enrique Soriano III III

Sme022208 soriano

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Marketing Management Marketing Management

101101

Professor Enrique Soriano IIIProfessor Enrique Soriano III

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Marketing Means ChangeMarketing Means Change

Change has been constant Change has been constant throughout the history of marketingthroughout the history of marketing

Markets are in a constant state of Markets are in a constant state of changechange

To survive, you have to move with To survive, you have to move with the marketthe market

To do this, you have to change your To do this, you have to change your marketingmarketing

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Everything ChangesEverything Changes Customers grow old, develop new Customers grow old, develop new

tastes, acquire new values, earn tastes, acquire new values, earn different amounts and prioritize different amounts and prioritize “new” needs“new” needs

New competitors emerge, laws and New competitors emerge, laws and regulations change and technology regulations change and technology sends out shockwavessends out shockwaves

The world and marketing are The world and marketing are changingchanging

In short, NOTHING STAYS THE SAME!In short, NOTHING STAYS THE SAME!

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Today’s winners may be Today’s winners may be tomorrow’s loserstomorrow’s losers

Guess what percentage of the Guess what percentage of the world’s 500 most successful world’s 500 most successful (Fortune 500) companies in 1957 (Fortune 500) companies in 1957 still exist today?still exist today?

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33% or one third 33% or one third

who were at the top in who were at the top in 1957 still 1957 still survivesurvive today today

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Success is the Success is the temporary suspension oftemporary suspension of

failurefailure

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In search of excellence?In search of excellence?

The book highlighted 46 outstandingly The book highlighted 46 outstandingly excellent companiesexcellent companies

How many of these so-called excellent How many of these so-called excellent companies of the 80’s have survived companies of the 80’s have survived

today?today?

66

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Dot.com companies?Dot.com companies? Jump forward to the turn of the Jump forward to the turn of the

millenniummillennium

(2000) and 95-98 per cent of the dot (2000) and 95-98 per cent of the dot coms were forecasted to failcoms were forecasted to fail

You can see them falling today You can see them falling today Its not just new on-line companies but Its not just new on-line companies but

well established major businesses that well established major businesses that get left behind by the relentless pace get left behind by the relentless pace of change and changing marketsof change and changing markets

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The pattern continues…The pattern continues…

Continual success requires Continual success requires continual monitoring and continual monitoring and responses to change …responses to change …often before the change often before the change actually occursactually occurs

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Marketers must keep their Marketers must keep their antennae outantennae out

We must observe change and We must observe change and respond to itrespond to it

We must look towards long term We must look towards long term changes and future market trend changes and future market trend that may affect directly and that may affect directly and indirectly their marketsindirectly their markets

Today’s marketers must have to be Today’s marketers must have to be keen observers of changekeen observers of change

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As Jack Welch ex CEO of General As Jack Welch ex CEO of General Electric pointed out…Electric pointed out…

““If the rate of change inside a If the rate of change inside a company is less than the rate company is less than the rate of change outside a company, of change outside a company, then the end is in sight” then the end is in sight”

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Why are most companies Why are most companies weak in marketing?weak in marketing?

Consider this recent list of pathetic Consider this recent list of pathetic marketingmarketing• 95% do not design customer experiences to 95% do not design customer experiences to

evolve specific emotionsevolve specific emotions• 85% do not identify customer expectations85% do not identify customer expectations• 70% of major Asian companies do not reply to 70% of major Asian companies do not reply to

an email inquiry in 4 daysan email inquiry in 4 days• 70% of Asian companies could not identify 70% of Asian companies could not identify

customers at risk of defectioncustomers at risk of defection• 80% of Asian companies were unable to 80% of Asian companies were unable to

identify why they lose customersidentify why they lose customers

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What is Marketing?What is Marketing?

There are many different definitions of There are many different definitions of marketingmarketing

It can be defined as a range of activities It can be defined as a range of activities including advertising, selling, PR, sales including advertising, selling, PR, sales promotion, direct mail, pricing, market promotion, direct mail, pricing, market research and so on,research and so on,

It is a management process responsible for It is a management process responsible for identifying, anticipating and satisfying identifying, anticipating and satisfying customer requirements profitably. customer requirements profitably.

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What is Marketing?What is Marketing?

The great thing about marketing is The great thing about marketing is that it takes an hour to learn and a that it takes an hour to learn and a lifetime to masterlifetime to master

Drucker, the great management Drucker, the great management theorist had an equally appealing theorist had an equally appealing

phrase which said” phrase which said” ““The role of The role of marketing is to make the marketing is to make the sales force redundant”sales force redundant”

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What is Marketing?

Classic definition of marketing…

Getting the right products in the right place at the right price at the right level of promotion

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What is Marketing?

Marketing is about identifying consumer needs, meeting those

needs in terms of product development and very effectively

communicating to customers that you have met their needs and that

includes pricing , that includes the right communication channels, it

includes the right messages and the right media for those messages.

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What is Marketing?

I define Marketing as looking at people’s needs and wants and matching

them with certain products that are available now, today and in the future!

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Marketing is about A Focus on Benefits…

Customers buy products but they want benefits

What people really desire are not products but satisfying experiences

Ray Croc built McDonalds on one simple formula:Quality, Service and Cleanliness

“Doing yesterday better”

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Who Needs Marketing?

The key is to approach marketing in a proper, disciplined approach

That stays close to the customer, collects feedback and develops new and improved products for tomorrow

The time is ripe for your organization to adopt marketing excellence!

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Who Needs Marketing?

•Everyone needs marketing

•Its not just big corporations that use marketing techniques

•Even religious groups and non profit organizations and even our police force employ marketing techniques to a certain degree

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What is Marketing?

In short…

Marketing is common sense applied!

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Why bother with researching Why bother with researching needs and wants?needs and wants?

Customers are at the centre of the Customers are at the centre of the marketing conceptmarketing concept

Customer needs and wants are not always Customer needs and wants are not always apparentapparent

They have to be continually researchedThey have to be continually researched

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Why bother with researching Why bother with researching needs and wants?needs and wants?

We have basic needs for food, shelter, We have basic needs for food, shelter, love and so onlove and so on

Wants are specific desires some would Wants are specific desires some would prefer hamburger, others vegetarian prefer hamburger, others vegetarian meal, others Indian, Chinese or meal, others Indian, Chinese or MexicanMexican

The same person in a different The same person in a different situation, might only want a plain bar situation, might only want a plain bar of chocolateof chocolate

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Why bother with researching Why bother with researching needs and wants?needs and wants?

Understanding customers’ needs and Understanding customers’ needs and wants is absolutely vital for long term wants is absolutely vital for long term survivalsurvival

Not everyone can spot a new product Not everyone can spot a new product opportunity or a relevant market trend opportunity or a relevant market trend that satisfies a customer’s, often that satisfies a customer’s, often hidden, needshidden, needs

Even the best get it wrong, and Even the best get it wrong, and misinterpret customer needs and wantsmisinterpret customer needs and wants

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Is Marketing an Artor a science?

Can marketing managers predict what will happen when they mix marketing ingredients together?

If they reduce price will sales go up…or down?

Or if they increase advertising… will sales go up… or down?... This week, this month, next year or in the long term… what will happen?

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Is Marketing an Art or a science?

Are human beings conditioned by TV advertising, or by their neighbors or are they totally free Agents

With the advertising intensity of the cellular business, suddenly the SMS craze change the behavior patterns of 30 million Filipinos

Marketing moves beyond the realm of physical responses and into the realm of mental responses such as shifts in awareness, attitudes, intentions to purchase, and so on

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Is Marketing an Art or a science?

Can marketers buy “ share of mind” i.e. calculate how many advertisements it takes to achieve carefully determined levels of brand awareness

Marketers can predict aggregate numbers of customers who will respond to direct mail shots or TV advertisements

Or is there so much creativity in marketing that many would consider it to be an art form? So it an art, a science or both? Time to think…

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ESTIMATED MONTHLY INCOME ESTIMATED MONTHLY INCOME (Source: PSRC/AGB data)(Source: PSRC/AGB data)

   % Pop HH% Pop HH

  Estimated Estimated Monthly IncomeMonthly Income

Total Total PhilippinesPhilippines Metro Manila Metro Manila

Upper AUpper A P 100, 000 +P 100, 000 +

1%1% 6%6%Upper BUpper BP 50, 001 - 99, P 50, 001 - 99, 999999

Upper Middle C1Upper Middle C1P 30, 001 - 50, P 30, 001 - 50, 000000 7%7% 14%14%

Middle C2Middle C2P 15, 001 - 30, P 15, 001 - 30, 000000 18%18% 28%28%

Lower DELower DE P 15, 000 - BelowP 15, 000 - Below 74%74% 52%52%

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Is Marketing an Artor a science?

Or is there so much creativity in marketing that many would consider it to be an art form? So it an art, a science or both? Time to think…

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Are markets becoming more competitive?

Somewhere out there, as I speak, competitors are Analyzing And Targeting our customers

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Are markets becoming more competitive?

Markets are becoming more competitive today than ever before

Partly because of global competition and partly because reaction times are quicker and product life cycles are shorter

No market is safe from competition

Competition can attack an organization’s sales,Market share or profits anytime

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Are markets becoming more competitive?

That is why we need to spend time studying

1.Customers

2.Competitors

3.Market Trends

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Applying segmentation in your organization

It is a unique group of customer (or potential customers) who share some common characteristics that make them different from other groups of customers

Some segments have different needs, require different versions of the same product, pay different prices, buy in different places, can be reached by different media

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Applying segmentation…Customers and prospective customers can be grouped together or ‘segmented’ in lots of different ways… age, sex, where they live, how they live, what they earn, and so on

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Knowing your customer!Allocate time to know your customers as each segment that is chosen or targeted needs to be treated differently in some way.

Segmenting and selecting the best target segments is called target marketing

This is a vital marketing skill

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Knowing your customer!

In the 60’s, we had mass marketing

In the 70’s segmentation became more popular

In the 80’s target marketing became so precise that narrower, smaller segments or niche markets emerged

In the 90’s one to one grew as technology spread and named individuals where targeted directly through database marketing’s mail and telesales

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Knowing your customer!Marketers today satisfy smaller and smaller segments, right down to individual requirements

Mass Customization

New millennium strategy that will compel many products and services to tailor-made their offerings to thousands and even millions of individual requirement i.e. newspapers, publications and websites

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Stay Close to your Customers!

It also helps to see the target customers more effectively

It allows the marketer to break up the market, focus on the best segments and find new customers who might otherwise have been lost in the madding crowd

Sloppy targeting not only waste resources but it can also damage an organizations’ reputation

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Stay Close to your Customers!

The closer understanding of customer needs helps protect an organizations’ existing customer base from the inevitable onslaught of competitors and their offerings

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Why bother with STP?

It not only reduce waste but also help boost sales and find the best prices

Some people are more likely to buy your product, service or idea than other people

Time spent carefully segmenting and accurately targeting helps to find those people.

Without segmentation, the likelihood of success reduces

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How do you select your How do you select your target markettarget market

SizeSize ProfitabilityProfitability GrowthGrowth CompetitionCompetition Resources requiredResources required

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What exactly is What exactly is positioningpositioning

Effective positioning requires an in-depth Effective positioning requires an in-depth understanding of the market, its needs, understanding of the market, its needs, its segments and the target market its segments and the target market selectedselected

Positioning strategy is based on whether it Positioning strategy is based on whether it is is

A. Required by the marketA. Required by the market B. DistinctiveB. Distinctive

C. SustainableC. Sustainable

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Why bother with planning?

It’s a pain in the neck!

It’s a waste of time!

I need to be out there with my customers!

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Why bother with planning?

But wait a minute…

How much money is needed for advertising and promotions?

Is there money available for a new brochure?

What is the sales campaign going to happen?

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Why bother with planning?

Without a plan there is no control, just Different people pushing in different Directions

Without a plan, you lose control and Sometimes your business

Why some organizations have big Increases in sales and profits and yet they still go out of business

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Why bother with planning?

Why some organizations have big Increases in sales and profits and yet they still go out of business

Because of the cash flow problems Caused by unplanned growth

Sales and marketing must integrate with other functions like finance

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Why bother with planning?

Planning forces the manager to consider the future… even create the future!

Managers need to move away from the day to day operations and reflect on the bigger picture– how it all fits Together

Plans integrates all activities!

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Why bother with planning?

Planning along with leading, organizingAnd controlling- is one of the key skills that a manager and even an employeemust have

To summarize, planning saves time and Money, reduces stress, panic and heart Attack, paints a bigger picture, looks to the future, helps a person organize effectively

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Marketing must permeate throughout the whole organization as part of the corporate culture

MARKETING IS TOO IMPORTANT TO BE LEFT TO THE MARKETING DEPARTMENT

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Enrique SorianoEnrique Soriano

[email protected]@belomed.com