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KENT 31 BAD 67051 Marketing Management

KENT 31 BAD 67051 Marketing Management. Lecture 1 Marketing Management Thinking, Decision Making, & Positioning. Marketing Defined.

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KENT 31 BAD 67051 Marketing Management

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  1. KENT 31BAD 67051Marketing Management Lecture 1 Marketing Management Thinking, Decision Making, & Positioning

  2. Marketing Defined • “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” b)…and a bit of controversy about the definition

  3. Marketing Management A. Definition 1 “…the process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges with target groups that satisfy customer and organizational objectives.” [ugh]

  4. Marketing Management A. Definition 2 Marketing Management is the management of “innovative and imitative processes” to identify and satisfy consumers cost effectively.

  5. Don Kosec, TWC Business Services

  6. Kosec…Importance of Marketing to Time Warner Business Services “Marketing Drives Sales” Collect Marketing Trends and Data, Helps to determine incentives, Use research and tools to Drive Sales through Brand Awareness

  7. II. Marketing Management Philosophies • A. Production Concept

  8. A. Production Concept • Assumes consumers want products that are available and highly affordable. • Implies management should focus on improving production and distribution efficiency. • Useful when: • demand exceeds supply • product cost is too high

  9. B. Product Concept • Assumes consumers want product that offer the most quality, performance, and features. • Implies the firm should make continuous product improvements. • Places the focus on the product, not the customer.

  10. C. Selling Concept • Assumes consumers will not buy enough product unless there is a strong sales and promotional effort. • Useful for: • unsought goods • nonprofit areas

  11. D. The Marketing Concept • Assumes that achieving the organization’s goals depends on determining and satisfying consumers more effectively and efficiently than competitors. • Peter and Donnelly say: “An organization should seek to make a profit by serving the needs of customer groups” (p. 4).

  12. D. The Marketing Concept Three parts to the concept: • The satisfaction of consumers’ needs, wants, and desires, • at a profit (or to attain organizational goals), • through an integrated effort within the firm.

  13. Notes: • Firms must identify and satisfy customers’ needs AND continue to do so! • Competition FORCES sellers to focus on the consumer. • Consumers must be seen in the context of all environmental/market factors (managers must also have a “market orientation”).

  14. E. The Societal Marketing Concept Assumes that customer satisfaction should be delivered in a way that maintains or improves the consumer’s and society’s well-being. (a customer’s wants/needs may be at odds with what is good for society) e.g., pollution control

  15. III. The Marketing Concept and: A. Synergy • Managers must create marketing tactics that fit together well. • They must coordinate implementation.

  16. III. The Marketing Concept and: B. Hypercompetition • Competitive Advantages do not last. Customer Satisfaction and competition require innovation, cost advantages, and quality enhancements. • Changes create new market segments, with new needs.

  17. III. The Marketing Concept and: C. Cross Functional Decision Making Teams

  18. Customer Orientation PROFITS Competitor Orientation Interfunctional Coordination Market Orientation Target Market

  19. IV. Strategic Planning The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing markets. Developed by senior managers • Future oriented • Intended to create objectives and strategies for success against competition. (see P&D page 6)

  20. IV. Strategic Planning The Process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing markets. A. Defining the Company’s Mission B. Setting Company Objectives and Goals C. Corporate Strategies

  21. Mission Statement • The mission statement should be a clear and succinct representation of the enterprise's purpose for existence. It should incorporate criteria addressing concepts such as the moral/ethical position of the enterprise, public image, the target market, products/services, the geographic domain and expectations of growth and profitability. • The intent of the Mission Statement should be the first consideration for any employee who is evaluating a strategic decision. 2-21 http://www.businessplans.org/mission.html

  22. Dan Muller, President, Distribution and Services, Timken

  23. Mission/Vision at Timken WAS “World-wide Leader in Bearings and Steel” BUT that put them in a “strategic box” NEW “Improving Customer Performance” Allows “out of the box thinking!” For customers who are WILLING TO PAY for the VALUE we create. Remember “At a Profit?”

  24. XI. Setting Strategic Directions • Three and ½ C’s of where we are NOW. Understand: • Our COMPETENCIES • Competitive Advantage • Our CUSTOMERS • Our COMPETITORS 2-24

  25. Setting Strategic Directions • Where do we want to go? • Grow? • Sustain? • Divest? • Invest? Use Portfolio Analysis to help figure it out 2-25

  26. V. Types of Corporate GROWTH Strategies

  27. V. Types of Corporate Strategies A. Growth Strategies for Current Markets • 1. Market Penetration

  28. Market Penetration • Increase sales of EXISTING products in CURRENT markets.

  29. V. Types of Corporate Strategies A. Growth Strategies for Current Markets • 1. Market Penetration • 2. Product Development

  30. Product Development Develop NEW PRODUCTS for CURRENT markets to: • Meet changing CUSTOMER needs and wants, • Match new COMPETITIVE offerings, • Take advantage of NEW TECHNOLOGY, and • Meet the needs of SPECIFIC market segments.

  31. V. Types of Corporate Strategies A. Growth Strategies for Current Markets 1. Market Penetration 2. Product Development B. Growth Strategies for New Markets 1. Market Development

  32. Market Development • Bring CURRENT products to NEW markets • (e.g., Arm & Hammer)

  33. V. Types of Corporate Strategies A. Growth Strategies for Current Markets • 1. Market Penetration • 2. Product Development B. Growth Strategies for New Markets • 1. Market Development • 2. Market Expansion

  34. Market Expansion • Taking CURRENT products to NEW DOMESTIC geographic areas • International Expansion • Regional strategy • Multinational strategy • Global strategy

  35. V. Types of Corporate Strategies A. Growth Strategies for Current Markets • 1. Market Penetration • 2. Product Development B. Growth Strategies for New Markets • 1. Market Development • 2. Market Expansion • 3. Diversification

  36. Diversification • Taking NEW PRODUCTS to NEW MARKETS • (e.g., Arm and Hammer Toothpaste)

  37. V. Types of Corporate Strategies A. Growth Strategies for Current Markets • 1. Market Penetration • 2. Product Development B. Growth Strategies for New Markets • 1. Market Development • 2. Market Expansion • 3. Diversification • 4. Strategic Alliances

  38. Strategic Alliances • Total collaboration by EXCHANGING key resources to enhance companies’ performance.

  39. V. Types of Corporate Strategies A. Growth Strategies for Current Markets B. Growth Strategies for New Markets C. Consolidation Strategies • 1. Retrenchment

  40. Retrenchment • WITHDRAW from WEAKER current markets

  41. V. Types of Corporate Strategies A. Growth Strategies for Current Markets B. Growth Strategies for New Markets C. Consolidation Strategies • 1. Retrenchment • 2. Pruning

  42. PRUNING • REDUCE the number of PRODUCTS offered in current markets

  43. V. Types of Corporate Strategies A. Growth Strategies for Current Markets B. Growth Strategies for New Markets C. Consolidation Strategies • 1. Retrenchment • 2. Pruning • 3. Divestment

  44. Divestment • Selling off part of the business -- ELIMINATE a product and a current market.

  45. V. Types of Corporate Strategies A. Growth Strategies for Current Markets B. Growth Strategies for New Markets C. Consolidation Strategies D. Other Strategies

  46. Other Strategies 1. Based on Competitive Advantage • Low Cost Leader or • Differentiation --Offer a unique value to customers based on: Design, quality, service, variety, etc.

  47. Other Strategies 2. Based on Value Disciplines • Operational Excellence --“Okay” products, best price, least inconvenience • Product Leadership --Innovation for best product performance • Customer Intimacy

  48. VI. Product Portfolio Models A. The Boston Consulting Group Growth-Share Matrix (See P&D page 25)

  49. STAR PROBLEM CHILD High Market- Growth Rate 10% CASH COW DOG Low 0% High Low 10X 0.1X Market Dominance The BCG Model

  50. Ne-Yo STAR PROBLEM CHILD High The Dream Market- Growth Rate Kanye West Playaz Circle 10% CASH COW DOG Low LL COOL J Jay-Z 0% High Low 10X 0.1X Market Dominance The BCG Model in the Music Industry – Def Jam’s Portfolio of Artists 2-50

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