1. MARKETING: CONCEPT ORIENTATION ENVIRONMENT
AN OVERVIEW OF MARKETING MANAGEMENT-I
LECTURE 1
MARKETING:
CONCEPT
ORIENTATION
ENVIRONMENT

2. Definitions of Marketing
The management
process responsible for
anticipating and
satisfying customer
requirements profitably
(Chartered Institute of
Marketing)
The process of
defining, anticipating and
creating customer needs
and of organizing the
company’s assets and
resources to satisfy them
for the greater profit of
the customer and the
firm (Anon)
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3. What marketing is not
“A sophisticated form of selling done by graduates”
“Advertising, sales promotion, selling, PR, direct mail, market research”
“What the marketing department does”
“A process which increases costs”
“An irrelevance to what I do”

4. Some definitions CUSTOMER
Person or organisation who actually buys the product or service
BUYER
Same as customer but more B2B
CLIENT
A customer for whom a service is performed
CONSUMER
The person who ultimately consumes or uses the end product

5. Some definitions PROSPECT A potential customer MARKET
The actual or potential customers for a given product or service
STAKEHOLDER
Anyone with a stake in the organisation

6. 3 Levels of Marketing 1st Level: Tactical Output
(promotional literature, advertising – WHAT THEY SEE)
2nd Level: Management Process
(allocation of resources – WHAT WE DO)
3rd Level: Marketing Orientation
(a philosophical approach to doing business which puts customer at the heart of the enterprise – HOW WE ACT)
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7. Evolution of the Marketing Concept
Integrated
customer
focus
Marketing
Orientation
Long run profits
through customer
satisfaction
Sales
Orientation
Push! Push!
Sell! Sell!
by promotion
Short term
gains in profit
via sales increases
Production
Orientation
“Any colour you
like, as long as
it’s black”
Profits through
production controls 16 15

8. The Marketing Concept Marketing concept Customer orientation
The achievement of corporate goals through meeting and exceeding customer needs better than the competition
Marketing Concept
The achievement of corporate goals through meeting and exceeding customer needs better than the competition
Customer orientation
Corporate activities are focused upon providing customer satisfaction
Integrated effort
All staff accept the responsibility for creating customer satisfaction
Goal achievement
The belief that corporate goals can be achieved through customer satisfaction
Customer orientation
Corporate activities are focused upon providing customer satisfaction
Integrated effort
All staff accept the responsibility for creating customer satisfaction
Goal achievement
The belief that corporate goals can be achieved through customer satisfaction 2

9. VMV What are Vision, Mission and Values?
What part does each of the above play in helping a company achieve its goals?
Watch the video clip of a well-known organisation, and work out their VMV

10. Possible Descriptions
VMV
Issue
Possible Descriptions
What are we here for?
Purpose
Mission
Aim
Where are we going?
Vision
Goal, destination
Strategic Intent
What beliefs will guide our behaviour?
Values, credibility
Ethos, principles
Guidelines, rules ?

11. Review - the marketing concept
SOMETHING OF VALUE
money, credit, donations, labour, goods
BUYER
(consumer)
Satisfaction
Exchange process
SELLER
(provider)
Profit
SOMETHING OF VALUE
goods, services, ideas

12. The Marketing Environment
VMV
Macroenvironment
Economic
Legal
Microenvironment S W O T
Suppliers
Customers
Company
Distributors
Competitors
Social
Political
Technological

13. WHY scan the environment?
Scanning the environment
WHY scan the environment?
“Assessing the potential impact of likely changes in the environment offers organisations an advantage over their competitors by enabling decision-makers to narrow their range of options.
It is clear that, in a dynamic & complex business environment, attempting to forecast sometimes discontinuous trends is fraught with difficulty…..
However, to do nothing is even more dangerous for an organisation, as is over-reliance on internal sources of information, rather than external channels”

14. Model 1 - Using PEST/PESTEL analysis to scan the “MACRO” environment
Legal
Ecological
ORGANISATION
Economic
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Social
Technological
Political

15. Some possible PEST factors
Political / Legal
Deregulated markets
Taxation policy
International trade policy
Joint Ventures legislation
Social / Ecological
Population demographics (household size, no of cars)
Income distribution
Level of environmental concern
Attitudes to work & leisure
Education levels
Economic
Business cycle
Interest rates / inflation
Unemployment level
Raw materials availability
Disposable income
Technological
Govt spending on research
Speed of take-up of new technology
Barriers to entry
Impact of Internet
Merging of “ unrelated” sectors e.g. banks & telecomms
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Note: EXAMPLES ONLY!

16. Model 2 – Using 5 Forces analysis to scan the “MICRO” environment
New
Entrants
Threat of
New Entrants
Bargaining
Power of
Suppliers
Industry
Competitors
Bargaining
Power of
Buyers
Suppliers
Buyers
Intensity of
Rivalry
1.     Porter’s 5 Forces.
(The ideas discussed here are attributable to the work of Professor Michael Porter of Harvard Business School)
In any segment there is a limited total amount of profit that can be shared among the various players. Hence, given normal business drivers, they can all be expected to fight for the bulk of the profit. This means that competitor analysis must be extended beyond conventional rivals to include all of these forces. Specifically, firms need to understand structural rivals’ needs, power, capabilities and motivations and to develop strategies to achieve their own profit and performance objectives given the constraints the five forces impose.
Ø       Customers: in consumer markets, end customers and powerful retailers apply pressures for lower prices and better benefits. In industrial and other organisational markets, customers and/or channel members apply this same profit pressure.
They demand the best levels of benefits at the lowest attainable prices by playing off the various suppliers against each other. Their ability to do this is strong when: products are not well differentiated: they have monopoly power: and can buy in bulk. Defensive options for suppliers include: building differential advantage; fixing long-term contracts; forward integration; and targeting the less powerful customers.
Ø       Conventional Competitors: Rivalry here is usually most intense in oligopoly markets (where only a few firms supply all or most of the market). This typifies most markets. Company growth is only possible at the expense of rivals so that fighting for market share is common and fierce and, of course, encouraged by customers. The outcome is usually downward-spiralling profits for all competitors that are unable to protect themselves.
Ø       New Entrants: These are competitors entering markets they haven’t played in before because they believe they have differential advantage. Further, as they are not known or understood as well as existing rivals, their actions are less predictable, they raise market uncertainty and frequently cause existing firms to panic, thus increasing competitive pressure. Examples include: creation of differential advantage; patents; captive channels and/or suppliers and threats of massive retaliation by attacking entrants own markets or market spoiling tactics.
Ø       Substitutes: These take the form of new technologies or benefits that satisfy buyer needs more effectively than they were satisfied before. For instance: railways damaged the canal business; electricity replaced steam; calculators killed off the slide rule; television eroded cinema attendance; Encarta CD Rom replaced Encyclopaedia Britannica.
Ø       Suppliers: Competition with suppliers is similar to that with buyers. Firms and their conventional rivals seek maximum benefits and minimum prices from suppliers, who are seeking the opposite. Supplier power is enhanced when suppliers are few, have a strong differential advantage, cannot be played off against each other, provide essential inputs, or can integrate forward, and when users face high switching costs. Options for defence include: accepting lower margins; shifting the costs to customers; finding new suppliers or substitutes; integrating backwards; fixing long-term deals and/or targeting particular suppliers with which to form close strategic partnerships.
Threat of
Substitutes
Substitutes

17. 5 Forces example: (Mobile phones)
Weak
Cost of licence
High barrier to entry
Huge cost to 3G
New functions?
Weak
Nokia
Motorola
Ericsson
Competing strongly
For share of
Mature market
Strong
Customers have many
competing offers, some
including airtime,
some not.
Cheap deals through
Internet
Strong
Airtel
Reliance
Vodaphone
Medium
Customers returning to
land lines
Convergence with PDAs
Location technology

18. Basic information we need
CUSTOMERS COMPETITORS
Who are they?
Who could they/should they be?
How are their needs/expectations met?
How loyal are they?
How do they rate the company – product/price/service
How do they rate the company in relation to the competition?
What relevant broad macro changes are taking place?
Who are they and what are their objectives?
Are they likely to change?
What is happening to market share?
Can we compare our profitability with their profitability?
What are their strengths and weaknesses?
How do customers rate the competition in relation to our company?
What will provoke the biggest retaliation from the competition?

19. Internal analysis What are we doing right? What are we doing wrong?
What are our internal strengths?
What are our internal weaknesses?

20. Bringing Macro/Micro/Internal information together - Marketing Audit Summary – Model 3 - SWOT
Use the preceding steps to help complete the SWOT.
SWOT should come at end of Marketing Audit and summarize it.
Highlight the key issues from the SWOT, - summary of the issues and implications for the company.
Should provide a succinct, interesting and readable summary of the state of the business and the external factors and trends impacting on it.
Beware! Inherent simplicity of the technique is often its undoing
Can become vague, confused, irrelevant, lacking in direction
A strength is only a truly a strength if you are stronger than your competitors on that attribute

21. An example of a SWOT Strengths Opportunities Weaknesses Threats
Strong market research teams
Distribution network
Strong financial resources
Service Reputation
Opportunities
Deregulated markets for utilities
Competitors prices rising due to currency fluctuation
Strategic alliance possibilities
Weaknesses
Admin costs 20% higher in UK than elsewhere
Major competitors more innovative
Little synergy between divisions
Threats
EC widening may bring in low cost competitors
Business activity in world economy starting to slow
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22. Effective use of SWOT STRENGTHS WEAKNESSES Matching Strategies
Conversion
Strategies
OPPORTUNITIES
THREATS
Conversion
Strategies

23. Model 4 - The Marketing Plan
Corporate objectives
Marketing audit
SWOT
Assumptions
Marketing objectives/strategies
FEEDBACK
Estimate results
Alternative plans/
mix
Measure/review
Programmes

24. 10 benefits for you from Marketing Planning
It looks like hard work – why bother?
10 benefits for you from Marketing Planning
Hitting the best customer targets
Winning new customers
Expanding markets
Beating the competition
Keeping abreast of market developments
Using resources to best advantage
Improving internal communications
Minimising threats to Reduce risk and surprise
Identifying company strengths and weaknesses
Achieving consistency