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

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Presentation on theme: "1 LECTURE 1 MARKETING: CONCEPT CONCEPTORIENTATIONENVIRONMENT AN OVERVIEW OF MARKETING MANAGEMENT-I."— Presentation transcript:

1 1 LECTURE 1 MARKETING: CONCEPT CONCEPTORIENTATIONENVIRONMENT AN OVERVIEW OF MARKETING MANAGEMENT-I

2 2 Definitions of Marketing The management process responsible for anticipating and satisfying customer requirements profitably (Chartered Institute of Marketing) 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)

3 What marketing is not “A sophisticated form of selling done by graduates” “A sophisticated form of selling done by graduates” “Advertising, sales promotion, selling, PR, direct mail, market research” “Advertising, sales promotion, selling, PR, direct mail, market research” “What the marketing department does” “What the marketing department does” “A process which increases costs” “A process which increases costs” “An irrelevance to what I do” “An irrelevance to what I do”

4 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 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 6 3 Levels of Marketing 1 st Level: Tactical Output 1 st Level: Tactical Output (promotional literature, advertising – WHAT THEY SEE ) (promotional literature, advertising – WHAT THEY SEE ) 2 nd Level: Management Process 2 nd Level: Management Process (allocation of resources – WHAT WE DO) (allocation of resources – WHAT WE DO) 3 rd Level: Marketing Orientation 3 rd Level: Marketing Orientation (a philosophical approach to doing business which puts customer at the heart of the enterprise – HOW WE ACT) (a philosophical approach to doing business which puts customer at the heart of the enterprise – HOW WE ACT)

7 7 Marketing Orientation Integrated customer focus Long run profits through customer satisfaction Sales Orientation Push! Sell! by promotion Short term gains in profit via sales increases Evolution of the Marketing Concept Production Orientation “Any colour you like, as long as it’s black” Profits through production controls

8 8 The Marketing Concept 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 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

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

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

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

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

13 13 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. “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….. 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” However, to do nothing is even more dangerous for an organisation, as is over-reliance on internal sources of information, rather than external channels” Scanning the environment

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

15 15 Some possible PEST factors Political / Legal Political / Legal 1. Deregulated markets 2. Taxation policy 3. International trade policy 4. Joint Ventures legislation Social / Ecological Social / Ecological 1. Population demographics (household size, no of cars) 2. Income distribution 3. Level of environmental concern 4. Attitudes to work & leisure 5. Education levels Economic Economic 1. Business cycle 2. Interest rates / inflation 3. Unemployment level 4. Raw materials availability 5. Disposable income Technological Technological 1. Govt spending on research 2. Speed of take-up of new technology 3. Barriers to entry 4. Impact of Internet 5. Merging of “ unrelated” sectors e.g. banks & telecomms Note: EXAMPLES ONLY!

16 16 Model 2 – Using 5 Forces analysis to scan the “MICRO” environment IndustryCompetitors Intensity of Rivalry Buyers Suppliers New Entrants Substitutes Threat of New Entrants Threat of Substitutes Bargaining Power of Suppliers Bargaining Buyers

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

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

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

20 20 Use the preceding steps to help complete the SWOT. Use the preceding steps to help complete the SWOT. SWOT should come at end of Marketing Audit and summarize it. 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. 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. 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 Beware! Inherent simplicity of the technique is often its undoing Can become vague, confused, irrelevant, lacking in direction 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 A strength is only a truly a strength if you are stronger than your competitors on that attribute Bringing Macro/Micro/Internal information together - Marketing Audit Summary – Model 3 - SWOT

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

22 Effective use of SWOT STRENGTHSWEAKNESSES OPPORTUNITIESTHREATS Matching Strategies Conversion Strategies Conversion Strategies

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

24 24 10 benefits for you from Marketing Planning 1. Hitting the best customer targets 2. Winning new customers 3. Expanding markets 4. Beating the competition 5. Keeping abreast of market developments 6. Using resources to best advantage 7. Improving internal communications 8. Minimising threats to Reduce risk and surprise 9. Identifying company strengths and weaknesses 10. Achieving consistency It looks like hard work – why bother?


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