1. Introduction to Marketing (MC4050)
Lecture Week 2
Marketing process and strategic planning

2. Agenda Marketing process
Organisation’s overall Strategic planning process

3. MARKETING PROCESS
Understand the market place 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 customer to create profits and customer equity

4. 1. Understand the market place and customer needs
Customer needs, wants and demands
Market offerings- products, services and experiences.
Customer value and satisfaction
Exchanges and relationships
Market

5. Customer need, wants and demand
state of felt deprivation
Wants
the form human needs take as shaped by culture and individual personality
Demands
human wants that are backed by buying power

6. Market offerings
Combination of Products ,Services, Information or Experiences offered to market to satisfy need or want.
Some marketers go beyond products and services they sell to create brand experience for consumers.

8. Customer value and satisfaction
How do customer choose among so many market offerings?
Customer form expectations about the value and satisfaction that various market offerings will deliver and buy accordingly.
Satisfied customer will buy again and again but dissatisfied one will switch to competitor.
So marketers should be careful to set the right level of expectations.

9. Exchange and relationships
Marketing occurs when people decide to satisfy their needs and wants through exchange relationships.
Exchange is the act of obtaining a desired object from someone by offering something in return.
There should be a desirable exchange relationship between marketer and customer.

10. Markets
The set of all actual and potential buyers of product or service.

11. 2. Designing a customer driven strategy
To design a winning marketing strategy, marketing manager must answer two important questions
What customer will we serve ( target market)
How can we serve these customers best

12. Selecting customers to serve
Company must decide who will it serve
Market segmentation as a means.
Selecting all the customers might not be possible
Select the customers that they can serve well and profitably

13. Choosing a value proposition
Value proposition is the set of benefits or value it promises to deliver to consumers to satisfy their needs.
For example how the company differentiate themselves from the competitors.
Red Bull gives you extra energy to fight mental and physical fatigue.

14. Concepts for developing marketing strategies
Production concept
Product concept
Selling concept
Marketing concept
Societal marketing concept

15. Concepts for developing marketing strategies
Production concept
Product concept
customer favours products that are easily available and affordable,
So company focus on efficient production and distribution
For e.g. Lenovo dominates highly sensitive Chinese market through this approach
customer favour the product that have good quality, performance and innovative
Marketing strategy focus on continuous product improvements

16. Product concept- Marketing myopia

17. Concepts for developing marketing strategies
Selling concept
Marketing concept
idea that the customers wont buy enough of the firms product unless it undertakes a large scale selling and promotion effort,
E.g. insurance, blood donations
“sense and respond” rather than “make and sale” philosophy

18. Concepts for developing marketing strategies
Societal marketing concept
should consider consumers wants, company’s requirements and society’s long run interest.

19. 3. Preparing an integrated marketing plan and program
Next step is to develop an integrated marketing program that will actually deliver the intended value to the target customers.
Marketing mix

20. 4. Building a customer relationship
Customer relationship management
Customer perceived value
Customer evaluation of Difference between all the benefits and all the cost of market offering compared to competitive offers
e.g. Toyota Prius
Customer satisfaction
Depends upon the products perceived performance relative to buyers expectations
e.g. Lexus

21. Customer satisfaction

22. 5. Capturing value from customers
Creating customer loyalty and retention
customer life time value
For e.g. Lexus believes that single satisfied and loyal customer is worth $600,000 in lifetime sales
Growing share of customer
the share they get of the customer’s purchasing in their product categories.
E.g. supermarkets and restaurant want more “share of Stomach”,
Airlines want more “share of travel”.
Building customer equity
combined life time value of all the company’s customer both current and potential

23. Assignment for Workshop
Explain the major trend and forces that are changing the marketing landscape and challenging marketing strategy.

24. To understand the role of marketing, we must first understand the organisations overall strategic planning process

25. Companywide strategic planning
Each company must
find the game plan for long-run survival and growth that makes sense given its specific situation, opportunities, objectives and resources.
This is the focus of strategic planning,
The process of developing and maintaining a strategic fit between organisation’s goal and capabilities and its changing marketing opportunities.

26. Strategic planning (contd..)
Company’s annual and long range plans deals with the company's current business and how to keep them going.
Whereas company's strategic plan involves adapting the firm to take advantage of opportunities in its constantly changing environment.

27. Steps in strategic planning
Defining the company mission
Setting company objectives and goal
Designing the business portfolio
Planning marketing and other functional strategies
Business unit, product and market level
corporate level

28. Defining a market oriented mission
Every organisation exists to accomplish something
Mission statement:
A statement of the organisation purpose- what it want to accomplish in the larger environment.
Clear mission statement will act as an “ invisible hand”, that guides people in the organization.

29. Mission statement (contd..)
Mission statement should be
market oriented and defined in terms of customer needs rather than
focusing in product or technology terms.
Product and technologies eventually become outdated, but basic market needs last forever.

30. Mission statement- examples
E.g.
Nike isn’t just a shoe and apparel manufacturer rather it wants “ to bring inspiration and innovation to every athlete in the world”
eBay’s mission isn’t simply to hold online auctions and trading. Rather its mission is “ to provide a global trading platform where practically anyone can trade practically anything you can get it on eBay.”

31. Mission statement Mission statement should be
Realistic (e.g. Nepal airline mission to become the worlds largest airline could be deluding itself)
Specific (e.g. shouldn’t be too long to remember, to vague to be meaningful and too dull to inspire)
Fit the market environment (e.g. the mission statement of girl scout of America will be “ place where girls grow strong”)
Based on distinctive competencies
Motivating (e.g. Microsoft aim is to help people to realize their potential, “your potential our passion” says the company.

32. Setting company objectives and goals
Company needs to turn its mission into detailed supporting objective for each level of management.
Objective should be SMART
S- specific
M- measurable
A- achievable
R- realistic
T- time bound

33. Objectives and goals- example
Monsanto- operates in agricultural biotechnology business
Mission-
improving the future of farming and food abundantly and safely.
Overall objective-
build profitable customer relationships by developing better agricultural product that safely help crops produce more nutrition and higher yields without chemical spraying
Marketing objective-
So improving profit by increasing sales or reducing cost become another major objective
Marketing strategies and programs must be developed to support these marketing objectives.

34. Designing the business portfolio
The collection of businesses and products that make up the company
The best business portfolio is the one that best fits the company’s strength and weakness to opportunities in the environment.

35. Steps in business portfolio planning
Company must analyse its current business portfolio and decide which business should receive more, less or no investment
It must shape the future portfolio by developing strategies for growth and downsizing.

36. Analysing the current business portfolio- BCG growth share matrix

37. Developing strategies for growth and downsizing
Designing the business portfolio involves
finding businesses and products the company should consider in future
The company’s objective must be profitable growth
Product/market expansion grid is one of the device for identifying growth opportunities.

38. The product/market expansion grid

39. The product market expansion grid
Market penetration:
a strategy for company growth by increasing sales of current products to current market segments without changing the product.
E.g. Starbucks adding new stores in current market
Market development:
a strategy for company growth by identifying and developing new market segments for current company products.
E.g. Starbucks manager could review new demographic/geographic markets.

40. The product market expansion grid
Product development:
a strategy for company growth by offering modified or new products to current market segments.
E.g. Starbucks has introduced new reduced calorie options such as Frapuccino light blended beverages.
Diversification:
a strategy for company growth by acquiring businesses outside the company’s current products and markets.
E.g. Starbucks purchased Hear Music, which was so successful that it created the Starbucks new entertainment division.

41. Downsizing
Company not only develop strategies for growing their business portfolio but also strategies for downsizing them.
Downsizing is the process of reducing the business portfolio by
eliminating product of business units that are not profitable or that no longer fit the company’s overall strategy.

42. Planning Marketing: partnership to build customer relationships
Marketing plays a key role in the company’s strategic planning
Marketing provides a guiding philosophy-
the marketing concept- company strategy should revolve around building profitable customer relationships.
Marketing provides inputs to strategic planners by helping them to identify attractive market opportunities.

43. Planning Marketing: partnership to build customer relationships
Marketing alone cannot produce superior value to the customer.
Although it plays a leading role, marketing can be only a partner in attracting, keeping and growing customer.
In addition to customer relationship management, marketers must also practice partners relationship management- value chain analysis.

44. Value chain analysis
Series of departments that carry out value creating activities to design, produce, market, deliver and support the firms product.

45. Value chain analysis- example
Wall- Marts ability to offer the right products at low prices depends on the contributions of people in all of the company’s departments- marketing, purchasing, information systems and operations.

46. Partnering with others in marketing system
To create customer value, the firms need to look beyond the own value chain and into the value chain of suppliers, distributors, and ultimately customers.
E.g. McDonalds is capturing more than 40% of the burger market in the world even though it is rated below burger king in taste.
This is because McDonalds successfully partners with its franchisees, suppliers and others to jointly deliver exceptionally high customer value.

47. Marketing strategy and the marketing mix

48. Marketing strategy and the marketing mix
Customer stand in the centre
Next come marketing strategy where company hopes to create this customer value.
Which customer it will serve ( segmentation and targeting), how it will serve ( differentiation and positioning)
Guided by marketing strategy, company’s design an integrated marketing mix
To find the best marketing strategy and mix,
company engages in marketing analysis, planning and control.
Through this activities, the company watches and adapts to the forces in the marketing environment.

49. Customer driven marketing strategy- market segmentation
Dividing the market into distinct group of buyers who have distinct needs, characteristics or behaviours and who might require separate products or marketing programs.
Markets could be segmented based upon the demographic, geographic or behavioural factors.

50. Customer driven marketing strategy-Market targeting
The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Market niches (e.g. Ferrari) or several related market segments

51. Customer driven marketing strategy-differentiation and positioning
positioning is arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers.
E.g. BMW makes the ultimate driving machine, Ford built for the road ahead.
Differentiation
effective positioning begins with differentiation,
actually differentiating the company’s market offerings so that it gives customer superior value.

52. Customer driven marketing strategy-differentiation and positioning

53. Developing an integrated marketing mix
Marketing mix is the set of controllable, tactical marketing tools that firm blends to produce the response it wants in target market.
Marketing mix consists of everything the firm can do to influence the demand for its products.
7ps- product, price, place and promotion, people, process and physical environment.

54. Marketing mix- 7 Ps