Presentation on theme: "U’ MGMT14 marketing … ‘where good ideas come from"— Presentation transcript:
1U’ MGMT14 marketing opportunities @ … ‘where good ideas come from … mnm institute … makes sense
2Element and Performance Criteria 1. Identify marketing opportunities1.1. Analyse information on market and business needs to identify marketing opportunities1.2. Research potential new markets and assess opportunities to enter, shape or influence the market in terms of likely contribution to the business1.3. Explore entrepreneurial, innovative approaches and creative ideas for their potential business application, and develop into potential marketing opportunities
3Element and Performance Criteria 2. Investigate marketing opportunities2.1. Identify and analyse opportunities in terms of their likely fit with organisational goals and capabilities2.2. Evaluate each opportunity to determine its impact on current business and customer base2.3. Use an assessment of external factors, costs, benefits, risks and opportunities to determine the financial viability of each marketing opportunity2.4. Determine probable return on investment and potential competitors2.5. Describe and rank marketing opportunities in terms of their viability and likely contribution to the business
4Element and Performance Criteria 3. Evaluate required changes to current operations3.1. Identify and document changes needed to current operations to take advantage of viable marketing opportunities3.2. Ensure organisational changes to service an increased or different customer base include provision for continued quality of service to existing customers3.3. Estimate resource requirements for changed operations3.4. Determine and communicate viability of making changes to current operations to key stakeholders3.5. Document newly identified marketing opportunities and required changes
6An Overview of Marketing Marketing is the process of identifying the needs and demands of potential customers, in order to be able to provide them with their desired products/services.Marketing is not just selling, or advertising, or promotion. It is customer focused and requires you to organise your business in such a way that you can:Identify your potential customersIdentify their needs and wantsProvide products/services to suit these needs and wantsTell your customers about your business and what it offersPersuade them to buy your products/servicesMake them satisfied with their purchasesMake a profit
7Marketing involves knowing and understanding WHO? … The prospects: customers and competitors WHAT? … The product/service WHERE? … The location of premises and markets WHY? … The customers’ buying motives and needs WHEN? … The right product/service at the right place, at the right time HOW? … Production, distribution and promotion HOW MUCH? … The price customers will pay
8The Marketing Process Involves: Gathering information Identifying key issuesDeveloping strategies and actions
9Essential Steps in Marketing Involvesselecting a product/service for which there is a demand,identifying your distribution or sales outlets,selling your product/serviceensuring that your customers are satisfied with their purchases.
10Marketing … processRESEARCH MARKET … research the market for your product/service SEGMENT MARKET … determine the types of customers that exist in the market place ACTION MARKET … align your product/service to the target market using design, packaging etc. CALCULATE PRICE … calculate the price of your product/service based on the market tolerance and your required profit
11Marketing … processPROMOTION STRATEGY … devise a promotion strategy – advertising, business cards, tags and labels, etc. DISTRIBUTION … decide how you will distribute your product/service SEEK FEEDBACK … seek customer and distribution feedback IMPLEMENT CHANGES … make any required changes in your product/service, quality, price and mix
13Marketing’s impact on individual consumers WRH50100 – Diploma of Hairdressing Salon Management (Stage 7)Lecture NotesMarketing’s impact on individual consumersConsumers have many concerns about how well marketing systems serve their interests.Surveys usually show that consumers hold mixed or even slightly unfavourable attitudes toward marketing practices.Marketing’s Impact on ConsumersSocial and ethical issues in marketing p 543A number of social and ethical issues arise from marketing practice and emerge as areas of attention for marketing scientists. These matters generate considerable criticism of marketing practice, some of which is justified but much of which is not. The underlying concern is whether certain marketing practices hurt individual consumers, society as a whole or other business firms.Marketing’s Impact on Individual Consumers p543Consumers have many concerns about how well marketing systems serve their interests. Surveys usually show that consumers hold mixed or even slightly unfavourable attitudes towards marketing practices. One survey found that consumers are worried about high prices, poor-quality and dangerous products, misleading advertising claims, and several other marketing-related problems. Consumer advocates, government agencies and other critics have accused marketing of harming consumers.Developed by Vicki J Hetherington 2006
14Marketing’s impact on individual consumers WRH50100 – Diploma of Hairdressing Salon Management (Stage 7)Lecture NotesMarketing’s impact on individual consumersConsumer worries include:High pricesPoor-qualityDangerous productsMisleading advertising claimsDeceptive practicesBreaches of privacyHigh-pressure sellingPlanned obsolescencePoor service to disadvantaged consumersMarketing’s impact on individual consumers p543Developed by Vicki J Hetherington 2006
15Marketing’s Impact on Society WRH50100 – Diploma of Hairdressing Salon Management (Stage 7)Lecture NotesMarketing’s Impact on SocietyCriticismsof Marketing’sImpact onSocietyFalse Wants andToo Much MaterialismCulturalPollutionToo MuchPoliticalPowerToo FewSocialGoodsMarketing’s Impact on Society ppThe marketing system has been accused of adding to several ‘evils’ in society. Advertising has been a special target – so much so that at one point, the American Association of Advertising Agencies launched a campaign to defend advertising against what it felt to be common but untrue criticisms. Similar campaigns have been undertaken at different times in other countries.False wants and too much materialism -- Social commentators have charged that the marketing system urges too much interest in material possessions. In Australia between 1992 and 2001, the ratio of gross household debt to household discretionary income rose form 90% to 148%. Another alarming indicator in this regard is the inequality in the distribution of wealth such that, in the US 1% of households hold 39% of the nation’s wealth, receiving as much after-tax income as the combined incomes of the lowest earning 100 million households.Too few social goods -- Business has been accused of overselling private goods at the expense of public goods. As private goods increase, they require more public services that are usually not forthcoming.Cultural pollution -- Critics accuse the marketing system of creating cultural pollution. Our senses are being assaulted constantly by advertising. Commercials interrupt serious program; pages of ads obscure printed matter; billboards mar beautiful scenery; hypermedia advertisements mar the educational qualities of the Internet. These interruptions pollute people’s minds with messages of materialism, sex, power and status.Too much political power -- Another criticism is that business wields too much political power. Advertisers are accused of holding too much power over the mass media, limiting their freedom to report independently and objectively. All industries promote and protect their interests. They have a right to representation in government and the mass media, although their influence can become too great.Developed by Vicki J Hetherington 2006
16Marketing’s impact on other businesses WRH50100 – Diploma of Hairdressing Salon Management (Stage 7)Lecture NotesMarketing’s impact on other businessesThere are three major problems involved:Acquisition of competitorsMarketing practices that create barriers to entryUnfair competitive marketing practicesMarketing’s impact on other businesses p545Critics of marketing charge that an organisation’s marketing practices can harm other companies and reduce competition which ultimately affects consumers.For example, critics argue that acquisition harms firms and reduces competition when large companies expand by acquiring others rather than developing new products. Sometimes acquisitions are good for consumers as economies of scale may result in lower selling prices.Another practice may be that large companies tie up suppliers and dealers and keep out competitors that way.Various laws work to prevent predatory competition, but it may be difficult to prove that an intent or action was predatory.Developed by Vicki J Hetherington 2006
17Private and public actions to regulate marketing WRH50100 – Diploma of Hairdressing Salon Management (Stage 7)Lecture NotesPrivate and public actions to regulate marketingThe two major movements are consumerism and environmentalismThere are movements that attempt too ensure that ethical business practicesare adoptedparticularly at times when executive salaries seem to be disproportionately high Example: HIH, Ansett, One Telor when fraud and misappropriation of company monies are uncovered Example: EnronPrivate and public actions to regulate marketing p546Developed by Vicki J Hetherington 2006
18WRH50100 – Diploma of Hairdressing Salon Management (Stage 7)Lecture Notes ConsumerismBusiness firms have been the target of organised consumer movementssince the 1960s.Why?Consumers have become better educatedProducts have become more complex and hazardous,Marketing organisations have raised consumers’ expectations as they seek to gain sustainable competitive advantage.Consumerism p 546Business firms have been the target of organised consumer movements since the 1960s. Consumers have become better educated, products have become more complex and hazardous, and marketing organisations have raised consumers’ expectations as they seek to gain sustainable competitive advantage. Many consumer groups have been organised, politicians lobbied and consumer laws passed.Consumerism: ‘An organised movement of consumers whose aim is to improve the rights an power of buyers in relation to sellers‘.Consumerism is an organised movement of citizens and governmentagencies to improve the rights and power of buyers in relation to sellers.Developed by Vicki J Hetherington 2006
19Traditional sellers’ rights WRH50100 – Diploma of Hairdressing Salon Management (Stage 7)Lecture NotesTraditional sellers’ rightsThe right to introduce any product in any size and style, provided it is not hazardous to personal health or safety; or, if it is, to include proper warnings and controls.The right to charge any price for the product, provided no discrimination exists among similar kinds of buyers.The right to spend any amount to promote the product, provided it is not defined as unfair competition.The right to use any product message, provided it is not misleading or dishonest in content or execution.The right to use any buying incentive schemes, provided they are not unfair or misleading.Traditional sellers’ rights (p )The right to introduce any product in any size and style, provided it is not hazardous to personal health or safety, or if it is, to include proper warning and controls.Developed by Vicki J Hetherington 2006
20Traditional buyers’ rights WRH50100 – Diploma of Hairdressing Salon Management (Stage 7)Lecture NotesTraditional buyers’ rightsInclude:The right not to buy a product that is offered for sale.The right to expect the product to be safe.The right to expect the product to perform as claimed.Traditional buyers’ rights p 547Comparing sellers’ and buyers’ rights, many believe that the balance of power lies on the sellers’ side. Critics feel that the buyer has too little information, education and protection to make wise decisions when facing sophisticated sellers.Consumer advocates call for the following additional consumer rights:· The right to be well informed about important aspects of the product.· The right to be protected against questionable products and marketing practices.· The right to influence products and marketing practices in ways that will improve the ‘quality of life.’Each proposed right has led to more specific proposals by consumerists. Proposals related to consumer protection include strengthening consumer rights in cases of business fraud, requiring greater product safety, and giving more power to government agencies to establish and enforce minimum standards of commercial conduct. Proposals relating to quality of life include controlling he ingredients that go into certain products and packaging, reducing the level of advertising ‘noise’, putting consumer representatives on marketing organisation boards to protect consumer interests, and giving consumers more forms of legal redress.Consumers have not only the right but also the responsibility to protect themselves instead of leaving this function to someone else. Consumers who believe they got a bad deal have several remedies available, including writing to the marketing organisation president or to the media, contacting federal, state or local agencies or going to small claims tribunals.Developed by Vicki J Hetherington 2006
21Environmentalism Eco-Systems Growth Issues Pollution Long-Term Effects WRH50100 – Diploma of Hairdressing Salon Management (Stage 7)Lecture NotesEnvironmentalismEco-SystemsLong-TermEffectsGrowthIssuesPollutionEnvironmentalism ppWhile consumerists monitor whether the marketing system is efficiently serving consumer wants, needs and demands, environmentalists are concerned with marketing’s effects on the environment and with the costs of serving consumers. They are concerned with damage to the ecosystem, loss of recreational areas and the increase in health problems. These concerns are the basis for environmentalism ‘an organised movement of concerned citizens, businesses and government seeking to protect and improve people’s living environment’ (p 545).Environmentalists are not against marketing and consumption; they simply want people and organisations to operate with more care for the environment and thus achieve ‘sustainable development’. The marketing system’s goal should be to maximise quality of life. Environmentalism has hit some industries hard. Steel companies and public utilities have had to invest billions of dollars in pollution control equipment and costlier fuels. The motor vehicle industry has had to introduce expensive emission controls in cars. The list goes on. These companies have absorbed large costs and passed them on to buyers.Marketers must monitor the ecological properties of their products and packaging and they must raise prices to cover the environmental costs. Many analysts saw the 1990s at the ‘Earth decade’ in which protection of the natural environment became a major issue facing people around the world. Green marketing: developing ecologically safer products, recyclable and biodegradable packaging, better pollution controls and more energy-efficient operations. This creates some special challenges for global marketers. As international trade barriers come down and global markets expand, environmental issues are having an ever-greater impact on international trade. Environmental policies vary widely from country to country and companies find it difficult to develop standard practices around the world.Developed by Vicki J Hetherington 2006
22Adopting ethical marketing WRH50100 – Diploma of Hairdressing Salon Management (Stage 7)Lecture NotesAdopting ethical marketingEthical marketing is an approach by organisation's whereby theyrecognise that the task of marketing is to be both enlightened to society’sviews and ethical in the organisation's approach to society as a whole andto customersMost organisation's respond positively to consumerism and environmentalism in order to serve customers’ needs betterBy adopting these the company often takes a philosophical position that they instill in their employeesCompanies need to develop corporate marketing ethics policies as not all managers have fine moral sensitivityEthical marketing ppDeveloped by Vicki J Hetherington 2006
23WRH50100 – Diploma of Hairdressing Salon Management (Stage 7)Lecture Notes Societal Marketing‘A principle of enlightened marketing that holds that an organisation shouldmake marketing decisions byConsidering consumers’ wants,The organisation’s requirements,Consumers’ long-run interests andSociety’s long-run interests’Societal Marketing (p554)See Figure 15.1 p554 for a company’s statement of valuesAnd Figure 15.2, p.555, for the Australian Marketing Institute’s Code of Professional ConductDeveloped by Vicki J Hetherington 2006
24Legal Compliance in Marketing WRH50100 – Diploma of Hairdressing Salon Management (Stage 7)Lecture NotesLegal Compliance in MarketingA legal compliance program is a system designed to identify, manage, and reduce the risk of breaking the lawAustralian Standards guide many businesses and is a useful guide to implementing a compliance program in marketingIt draws together comments from courts, opinion of legal practitioners and best practiceLegal Compliance in Marketing ppSee next slide for AS detailsDeveloped by Vicki J Hetherington 2006
25Australian Standard AS3806 -1998 WRH50100 – Diploma of Hairdressing Salon Management (Stage 7)Lecture NotesAustralian Standard ASPositive commitment to compliance at board and CEO level communicated to staffPositive promotion of compliance by all managersContinuous monitoring and improvement of all compliance proceduresThe integration of all compliance procedures into the organisation’s day to day operating procedures, systems and documentsAdequate numbers of senior staff with high status and sufficient ‘clout’ to take responsibility for complianceOngoing education and training for all staffAustralian Standard AS p556According to AS a compliance program should:Aim to prevent and, where necessary, identify and respond to, breaches of laws, regulations, codes or organisational standards occurring in the organisationPromote a culture of compliance within the organisationsAssist the organisation in remaining or becoming a good corporate citizenDeveloped by Vicki J Hetherington 2006
26WRH50100 – Diploma of Hairdressing Salon Management (Stage 7)Lecture Notes Legal EducationLegal education programs tend to cover four sets of relationships that needto be monitored:Relationships with competitorsRelationships with suppliersRelationships with other parties such as patent licenseesThe relationship with the industry itselfLegal Education p555The program aims to reduce and avoid infringements of legal and ethical rightsDeveloped by Vicki J Hetherington 2006
27Coverage of a legal compliance program WRH50100 – Diploma of Hairdressing Salon Management (Stage 7)Lecture NotesCoverage of a legal compliance programCompetition lawContract and consumer lawStandardsProduct liabilityMarketing CommunicationSales and after-sales financeFranchisingIntellectual propertyCoverage of a Legal Compliance Program ppCompetition law; Contract and consumer law; Standards; Product liability; Marketing communication; Sales and after-sales finance; Franchising;Intellectual property p 558 : Copyright, Design, Trademarks, Patent protection, Computer chip circuitry, Confidential informationThe Trade Practices Act 1974 comes into play in Intellectual Property marketing cases.Developed by Vicki J Hetherington 2006
29Brand … meaning and equity Levels ofBrand MeaningBrandEquityPortfoliosAttributesValueBenefitsPersonalityLoyaltyPreferenceAwarenessLevels of Brand Meaning and Brand Equity ppA brand can deliver various levels of meaning:· Attributes. A brand first brings to mind certain product attributes.· Benefits. Customers do not buy attributes they buy benefits. Therefore, attributes must be translated into functional and emotional benefits.· Values. A brand also says something about the buyers’ values.· Personality. A brand also projects a personality.The challenge of branding is to develop a deep set of meanings for the brand. The most lasting meanings of a brand are its values and personality. They define the brand’s essence. Brands vary in the amount of power and value they have in the marketplace. Some brands are largely unknown to most buyers. Other brands have a fairly high degree of consumer brand awareness. Still others enjoy brand preference – buyers select them over the others. Some command a high degree of brand loyalty. A powerful brand has brand equity ‘the value of the brand based on the extent to which it has high brand loyalty, name awareness, perceived quality, strong brand associations and other assets such as patents, trademarks and channel relationships’ (p 271). Measuring the equity of a brand name is difficult, but many companies are willing to pay for it. The brand equity for Microsoft is $US65 billion. Behind every powerful brand is a set of loyal customers. The basic asset underlying brand equity is customer equity. This suggests that marketing strategy should focus on extending customer lifetime value.
31Types of Segmentation Industrial Markets Market SegmentationIdentifying your Target Market There are two types of broad markets your business is going to serve. 1. The industrial market: involves business-to-business marketing. 2. The consumer market: retailing typifies the activities of this market. Market segmentation is the process of dividing a market into distinguishable segments, in order to identify customer characteristics and prepare a customer profile.Types of Segmentation Industrial MarketsThe industrial market for example could be segmented by:automotiveretailreal estate and so on
32Types of Segmentation Consumer Markets A market segment is a group of customers related by some commoncharacteristic(s).Four different forms of market segmentation can be applied.Geographic segmentationDemographic segmentationPsychographic segmentationOperational variable segmentation
37Identifying your Target Market Target marketing is a focused, planned approach for identifying and winning the customers whose needs you can best satisfy.When preparing to identify new market opportunity you should analyse the following factors:market share,market trends and development,new and emerging marketsyour current profitability and sales figuresCustomer ProfilingHaving segmented the market and identifies your target market, you now need to profile the customers within the target market so that you are more readily able to satisfy their requirements.
38Customer Profile Types cont… Fundamental 2 types of customer profiles:Demographic Profile - focuses onWhere individuals liveTheir ageTheir genderTheir incomeTheir level of internet usageTheir preference for a particular distribution channelBehavioural Profile - focuses onwhat the customer is actually doing, andinterpreting this behaviourCan effectively answer questions regarding their level of satisfaction andtheir motivation to buy.
39Profiling YOUR customer You should be attempting to answer the following questions:Who are my customers?What do they typically buy and how did they hear about it?How often do they buyHow can my new product/service meet the customers’ needs?
40Customer Behaviour and Buying Decisions Food for thought It is essential that you understand that customers perceive a product in their own terms and have different needs and reasons or motives for purchasing particular products services.
41Individual Motives or Needs Social: reflect desire for friendship, companionship and long-term business relationships.Security: these needs represent our desire to be free from danger. Such needs motivate individuals to purchase products such as security systems, health insurance, smoke alarms and traveler's cheques.Physiological: these needs include hunger, thirst, shelter and so onSelf-actualisation: these needs reflect the desire for self-fulfillment and reaching one’s own potential.Esteem: these needs reflect the desire to feel adequate, competent and worthy in the eyes of others.Maslow studied what he called exemplary people such as Albert Einstein, Jane Addams, Eleanor Roosevelt, and Frederick Douglass rather than mentally ill or neurotic people, writing that "the study of crippled, stunted, immature, and unhealthy specimens can yield only a cripple psychology and a cripple philosophy." Maslow also studied the healthiest one percent of the college student population. In his book, The Farther Reaches of Human Nature, Maslow writes, "By ordinary standards of this kind of laboratory research... this simply was not research at all. My generalizations grew out of my selection of certain kinds of people. Obviously, other judges are needed.”Maslow's hierarchy of needs is a theory in psychology, proposed by Abraham Maslow in his 1943 paper A Theory of Human Motivation, which he subsequently extended to include his observations of humans' innate curiosity.Maslow's hierarchy of needs is predetermined in order of importance. It is often depicted as a pyramid consisting of five levels: the first lower level is being associated with Physiological needs, while the top levels are termed growth needs associated with psychological needs. Deficiency needs must be met first. Once these are met, seeking to satisfy growth needs drives personal growth. The higher needs in this hierarchy only come into focus when the lower needs in the pyramid are met. Once an individual has moved upwards to the next level, needs in the lower level will no longer be prioritized. If a lower set of needs is no longer being met, the individual will temporarily re-prioritize those needs by focusing attention on the unfulfilled needs, but will not permanently regress to the lower level. For instance, a businessman at the esteem level who is diagnosed with cancer will spend a great deal of time concentrating on his health (physiological needs), but will continue to value his work performance (esteem needs) and will likely return to work during periods of remission.RepresentationsThe lower four layers of the pyramid are what Maslow called "deficiency needs" or "D-needs": physiological, safety and security, love and belonging, and esteem. With the exception of the lowest (physiological) needs, if these "deficiency needs" are not met, the body gives no physical indication but the individual feels anxious and tense.Deficiency needsPhysiological needs include:For the most part, physiological needs are obvious - they are the literal requirements for human survival. If these requirements are not met (with the exception of sex), the human body simply cannot continue to function.Physiological needsWaterHomeostasisBreathingExcretionFoodSleepSexWith their physical needs relatively satisfied, the individual's safety needs take over and dominate their behavior. These needs have to do with people's yearning for a predictable, orderly world in which injustice and inconsistency are under control, the familiar frequent and the unfamiliar rare. In the world of work, these safety needs manifest themselves in such things as a preference for job security, grievance procedures for protecting the individual from unilateral authority, savings accounts, insurance policies, and the like.Safety needsFor the most part, physiological and safety needs are reasonably well satisfied in the "First World." The obvious exceptions, of course, are people outside the mainstream — the poor and the disadvantaged. If frustration has not led to apathy and weakness, such people still struggle to satisfy the basic physiological and safety needs. They are primarily concerned with survival: obtaining adequate food, clothing, shelter, and seeking justice from the dominant societal groups.Personal securitySafety and Security needs include:Safety net against accidents/illness and the adverse impactsHealth and well-beingFinancial securityFriendshipAfter physiological and safety needs are fulfilled, the third layer of human needs is social. This psychological aspect of Maslow's hierarchy involves emotionally-based relationships in general, such as:Social needsHumans need to feel a sense of belonging and acceptance, whether it comes from a large social group, such as clubs, office culture, religious groups, professional organizations, sports teams, gangs ("Safety in numbers"), or small social connections (family members, intimate partners, mentors, close colleagues, confidants). They need to love and be loved (sexually and non-sexually) by others. In the absence of these elements, many people become susceptible to loneliness, social anxiety, and Clinical depression. This need for belonging can often overcome the physiological and security needs, depending on the strength of the peer pressure; an anorexic, for example, ignores the need to eat and the security of health for a feeling of control and belonging.Having a supportive and communicative familyIntimacyAll humans have a need to be respected, to have self-esteem, self-respect, and to respect. Also known as the belonging need, esteem presents the normal human desire to be accepted and valued by others. People need to engage themselves to gain recognition and have an activity or activities that give the person a sense of contribution, to feel accepted and self-valued, be it in a profession or hobby. Imbalances at this level can result in low self-esteem or an inferiority complex. People with low self-esteem need respect from others. They may seek fame or glory, which again depends on others. It may be noted, however, that many people with low self-esteem will not be able to improve their view of themselves simply by receiving fame, respect, and glory externally, but must first accept themselves internally. Psychological imbalances such as depression can also prevent one from obtaining self-esteem on both levels.EsteemThe motivation to realize one's own maximum potential and possibilities is considered to be the master motive or the only real motive, all other motives being its various forms. In Maslow's hierarchy of needs, the need for self-actualization is the final need that manifests when lower level needs have been satisfied.Aesthetic needsNear the end of his life Maslow revealed that there was a level on the hierarchy that was above self-actualization: self-transcendence. "[Transcenders] may be said to be much more often aware of the realm of Being (B-realm and B-cognition), to be living at the level of Being… to have unitive consciousness and “plateau experience” (serene and contemplative B-cognitions rather than climactic ones) … and to have or to have had peak experience (mystic, sacral, ecstatic) with illuminations or insights. Analysis of reality or cognitions which changed their view of the world and of themselves, perhaps occasionally, perhaps as a usual thing."Self-transcendenceSuccess of offspringWhile Maslow's theory was regarded as an improvement over previous theories of personality and motivation, it had its detractors. For example, in their extensive review of research which is dependent on Maslow's theory, Wahba and Bridgewell found little evidence for the ranking of needs Maslow described, or even for the existence of a definite hierarchy at all. Conducted in 2002, a recent study forwards this line of thought, claiming that "the hierarchy of needs is nothing more than a fool's daydream; there is no possible way to classify ever-changing needs as society changes." Chilean economist and philosopher Manfred Max Neef has also argued fundamental human needs are non-hierarchical, and are ontologically universal and invariant in nature - part of the condition of being human; poverty, he argues, is the result of any one of these needs being frustrated, denied or unfulfilled.CriticismsHe stated that the achievements and success of his offspring were more satisfying than the personal fulfillment and growth characterized in self-actualization.
42Buying MotivesWhen endeavouring to determine customer buying motives, it may be usefulto focus on the following questions:What does the customer say they need and why?What do they see the new product/service doing that their old one did not?What specific function must the new product/service perform?How soon is the product/service needed?What budget has been allocated for this purpose?
44Purpose / BenefitThe whole idea behind developing a vision and mission statement is to set an organisation apart from others in its industry and give it its own special identity, business emphasis, and path for development.The Vision Statement Represents a Dream that is Beyond What you Think is Possible It represents the mountain top of where the company is headed. Visioning takes you out beyond the present.The Vision Statement Provides a Picture of What Our Business will Look Like in 5 to 10 Years from Now. It should have a time horizon of a decade or more.
45Benefits of a VisionSeeing the benefits of vision can be a powerful motivation for individuals toreprioritise their activities and resources.A vision is beneficial for some of the following reasons:It empowers people and focuses their effortsIt focuses energy for greater effectivenessIt raises the standard of excellenceIt establishes meaning for todayIt gives hope for the futureIt brings unity to communityIt provides a sense of continuityIt raises commitment levelIt brings positive change
46Benefits of a MissionClearly stating the mission of the organisation both attracts or detersprospective employees and leaves no doubt in the customer's mind what theorganisation stands for and offers.Three major mission elements;Vision statement – specifies what an organisation could achieve if it performs perfectly. Difficulties encountered when the vision is too far removed from the reality of individual sections of the organisation.Purpose statement- definition of the organisation’s business. Often a problem that the business is stated too narrowly.Value statement – underlying beliefs of the organisation - how it chooses to work as a human enterprise
47Purpose … value proposition The organisation’s purpose statement is a description of the nature and scope of the organisation’s activities – the definition of the organisation’s business.Issues in defining purpose - narrow versus broad purposePurpose and relevant environment – relates to the total economic, social, political and competitive environment – internal and external.
48Success Success comes from a combination of luck and good management. Good luck alone cannot be relied on.Successful organisations manage (scarce) resources to achieve the best results (return on our investments of money, skills, time etc.)Marketing is an effective way of applying resources where they will have the best return on investment.
50The Concept of a ‘Business’ We can define a business as an organised or managed activity aimed at exchanging value with its market(s)The business (eg supplier, seller, originator, etc) has a value proposition or product (eg goods, an idea, place, program, services, technology, etc)It wants to get something back for it (sell it) for payment (eg money, barter, goodwill, more business, etc)From a buyer (the market - buyer, customer and consumer).
51Vision -Ensure Market Potential A Business ModelPeopleProcessesDeliveryMechanismsPricing & CostStrategyVision -Ensure Market PotentialLeadershipTechnology Platform… external action required… platform to run … what will it be?… business or career?
52Basic It doesn’t matter what type of organisation it is: Most organisations want to continue to be in business.They want customers to come back. It is not just about short-term objectives.If you want to make a profit, you need first to create customers.
54Questions STAGE 1 SITUATION ANALYSIS WHERE ARE WE NOW? How are we performing?What are our distinctive competitive (marketing) advantages?How effective is our Marketing Mix?Are we focusing on the best segments with the right type of customer?Are we using the most appropriate channels for communication and distribution?What uncontrollable event(s) or trend(s) can impact my business?
55Questions STAGE 2 SET OBJECTIVES WHERE DO WE WANT TO GO?Business Mission?Business Objectives?Marketing Objectives – Business Development?Marketing Communication Objectives?
56Questions STAGE 2 SET OBJECTIVES The SMART Test for ObjectivesMake sure your objectives are practical and measurable. Do they fit the following criteria?Specific (with numbers)Measurable (to monitor progress and confirm achievement)Actionable (can we do it?)Reasonable (realistically attainable)Timed (incorporate deadlines)
57Questions STAGE 3 STRATEGY HOW DO WE GET THERE? Segmentation – How do we want to divide up the market(s)?Targeting – Which segments of the market do we wish to focus upon?Positioning – How do we want to be perceived in each different target segment?
58Group key business development ideas /goals /objectives by your idea / goal / objective ‘value offer’Vision -Ensure Market PotentialLeadershipTechnology Platform
59Define key business operational planning / impact … analysis Outline policies and procedures by your idea / goal / objective ‘function’PeopleProcessesDeliveryMechanismsPricing & CostStrategy
60Key Components of any Organisation’s Business A market: The people or organisations who will buy, rent or hire your product. Without a market (the source of your payment), you have no basis for exchange.A value proposition/product (goods and services, anything of value to offer): What you believe the market will want and will pay for.Operations: How you produce and/or offer your product for exchange.Management and organisation: How you manage your resources and activities in relation to producing your product. This includes management of the above operations as well as financial management.
62CompetitorsA competitor is any business that offers the same or similar products andservices to the same group of customers you are targeting.These are three types of competitorsDirect CompetitorsIndirect CompetitorsEmerging Competitors
63Analysing Competitors In order to analyse your competitors, you need information in the followingareas:LocationProducts OfferedServices OfferedMarkets OfferedPoints of SalesPricing StructureStrengthsWeaknesses
64Competitive Advantage A competitive advantage is a feature or set of features, together with theassociated benefits, which make your products/services meaningfullydifferent from those of your competitors and valuable to the customer.To succeed against competitors your business must be:cost effectiveable to offer products/services which customers regardas preferable to the products/services offered by rival suppliers.
65Competitive advantage include…… Some specific areas:depth of your product/service linesqualityuniquenessyour knowledge, skills and experiencemarketing approach and strategiesimagereputationlevel of customer servicelocationpriceavailabilitydays ad hours of openingparking facilities
66Positioning Strategies In order to give your business a strategic advantage over your competitors, you need to formulate a strategy which positions your marketing mix in a more powerful position than those of your competitors.The aim of your positioning strategy is to ensure that your business is able to better its competitors in supplying particular products/services.
68Black and White page ANSOFF 1 off 4 objectives Extending, expanding or otherwise changing an existing business (Ansoff)Potential for greater penetration of existing markets with existing products or servicesNew products or services for existing marketsNew products or services for new markets
70The Boston Consulting Group (BCG) History Global management consulting firm with offices in 41 countries.It is recognised as one of the most prestigious management consulting firms in the world.It is one of only three companies to appear in the top 15 of Fortune's "Best Companies to Work For" report for six consecutive years.In 1968, BCG created the "growth-share matrix", a simple chart to assist large corporations in deciding how to allocate cash among their business units.
71Matrix "Stars" "Question Marks" "Cash Cows" "Dogs" relative market sharehighlow"Stars""Question Marks""Cash Cows""Dogs"Select a fewhighDivest the othersmarket growth rateInvest if needed to create cash cowLicqidatelow
72Relative Position (Market Share) The percentage of the total market that is being serviced by your company.Measured either in revenue terms or unit volume terms.The higher your market share, the higher the proportion of the market you control.The Boston Matrix assumes that if you enjoy a high market share you will be making money
73Business Growth Rate (Market Growth) Used as a measure of a market's attractiveness.Markets experiencing high growth are ones where the total market is expanding, meaning that it’s relatively easy for businesses to grow their profits, even if their market share remains stable.By contrast, competition in low growth markets is often bitter, and while you might have high market share now, it may be hard to retain that market share without aggressive discounting.
75Generally, there are three types of positioning concepts: Functional positionsSolve problemsProvide benefits to customersGet favorable perception by investors and lendersSymbolic positionsSelf-image enhancementEgo identificationBelongingness and social meaningfulnessAffective fulfillmentExperiential positionsProvide sensory stimulationProvide cognitive stimulation
76Perceptual MappingExtensively used perceptual mapping for over thirty years now.Most companies use perceptual maps before they embark on to any new brand positioning activity.You can get the most complicated market information made simple with easy to understand graphic representations.Graphics speak much more than numbers or words.A perceptual map helps you get a comparative perspective with regards to competition, consumer behavior, market trends etc.The most commonly used two dimensional maps are highly effective with their visual impact. They are simple to read and help in quick strategic decision making.
77What are perceptual maps? Perceptual mapping helps to communicate the relationship between competitors and the criteria used by your consumers while making purchase decisions.Perceptual maps, being simple graphic figures, can pave the path towards strategic thinking and trigger discussions.There are various statistical and mathematical methods used to produce perceptual maps, however, published research has found that multi-dimensional scaling provides the most reliable methodology.
78How are perceptual maps created? Rating scales provide the data required for perceptual mapping. These rating scales will have the subjects of the map described on the basis of selected attributes.The raw data collected from a survey can be converted into a perceptual map through an assortment of statistical procedures. Multi-dimensional scaling will produce ideal points and competitor positions.
79What functions can perceptual mapping help you in? If you want to test the waters before you launch a product or before youcontemplate on a new brand positioning strategy, you can benefit from using aperceptual map.Here is a gist of the marketing functions that perceptual mapping serves:Brand positioningMarket segmentationConcept evaluationProduct positioningPositioning analysisCluster analysisTrend analysisCompetitor analysisIdentifying new market opportunitiesIdentifying potential customers
80Perceptual … analysis of competing products Opportunity at mid Quality and Price
81Airlines Positioning Map Map shows consumer perceptions of various airlines on the dimensions of Affordable/ Onboard comforts and Entertainment/ServicesBest Good ServiceBest AffordableBest Onboard ComfortsHigh (2nd) Entertainment Facilities
82Destination Positioning Map The destination brand positioning map Source: Morgan and Pritchard (2004: 67)
84PositioningA firm positions itself by leveraging its strengths. Michael Porter has arguedthat a firm's strengths ultimately fall into one of two headings:Cost advantageDifferentiationPortersFor an organisation to obtain a sustainable competitive advantage MichaelPorter suggested that they should follow either one of three generic strategies.Strategy 1: Cost LeadershipStrategy 2: DifferentiationStrategy 3: Focus Strategy (Niche strategies)
85Cost LeadershipThis strategy involves the organisation aiming to be the lowest cost producer within their industry.The orgainisation aims to drive cost down through all the elements of the production of the product from sourcing, to labour costs.The cost leader usually aims at a broad market, so sufficient sales can cover costs. Low cost producers include Easyjet airline, Ryan air, Asda and Walmart.Some organisation may aim to drive costs down but will not pass on these cost savings to their customers aiming for increased profits clearly because their brand can command a premium rate.
86A COST LEADERSHIP STRATEGY is based on the concept that you can produce and market a good quality product or service at a lower cost than your competitors.These low costs should translate to profit margins that are higher than the industry average.Some of the conditions that should exist to support a cost leadership strategy include an on-going availability of operating capital, good process engineering skills, close management of labour, products designed for ease of manufacturing and low cost distribution.
87DifferentiationTo be different, is what organisations strive for. Having a competitive advantage which allows the company and its products ranges to stand out is crucial for their success.Organisation aims to focus its effort on particular segments and charge for the added differentiated value.If we look at Brompton folding cycles their compact design differentiates them from other folding bike companies.New concepts which allow for differentiation can be patented, however patents have a certain life span and organisation always face the danger that their idea that gives the competitive advantage will be copied in one form or another.
88A DIFFERENTIATION STRATEGY is one of creating a product or service that is perceived as being unique "throughout the industry".The emphasis can be on brand image, proprietary technology, special features, superior service, a strong distributor network or other aspects that might be specific to your industry.This uniqueness should also translate to profit margins that are higher than the industry average. In addition, some of the conditions that should exist to support a differentiation strategy include strong marketing abilities, effective product engineering, creative personnel, the ability to perform basic research and a good reputation.
89Focus Strategy (Niche strategies) Organisation focuses its effort on one particular segment and becomes well known for providing products/services within the segment.They form a competitive advantage for this niche market and either succeed by being a low cost producer or differentiator within that particular segment.Examples include Roll Royce and Bentley.
90A FOCUS STRATEGY may be the most sophisticated of the generic strategies, in that it is a more 'intense' form of either the cost leadership or differentiation strategy.It is designed to address a "focused" segment of the marketplace, product form or cost management process and is usually employed when it isn't appropriate to attempt an 'across the board' application of cost leadership or differentiation.It is based on the concept of serving a particular target in such an exceptional manner, that others cannot compete. Usually this means addressing a substantially smaller market segment than others in the industry, but because of minimal competition, profit margins can be very high.
91Positioning of your product / service … decision making
92Stuck in the middleThe danger some organisation face is that they try to do all three andbecome what is known as stuck in the middle.The have no clear business strategy, be all to all consumers, which adds totheir running costs causing a fall in sales and market share.‘Stuck in the middle’ companies are usually subject to a takeover or merger.
94Sales ForecastingOrganisations need to look well ahead in order to plan their investments, launch new products, and decide what volume to bring to market, when to bring it, and when to withdraw products.As the future is never totally predictable, a sales forecast is really an educated guess.
95Estimating Future Market Demand Sales forecast has three stages:Prepare a macroeconomic forecastPrepare an industry sales forecastPrepare the organisation sales forecastSales forecasts can be based on information inputs, such as:Buyer intention.Current salesPast sales
96Time Series AnalysisTime series analysis is a sales forecast on the basis of past sales.Four components:TrendsSeasonal or cyclical factorsErratic eventsMarketing responses
98We can monitor and evaluate Performance AnalysisCan includeProduct QualityCustomer Satisfaction LevelQuality of ServiceProvides a basis of checking the degree of success of the marketing mix.We can monitor and evaluatePerformance targetsPerformance gapsOver performance
99Performance TargetObjective that the business (company) wants to achieveShould be analysed as soon as possible after targets have been set in motionOngoing Analysis allows us to see if the marketing plan is working and to what extend
101Analysing previous marketing activities Assessment of effectiveness of a marketing activity:Did sales increase or decrease after the activity?How many customers initiated contact with business in response to the activity?How many customers were prompted to purchase from the organisation as a result of the activity?Did customer inquiries increase?Did visits to the organisation’s website increase?Has brand awareness grown?Has traffic flow into the store increased?Did activity reach and communicate with its intended audience?
102Aknowledgement Otilia (2012) online resources Brand Planning (2012) McCleary, Geoff; Hill, BryanMarketing in Black and White by Brian Monger (2011)Marketing a Practical Approach, Peter Rix,( 2011) Mc Graw HilSlideshow creation MnM Institute Pty Ltd
103mnm institute … makes sense …mnm institute … makes sense