1. Lesson 1
Marketing Management

2. QCF Level 7: BTEC Professional Guided learning hours: 30
Subject Detail
Unit 7: Strategic Marketing Management
Unit code: Y/602/2065
QCF Level 7: BTEC Professional
Credit value: 10
Guided learning hours: 30

3. Understand the principles of strategic
Learning Outcome
Understand the principles of strategic
marketing management

4. Introduction to Marketing
Miss Mary Lynn Mundell

5. What Is Marketing?
Simple definition: Marketing is the management process responsible for identifying, anticipating, and satisfying customer requirements profitably.” (CIM,2001)
Goals:
Attract new customers by promising superior value.
Keep and grow current customers by delivering satisfaction.

6. Making a sale—“telling and selling” Satisfying customer needs
Marketing Defined
Marketing is the activity, set of instructions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
OLD view of marketing:
Making a sale—“telling and selling”
NEW view of marketing:
Satisfying customer needs
This has come about, in part, due to the business paradigm shift experienced in many markets.
In New Markets, we tend to talk about sellers markets- the seller has the power- demand outstrips demand.

7. Why is Marketing Important?
Shifting Business Paradigms
Sellers’ markets
Buyers’ markets

8. The Marketing Process A simple model of the marketing process:
Understand the marketplace and customer needs and wants.
Design a customer-driven marketing strategy.
Construct an integrated marketing program that delivers superior value.
Build profitable relationships and create customer delight.
Capture value from customers to create profits and customer quality.

9. Needs, Wants, and Demands
Need: State of felt deprivation including physical, social, and individual needs.
Physical needs: Food, clothing, shelter, safety
Social needs: Belonging, affection
Individual needs: Learning, knowledge, self-expression
Want: Form that a human need takes, as shaped by culture and individual personality.
Wants + Buying Power = Demand

10. Need/ Want Fulfillment
Needs & wants are fulfilled through a Marketing Offering:
Products:
Persons, places, organizations, information, ideas.
Services:
Activity or benefit offered for sale that is essentially intangible and does not result in ownership.
Experiences:
Consumers live the offering.

11. Customer Value and Satisfaction
Dependent on the product’s perceived performance relative to a buyer’s expectations.
Care must be taken when setting expectations:
If performance is lower than expectations, satisfaction is low.
If performance is higher than expectations, satisfaction is high.
Customer satisfaction often leads to consumer loyalty.
Some firms seek to DELIGHT customers by exceeding expectations.

12. Marketing Management
The art and science of choosing target markets and building profitable relationships with them.
Requires that consumers and the marketplace be fully understood.
Aim is to find, attract, keep, and grow customers by creating, delivering, and communicating superior value.

13. Marketing Management
Marketing managers must consider the following, to ensure a successful marketing strategy:
What customers will we serve?
— What is our target market?
How can we best serve these customers?
— What is our value proposition?

14. Choosing a Value Proposition
The set of benefits or values a company promises to deliver to consumers to satisfy their needs.
Value propositions dictate how firms will differentiate and position their brands in the marketplace.

15. The Marketing Concept The marketing concept:
A marketing management philosophy that holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfaction better than competitors.

16. Customer Perceived Value
“Customer’s evaluation of the difference between all of the benefits and all of the costs of a marketing offer relative to those of competing offers.” (Armstrong & Kotler)
Perceptions may be subjective
Consumers often do not objectively judge values and costs.
Customer value = perceived benefits – perceived sacrifice.
Burberry- an example when over-riding social factors impacted on customer perceived value of the Burberry brand- often seen as highly exclusive and expensive brand and instantly recognisable. When it was ‘adopted’ by the football hooligan fraternity, and knock-offs became more common than the original brand, it started to affect perceived value- people don’t want to be associated with a cheapened brand, and began to associate the brand with the undesirable behaviours of the people wearing it.

17. The Marketing Mix
The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market.
Product: Variety, features, brand name, quality, design, packaging, and services.
Price: List price, discounts, allowances, payment period, and credit terms.
Place: Distribution channels, coverage, logistics, locations, transportation, assortments, and inventory.
Promotion: Advertising, sales promotion, public relations, and personal selling.

18. Marketing Strategy

19. Customer-Driven Marketing Strategy
Requires careful customer analysis.
To be successful, firms must engage in:
Market segmentation
Market targeting
Differentiation
Positioning

20. Market Segmentation and Targeting
The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products of marketing programs.
Targeting:
Involves evaluating each market segment’s attractiveness and selecting one or more segments to enter.

21. Differentiation and Positioning
Creating superior customer value by actually differentiating the market offering.
Positioning:
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

22. Market Segmentation Key segmenting variables: Geographic Demographic
Psychographic
Behavioral
Different segments desire different benefits from products.
Best to use multivariable segmentation bases in order to identify smaller, better-defined target groups.
No single way to segment is best. Often combine more than one variable to better define segments.
Geographic- simply where people live
Demographic- the easiest and most popular segmenting variable.
Psychographic segmentation:
Dividing a market into different groups based on social class, lifestyle, or personality characteristics.
Behavioral segmentation:
Dividing buyers into groups based on consumer knowledge, attitudes, uses, or responses to a product.
MTV- different ages favour different channels. MTV pay attention to geographical differences also.

23. Market Segmentation Why Segment?: Meet consumer needs more precisely
Increase profits
Segment leadership
Retain customers
Focus marketing
communications

24. Evaluating Market Segments
Segment size and growth:
Analyze current segment sales, growth rates, and expected profitability.
Segment structural attractiveness:
Consider competition, existence of substitute products, and the power of buyers and suppliers.
Company objectives and resources:
Examine company skills and resources needed to succeed in that segment.
Offer superior value and gain advantages over competitors.

25. Market Targeting Market targeting involves:
Evaluating marketing segments.
Segment size, segment structural attractiveness, and company objectives and resources are considered.
Selecting target market segments.
Alternatives range from undifferentiated marketing to micromarketing.
Being socially responsible.

26. Differentiation and Positioning
A product’s position is:
The way the product is defined by consumers on important attributes—the place the product occupies in consumers’ minds relative to competing products.
Perceptual positioning maps can help define a brand’s position relative to competitors.

27. Differentiation and Positioning
Identifying possible value differences and competitive advantages:
Key to winning target customers is to understand their needs better than competitors do and to deliver more value.
Competitive advantage:
Extent to which a company can position itself as providing superior value.
Achieved via differentiation.

28. What's next?

29. Weekly Program
1.1 discuss the role of strategic marketing in an organisation
1.2 explain the processes involved in strategic marketing
1.3 evaluate the links between strategic marketing and corporate Strategy

30. Today’s Objective 1.1 Discuss the role of strategic marketing in
an organisation

31. Main issues to discuss LO 1
Role of strategic marketing:
key definitions of strategic marketing from the Chartered Institute of Marketing and key authors (eg Hugh Davidson; Peter Doyle; Philip Kotler; Malcolm McDonald);
role and importance of strategic marketing
in an organisation; concepts; systematic approach; sequencing and scheduling of activities; integration of activities; resource requirements; timescaling; onitoring and control elements
Processes:
strategic marketing planning processes (eg Peter Doyle, Malcolm McDonald) including strategic marketing analysis, marketing strategy objective setting, perceptual mapping, factor analysis, option evaluation, choice,

32. formulation, implementation and control
Links to corporate strategy: the nature of strategy and marketing links to corporate strategy eg Michael Porter; links to mission statement, organisational structure, corporate responsibility and ethics; dynamic strategy (Carpenter and Sanders); knowledge management systems

33. Focus on Strategic Marketing

34. Marketing - Definition
The management process responsible for identifying, anticipating and satisfying customer requirements profitably

35. Strategic Marketing
Strategic marketing focuses on how to develop competitive advantage through the drivers of shareholder value. Delivering value to your business requires insight into your changing marketplace and decisions regarding how to match your organisation’s distinctive capabilities with promising value opportunities. Being able to do this is the key for many marketers to increase their influence in the organisation

36. FIGURE 2-1 The three levels of strategy in organizations: corporate, business unit, and functional

37. ORGANIZATIONS AND THEIR LEVELS OF STRATEGY
Strategy Issues in Organizations
Goals or Objectives
Profit
Customer Satisfaction
Sales
Employee Welfare
Market Share
Social Responsibility
Quality

38. THE STRATEGIC MARKETING PROCESS
How do we allocate our resources to get where we want to go?
How do we convert our plans to actions?
How do our results compare with our plans, and do deviations require new plans?
Strategic Marketing Process
Marketing Plan

39. FIGURE 2-4 The strategic marketing process

40. THE STRATEGIC MARKETING PROCESS
Strategic Marketing Process: The Planning Phase
Step 1: Situation (SWOT) Analysis
Situation Analysis
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats

41. FIGURE 2-5 Ben & Jerry’s: a SWOT analysis to get it growing again

42. Ben & Jerry’s One Sweet Whirled Campaign What is the impact of a SWOT analysis?

43. THE STRATEGIC MARKETING PROCESS
Strategic Marketing Process: The Planning Phase
Step 2: Market-Product Focus and Goal Setting
Market Segmentation
Set Marketing and Product Goals
Select Target Markets
Find Points of Difference
Position the Product

44. THE STRATEGIC MARKETING PROCESS
Strategic Marketing Process: The Planning Phase
Step 3: Marketing Program
Product Strategy
Price Strategy
Promotion Strategy
Place (Distribution) Strategy

45. FIGURE 2-6 Elements of the marketing mix that comprise a cohesive marketing program

46. THE STRATEGIC MARKETING PROCESS
Strategic Marketing Process: The Implementation Phase
Obtaining Resources
Designing the Marketing Organization
Developing Schedules

47. FIGURE 2-7 Organization of a typical manufacturing firm showing a breakdown of the marketing department

48. THE STRATEGIC MARKETING PROCESS
Strategic Marketing Process: The Implementation Phase
Executing the Marketing Program
Marketing Strategy
Marketing Tactics

49. THE STRATEGIC MARKETING PROCESS
Strategic Marketing Process: The Control Phase
Comparing Results With Plans to Identify Deviations
Planning Gap
Acting on Deviations
Exploiting a Positive Deviation
Correcting a Negative Deviation

50. MARKETING VERSUS BUSINESS PLANS
SUPPLEMENTAL LECTURE

51. FIGURE A-1 Elements in typical marketing and business plans targeted at different audiences
This figure shows that marketing and business plans may be targeted at an (1) internal audience to be used to help direct the firm or (2) external audience to try to raise capital. Each combination has slightly different elements. See SLN 2-4.

52. FIGURE 2-A Results of good and bad marketing planning and implementation

53. FIGURE 2-E Gantt chart for scheduling the term project

56. Profit
Profit is the reward to a business firm for the risk it undertakes in offering a product for sale. It is also the money left over after a firm’s total expenses are subtracted from its total sales.

57. Mission
Mission is a statement of the organization’s scope, often identifying its customers, markets, products, technology, and values.

58. Organizational Culture
Organizational culture is a set of values, ideas, and attitudes that is learned and shared among the members of an organization.

59. Goals or Objectives
Goals or objectives convert the mission into targeted levels of performance to be achieved, often by a specific time.

60. Market Share
Market share is the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself.

61. Strategic Marketing Process
The strategic marketing process is the approach whereby an organization allocates its marketing mix resources to reach its target markets.

62. Marketing Plan
A marketing plan is a road map for the marketing activities of an organization for a specified future period of time, such as one year or five years.

63. Situation Analysis
Situation analysis involves taking stock of where a firm or product has been recently, where it is now, and where it is headed in terms of the organization’s plans and the external factors and trends affecting it.

64. SWOT Analysis
SWOT analysis is an acronym describing an organization’s appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats.

65. Market Segmentation
Market segmentation involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action.

66. Points of Difference
Points of difference are those characteristics of a product that make it superior to competitive substitutes.

67. Marketing Strategy
A marketing strategy is the means by which a marketing goal is to be achieved, usually characterized by a specific target market and a marketing program to reach it.

68. Marketing Tactics
Marketing tactics are detailed day-to-day operational decisions essential to the overall success of marketing strategies.