Unit 1 - The Market-Led Organization - PDF

The market-led organization UNIT 1  TODAY'S LESSON BRIEF INTRODUCTION 1. The nature of marketing 2. Marketing strategy and planning 3. Undestanding customer behaviour 4. Market research and customer insights 5....

The market-led organization UNIT 1  TODAY'S LESSON BRIEF INTRODUCTION 1. The nature of marketing 2. Marketing strategy and planning 3. Undestanding customer behaviour 4. Market research and customer insights 5. The marketing envitonment WHAT MARKETING IS NOT WHAT IS (INSTEAD) MARKETING? WHAT IS MARKETING? 12 EVOLVING CORE CONCEPTS OF MARKETING Transactions Understanding & responding to the customer & their evolving needs, wants & demands Exchange  WHY IS MARKETING BORN? Perfect Competition Oligopoly (the only variable is the costs) PRODUCT Undifferentiated Differentiated PRICE Given To be defined INFORMATION Perfect Imperfect PLACE Irrelevant Relevant Monopoly: the only problem is maximizing profits  MARKETING AND DIFFERENT MANAGEMENT APPROACHES orientation BUSINESS ORIENTATION EVOLUTION Relationship orientation Relationship From exchange to relationship Cooperation between supply and demand The tactical and strategic management of Customer the relationship ECONOMIC VALUE: Marketing The generation of economic value depends on the ability to accumulate Relational Capital. Relational Capital is the combination of Sales quantity and quality of the relationships that the company has developed with its customers Product environment static dynamic turbulent complex ORIENTATION TO THE CREATION OF THE MAXIMUM VALUE FOR THE CUSTOMER THE BASIC PRINCIPLE OF MARKETING  THE NATURE OF CUSTOMER VALUE Perceived Benefits Perceived Sacrifices Customer Product benefits Monetary costs Value Service benefits Time costs Image benefits Energy costs Psychological costs THE NATURE OF CUSTOMER VALUE Price value Performance value Customers perceive a product as Customers look for the latest being cheaper than those offered features, functionality, convenience by competitors and quality (e.g. Ryanair, Aldi, easyCar) (e.g. Dyson) Customer Value Emotional value Relational value Sometimes the only differences that The quality of service received by a exist between brands is based on customer engenders a high level of customer perceptions (e.g. Volvo & trust which leads to a strong and safety, Coca Cola & joy, Chanel & reciprocal relationship with luxury) customers 21 YOU WILL TALK IN A SPEECH IN THE NEXT LESSONS (GROUP 1) ABOUT MASLOW, CUSTOMER BEHAVIOUR AND EXPERIENCE JOURNEY THE THREE LEVELS OF MARKETING PROCESSES Macroenvironment, microenvironment and internal Analytical marketing: environment Direct and extended competition Market Segmentatione Strategic marketing (STP): Targeting Positioning Product Price Operational marketing (Mix): Place (Distribution) Promotion (Communication)  APPROACH It is an approach that is realized in common sense, in the knowledge of oneself, of one's limits, of one's strengths, in the availability towards others (in the predisposition to understand needs and desires), in the ability to be proactive, in the mental openness as well as logic and coherence in acting. LET'S TAKE A STEP BACK A COMPETITIVE STRATEGY EXPLAINS HOW YOU WILL DO BETTER THAN YOUR RIVALS (JOAN MAGRETTA IN «WHY BUSINESS MODELS MATTER»))  Lead strategist Michael Porter onWhat Is Strategy?, see MICHAEL «Strategy as a position based on differentiating characteristics; a vision that concerns the choices on PORTER which products or services are offered in which markets». It has a "circular" and "iterative" nature (strategic thinking and dynamism) MARKETING PLANNING PROCESS For marketing efforts to be effective, it is essential that a planned approach is The process by which businesses taken analyze the environment and their Marketers certainly need to consider capabilities, decide upon courses of opportunities that are emerging in marketing action and implement terms of market trends, consumer those decisions is called marketing demand, and technological changes planning. Marketers need to focus on their overall goals and objectives and evaluate the potential roles (if any) that digital tools might play in their efforts  THE MARKETING PLANNING PROCESS Key questions Stages in marketing planning Who we are, what we do and Business mission, vision and values what we belief on Where would we like to be? Marketing objectives Where are we now and how did Marketing audit we get here? SWOT analysis Marketing strategy (STP) Marketing mix decisions How do we get there? Organization Execution and evaluation * Key questions and the process of marketing planning THE MISSION, THE VISION, THE VALUES THE REASON WHY YOUR BUSINESS IS EXISTING YOUR BUSINESS BELIEFS HOW YOUR BUSINESS WILL POSITION IN THE FUTURE WATCH THIS VIDEO A Simple Intro to Mission, Vision and Values https://youtu.be/7mWQh_7fK3U  STRATEGIC OBJECTIVES The mission states the philosophy and orientation of the company. Strategic objectives represent measurable goals Every manager should pursue specific goals and be accountable for them. CLASSIFICATION OF MARKETING OBJECTIVES AREAS OF KEY IMPORTANCE DEFINABLE MARKETING GOALS WITH PARAMETERS TO MEASURE OBJECTIVES REFERENCE TO: Profitability Product \ product line ROI Market segment Profitability of sales Sales volumes Distribution channels Revenue Sales areas Units sold Market shares Sales organization Potential customers Marketing communication Customers served Marketing costs Physical distribution Potential market Marketing research Sales potential Marketing mix Product, service, distribution, Market share personal sales and pricing policies Expenses for sales, communication, distribution, research, etc. Efficiency of action programs MARKETING OBJECTIVES: SMART CRITERIA S M specific measurable T A time- attainable specific R realistic ENVIRONMENT, EXTERNAL CONDITIONS AND AVAILABLE RESOURCES COMPETITIVE, INTERNAL AND EXTERNAL AUDIT  SITUATION ANALYSIS The marketing audit is a systematic examination of a firm’s marketing environment, objectives, strategies and activities, which aims to identify key strategic issues, problem areas and opportunities An external audit focuses on those forces over which management has less control An internal audit concentrates on those areas that are under the control of marketing management The results of an audit may give rise to a re-defined strategy or business mission and will drive the direction of the marketing plan.  THE EXTENDED ENVIRONMENT OF THE COMPANY The macroenvironment comprises a set of forces that are largely uncontrollable by organizations. A PESTEL analysis can be used to examine these forces. There are six key components to the macroenvironment : economic forces social forces legal forces political forces technological forces ecological forces  THE COMPETITIVE ENVIRONMENT The competitive environment of the company is made up of the set of actors with which it establishes both active and passive interactions The variables describing the competitive The nature of the environment are: interactions is different in Those defined by M. Porter. relation to: Two additional variables: repetitiveness; intensity and sign of the intervention of the degree of conflict. external stakeholders; degree of integration with complementary companies with respect to the final demand. PORTER'S FIVE FORCES MODEL WATCH THIS VIDEO Porter's 5 Competitive Forces Analysis https://youtu.be/XuiluvBqDOI  THE INTERNAL ENVIRONMENT OF THE COMPANY The microenvironment comprises a set of forces that are controllable by organizations There are five key components to the microenvironment: Marketing channels with which the company Market (5 types: consumers, Internal Environment manufacturers, retailers, (organization) cooperates to create value (suppliers and public sector and intermediaries) international markets) Public (stakeholders who have current or potential Competition interest in the company such as financial circles, the media, associations and movements of citizens)  SOURCES OF COMPETITIVE ADVANTAGE: THE VALUE CHAIN The competitive advantage is the result of a strategy that leads the company to occupy and maintain a favorable position in the market in which it operates and which translates into a profitability that is permanently higher than the average of its competitors. to learn more about competitive advantage SEE USEFUL INSIGHTS PART OF THIS PRESENTATION  (SWOT) ANALYSIS Source INTERNAL STRENGTHS WEAKNESSES (controllable) EXTERNAL (uncontrollable) OPPORTUNITIES THREATS WATCH THIS VIDEO How to Perform a SWOT Analysis https://youtu.be/I_6AVRGLXGA  REFERENCE FOR STRENGTHS AND WEAKNESSES (INTERNAL FACTORS) MARKETING FACTORS OTHER FACTORS Market share Production facilities capacity. Product range Technological innovation and Technical competence Product quality Productivity Distribution channels Availability of the workforce Size of the sales force Motivations of the staff Effectiveness of the sales force Quality of management Marketing costs Organizational system Price competitiveness Planning system Numbers of customers Informative system Customer service Image on the market New products  REFERENCE FOR OPPORTUNITIES AND THREATS (EXTERNAL FACTORS) MARKETING FACTORS OTHER FACTORS Product life cycle stage Concentration of the offer Market size Value added Market growth rate Customer learning New market segments to be developed Number of competitors Concentration of demand Replacement products Customer sensitivity to price Changes in Productivity Customer cyclicality Bargaining power of suppliers Customer solidity Process or product innovations Export options - Access or new distribution channels Product differentiation  COMPETITIVE STRATEGIES Differentiation strategy involves the the creation and exploitation of some form of performance value The aim is to differentiate in a way that leads to a price premium in excess of the cost of differentiating The cost leadership approach involves the achievement of the lowest cost position in an industry The aim is to achieve superior performance by ensuring that the cost advantage over the competition is not offset by the price discount. MARKETING STRATEGY THE COMPANY'S GROWTH MODEL, THE PORTFOLIO ANALYSIS, AND THE STP GROWTH OBJECTIVES: THE ANSOFF MATRIX Product Existing Market penetration or expansion Product development Markets New Market development Diversification Existing New WATCH THIS VIDEO Ansoff Matrix https://youtu.be/AnOevGzAP4M  GROWTH OBJECTIVES Product development: this strategy involves increasing sales by improving current products or developing new products for current markets Breakfast cereal manufacturers have moved into the snack food business with products like these to learn more about PORTFOLIO ANALYSIS SEE USEFUL INSIGHTS PART OF THIS PRESENTATION WE WILL TALK SOON ABOUT SEGMENTATION, TARGETING AND POSITIONING (STP) TACTICS, EXECUTING AND EVALUATING WE WILL TALK SOON ABOUT MARKETING MIX SUMMARY TODAY'S CLASS OF 01 02 03 04 RECAP 1 RECAP 2 RECAP 3 RECAP 4 The marketing The business The role of The marketing concept is a strategy sets the marketing audit is divided business overall direction planning is to into an external philosophy that for the enterprise give direction to audit, which puts the customer Marketing strategy the examines at the center of is concerned with organization’s environmental things. creation customer marketing effort and competitive Implementing the value in particular and to co- conditions marketing market ordinate its An internal audit concept requires Marketing tactics activities reviews marketing an integrated are the means decisions and effort throughout through which this operating results the company. value is delivered marketing audit èfuture directions USEFUL INSIGHTS EXTERNAL MARKETING AUDIT CHECKLIST The Macroenvironment Economic: inflation, interest rates, unemployment Social/cultural: age distribution, lifestyle changes, values, attitudes Technological: new product and process technologies, materials Political/legal: monopoly control, new laws, regulations Ecological: conservation, pollution, energy EXTERNAL MARKETING AUDIT CHECKLIST The market Market: size, growth rates, trends and developments Customers: who are they, their choice criteria, how, when, where do they buy, how do they rate us vis-à-vis competition on product, promotion, price, distribution Market segmentation: how do customers group, what benefits does each group seek Distribution: power changes, channel attractiveness, growth potential, physical distribution methods, decision-makers and influencers Suppliers: who and where they are, their competencies and shortcomings, trends affecting them, future outlook? EXTERNAL MARKETING AUDIT CHECKLIST Competition Who are the major competitors: actual and potential What are their objectives and strategies What are their strengths (distinctive competencies) and weaknesses (vulnerability analysis) Market shares and size of competitors Profitability analysis Entry barriers  INTERNAL MARKETING AUDIT CHECKLIST Operating results (by product, Operating results (by product, customer, geographic region) customer, geographic region) Sales, Profit margins, costs Marketing operations effectiveness Market share Product, Price, Promotion, Distribution Strategic issues analysis Marketing structures and organization Marketing training Marketing objectives Intra- and interdepartmental communication Market segmentation Marketing systems Competitive advantage and Core competencies Marketing information system, Marketing planning and Positioning control systems Portfolio analysis WATCH THIS VIDEO Sustainable Competitive Advantages https://youtu.be/a5_kzUxqxtA WATCH THIS VIDEO BCG Matrix (Growth-Share Matrix) https://youtu.be/gNR49lk5dS0 MARKETING TACTICS: THE MARKETING MIX Produ ct The Prom Marketing Price otion Mix Place EXECUTING MARKETING CAMPAIGNS Budget: you will need approval for what you are proposing to spend. All marketing plans cost money and the quality of your plan along with considerations regarding other pressing resource requirements will determine whether or not it is approved by the key budget holders Schedule: you will need a clear schedule outlining when each of the key tactical elements will be put into action. Many plans will feature a Gantt chart showing what is going to happen and when which allows management to see the full picture and identify any inconsistencies Staff: you will need to decide how work is allocated to the various people responsible for doing it such as product managers, key account managers, digital marketing executives and/or external agencies  METRICS % rating Source: Based on Ambler, Kokkinaki and Puntoni, 2004 The use of marketing metrics in UK firms % using Rank Metric it as measure important 1 Profit/profitability 92 80 Sales, value and/or 2 91 71 volume 3 Gross margin 81 66 4 Awareness 78 28 Market share 5 78 37 (value/volume) Number of new 6 73 18 products 7 Relative price 70 36 Customer 8 69 45 dissatisfaction 9 Customer satisfaction 68 48 10 Distribution/availability 66 18  MARKETING AND BUSINESS PERFORMANCE A market orientation, has a positive effect in both the short and long term Sustained advantages are achieved by firms that had adopted a market orientation earlier than competitors and it had a more pronounced effect on profits than on sales because of the focus on customer retention Marketing, done well, can clearly have a powerful impact on the success of the organisation Impact on Impact on Impact on The firm’s Specific customer market value of strategy tactics attitudes share the firm to learn more about marketing research and customer insights READ CHAPTER 4 OF THE BOOK