Exchange is he underlying theory of marketing, and explains why we need to work in order to get the things we want.

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Charla Ball
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1 Exchange: Def n : Exchange: The act of obtaining a desired object from someone by offering something in return Exchange is he underlying theory of marketing, and explains why we need to work in order to get the things we want. Market: Def n : Market: The set of all actual and potential buyers of a product or service. Marketing management Marketing management involves the analysis, planning, implementation and control of programs designed to create, build and maintain beneficial exchanges with target buyers for the purpose of achieving organisational goals. Marketing concept Marketing concept holds the key to achieving organisational goals. It places the consumer as the focal point and has four main premises: 1. Consumer orientation 2. Continuous marketing research 3. All organisational activities and strategies are integrated 4. Aims to convert satisfied consumers into loyal customers What marketers do Environmental scanning and analysis Marketing research and analysis Segmentation, targeting, positioning Design products Set prices Identify places to sell Coordinate promotion Manage relationships (i.e. deal with people) 3

2 Chapter 2: Creating value and competitive advantage (Lecture 2) Difference between selling and marketing Selling is making products or creating/ delivering services. Selling aims to maximise profit by sales volume. Marketing is trying to understand customers needs and satisfying those wants, profitably. Alternative management philosophies and cultures Production: Favour products that are available and affordable Product: Favour products that offer the most quality, performance and innovation Selling: Large scale selling and promotion effort Building customer relationships Customer relationship management: Def n : CRM: The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction Delivering value to customers: Market oriented culture is the overarching culture that focuses on markets- the belief that the purpose of business is to create superior customer value, and is reflected by: Deep understanding of customers Awareness and knowledge of competitors Strong collaborations across all functions of the firm Leadership actions that focus on the customer Strong market oriented culture = strong business performance/ profits Relationship building blocks: customer value and satisfaction: Customer value: Def n : Customer perceived value: The customer s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of a competing offer. Customers are value maximisers: Customers will buy from the firm they believe can provide them with the highest customer delivered value, or the difference between total customer value and total customer cost. When customers decide on the value they get from a product or service, they will only consider the features that are important to them Customers perception of the value of a product or service is a strong predictor of purchase and their experience with the product will influence future choice An important part of the experience is customer satisfaction 4

3 Customer satisfaction: Def n : Customer satisfaction: The extent to which a product s perceived performance matches a buyer s expectations. Customer satisfaction is the customer s conscious evaluation of a product or service feature, or of the product or service itself. Satisfaction judgements are influenced by many factors: Past experiences The information and promises made by marketing organisations Company s competitors or competing products What seems like fair value Satisfaction is closely linked to quality Expectations met= satisfied Expectations not met= dissatisfied Measuring customer satisfaction and loyalty Tools for assessing, measuring and tracking customer satisfaction and loyalty are continually increasing in sophistication and may include: Customer satisfaction and loyalty surveys Complaint and suggestion systems Mystery shopping and customer interviews Lost customer analysis Relationships in marketing As companies shift their focus from single sales encounters, they are beginning to develop strategies and actions that recognise how ongoing relationships contribute to customer retention. The focus is on retaining profitable customers often known as key customers and holding their loyalty by totally satisfying them. Relationship levels: 1. Basic 2. Reactive 3. Accountable 4. Proactive 5. Partnership Relationship ties: Financial Social Structural 5

4 Strategies for competitive advantage Competitive advantage= satisfying target customers needs better than your competitors. First step is to do a competitor analysis then develop competitive marketing strategies. Competitor analysis: Who are your competitors? (Direct/ indirect) What are their objectives? Identify competitors strategies Assess their strengths and weaknesses Porter s five forces: Porter s five forces model can be used to determine the attractiveness of an industry: 1. Bargaining power of suppliers 2. Bargaining power of buyers 3. Potential new entrants 4. Threat of substitutes 5. Intensity of rivalry Competitive strategies: Cost leadership: Offer a lower price than competitors Differentiation: Concentrate on highly differentiated products Focus: Concentrate on a small piece of the market Competitive positions Market leader: Largest market share Leads others in price changes, new products, promotional spend Market challenger: Usually 2 nd biggest firm on the market Fighting hard to increase market share Market follower: Wants to hold market share without rocking the boat Market nicher: Serves small segments not served by other firms 6

5 Strategic planning Chapter 3: Strategic planning and branding (Lecture 3) Def n : Strategic planning: The process of developing and maintaining a strategic fit between the organisation s goals and capabilities and its changing marketing opportunities. The main purpose of strategic planning is to help firms understand how to compete for the future. Strategic planning relies on: Clear company mission (why are we here?) Supporting objectives (What are we trying to achieve?) Sound business portfolio (All different things in the business and how they come together) Coordinated functional strategies Steps in strategic planning: Corporate level: 1. Defining the company mission 2. Defining company objectives and goals 3. Designing the business portfolio Business level: 4. Planning, marketing and other functional strategies 5. Marketing plan Setting company objectives and goals: The mission needs to be turned into detailed supporting objectives for each level of management The mission leads to a hierarchy of objectives including business and marketing objectives Marketing strategies must be developed to support the objectives Objectives need to be specific Marketing s role in strategic planning and value creation: Marketing plays a key role in the company s strategic planning Marketing provides a guiding philosophy which suggests that company strategy revolves around serving the needs of important customer groups Marketing provides input to strategic planners by helping to identify attractive market opportunities and by assessing the company s potential to take advantage of them The focus is on developing market position and customer satisfaction and retention Marketing strategy- where it fits Corporate strategy: Concerned with the economic value and financing requirements of the organisation, and the returns required by stakeholders. Business strategy: The focus is on building, defending and maintaining a competitive position through development and implementation of competitive marketing strategies 7

Topic 1 Marketing Concepts

Topic 1 Marketing Concepts What is Marketing? Marketing: the activity, set of institutions, and process for creating, communicating, delivering and exchanging offerings that have value for customers, client