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Chapter 1: An Overview of Marketing Chapter 1: An Overview of Marketing

Chapter 1: An Overview of Marketing - PowerPoint Presentation

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Chapter 1: An Overview of Marketing - PPT Presentation

Copyright 2010 by Cengage Learning Inc All Rights Reserved 1 What is Marketing What is Marketing A Philosophy An Attitude A Perspective A Management Orientation A Set of Activities ID: 669510

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Slide1

Chapter 1: An Overview of Marketing

Copyright 2010 by

Cengage Learning Inc. All Rights Reserved

1Slide2

What is Marketing?Slide3

What is Marketing?

A Philosophy

An Attitude A Perspective

A Management Orientation

A Set of Activities

Products

Distribution

PromotionPricing

AMA: 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.Slide4

Exchange

At Least Two Parties

Something of Value

Communication and Delivery

Freedom to Accept or Reject

Desire to Deal with Other Party

Conditions for Exchange

People giving up something to receive something they would rather have.Slide5

What

is Marketing?

Product

Price

Place

Promotion

Exchange

A B

Delivering

Value

Communicating

Value

Creating

Value

Customer value

and beneficial

relationshipsSlide6

The

Four Marketing Management Philosophies

Production

Sales

Marketing

Societal

What can we make or do best?

How can we sell more aggressively?

What do

customers want

and need?

What do customers want and need, and how can we benefit society?

Orientation

FocusSlide7

Achieving a Marketing Orientation

Obtain information about customers, competitors, and markets

Examine the information from a total business perspective

Determine how to deliver superior customer valueImplement actions to provide value to customersSlide8

Customer Value Requirements

Offer products that perform

Earn trustAvoid unrealistic pricing

Give the buyer factsOffer organization-wide commitment in

service and after-sales support

Co-CreationSlide9

Sales

vs. Marketing Orientations

Organization’s

Focus

Firm’s

Business

For

Whom?

Primary

Profit

Goal?

Tools to Achieve

Selling

goods and services

Everybody

Maximum sales volume

Primarily promotion

Inward

Sales Orientation:

Market Orientation:

Outward

Coordinated

use of all marketing activities

Customer satisfaction

Specific groups of people

Satisfying wants and needsSlide10

Why Study Marketing?Slide11

Why Study Marketing?

Plays an important role in society

Vital to business survival, profits and growthOffers career opportunities

Affects your life every daySlide12

Chapter 2: Strategic Planning for Competitive Advantage

Copyright 2012 by Cengage Learning Inc. All Rights Reserved

12Slide13

The Nature of Strategic Planning

Understand the importance

of strategic marketing and know a basic outline for a marketing plan.Slide14

Strategic Planning

The managerial process of creating and

maintaining a fit between the organization’s objectives and resources and evolving market opportunities.The goal is long-term profitability and growth.Slide15

Why Write a Marketing Plan?

LO

I

Provides a basis for comparison of

actual and expected performance

Provides clearly stated activities to

work toward common goals

Serves as a reference for the success of

future activities

Provides an examination of the marketing

environment

Allows entry into the marketplace with

awarenessSlide16

Marketing Plan ElementsSlide17

Defining the Business Mission

Answers the question, “What business are we in?”

Focuses on the market(s) rather than the good or serviceStrategic Business Units (SBUs) may also have a mission statementSlide18

Southwest Airlines Mission Statement

Source:

http://www.southwestairlines.com/about_swa/missionSlide19

Strategic Business Units (SBUs)

Characteristics:An SBU HAS…

A distinct mission and specific target marketControl over its resourcesIts own competitorsPlans independent of other SBUsSlide20

SWOT Analysis

©South-Western College Publishing

S

W

O

T

Things the company does well.

Things the company does not do well.

Conditions in the external environment that favor strengths.

Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.

Internal

ExternalSlide21

Scanning the Marketing Environment

The process of continually acquiring/interpreting

info on the events occurring outside the organization to identify and interpret potential trends.Slide22

Scanning the Marketing Environment Slide23

Marketing Objectives

Realistic

Measurable

Time specific

Compared to a

benchmark

Our objective is to increase sales of Purina brand cat food by 15 percent over 2009 sales of $300 million.”Slide24

Criteria

for Good Marketing Objectives

Realistic, measurable, and time-specific objectives consistent with the firm’s objectives:

1. Communicate marketing management philosophy

2. Provide management direction

3. Motivate employees

4. Force executives to think clearly

5. Allow for better evaluation of resultsSlide25

Competitive

Advantage

Niche Strategies

Cost

Product/Service Differentiation

Types of Competitive Advantage

The set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition.Slide26

Cost Competitive

Advantage

Being the low-cost competitor in an industry while maintaining satisfactory profit margins.

Obtain inexpensive raw materialsCreate efficient plant operations

Design products for ease of manufacture

Control overhead costs

Avoid marginal customersSlide27

Sources of Cost Reduction

Experience Curves

Efficient Labor

No-frills Goods and

Services

Government Subsidies

Product Design

Reengineering

Production Innovations

New Service

Delivery MethodsSlide28

Product/Service Differentiation

The provision of something that is unique and valuable to buyers beyond simply offering a lower price than the competition’s.Brand namesStrong dealer network

Product reliabilityImageServiceSlide29

Niche Competitive Advantage

Used by small companies with limited resources

May be used in a limited geographic marketProduct line may be focused on a specific product categorySlide30

Sources of

Sustainable Competitive Advantage

Patents

Copyrights

Locations

Equipment

Technology

Customer Service

Promotion

Skills and Assets

of an

Organization

Slide31

Sources

of Competitive Advantage

Sources of

Competitive Advantage

Cost

$

Product/Service

Differentiation

A

vs.

B

vs.

C

Niche

StrategiesSlide32

StrategySlide33

Ansoff’s Strategic Opportunity Matrix

Present Product

New Product

New

Market

Market

Penetration

Market

Development

Product

Development

Diversification

Present

MarketSlide34

Strategic Alternatives

Market

Penetration

MarketDevelopment

Product Development

Diversification

Increase market share among

existing customers

Attract new customers to

existing products

Introduce new products

into new markets

Create new products for

present marketsSlide35

Setting Strategic Direction

Where are we now?Where do we want to go?Slide36

Setting Strategic Direction – Where are we now?

CustomersCompetencies

CompetitorsBusiness sectorsSWOT analysisEnvironmental scanningSlide37

Setting Strategic Direction – Where are we now?

Competencies – an organization’s special capabilities, including skills, technologies, and resources that distinguish it from other organizations

Competitive advantage – a unique strength relative to competitors, often based on quality, time, cost, or innovationBenchmarking – discovering how others do something better than your own firm, so you can imitate or leapfrog competition. Studying operations in completely different businesses.Slide38

Setting Strategic Direction – Where do we want to go?

Growth strategies

Portfolio analysisMarket growth rate versus market share

Market-Product analysisAnalyze current and new products and marketsSlide39

Critical Factors for Success

Customer relationships (value)Innovation (new and unique value)Quality

EfficiencySlide40

Strategic Marketing Process

The activities of selecting and describing one or more target markets and developing and maintaining a market mix that will produce mutually satisfying exchanges with target markets.Slide41

Target Market Strategy

Segment the market based on groups with similar characteristics

Analyze the market based on attractiveness of market segmentsSelect one or more target marketsSlide42

Target Market Strategy

Appeal to the entire market

with one marketing mix

Concentrate on one marketing segment

Appeal to multiple markets

with multiple marketing mixesSlide43

Segmentation

Defining markets

Dimensions to use

Identifying segments

Identifying segments to target

Segmentation approaches

Positioning

Understanding customer’s view

Positioning techniques

Evaluating segment preferences

Differentiating the marketing mix

Relationship between

positioning & targeting

Focusing Marketing Strategy with Segmentation and PositioningSlide44

Market Segmentation

Involves aggregating prospective buyers into groups thatHave common needs, andWill respond similarly to a marketing actionSlide45

Product Segmentation

Using different marketing mix activities (features and advertising) to demonstrate perceive differences against competing products/brandsA firm selling two or more products with different features targeted to different market segments.Good – Better – Best

Cost – Value – Premium Slide46

5 Steps to Segmenting Markets

Form prospective buyers into segmentsForm products to be sold into groupsDevelop a market product grid and estimate size of marketSelect target marketsDesign marketing activities to each target marketSlide47

Criteria for Forming Segments

Potential for increased profit/ROISimilarity of needsDifference of needsFeasibility of marketing action to reach the targeted segmentSimplicity of cost of assigning potential buyers to a segmentSlide48

Ways to Segment Consumer Markets

Customer CharacteristicsGeographicDemographic

SocioeconomicPsychographicBuying SituationsOutlet typeBenefits soughtUsageAwareness and intentions

Behavior Slide49

Ways to Segment Consumer MarketsSlide50

Broad product-market (or generic market) name goes here (The bicycle-riders product-market)

Submarket 1

(Exercisers)

Submarket 2

(Off-road

adventurers)

Submarket 3

(Transportation riders)

Submarket 4

(Socializers)

Submarket 5

(Environmentalists)

Market Segmentation Defines Possible Target MarketsSlide51

Behavioral dimensions for segmenting consumer markets

Benefits soughtThoughtsRate of use

Type of problem solvingRate of useInformation requiredBrand familiarityPurchase relationshipKind of shoppingNeeds Slide52

Segmenting business markets

Kind of relationshipPurchasing methodsType of customerSegmentationType of buying situation

How customers will use the productSlide53

Marketing Mix – 4P’s Slide54

Marketing Mix: The “Four Ps”

The starting point of the

“4 Ps”

IncludesPhysical unit

Package

Warranty

Service

Brand

Image

Value

Product

Products can be…

Tangible goods

Ideas

ServicesSlide55

Marketing Mix: The “Four Ps”

Product availability where and when customers want them

All activities from raw materials to finished products

Ensure products arrive in usable condition at designated places when needed

PlaceSlide56

Marketing Mix: The “Four Ps”

Promotion

Role is to bring about exchanges with target markets by:

Informing

Educating

Persuading

Reminding

Includes integration of:

Personal selling

Advertising

Sales promotion

Public relationsSlide57

Marketing Mix: The “Four Ps”

Price

Price is what a buyer must

give up to obtain a product.

The most flexible of the

“4 Ps”-- quickest to change

Competitive weapon

Price x Units Sold = Total RevenueSlide58

Strategic Marketing ProcessSlide59

Following Up the Marketing Plan

Implementation EvaluationControl

Marketing audit is…ComprehensiveSystematicIndependentPeriodicSlide60

Effective Strategic Planning

Effective Strategic Planning requires…Continual attention – ongoing rather than annual

Creativity – challenging assumptionsManagement Commitment – support and participation from the topSlide61

Chapter 3: Ethics and Social ResponsibilitySlide62

Civil Society

Six Modes of Social Control

Ethics

Laws

Formal and Informal Groups

Self Regulation

The Media

Active Civil SocietySlide63

Ethical Behavior

63

Ethics

The moral principles or values that generally govern the conduct of an individual.

People usually base their individual choice of ethical theory on their life experiences

Deontology

Utilitarianism

Casuist

Moral Relativists

Virtue EthicsSlide64

Ethical Decision Making

Influential Factors

Extent of Problems

Top Management

Actions

Potential Consequences

Social Consensus

Probability of Harm

Time Until

Consequences

Number AffectedSlide65

Code of Ethics

Code of Ethics- A guideline to help

marketing managers and other employees make better decisions.Slide66

Creating Ethical Guidelines

Helps identify acceptable business practices

Helps control behavior internally Avoids confusion in decision makingFacilitates discussion about right and wrong Slide67

Ethical Guidelines and Training

Exhibit 3.3Slide68

Arguments for Social ResponsibilitySlide69

Corporate Social Responsibility

Stakeholders

Employees

Management

Customers

Local Community

Suppliers

OwnersSlide70

Sustainability

70

The idea that socially

responsible companies will

outperform their peers by

focusing on the world’s social

problems and reviewing

them as opportunities to build

profits and help the

world at the same time.Slide71

Cause-Related Marketing

The cooperative efforts of a “for-profit” firm and a “non-profit” organization for mutual benefit.

Five Questions to Ask Before Participating in a Cause-Related Marketing Program”

Is this company committed?

How is the program structured?

Who does the program benefit?

How will the organization that benefits use my money?

Is the program meaningful to me?