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Part 1 STRATEGIC MARKETING AND ITS ENVIRONMENT Part 1 STRATEGIC MARKETING AND ITS ENVIRONMENT

Part 1 STRATEGIC MARKETING AND ITS ENVIRONMENT - PowerPoint Presentation

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Part 1 STRATEGIC MARKETING AND ITS ENVIRONMENT - PPT Presentation

1 CustomerDriven Strategic Marketing 2 Planning Implementing and Evaluating Marketing Strategies 3 The Marketing Environment Social Responsibility and Ethics Chapter 1 CustomerDriven Strategic Marketing ID: 731544

customer marketing products customers marketing customer customers products mix activities market relationships crm product environment management organization relationship business

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Slide1

Part 1STRATEGIC MARKETING AND ITS ENVIRONMENTSlide2

1: Customer-Driven Strategic Marketing2: Planning, Implementing, and Evaluating Marketing

Strategies

3:

The Marketing Environment, Social Responsibility, and EthicsSlide3

Chapter 1Customer-Driven Strategic MarketingProfessor Jason

C. H. Chen, Ph.D.

School

of Business AdministrationGonzaga UniversitySpokane, WA 99258chen@jepson.gonzaga.eduSlide4

QuestionWhat is marketing? How did you define the term before you read/ we discuss this chapter?Slide5

ObjectivesTo be able to define marketing as focused on customers

To identify some important marketing terms, including target market, marketing mix,

marketing exchanges, and marketing

environmentTo understand the relationship between marketing and value

To

become aware of the marketing concept and

market

orientation

To understand the importance of building customer

relationships

To recognize the role of marketing in our

societySlide6

Defining MarketingThe process of creating, distributing, promoting,

and pricing goods, services, and

ideas to:

facilitating satisfying exchange relationships with customers

developing

and

maintaining favorable

relationships with stakeholders in a dynamic

environmentSlide7

Marketing Strategies/DecisionsTo Satisfy Market Needs

Select a

Target Market

Develop a

Marketing Mix

A

marketing strategy

is the selection of a

target market

and the creation of a

marketing mix

that will satisfy the needs of target market members.

A

marketing strategy articulates the best use of the company’s resources to accomplish its marketing objectives.Slide8

A Marketing Strategy

C

The

Marketing MixSlide9

A Marketing Strategy – showing the 4 P’s of a

Marketing Mix

Place

Product

Price

Promotion

CSlide10

Marketing Mix Decisions

Marketing

Mix

Integrated Marketing

Communications

Decision

(Promotion)

Product Decisions

Distribution

Decisions

(_______+ ______)

Price Decisions

Time

PlaceSlide11

Figure 1.1 - Components of Strategic Marketing

4 P’s

4 P’s

(

place+time

)Slide12

Marketing Focuses on CustomersCustomersThe purchasers of organizations’ productsThe focal point of all marketing activitiesTarget Market

A specific group of customers on whom an organization focuses its marketing effortsSlide13

Marketing Mix VariablesFour marketing activities a firm can control to meet the needs of customers in its target market

Product

Distribution

PromotionPrice

Marketing mix variables are often viewed as

controllable

but have their limitsSlide14

Product VariableA product can be:

A good

A service

An idea

Involves creating/modifying:

Brand names

Packaging

Product variable decisions are important because they are directly involved with creating products that address customers’ needs and wantsSlide15

Distribution VariableMarketing managers need to make products available in quantities desired to as many target market customers as possible

While minimizing these three

costs:

InventoryTransportation

Storage

Ensures

availability of products:

At the right

time

In

convenient

locationsSlide16

Distribution VariableMarketing managers maySelect/motivate intermediaries (wholesalers and retailers)

Establish/maintain inventory control procedures

Develop/manage transportation and

storage systems

How has the Internet and electronic commerce influenced the distribution variable?

Marketing Information SystemsSlide17

Promotion VariableRelates to activities used to inform individuals or groups about the organization and its productsCan aim to increase public awareness of the organization and of new or existing products

Can educate customers about product features

Can

urge people to take a stance on a political or social issue

Can help sustain interest in established productsSlide18

Price VariableRelates to decisions and actions associated with establishing pricing objectives and policies and determining product prices

Price is

a critical component of the marketing mix as customers are concerned about value obtained in an exchange

used as a competitive toolIntense price competition sometimes leads to price warsSlide19

Marketing Creates ValueValue is a customer’s subjective assessment of benefits relative to costs in determining the worth of a productCustomer

benefits include anything a buyer receives in an exchange

Customer

costs include anything a buyer must give up to obtain the benefits the product provides including cost, time, effort and riskThe marketing mix can be used to enhance perceptions of value (p.8)

Customer Benefits

Customer

Costs

Value

=

–Slide20

CostsMonetary costsNon-monetary costsTime and efforts customers expend to find and purchase desired productsRisk-reduction strategyan offer of a 100 percent satisfaction guarantee and becomes popular in today’s catalog/telephone/Internet shopping environment.Slide21

Figure 1.2 - Marketing Builds RelationshipsExchanges are the provision or transfer of goods, services, or ideas in return for something of value

E

xchange

(and with other stakeholders)Slide22

Relationships with CustomersFor an exchange to take place, four conditions must exist:

Two or more parties must participate, and each must possess something of value that the other party desires

The exchange should provide a benefit or satisfaction to both parties

Each party must have confidence in the promise of the “something of value” held by the other

To build trust, the parties to the exchange must meet expectations

Marketing activities should attempt to

create

and

maintain

satisfying exchange relationships.Slide23

Relationships with StakeholdersStakeholders are constituents

who have a “stake,” or claim, in

some aspect of a company’s products, operations, markets,

industry, and outcomes

Stakeholders include:

Customers

Employees

Investors and shareholders

Suppliers

Governments, communities and moreSlide24

Marketing EnvironmentThe marketing environment is dynamic

and includes the following forces:

Competitive

Economic

Political

Legal and

regulatory

Technological

Socio-cultural

The marketing environment forces surround the customer and affect the marketing mixSlide25

Figure 1.1 - Components of Strategic Marketing

4 P’s

4 P’s

(

place+time

)

#1

#2

#3

#4

#5

#6Slide26

Marketing EnvironmentEffects of these forces on buyers/sellers can be dramatic and difficult to predict

The impact on value can be extensive as market changes can easily impact how stakeholders perceive certain products

Unlike marketing-mix variables, an organization has little to no control over marketing environment forces.

Marketing environment forces can fluctuate quickly and dramatically, which is one reason why marketing is so interesting and challenging.

Changes in the marketing

environmen

produce

uncertainty

for marketers and at times hurt marketing efforts.Slide27

Marketing EnvironmentThe forces of the marketing environment affect a marketer’s ability to facilitate value-driven marketing exchanges in three ways

:

They influence customers by affecting their

lifestyle, standards of living, and

preferences and needs for products

They

help to determine whether and how a marketing manager can perform certain marketing

activities

They

may affect a marketing manager’s decisions and actions by influencing buyers’ reactions to the firm’s marketing mix

.Slide28

Marketing ConceptAccording to the marketing concept, an

organization should try to provide products that satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals

The marketing concept is a

management philosophy guiding an organization’s overall activities

A firm

that adopts the marketing concept must satisfy not only its customers’ objectives but also its own objectives

Customers are the main

focusSlide29

Evolution of the Marketing ConceptProduction OrientationSecond half of the nineteenth century, the Industrial Revolution improved speed and efficiency

Large increases in availability of products and consumer response was strongSlide30

Evolution of the Marketing ConceptSales OrientationDuring the first half of the 20th century competition increased and focus shifted to

selling products to buyers

Marketers were able to learn that many products did not meet consumers needs

Businesses viewed sales and selling as the main means of increasing profitsSlide31

Evolution of the Marketing ConceptMarket Orientation Emerged in the mid-20th century

Market orientation requires an organization-wide commitment to researching and responding to customer needs and

d

issemination of the marketing intelligence across departmentsNew-product innovation

by developing a strategic focus to explore and develop new products to serve target markets

Involves being responsive to ever-changing

customer needs

and

wantsSlide32

Implementing the Marketing Concept

Establish an information system to discover customers’ real

needs (e.g.,

BI – data mining)

Use the information to create satisfying products

Company must coordinate all its activities to satisfy objectives

Listen and respond to consumers frustrations and appreciation

is the key in implementing the marketing

conceptSlide33

Customercentric

Who are the customers?

Where are the customers?

Their purchasing habits

What they need/want?

How many they need/want?

When they need/want?

How to reach them?

Demands

Products/

Services

IS/E-BUSINESS

BUSINESS VALUE & FOCUS –IS Perspective

SCM

CRM

BPR

ERP

Value

Business Models & Strategies

33

SCM: Supply Chain Management

CRM: Customer Relationship Management

BPR: Business Process Reengineering

ERP: Enterprise Resources PlanningSlide34

Customer Relationship Management (CRM)

Marketing Strategy

Information Technology

???

(what is a

strategic bridge?)Slide35

Customer Relationship Management (CRM)

Marketing Strategy

Information Technology

CRM

(CRM provides a strategic bridge between marketing strategy and IT aimed at long-term relationships)Slide36

Customer Relationship ManagementCustomer relationship management (CRM) means using information about customers to create marketing strategies that develop and sustain desirable customer relationships

Marketing relationships with customers are the lifeline of all businesses

Profits can be obtained through relationships in the following ways:

1) By acquiring new customers

2) By enhancing profitability of existing customers

3) By extending the duration of customer relationships

How?

We will learn

BI

RapidMiner

a

dataming

tool for exploring “

Market Basket

” and “

Target Market

” if time is allowed.Slide37

CRM Suite of applications, a database, and a set of inherent processesIntended to support customer-centric organization

Integrates all primary activities of value chain

Manage all interactions with customer though four phases of

customer life cycle:Marketing - marketing sends messages to target marketCustomer ___________ - customer prospects order and need to be supported

___________ Management - support and resale processes increase value to existing customers

Loss/churn - win-back processes categorize customers according to value and attempt to win back high-value customers

Customer Relationship Management (CRM)

37

Acquisition

RelationshipSlide38

Four Phases of Customer Life Cycle

Fig

1-Extra:

The Customer Life Cycle

Figure

below depicts

the

four

phases of the customer life cycle and shows how a

CRM

system integrates them into three major processes: solicitation, lead-tracking, and relationship management.Slide39

CRM Applications39

Fig

(Extra):

CRM Applications

Customer Relationship Management (CRM) systems store data in a single database and link CRM processes to one another.Slide40

Customer Relationships

40Slide41

“Long-term and mutually beneficial arrangement in which both the buyer and seller focus on value enhancement through the creation of more satisfying exchanges.”Deepens the buyers trust Building satisfying exchange relationships between buyers and sellers requires:Gathering useful data at all customer contact points Analyzing that data to better understand customers’ needs, desires, and habitsRelationship MarketingSlide42

Importance of Marketing in a Global Economy SummaryMarketing costs (50% - 60%) consume a sizable portion of buyers’ dollarsUsed in nonprofit organizationsImportant to businesses and the economyFuels global economyMarketing knowledge enhances consumer awarenessConnects people through technologyComputers and telecommunications helps marketers understand and satisfy more customers than ever before

The Internet provides information about products and allows customer interaction

As more consumers adopt smartphones, mobile marketing is also becoming a major trendSlide43

People, Process and Technology

Start with People

43Slide44

The Importance of Marketing in Our Global EconomySocially responsible marketing – Promoting the welfare of customers and stakeholders

Green marketing

– A strategic process involving stakeholder assessment to:

create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment (Safeway Whole Foods)Market orientation combined with social responsibility improves overall business performance.

All

organizations engage in some kind of marketing

The field offers interesting and challenging career opportunities throughout the

world

25-33% of civilian workers in the U.S. perform marketing

activities and marketing

skills are valuable in every fieldSlide45

Video Case 1.1: Cruising to Success: The Tale of New Belgium BrewingSummaryThis case illustrates how New Belgium Brewing’s market orientation has helped the company grow from a small business to America’s third largest brewery. Since its founding, New Belgium has emphasized the importance of meeting the needs of its many stakeholder groups, and that philosophy continues to guide the company’s marketing activities. While students may be familiar with the company’s corporate social responsibility activities, it is important for them to realize that those activities are part of the company’s marketing strategy and thus its profitability. Slide46

1. How has New Belgium implemented the marketing concept? According to the marketing concept, an organization should try to provide products that satisfy customers’ needs through a coordinated set of activities that also allow the organization to achieve its goals. New Belgium considers its customers and other stakeholders at every level of its marketing activities, which has led to the company’s popularity and success. Students may cite examples related to each part of the marketing mix, so make sure they focus on how the marketing mix contributes to customer satisfaction and the marketing concept. To ensure customer satisfaction, New Belgium focuses on creating quality products. The company engages in market research when creating its beers. It continually creates new products to keep customers engaged and excited about the brand. Even the company’s focus on sustainability reflects what is important to their customers. However, New Belgium’s corporate social responsibility activities are not just philanthropic—they are strategic. Because New Belgium beers provide more value, customers are willing to pay premium prices, which leads to higher profits for the company and its impressive 15 percent growth rate. Slide47

2. What has Kim Jordan done to create success at New Belgium? Kim Jordan created a unique marketing mix for New Belgium. Under her direction, the company crafted quality beers (product), placed them on shelves and in bars (distribution), created a unique indie brand (promotion), and increased their profit by providing more value and charging a higher price. In addition, Jordan’s vision for New Belgium’s corporate culture creates value for all stakeholder groups, including employees, customers, the environment, and the community and fosters loyalty to the New Belgium brandSlide48

3. How does New Belgium’s focus on sustainability as a core value contribute to its corporate culture and success? Sustainability has been a major part of the company’s vision since its founding. For this reason, NBB strives to incorporate environmental responsibility directly into its business strategies. Sustainability is important to several of New Belgium’s stakeholder groups, which increases customer and employee loyalty. Because of this, the company’s environmental philosophy creates a competitive advantage. Environmentally conscious consumers are more likely to do business with a company that incorporates green practices into its business activities. Sustainable practices also increase consumers’ perceptions of the value of New Belgium’s prices, which results in higher prices and better financial returns for the company.