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CHAPTER 11

CHAPTER 11. MARKETING MANAGEMENT. Objectives. The objectives of this chapter are to: introduce marketing management to the reader familiarize the reader with basic marketing terms and concepts

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CHAPTER 11

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  1. CHAPTER 11 MARKETING MANAGEMENT

  2. Objectives The objectives of this chapter are to: • introduce marketing management to the reader • familiarize the reader with basic marketing terms and concepts • provide an overview of the process of managing the marketing inputs in order to develop an effective marketing programme • emphasize on the importance of monitoring and control in the implementation of marketing programmes

  3. Learning Outcomes At the end of this chapter, students should be able to: • apply marketing management knowledge in their everyday tasks more effectively • use critical thinking in overcoming problems creatively and innovatively • prepare a business plan that is of quality, effective and viable and which can reduce the business risks and increase the success of the business

  4. Understanding Marketing Terms • Market • Needs and wants • Products and services • Customer value and satisfaction

  5. The Marketing Concept • Relationship marketing • Analysis of the marketing environment • External environment analysis • Microenvironment factors • Suppliers • Marketing intermediaries • Customers • Competitors • Public

  6. The Marketing Concept (cont.) • Macroenvironmental factors • Demographic factors • Economic factors • Political–legal factors • Cultural factors • Technological factors • Natural factors (green technology) • Internal environment analysis • Strengths • Weaknesses

  7. The Marketing Strategy and Process • Setting marketing objectives • Identifying market opportunities • Selecting target markets • Market segmentation • geographic segmentation • demographic segmentation • psychographic segmentation • Behavioural segmentation

  8. The Marketing Strategy and Process (cont.) • Segmenting business and international market • Selection of target market segments • Undifferentiated marketing • Differentiated marketing • Concentrated marketing • Positioning • Developing marketing mix

  9. The Marketing Strategy and Process (cont.)

  10. packaging sizes services warranties returns policies The Marketing Strategy and Process (cont.) Product and Service A company or business must try to identify the specific ways it can differentiate its product to obtain its competitive advantage (Kotler, 1997). • product variety • product quality • product designs • product features • branding

  11. The Marketing Strategy and Process (cont.) In the services business, the marketing attributes that need to be considered are as follows (Kotler, 1997): • Service quality • Consistency of service offering • Service package • Combination of services at competitive price • Service differentiation • Offering that is unique and can be differentiated from the competitors • After sales services • Follow-up to ensure customers are satisfied

  12. The Marketing Strategy and Process (cont.) Kotler (1997) suggests that differentiation variables on the product that may be adopted by entrepreneurs are: • product features • product performance • product conformance • product durability • product reliability • product reparability • product style • product design

  13. The Marketing Strategy and Process (cont.) In addition, in services business the differentiation can be in the manner of: • ordering ease • delivery • installation • customer training • customer consulting • maintenance and repair • miscellaneous services • after sales service

  14. The Marketing Strategy and Process (cont.)

  15. The Marketing Strategy and Process (cont.)

  16. The Marketing Strategy and Process (cont.)

  17. The Marketing Strategy and Process (cont.)

  18. The Marketing Strategy and Process (cont.)

  19. The Marketing Strategy and Process (cont.)

  20. The Marketing Strategy and Process (cont.)

  21. The Marketing Strategy and Process (cont.) Objectives of Pricing The objectives of a firm when setting-up the pricing on a product or services are: • to achieve target return on investment or net sales • to improve or stabilize prices • to sustain or raise market share • to counter or put off competition • to maximize profit

  22. The Marketing Strategy and Process (cont.)

  23. The Marketing Strategy and Process (cont.) Pricing decisions need to consider internal and external factors. The external factors to be considered are: • government, ministries and agencies • demand for the product and economic conditions • consumer associations and groups • competitors and competitive reactions • distribution (distributors) • suppliers (supply of raw materials)

  24. The Marketing Strategy and Process (cont.) Pricing decisions need to consider internal and external factors. The internal factors to be considered are: • objectives of marketing • survival of the company in the market competition • profit making • market share leadership • product quality leadership

  25. The Marketing Strategy and Process (cont.)

  26. The Marketing Strategy and Process (cont.)

  27. The Marketing Strategy and Process (cont.) Channel A Manufacturer directly sells it product or services to consumers Channel B It consists of one selling intermediary, that is the retailer, who will sell the product to the consumer Manufacturer Customer Manufacturer Retailer Customer

  28. The Marketing Strategy and Process (cont.) Channel C Through this channel arrangement, wholesalers mediate between manufacturers and retailers. The wholesalers buy from the manufacturers, and sell to the retailers, who in turn sell to the consumers. Manufacturer Wholesaler Retailer Consumer

  29. The Marketing Strategy and Process (cont.) Channel D This channel involves 3 intermediaries between the manufacturer and consumer. This type is practised when a small manufacturer cannot afford or justify its sales force, or when the market consists of a number of small retail outlets. Jobber plays a role with products that are not distributed by large wholesalers. Non store retailing – another option for businesses—can take the form of: door-to-door selling, in-house selling, mail order/direct response selling, teleshopping or automated vending. Manufacturer Wholesaler Jobber Retailer Customer

  30. Factors influencing distribution strategies: Type of product Target market and market coverage Product standardization Transportation ease The Marketing Strategy and Process (cont.)

  31. The Marketing Strategy and Process (cont.) Promotion • Promotion is the last marketing tool used to create awareness and favourable attitude within the target market, community and among various groups of people that are connected to the business. • It consists of all the activities the business undertakes to communicate and promote its products or services to the target market.

  32. The Marketing Strategy and Process (cont.) The objectives of promotion may be varied. Among the objectives are as follows: • to retain ‘loyal’ customers • to retrieve ‘lost’ customers • to recruit ‘new’ customers • to reassure ‘old’ and ‘new’ customers are making wise decision in buying the product or service

  33. Promotional strategies Advertising Personal selling Sales promotion Publicity The Marketing Strategy and Process (cont.)

  34. The Marketing Strategy and Process (cont.) Advertising Advertising is dissemination of marketing information through various media of communication for the purpose of increasing and maintaining effective demand and helping the sale of goods and services.

  35. The Marketing Strategy and Process (cont.) Advertising channel can be categorized as printed medium, electronic and digital medium, and at outdoor settings. Electronic and digital medium are as follows: television radio internet short messaging system Outdoors settings are like: billboards banners transportation • Printed medium are as follows: • newspaper • magazines • yellow pages • brochures • business cards • electronic and digital • television • radio • Internet • short messaging system

  36. The Marketing Strategy and Process (cont.) Sales Promotion • Refers to promotional activities or incentives carried out or offered within a set time frame to influence purchase. The common sales promotional strategies are: • rebates • coupons • purchase-with-purchase • samples • premiums • contest • point-of-purchase promotion • sweepstakes • free delivery • extended warranty 

  37. The Marketing Strategy and Process (cont.) Personal Selling • Personal selling is the most cost-effective tool at later stages of buying process. It is a face-to-face selling in which a seller attempts to persuade a buyer to make a purchase. Personal sales presentation is normally conducted by a trained sales person to influence potential customers. It is most often used for products that require demonstration or explanation. • Benefits of personal selling: • Alive, interactive and immediate relationship between the seller and buyer. • Cultivation of short- and long-term relationship through sales activities. It can also create extensive networking. • Immediate response by the buyer

  38. The Marketing Strategy and Process (cont.) Publicity • Publicity is about efforts taken by the company to develop and maintain good relationship with the public, to ensure good favourable public image of the business.

  39. Marketing Programme • A marketing programme, also known as the marketing plan, must eventually be prepared to document the marketing activities and marketing strategies. A typical marketing programme consists of the following: • executive summary and table of contents • analysis of marketing environment • product concept and customers’ needs and wants • identify target market and their profile analysis • estimation of market size • identify and analysis of competitors • analysing the strengths, weaknesses, opportunities and threats (SWOT) of the business • SWOT analysis and estimation of market share

  40. Marketing Programme (cont.) • marketing objectives • outline marketing objectives that has been identified • detailed estimation and breakdown of sale based on areas, customers group, monthly sales, other purchasing pattern • marketing action programmes • this section answers the what, when, where, who and how. Includes target market selected and justification for selection • marketing strategies • marketing strategies such as products, prices, promotion and outlet location and distribution • financial projections and marketing budget • detail on the marketing sales forecast and budget • monitoring and controls • explain how the plan programme will be monitored and controlled

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