Program Magister Manajemen Universitas Islam Indonesia

Program Magister Manajemen Universitas Islam Indonesia
MANAJEMEN PEMASARAN Asmai Ishak Program Magister Manajemen Universitas Islam Indonesia

Learning Goals Define marketing and marketing management.
Understand marketing orientations Understand the market places Identify changes in the new economy and changes in businesses practices Describe the marketing planning process Understand the strategic planning carried out in corporate and division level Understand the strategic planning carried out in business unit level

What is Marketing? Marketing Defined:
“Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others” Marketing is to establish, develop and commercialize long-term customer relationships, so that the objectives of the parties involved are met. This is done by a mutual exchange and keeping of promises (Gronroos, 1989)

What are marketed? Places Properties Organizations Information Ideas
Goods Services Experiences Events Persons Marketing is about managing profitable customer relationships Attracting new customers Retaining and growing current customers

Who are the markets? Consumer Markets Business Markets Global Markets
Nonprofit and Governmental Markets

Marketing Management Marketing management is the art and science of choosing target markets and building profitable relationships with them. This definition must include answers to two questions: What customers will we serve? How can we serve these customers best?

Selecting Customers and Creating Value
Customer Management What customers will we serve? Marketers select customers that can be served profitably Value Proposition How can we serve these customers best? Includes the set of benefits or values a company promises to deliver to consumers to satisfy their needs

Marketing Orientations
The Production Concept Management focus on production and distribution efficiency Consumers favour Readily available products Affordable products The Product Concept Consumers favour products offering Highest quality Best performance Most innovative features

The Selling Concept The Marketing Concept Sell what you make
Typically for unsought goods Focus on sales transactions Driven by excess capacity Assumes hard sell customers are satisfied The Marketing Concept Focus on customer wants and needs Delivering satisfaction More effectively than competitors More efficiently than competitors

Comparison between Selling and Marketing Concepts
Factory Existing products Selling and promoting Profits through sales volume Market Customer needs Integrated marketing satisfaction Starting point Focus Means Ends The selling concept The marketing concept

Socially Responsible Marketing Relationship Marketing
The Holistic Marketing Concept Senior Management Products & Services Other Department Marketing Department Communications Channels Integrated Marketing Internal Marketing Holistic Marketing Socially Responsible Marketing Relationship Marketing Ethics Community Customer Partners Environment Legal Channel

Understanding the Marketplace
Core Concepts Need State of felt deprivation Example: Need food Wants The form of needs as shaped by culture and the individual Example: Want a Big Mac Demands Wants which are backed by buying power Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets

Core Concepts Marketing offer Combination of products, services, information or experiences that satisfy a need or want Offer may include services, activities, people, places, information or ideas Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets

Core Concepts Value Customers form expectations regarding value Marketers must deliver value to consumers Satisfaction A satisfied customer will buy again and tell others about their good experience Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets

Core Concepts Exchange The act of obtaining a desired object from someone by offering something in return One exchange is not the goal, relationships with several exchanges are the goal Relationships are built through delivering value and satisfaction Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets

Core Concepts Market Set of actual and potential buyers of a product Marketers seek buyers that are profitable Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets

Changes in the New Economy
Major Drivers of the New Economy Digitization and Connectivity Disintermediation and Reintermediation Customization and Customerization Industry Convergence

How Business Practices Are Changing
Organize by product units to organize by customer segments Shift focus from profitable transactions to customer lifetime value Shift focus from financial scorecard to also focusing on the marketing scorecard Shift focus from shareholders to stakeholders

How Business Practices Are Changing
Everyone does the marketing Build brands through performance, not just advertising Customer retention rather than customer acquisition From none to in-depth customer satisfaction measurement From over-promise, under-deliver to under-promise, over-deliver The New Hybrid

Table 2-1: Old Economy vs. New Economy
Organize by product units Focus on profitable transactions Look primarily at financial scorecard Focus on shareholders Marketing does the marketing Build brands through advertising Focus on customer acquisition No customer satisfaction measurement Overpromise, underdeliver Organize by customer segments Focus on customer lifetime value Look also at marketing scorecard Focus on stakeholders Everyone does the marketing Build brands through behavior Focus on customer retention and growth Measure customer satisfaction and retention rate Underpromise, overdeliver

The Marketing Planning Process
A. Traditional Physical Process Sequence Make the Product Sale the Product Design product Procure Make Price Sell Advertise/Promote Distribute Service B. Value Creation and delivery sequence Choose the Value Communicate the Value Cust. segmentation Product development Pricing Sales force Sales pro-motion Advertising Provide the Value Market selection/focus Value positioning Service development Sourcing making Distributing servicing

Generic Value Chain

Core Business Processes in the Value Chain
The market sensing process The new offering realization process The customer acquisition process The customer relationship management process The fulfillment management process

Strategic Planning: Three Key Areas and Four Organization Levels
Marketing plan  central instrument for directing and coordinating the marketing efforts for the product line Strategic marketing plan  lays out the target markets and the value proposition that will be offered Tactical marketing plan specifies the marketing tactics, including product features, promotion, merchandising, pricing, channels, and services The Level of Organization Corporate Division Business Unit Product

Corporate and Division Strategic Planning
All corporate headquarters undertake four planning activities Defining the Corporate Mission Establishing Strategic Business Units (SBUs) Assigning resources to each SBU Planning new businesses, downsizing, or terminating older businesses

Defining the Corporate Mission Mission statements define which competitive scopes the company will operate in Industry scope Products and applications scope Competence scope Market-segment scope Vertical scope Geographical scope

Mission should be market oriented, what does it mean?
Mission/Vision: a statement of organization’s purpose – what it wants to accomplish Mission should be market oriented, what does it mean? What’s the different between market oriented companies and customer oriented companies Customer oriented companies: only focus on the expressed needs of the customers and developing goods and services that satisfy those needs Market oriented companies: commit to understand the latent and expressed needs of the customers, and to understand the capabilities and plans of their competitors through the process of acquiring and evaluating market information in a systematic and anticipatory manner

Table 4.1: Product-Oriented versus Market-Oriented Definitions of a Business
Company Product Definition Market Definition Missouri-Pacific Railroad We run a railroad We are a people-and-goods mover Xerox We make copying equipment We help improve office productivity Standard Oil We sell gasoline We supply energy Columbia Pictures We make movies We market entertainment Encyclopaedia We sell encyclopedias We distribute Information Carrier We make air conditioners and furnaces We provide climate control in the home

Some Criteria for Effective Mission Statement:
Not too broad Realistic Fit with the current market environments Based on the organization distinctive competencies Motivating Visionary

Establishing Strategic Business Units (SBUs) Three characteristics of SBUs Single business or collection of related businesses that can be planned for separately Has its own set of competitors Has a manager who is responsible for strategic planning and profit

The Growth-Share Matrix Relative market share Four Cells Question Marks Stars Cash Cows Dogs SBU Strategies SBU Lifecycle

The General Electric Model

See text for complete table
Table 4-2: Factors underlying Market Attractiveness and Competitive Position in GE Multifactor Portfolio Model: Hydraulic-Pumps Market Market Attractiveness Overall market size Annual market growth rate Historical profit margin Competitive intensity Technological requirements Inflationary vulnerability Energy requirements Environmental impact Social-political-legal Weight 0.20 0.15 0.05 Must be acceptable 1.0 Rating = (1-5) 4 5 2 3 Value 0.80 1. 0.60 0.30 0.10 3.70 Business Strength Market share Share growth Product quality Brand reputation Distribution network 0.40 0.50 See text for complete table

Critique of Portfolio Models: Focus on classifying current business but provide little advice for future planning Many policies of business units are determined at the corporate level Too much emphasis on market share growth or growth through entry into new attractive market – even unrelated ones. Merger and acquisition are the results of this approach. Planning New Businesses, Downsizing Older Businesses

Intensive Growth (Ansof Matrix)

Integrative Growth Diversification Growth Downsizing Older Businesses

Business Unit Strategic Planning
Business Mission SWOT Analysis External Environment Analysis (Opportunity and Threat Analysis) Marketing Opportunity Buying opportunity more convenient or efficient Meet the need for more information and advice Customize an offering that was previously only available in standard form

Marketing Opportunity Analysis (MOA) Can the benefits be articulated to a target market? Can the target market be reached with cost-effective media and trade channels? Does the company have the critical capabilities to deliver the customer benefits? Can the company deliver these benefits better than any actual or potential competitors? Will the rate of return meet the required threshold of investment?

Figure 4-7: Opportunity and Threat Matrices

Internal Environmental Analysis (Strength/Weakness Analysis) Goal Formation Strategic Formulation Strategy

Porter’s Generic Strategies Overall cost leadership Differentiation Focus Operational Effectiveness and Strategy Strategic group Strategic alliances

Marketing Alliances Product or service alliances Promotional alliances Logistical alliances Pricing collaborations Partner Relationship Management, PRM Program Formulation and Implementation Feedback and Control

Product Planning: The Nature and Contents of a Marketing Plan
Contents of the Marketing Plan Executive Summary Current Marketing Situation Opportunity and issue analysis Objectives Marketing strategy Action programs Financial projections Implementation controls

Program Magister Manajemen Universitas Islam Indonesia

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