Principle of Management 1 Week 2 & 3 2024-2025 PDF

Principle of Management 1 (Week 2 & 3) 2024-2025 Lassaad RIANI 2. MARKETING FUNCTION 2.1 Evolution of Marketing Approaches: Marketin...

Principle of Management 1 (Week 2 & 3) 2024-2025 Lassaad RIANI 2. MARKETING FUNCTION 2.1 Evolution of Marketing Approaches: Marketing has undergone significant evolution over the years, adapting to changing consumer behaviors, technological advancements, and global economic shifts. Understanding this evolution is crucial to grasp the modern landscape of marketing. Here's a detailed overview: 2.1.1 Production Era (Late 19th century - early 20th century): In the production era, businesses primarily focused on the efficient production of goods. The key idea was to make products as efficiently as possible and then find customers for them. Marketing was limited and often involved basic selling. 2.1.2 Product Era (Early to mid-20th century): As manufacturing capabilities improved, the focus shifted to product quality and innovation. Marketers started emphasizing product features and benefits in their efforts. Advertising and branding became more prominent. 2.1.3 Sales Era (Mid-20th century): The sales era marked a shift from a product-centric approach to a sales-centric one. Companies recognized the need to actively sell their products to consumers. Sales techniques and aggressive advertising strategies were prevalent. 2.1.4 Marketing Era (Late 20th century - early 21st century): This era saw a more customer-centric approach. Businesses began to understand the importance of understanding and satisfying customer needs and wants. Market research and segmentation became central to marketing strategies. 2.1.5 Societal Marketing Era (Late 20th century - present): The societal marketing era expanded the focus beyond profits to include societal well-being. Businesses embraced corporate social responsibility (CSR) and ethical marketing practices. They started considering the impact of their actions on the environment and society. 2.1.6 Digital Marketing Era (Late 20th century - present): The advent of the internet and digital technology revolutionized marketing. Digital marketing includes online advertising, social media marketing, email campaigns, content marketing, and e-commerce. It allows for more targeted and cost-effective marketing efforts. 2.1.7 Content Marketing and Inbound Marketing (21st century): Content marketing emphasizes creating valuable, informative content to attract and engage customers. Inbound marketing focuses on drawing potential customers in by providing content that addresses their needs and interests. 1 2.1.8 Personalization and Data-Driven Marketing (21st century): Modern marketing relies heavily on data analytics to understand customer behavior and preferences. Personalization involves tailoring marketing messages and offerings to individual customers, improving relevance and effectiveness. 2.1.9 Digital Transformation and Marketing Automation (21st century): Marketing has become increasingly automated and data-driven. Businesses use marketing automation tools to streamline and personalize marketing campaigns, improving efficiency and customer experience. 2.1.10 Relationship Marketing (21st century): Building and maintaining strong relationships with customers has become a central marketing strategy. Customer loyalty, retention are prioritized through excellent customer service and personalized experiences 2.1.11 Social Media Marketing and Influencer Marketing (21st century): Social media platforms have become powerful marketing channels. Influencer marketing leverages individuals with large social media followings to promote products or services. 2.2 Introduction to Marketing Marketing is the process of creating, communicating, delivering, and exchanging offerings that have value for customers, partners, and society at large. It's about understanding and meeting customer needs and wants. Creating Offerings: In marketing, creating offerings refers to developing products or services that cater to the needs and desires of a specific target audience. For example, a company like Apple creates offerings such as the iPhone, MacBook, and Apple Watch to fulfill the needs of tech-savvy consumers seeking quality, user-friendly devices. Communicating Offerings: Once a product or service is created, effective marketing involves communicating its features and benefits to the target market. For instance, Coca-Cola uses various advertising and promotional campaigns to communicate the refreshing taste and happiness associated with its beverages. Delivering Offerings: Delivering offerings involves making products or services available to customers in a convenient and accessible manner. Amazon, for instance, excels at delivering a wide range of products to customers' doorsteps efficiently through its online platform and logistics network. Exchanging Offerings: The exchange of offerings is the process of transactions between buyers and sellers. This exchange can involve monetary transactions or other forms of value exchange. When you buy a coffee at Starbucks in exchange for money, that's a basic example of the exchange of offerings. Value for Customers: Marketing is fundamentally about providing value to customers. This means that the offerings must meet the needs and desires of the customers. For example, Airbnb offers value to travelers by providing a platform to find affordable and unique accommodations. 2 Value for Partners: Partnerships are a significant part of marketing. Businesses often collaborate with other organizations to expand their reach and offer additional value to customers. For instance, a smartphone manufacturer may partner with a software company to provide more features and enhance the user experience. Value for Society at Large: Responsible marketing also takes into consideration the impact on society. Companies that practice corporate social responsibility (CSR) by supporting social and environmental causes contribute value to society. For example, a company that donates a portion of its profits to a local charity is adding value to the community. 2.3 The key marketing concepts: 2.3.1 Market Research: Market research is the process of gathering, analyzing, and interpreting information about a market, including its customers, competitors, and trends. It helps businesses make informed decisions and understand customer needs. For example, a new restaurant might conduct market research to determine what type of cuisine is in demand in a particular area. 2.3.2 Consumer Decision-Making Process: Understanding how consumers make decisions is vital for marketing. This process typically involves problem recognition, information search, evaluation of alternatives, purchase decision, and post- purchase evaluation. Marketers need to influence each stage of this process. 3 2.3.3 The AIDA marketing model: The AIDA marketing model is a framework that outlines the stages a customer typically goes through when making a purchase decision. AIDA stands for: Attention: Attracting the customer's attention is the first step. In this stage, marketers aim to create awareness about their product or service. This can be achieved through various marketing strategies, such as advertising, social media, content marketing, or eye-catching packaging. Interest: Once you have the customer's attention, the next goal is to generate their interest. Marketers need to provide more information about the product's features, benefits, and why it's valuable. Content like detailed product descriptions, reviews, or informative videos can help pique the customer's interest. Desire: In this stage, the objective is to make the customer desire the product. Marketers can achieve this by highlighting what sets their product apart from competitors, emphasizing its unique selling points, and creating a sense of need or desire in the customer's mind. Special offers, testimonials, and endorsements can also play a role in building desire. Action: The final step is to encourage the customer to take action, which typically means making a purchase. This could involve clear calls to action, such as "buy now," "sign up," or "contact us." Marketers should make it as easy as possible for the customer to convert, whether it's an online purchase, a form submission, or any other desired action 4 2.3.4 Value Proposition: A value proposition is a statement that communicates the unique benefits and value that a product or service offers to customers. It answers the question, "Why should customers choose your product or service over alternatives?" Developing a strong value proposition is crucial for effective marketing. 2.3.5 Competitive Advantage: A competitive advantage is something that sets a business apart from its competitors and gives it an edge in the marketplace. It can be based on cost leadership, product innovation, superior customer service, or other factors. 2.3.6 Consumer Behavior: Consumer behavior refers to the actions, decisions, and factors that influence individuals when making purchases. Understanding consumer behavior is essential for creating marketing campaigns that resonate with customers. For example, a car manufacturer might study consumer behavior to determine which features are most important to potential buyers. 2.3.7 Market Positioning: Market positioning means how people see a product compared to others. Companies want their product to stand out and attract the right customers. For example, Volvo is known for being really safe, so it attracts people who care a lot about safety when they choose a car. 2.3.8 Target Market: The target market is the specific group of customers that a business aims to reach with its products or services. It's the group most likely to be interested in what you're offering. 2.3.9 Market Segmentation: Market segmentation involves dividing a broader market into smaller, more specific segments based on shared characteristics such as demographics, psychographics, and behavior. This allows businesses to tailor their marketing efforts to reach specific customer groups. For example, a shoe company might segment its market based on age, with specific lines for children, teenagers, and adults. 2.3.10 Product Life Cycle: The product life cycle illustrates the stages a product goes through from introduction to decline. These stages include introduction, growth, maturity, and decline. Marketers need to adapt strategies at each stage. 5 2.3.11 Branding: Branding is the process of creating a distinct and recognizable identity for a product, service, or company. Effective branding builds customer trust and loyalty. For instance, well-known brands like Coca-Cola and Apple have strong brand identities that customers recognize and trust. 2.3.12 Brand Loyalty: Brand loyalty is the extent to which customers consistently choose a particular brand or product over alternatives. It's cultivated through positive experiences and effective marketing efforts. 2.3.13 Marketing-mix: Marketing Mix refers to the set of tactical and controllable marketing tools that a company uses to promote its products or services to the target market. These tools are often described using the four Ps: Product - Price - Place - Promotion. Product: Definition: Product refers to the tangible goods or intangible services that a company offers to meet customer needs. Explanation: A business must design, develop, and manage products that align with customer expectations. This includes features, quality, design, and branding. Example: Apple's iPhone is a well-designed product known for its sleek design, user-friendly interface, and innovative features. Apple continually enhances and introduces new models to meet customer demands. Price: Definition: Price is the amount of money that customers pay to acquire a product or service. Explanation: Pricing strategies determine how a product or service is priced, taking into account costs, competition, perceived value, and customer willingness to pay. Example: Discount retailers like Walmart use a cost leadership strategy, offering products at lower prices compared to competitors. Luxury brands like Rolex adopt a premium pricing strategy, positioning their products as high-end and exclusive. Place (Distribution): Definition: Place refers to the distribution channels, locations, and methods used to make products or services accessible to customers. Explanation: Effective distribution ensures that the right product is available in the right place at the right time for customers to purchase. Example: Amazon's vast online platform and efficient delivery network provide customers with easy access to a wide range of products. Starbucks strategically locates its stores in high-traffic areas, making its coffee readily available to customers. 6 Promotion: Definition: Promotion includes all activities that communicate the value of a product or service to the target audience. This includes advertising, public relations, sales promotions, and other marketing communications. Explanation: Promotional strategies aim to create awareness, interest, desire, and action (AIDA) among potential customers. Example: Coca-Cola's "Share a Coke" campaign involved personalizing bottles with customers' names, encouraging social sharing and engagement. This creative promotion boosted brand awareness and sales. 2.3.14 Customer Perceived Value (CPV): Customer Perceived Value (CPV) is a marketing and business concept that represents the worth or benefit that a customer believes they receive from a product or service. It is a subjective assessment made by the customer based on their individual needs, preferences, and expectations. CPV is influenced by various factors, including: Product or Service Features: Customers evaluate the features, functionality, and performance of a product or service. The more features and benefits a product offers, the higher its perceived value. Price: The price of a product or service plays a significant role in determining its perceived value. Customers assess whether the price aligns with the benefits they receive. A lower price for a comparable product can increase CPV. Brand Reputation: The reputation and brand image of a company can influence customer perceptions. A well-established and trusted brand often leads to a higher perceived value. Quality and Reliability: Customers value products and services that are of high quality and reliable. Quality assurance can enhance perceived value. Customer Service: The level of customer support, ease of purchase, and after-sales service can impact perceived value. Excellent customer service can increase the value customers associate with a product or service. Emotional and Psychological Factors: Emotions, personal preferences, and psychological factors can also influence CPV. For example, a product that aligns with a customer's values or makes them feel a certain way may have a higher CPV. Social Influence: Peer recommendations, reviews, and word-of-mouth play a role in CPV. Positive feedback and social proof can increase the perceived value of a product or service. Understanding and managing customer perceived value is crucial for businesses, as it directly influences purchase decisions and customer loyalty. Companies that focus on delivering high perceived value are more likely to attract and retain customers in competitive markets. Customer Perceived Value (CPV) is how much a customer thinks a product or service is worth to them. It's all about what they believe they get for the money they spend. 7 2.4 Organization of the Marketing Function: Organization of the Marketing Function refers to the structure and arrangement of marketing activities within a company to effectively plan, execute, and manage marketing strategies. It outlines how marketing tasks, responsibilities, and roles are distributed to achieve marketing goals. 2.4.1 Marketing Roles and Responsibilities: Marketing roles define the specific functions and tasks of marketing professionals. Responsibilities may include market research, product development, branding, advertising, and customer relationship management. Clear roles and responsibilities ensure that each aspect of marketing is managed by experts in their respective fields. It enhances specialization and effectiveness in executing marketing strategies. 2.4.2 Marketing Communication Channels: Marketing communication channels are the various methods and platforms used to reach target audiences. These include digital marketing, social media, print media, television, email, content marketing, and public relations. 2.4.3 Marketing Budget Allocation: The allocation of marketing budgets involves determining how financial resources are distributed among different marketing activities, campaigns, and initiatives. This should align with strategic priorities. Effective budget allocation ensures that marketing campaigns receive the necessary funds for successful execution. It should reflect the priorities and objectives of the marketing plan. 2.4.4 Performance Metrics and Reporting: Metrics and reporting establish how marketing performance is measured and reported. Key performance indicators (KPIs) may include: Return On Investment - Customer acquisition costs - Website traffic - Conversion rates. A clear system for measuring performance helps assess the effectiveness of marketing strategies and make data-driven decisions. Regular reporting ensures transparency and accountability. 2.4.5 Cross-Functional Collaboration: Marketing often collaborates with other departments, such as sales, product development, and customer service, to ensure that marketing strategies align with broader business objectives. Effective cross-functional collaboration enhances the integration of marketing efforts throughout the organization, ensuring that the customer experience remains consistent and aligned with the company's brand and values. Example: In the automotive industry, marketing teams collaborate with research and development (R&D) to align marketing campaigns with product launches and feature updates. 8