marketing management prof. b. n. f. warnakulasooriya dr.(mrs.) amila jayarathne
TRANSCRIPT
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Marketing Management
Prof. B. N. F. Warnakulasooriya
Dr.(Mrs.) Amila Jayarathne
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Student Discipline
Be punctual to the lecture
Excuse the lecturer in case want to be late or leave the class early
Maintain required level of attendance to sit for the final exam
Keep your mobile phones switched off
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Learning Outcomes
After learning this course unit, the students should be able to,
1. Define marketing and the marketing process.
2. Capture market insights from the environment.
3. Design a customer-driven marketing strategy.
4. Design marketing programmes.
5. Apply sustainable marketing practices into
businesses.
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Evaluation
End Semester Examination - 60 marks
Group Assignment - 40 marks
100%
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Required Texts and References
Principles of Marketing Kotler, Armstrong, Agnihotri, Haque, 13th edition, A South Asian Perspective
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Defining Marketing and the Marketing Process
Session – 1, 2 and 3
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Session Outline
What is Marketing?
The Role of Marketing
The Marketing Management Process
The Changing Marketing Landscape
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What is Marketing?
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What is Marketing? (Cont.)
Selling?
Advertising?
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Marketing Includes Selecting target markets
Understanding the needs and wants
Designing the value
Designing the product
Pricing the product
Selling
Advertising
Making products available in stores
Arranging displays
Maintaining inventories
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Marketing Defined
“Marketing is managing profitable customer relationships”
“The aim of marketing is to make selling superfluous (Drucker)”
Simply, marketing is “meeting needs profitably”
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Marketing Defined (Cont.)
Marketing is a social and managerial process by which individuals and organization obtain what they need and want through creating and exchanging value with others (Kotler, 2011).
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The Role of Marketing
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The Role of Marketing to the Business
As a Business Philosophy
As a Functional Area of Management
As a Skill
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Marketing as an Overall Business Philosophy
Marketing is not only much broader than selling, it is not a specialized activity at all. It encompasses the entire business. It cannot be considered a separate function. It is the whole business seen from the point of view of its final result, that is, from the customer’s point of view. Concern and responsibility for marketing must therefore permeate all areas of the enterprise (Peter Drucker).
It concerns the achievement of effectiveness.
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Marketing as a Function
Among the other functions of HR , Finance or Operational Management,
Department of Marketing Management
Marketing function is dedicated to efficiency.
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Marketing function is dedicated to efficiency
Analysis
Planning
Implementation
Control
Marketing as a Functional Area of Management
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Marketing as a Skill
Market Sensing Ability
Market Relating Ability
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Role of Marketing as Both a Business Philosophy and a Business Function
Marketing as a Philosophy Effectiveness
(The ability to achieve appropriate objectives /the ability to create and keep profitable customer/Doing the right thing )
Marketing as a Functions Efficiency
(ability to minimize the use of resources in achieving organizational objectives/Doing things right)
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Principle Combinations of Effectiveness & Efficiency
Efficient Thrive Die Slowly
Survive Die QuicklyInefficient
Effective
Ineffective
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The Importance of Marketing to You...
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The Marketing ProcessA Simple Model of the Marketing Process
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1. Understanding the Marketplace and Customer Needs
As a first step, marketers need to understand customer needs and wants and the marketplace within which they operate.
Core Customer and Marketplace Concepts
1. Customer Needs, Wants and Demands 2. Market Offerings - Products, Services and
Experiences 3. Customer Value and Satisfaction4. Exchange and Relationships 5. Markets
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Customer Needs, Wants and Demands
Needs
State of felt deprivation
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Wants
The form human needs take as shaped by culture and individual personality
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Demands
Human wants that are backed by buying power
Demand
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Market Offerings - Products, Services and Experiences
Consumers’ needs and wants are fulfilled through market offerings.
Market Offerings Combination of products, services, information, experiences, persons, places, events or ideas offered to a market to satisfy a need or want.
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Customer Value and Satisfaction
Customers form expectations about the value and satisfaction that various market offerings will deliver and buy accordingly. Satisfied customers buy again and tell others about their good experiences. Dissatisfied customers often switch to competitors and disparage the product to others.
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Exchanges and Relationships
Exchange is the act of obtaining a desired object from someone by offering something in return.
Marketing consists of actions taken to build and maintain desirable exchange relationships with target audiences involving a product, service, idea, or other object.
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Markets
The set of all actual and potential buyers of a product or service.
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A Modern Marketing System
Suppliers Consumers Marketing Intermediaries
Company
Competitors
Major environmental forces
Markets (Cont.)
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2. Designing a Customer-Driven Marketing Strategy
Once it fully understand consumers and the marketplace, marketing management can design a customer-driven marketing strategy.
Winning marketing strategy
What customers will we serve?
How can we serve these customers best?
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Selecting Customers to Serve
Market Segmentation
Target Marketing
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Choosing a Value Proposition
The company must also decide how it will serve targeted customers – how it will differentiate and position itself in the marketplace.
A company’s value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs.
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Marketing Management Orientations
Marketing management wants to design strategies that will build profitable relationships with target consumers.
What philosophy should guide these marketing strategies?
What weight should be given to the interests of customers, the organization and society?
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Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept
Marketing Management Philosophies
Holistic Marketing Concept
Customer Driven
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The Production Concept
The production concept holds that consumers will favour products that are available and highly affordable. Therefore, management should focus on improving production and distribution efficiency.
•High production efficiency•Low costs (inexpensive) •Mass distribution
Management Focuses
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Ford Model-T Car
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Major Risk of Production Concept
Focusing too narrowly on their own operations and loosing sight of the real objective – “Satisfying customer needs and building customer relationships”.
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The Product Concept
The product concept holds that consumers will favour products that offer the most in quality, performance and innovative features.
Making continuous product improvements
Management Focuses
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Focusing only on the company’s product can lead to Marketing Myopia - “focus on the product rather than the consumer need”.
Product Concept (Cont)
People do not want a better mousetrap, but they want a better solution to mouse problem
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Marketing MyopiaThe mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products.
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The Selling Concept
The selling concept holds that consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort.
Aggressive selling and promotional efforts
Management Focuses
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Selling (Cont.)
The aim often is to sell what the company makes rather than making what the customer wants.
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The Marketing Concept
The marketing management philosophy holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.
Being customer centered
Management Focuses on
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Marketing Concept (Cont.)
The job is not to find the right customers for your product but to find the right products for your customers.
Marketing Concept Components
Target marketsCustomer needsCoordinated marketingProfitability
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The Selling and Marketing Concepts Contrasted
Starting Focus Means Ends Point
Factory Existing Selling and Profits through products promoting sales volume
Market Customer Integrated Profits through Needs marketing customer satisfaction
Marketing Concept
(Outside-in view)
SellingConcept
(Inside-out view)
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???
Does the marketing concept overlook possible conflicts between consumer
short-run wants and consumer long-run welfare?
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Is a firm that satisfies the immediate needs and wants of target markets
always doing what is best for consumers in the long run?
???
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The Societal Marketing Concept
The societal marketing concept holds that a company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests and society’s long-run interests.
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Society (Human Welfare)
Consumers (Want Satisfaction)
Company (Profits)
SocietalMarketing Concept
The Considerations Underlying the Societal Marketing Concept
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Today’s best marketers recognize the need to have a more complete, cohesive approach that goes beyond traditional applications of the marketing concept.
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The Holistic Marketing Concept
The holistic marketing concept is based on the development, design, implementation of marketing programs, processes and activities that recognizes their breadth & inter dependencies.
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Holistic Marketing (Cont.)
Holistic marketing recognizes that, “everything matters” in marketing and that a broad, integrated perspective is often necessary.
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Holistic Marketing
Internal Marketing
Integrated Marketing
Performance Marketing
Relationship Marketing Sales
revenue
Brand & customer equity
Ethics PartnersEnvironment
Legal
Community
Customers Channel
Channel
Product & Services
Communications Marketing department
Senior management
Other departments
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Relationship Marketing
Relationship Marketing aims to build mutually satisfying long-term relationships with key constituents in order to earn and retain their business.
Four key constituents for relationship marketing
1. Customers2. Employees3. Marketing partners 4. Members of the financial community
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Integrated Marketing
The marketer’s task is to devise marketing activities and assemble fully integrated marketing programmes to create, communicate and deliver value for consumers.
Two key themes of integrated marketing
1.That many different marketing activities communicate and deliver value
2.When coordinated, marketing activities maximize their joint effects.
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Internal Marketing
Ensuring everyone in the organization embraces appropriate marketing principles, especially senior management.
Internal marketing must take place on two levels
1.The various marketing functions must work together
2.Other departments must embrace marketing
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Performance Marketing
Holistic marketing incorporates performance marketing and understanding the returns to the business from marketing activities and programmes, as well as addressing broader concerns and their legal, ethical, social and environmental effects.
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3. Preparing an Integrated Marketing Plan and Programme
Marketers develop integrated marketing programmes that will actually deliver the intended value to target customers. The marketing programme builds customer relationships by transforming the marketing strategy into action.
It consists of the firm’s marketing mix, the set of marketing tools the firm uses to implement its marketing strategy.
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The Marketing Mix
Creating a need satisfying market offering
How much it will charge for the offering
How it will make the offering available to target consumers
Communicate with the target customers about the offering and persuade them of its merits
Product
Price
Place
Promotion
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4. Building Customer Relationships
Customer Relationship Management
The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
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Relationship Building Blocks
• Customer Value• Satisfaction
Customer-Perceived Value
The customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers.
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Perceived Value (Cont.)
Total Customer BenefitsThe bundle of benefits customers expect from a given product or service
Total Customer CostThe bundle of costs customers expect to incur in evaluating, obtaining, and using the product or service
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Determinants of Customer Delivered Value
Image value
Personnel value
Services value
Product value
TotalcustomerBenefits
Monetary cost
Time cost
Energy cost
Psychological cost
Totalcustomer
cost
CustomerPerceived
value
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Customer Satisfaction
Customer satisfaction depends on the product’s perceived performance relative to a buyer’s expectations.
Customer Satisfaction
The extent to which a product’s perceived performance matches a buyer’s expectations.
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The level of a person’s felt state resulting from comparing a product’s perceived performance in relation to the person’s expectations
Dissatisfied SatisfiedDelighted
(Highly satisfied)
P < E P = E P > E
Satisfaction (Cont.)
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Customer Expectations
Set the right level of expectations
Setting too low expectation
Setting too high expectation
Satisfy but fail to attract enough customers
Buyers will be disappointed
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What does a highly satisfied customer do?
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A Highly Satisfied Customer…
• Stays loyal longer
• Buys more as the company introduces new products and upgrades existing products
• Talks favorably about the company and its products
• Pays less attention to competing brands and advertising and is less sensitive to price
• Offers product/service ideas to the company
• Costs less to serve than new customers because transactions are routinized
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What does a dissatisfied customer do?
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Tracking and Measuring Customer Satisfaction
Complaint and suggestion systems
Customer satisfaction surveys
Lost customer analysis
Ghost shopping
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5. Capturing Value from Customers
Creating Customer Loyalty and Retention
Good customer relationship management creates customer delight. In turn, delighted customers remain loyal and talk favourably to others about the company and its products.
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Customer Lifetime Value
The value of the entire stream of purchases that that the customer would make over a lifetime of patronage.
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The Changing Marketing Landscape
The Digital Age
Rapid Globalization
The Call for More Ethics and Social
Responsibility
The Growth of Not-for-Profit Marketing
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So, What is Marketing?
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Summary and Conclusions