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I UNDERSTANDING MODERN MARKETING

I UNDERSTANDING MODERN MARKETING. The Marketing Concept Marketing Mix Model Broadening Scope of Marketing Marketing’s Role in the Organization Creating Customer Value and Satisfaction Relationship Marketing.

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I UNDERSTANDING MODERN MARKETING

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  1. IUNDERSTANDING MODERNMARKETING The Marketing Concept Marketing Mix Model Broadening Scope of Marketing Marketing’s Role in the Organization Creating Customer Value and Satisfaction Relationship Marketing

  2. “The underlying philosophy of modern marketing management (since the 1960’s) is the outward focus on customers as the “Center of the Universe”

  3. The Marketing ConceptCaptured in terms such as: • Customer orientation • Customer focused • Customer driven • Customer centric • Customer satisfaction • Market driven • Exceed customer expectations

  4. Marketing ConceptKey Characteristics Focus on customers • Profits = f (customer satisfaction) • Supply adjusts to will of demand • Assumes intense competitive environment • Long-term time horizon • Normative not descriptive model

  5. Selling and MarketingConcepts Contrasted Starting point Focus Means Ends Factory Existing products Selling and promotion Profits through sales volume (a) The selling concept Target market Customer needs Integrated marketing Profits through customer satisfaction (b) The marketing concept

  6. Problems in Implementing the Marketing Concept • Inertia, entrenchment (old ways die hard) • Projection of own beliefs and values • Confusion of MC with superficial PR • Learning about customer needs difficult to operationalize • Information lost in organizational maze • Calls for integrated organization to support marketing effort • Requires continuous monitoring

  7. Conclusion Marketing concept is more relevant than ever as we enter the 2nd decade of the 21st century

  8. Operational Model for Implementing the Philosophy of the Marketing Concept is the: Marketing Mix

  9. The Marketing MixConsists of Four Basic Strategic Variables (the four “Ps”) • Product Strategy • Price Strategy • Promotional Strategy • Place Strategy (Channels of Distribution)

  10. The role of marketing management is to mix or blend these four strategic variables in such a way as to meet the needs of...

  11. THE TARGET MARKET Product Price Promotion Place Target Market

  12. This process does not take place in a vacuum

  13. Environment(Exogenous Variables)Main Categories of Environmental Variables • Economic http://www.youtube.com/watch?v=7hbRZ3ZCyI8&feature=related • Competitive • Technological http://www.youtube.com/watch?v=R8mDd8bvUnE&feature=related • Socio-Cultural-Demographic • Legal-Political-Government

  14. Environment Product • Economic • Competitive • Socio-Cultural- Demographic • Legal-Political-Govt • Technology Internal Controllable Variables (endogenous) Place Price Target Market Promotion Illustrative Representation of the Marketing Mix

  15. The Marketing Mix Model Portrays Marketing Management as: Environment • Economic • Competitive • Socio-Cultural- Demographic • Legal-Political-Government • Technology Internal Controllable Variables (endogenous) • Based on the marketing concept • Having a supply side and demand side • Supply adapting to demand • Highly interactive • An open system • Requiring human direction • Highly dynamic process • An extremely challenging managerial task • Universally applicable to virtually any organization • Global in scope Target Market Price Promotion Product Place

  16. Manufacturers Retailers Accounting Law Organizations Non-profits Universities Government People (political candidates) Countries Marketing’s Broadened Scope

  17. Marketing as a Strategic Component of the Organization Marketing is elevated to a level of strategicposition in the organization Philip Kotler on Marketing Strategy http://www.youtube.com/watch?v=wAZtjhln5dM&feature=related

  18. Marketing-Management Inextricably Tied to Decisions Involving: Future direction of the organization Markets to be served Creation of competitive advantage Long term organizational performance

  19. Therefore Strategic Marketing Management Consists of at Least Six Major Areas • Defining the organization’s business • Specifying the purpose of the organization • Identifying opportunities • Formulating product/market strategies • Budgeting: financial, production, human resources • Monitoring, evaluating, and adapting

  20. Defining the Organization’s Business Type of customers (markets) to be served Needs of those customers Means by which organization will meet the needs Competitive advantage (attainment and sustained)

  21. Specifying the Purpose of the OrganizationAspirations of the organization and what it wishes to achieve ie., objectives and goals Marketing Production Finance ROI Output and Sales Volume ROS efficiency Margin measures, e.g. Profit Market Share output per Cash Flow Customer Man hour Satisfaction

  22. Identifying Organizational OpportunitiesExternal (environmental) opportunities matched with internal (organizational) capabilities • What do we do best? (distinctive competency) • What must we do? (success requirements) • What might we do? (environmental opportunity)

  23. Formulating Product/Market Strategies MARKETS Offerings EXISTING NEW Market Penetration Market Development EXISTING New Offering Development NEW Diversification

  24. Budgeting, Financial, Production, and Human Resources Financial implications and allocations relevant to the marketing plan Revenue, expense, and profit projections Cost allocations made

  25. Monitoring, Evaluating and Adapting Marketing Strategy Marketing audit --comprehensive, systematic, independent, and periodic examination of the organization’s marketing objectives and strategies to identify problems and opportunities as well as to recommend ways of improving marketing performance

  26. Customer Value and Satisfaction = = CV Input Customer Costs Output Customer Benefits Note: Costs defined broadly Benefits (customer’s viewpoint)

  27. Customer Satisfaction Customer’s perception of perceived performance of offering relative to experience • Perceived performance below expectations = dissatisfied customer • Perceived performance meets expectations = satisfied customer • Perceived performance exceeds expectations = delighted customer

  28. Relationship Marketing The development and maintenance of long-term, cost effective relationships with customers in order to retain their preference

  29. Relationship Marketing Compared to Transaction (Traditional) Marketing Factor Transaction Marketing Relationship Marketing Time orientation Short-term Long-term______________ Organizational goal Make sale Retain customers________ Customer service priority Relatively low Very high______________ Customer contact Low to moderate Frequent_______________ Customer commitment Low High__________________ Seller-customer interaction Conflict manipulation Cooperation; trust________ Source of quality Mainly from production Company wide _______

  30. Tools for Implementing Relationship Marketing • Affinity programs • Frequent-buyer/user programs • Database marketing • Partnerships (strategic alliances • Co-marketing and co-branding • EDI (electronic data interchange) • VMI (vender-managed inventory) • QR (quick response) • Life-time value of customer analysis • Social Networks

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