Marketing Management I PDF

Marketing Management I Chapter 1 Defining Marketing for the New Realities Learning Objectives 1.1 Define the scope of marketing. 1.2 Describe the new marketing realities. 1.3 Explain the role of marketing in the organization. 1.4 Illustrate how to organize and manage a modern marketing...

Marketing Management I Chapter 1 Defining Marketing for the New Realities Learning Objectives 1.1 Define the scope of marketing. 1.2 Describe the new marketing realities. 1.3 Explain the role of marketing in the organization. 1.4 Illustrate how to organize and manage a modern marketing department. 1.5 Explain how to build a customer-centric organization. The Scope of Marketing Marketing is about identifying and meeting human and social needs AMA’s formal definition: 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 Marketing Management The art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value What is Marketed? (1 of 2) Goods Services Events Experiences Persons What is Marketed? (2 of 2) Places Properties Organizations Information Ideas Who Markets? A marketer is someone who seeks a response— attention, a purchase, a vote, a donation—from another party Five Basic Markets Resource markets Manufacturer markets Consumer markets Intermediary goods markets Government markets Figure 1.1 Structure of Goods, Services, and Money Flows in a Modern Exchange Economy The Market Exchange Marketers view industry as a group of sellers and use the term market to describe customer groups Figure 1.2 A Simple Marketing System The New Marketing Realities The market forces that shape the relationships among the different market entities The market outcomes that stem from the interplay of these forces The emergence of holistic marketing as an essential approach to succeeding in the rapidly evolving market Figure 1.3 The New Marketing Realities Major Market Forces Technology Globalization Physical environment Social responsibility A Dramatically Changed Marketplace (1 of 5) New consumer capabilities – Can use online resources as a powerful information and purchasing aid – Can search, communicate, and purchase on the move – Can tap into social media to share opinions and express loyalty A Dramatically Changed Marketplace (2 of 5) New consumer capabilities – Can actively interact with companies – Can reject marketing they find inappropriate or annoying – Can extract more value from what they already own A Dramatically Changed Marketplace (3 of 5) New company capabilities – Can use the internet as a powerful information and sales channel, including for individually differentiated goods – Can collect fuller and richer information about markets, customers, prospects, and competitors – Can reach customers quickly and efficiently via social media and mobile marketing, sending targeted ads, coupons, and information A Dramatically Changed Marketplace (4 of 5) New company capabilities – Can improve purchasing, recruiting, training, and internal and external communications – Can improve cost efficiency A Dramatically Changed Marketplace (5 of 5) New competitive environment – Deregulation – Privatization – Retail transformation – Disintermediation – Private labels – Mega-brands What is Holistic Marketing? An integrated approach to managing strategy and tactics – Relationship marketing – Integrated marketing – Internal marketing – Performance marketing Figure 1.4 The Concept of Holistic Marketing Relationship Marketing (1 of 3) Relationship marketing aims to build mutually satisfying long-term relationships with key constituents in order to earn and retain their business Relationship Marketing (2 of 3) Customers Employees Marketing partners Financial community Relationship Marketing (3 of 3) The ultimate outcome of relationship marketing is a unique company asset called a marketing network, which consists of the company and its supporting stakeholders with whom it has built mutually profitable business relationships Integrated Marketing Devise marketing activities and programs that create, communicate, and deliver value such that “the whole is greater than the sum of its parts.” Internal Marketing The task of hiring, training, and motivating able employees who want to serve customers well Performance Marketing Financial accountability Environmental impact Social impact Defining the Role of Marketing in the Organization Production concept Product concept Selling concept Marketing concept Market-value concept Table 1.1 Product-Oriented v s Market- ersu Value-Oriented Definitions of a Business Company Product Definition Market-Value Definition Union Pacific Railroad We run a railroad. We move people and goods. Xerox We make copying equipment. We help improve office productivity. Hess Corporation We sell gasoline. We supply energy. Paramount Pictures We make movies. We market entertainment. Encyclopedia Britannica We sell encyclopedias online. We distribute information. Carrier We make air conditioners and We provide climate control in furnaces. the home. Organizing the Marketing Department Functional organization Geographic organization Product or brand organization Market organization Matrix organization Figure 1.5 Functional Organization Figure 1.6 The Product Manager’s Interactions Managing the Marketing Department The role of the CEO and the CMO Relationships with other departments The Role of the CEO Convince senior management of the importance of being customer focused Hire strong marketing talent Facilitate the creation of strong in-house marketing training programs Appoint a chief marketing officer The Role of the CMO Act as the visionary for the future of the company Build adaptive marketing capabilities Win the war for marketing talent Tighten the alignment with sales Take accountability for returns on marketing spending Infuse a customer perspective in business decisions affecting any customer touch point Relationships with Other Departments Marketers must work closely with: – customer insights and data analytics teams – different communication agencies – channel partners Building a Customer-Oriented Organization Create long-term customer value – Requires managers at every level to be personally engaged in understanding, meeting, and serving customers Customers expect companies to listen and respond to them Figure 1.7 Traditional Organization versus Modern Customer-Oriented Company Organization Becoming a Market-Driven Company Develop a company-wide passion for customers Organize around customer segments instead of products Understand customers through qualitative and quantitative research Table 1.2 Characteristics of Customer- Centric Organizations Low Customer-Centricity High Customer-Centricity Product driven Market driven Mass market focused Customer focused Process oriented Outcome oriented Reacting to competitors Making competitors irrelevant Price driven Value driven Hierarchical organization Teamwork Discussion Questions (1 of 2) For many Starbucks’ customers, buying a favorite drink now involves a few clicks on the Starbucks app and a pick-up at the counter. – How is technology changing the way Starbucks interacts with its customers? – What benefits does this offer? – What challenges does it present? Discussion Questions (2 of 2) Amazon’s success at anticipating customer needs and fulfilling them is evidenced by its record-breaking profits. – How does Amazon create value for its customers? – What are the tradeoffs between the convenience Amazon offers and the sustainability issues its business model creates?