Mária Magyar BASICS OF MARKETING 4TH MIDTERM MARKETING MANAGEMENT 1. 27/11/2013 Management and Business Economics
What will be discussed Marketing definition(s) Marketing management philosophies Marketing concept Environment of a company SWOT analysis Strategic and tactical planning Marketing strategies Marketing plan
What is marketing? personal selling? advertising? making products available? arranging displays?
Marketing has two sides: 1. it is a philosopy, attitude, perspective or management orientation that emphasize customer satisfaction 2. activities & processes used to implement this philosophy
American Marketing Association s 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. In the often-quoted words of David Packard, cofounder of HP Marketing is too important to be left only to the marketing department.
Define the term marketing
Marketing Management Philosophies (company orientations/concepts) Production Orientation Product Orientation Selling Orientation Marketing Orientation
Production Orientation FOCUSES: on the internal capabilities of the firm rather than on the needs and wants of the marketplace. The management asks questions like: What can we do? What can our engineers design? What is easy to produce, given our equipment? COMPANY: improving production and distribution efficiency PRODUCTS: available, higly affordable
Product Orientation PRODUCT: the most quality, performance and innovative features COMPANY: continuous product improvements BUT: sometimes what a firm can best produce is exactly what the market wants
Selling Orientation CUSTOMERS: don t buy enough COMPANY: agressive selling and communication!!!
Marketing Orientation
Marketing Orientation 1. Focusing on customers wants and needs so that the organization can distinguish its product(s) from competitors offerings. 2. Integrating all the organization s activities, including production, to satisfy these wants. 3. Achieving long-term goals for the organization by satisfying customers wants and needs legally and responsibly.
SOCIETAL marketing orientation/concept
The 4 (new) Marketing Management Philosophies ORIENTATION FOCUS Production What can we make or do best? Sales How can we sell more aggressively? Market What do customers want and need? Societal Previous + how can we benefit society?
Starting point Focus Means Ends Factory Products Selling and promoting Profits through sales volume S E L L I N G C O N C E P T Market Customer needs Integrated marketing Profits through customer satisfaction M A R K E T I N G C O N C E P T
So We Can Determined Marketing As: PHILOSOPHY Company s success depends on determining the needs and wants Of consumers and satisfying these needs more efficiently than competitors do. CONCEPT Target market orientation Consumer orientation Long term profit Organizational coordination and integration SUM OF TOOLS (4PS): Product Price Place Promotion
Marketing Concept Target market orientation: the group of customers toward whom the company will direct its marketing effort (most likely buy our products) Consumer orientation: understanding customer needs and wants Long term profit: consequence of creating superior customer value Organizational integration and coordination Integration: marketing and the other functions Coordination: synergy of marketing tools
The Environment of a Company MACRO ENVIRONMENT Demographic Economic Technological Political and legal Social and cultural International Natural environment MICRO ENVIRONMENT Suppliers Competitors Intermediaries Consumers Public Participants of the market
Strategic Marketing Planning PLANNING The process of anticipating future events and conditions and determining the courses of action necessary to achive organizational objectives. MARKETING PLANNING The process of anticipating future events and conditions and determining the courses of action necessary to achive marketing objectives.
Strategic planning The process of determining an organization s primary objectives, allocating funds, and then initiating actions designed to achieve those objectives. For 3,5 or more years Tactical planning The process of defining implementation activities that the company must carry out to achive its objectives. For shorter term
Types of Plans Prepared by Different Levels of Management STRATEGIC PLANNING TOP Board of Directors, President, Operating Division Vice-President Objectives of organization; fundamental strategies; total budget TACTICAL PLANNING OPERATIONAL PLANNING MIDDLE Genaral Sales Manager, Marketing Research Director, Head of Advertising Department SUPERVISORY District Sales Manager, Supervisors Quaterly and semiannual plans; subdivision of budgets policies and procedures for each department Daily and weekly plans; unit budgets
Three Levels of Strategy Corporate-Level Strategy: What business are we in? Corporation Business-Level Strategy: How do we compete? Business Unit A Business Unit B Business Unit C Functional-Level Strategy: How do we support the business-level strategy? Finance R & D Manufacturing Marketing
BASIC CORPORATE STRATEGIES Low-cost strategy Differentiation Focus strategy MARKETING STRATEGIES STP strategies Competitive strategies MARKETING MIX STRATEGIES Product Price Place Promotion
Basic Corporate Strategies LOW COST STRATEGY (overall cost leadership) Lowest production & distribution costs Lowest price Less skill in marketing DIFFERENTIATION Superior performance (service, quality, style, technology) FOCUS One or more narrow market segments Cost leadership or differentiation
The Business Strategic-Planning Process External environment (opportunitiy & threat analysis) Business mission Goal formulation Strategy formulation Program formulation Implementation Internal environment (strengths / weaknesses analysis) Feedback and control (Kotler, 2000)
The Mission A mission is a general, enduring statement of overall organizational purpose. We are an international company providing energy and chemical products vital to the growth of the world s economies. Our mission is to provide superior value for the stakeholders,our customers, and our employees. What business are we in? Who are our customers? What are we in business for? What sort of business are we? The mission statement should be market oriented!
External and Internal Audit: SWOT Analysis
Ansoff s Product-Market Expansion Grid(Growth Strategies) CURRENT market NEW market CURRENT product Market penetration strategy Market development strategy NEW product Product development strategy Diversification strategy
Contents of the Marketing Plan /Planning Process/ Current marketing situation Opportunity and issue analysis Objectives Marketing strategy Action programs Projected profit-and-loss statement Controls
BUTE, Department of Management and Corporate Economics Q.build. B307, E-mail: magyar@mvt.bme.hu