1 Marketing, Marketing Strategy, and Marketing Environment.

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Marketing,Marketing Strategy,and Marketing Environment

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Topic1

What is Marketing?

MGT252F L0301 Week2: Marketing, Strategy, and Environment

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Definition of Marketing

Marketing is a total system of business activities designed to plan, promote, and distribute want-satisfying products, services, and ideas to target markets in order to achieve the objectives of both the consumer and the organization (Sommers et al., p.6)


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PRODUCTION ORIENTATION

SALESORIENTATION

MARKETING ORIENTATION

Late 1800s Early 1930s Mid-1950s 1900s

Evolution of Marketing Concept


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Evolution of Marketing Concept:Production Oriented Stage

Late 1800’s to Early 1930At the early stage of industrialization,

when demand exceeded supply“Customers would purchase reasonably

priced and well-made products”Empathize mass production at lower

cost


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Evolution of Marketing Concept:Sales Oriented Stage

Early 1930’s to Mid 1950’sAfter supply began exceeding

demand“Selling what a company makes

rather than makes what the market wants”


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Marketing Concept

Customer Oriented Focused on customers’ need rather than

product itself


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Marketing Concept


product itself Customer satisfaction


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Marketing Concept


product itself Customer satisfaction

What is marketed? Products, services, ideas, people, and places


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Marketing Concept

Customer Oriented Focused on customers’ need rather than product

itself Customer satisfaction

What is marketed? Products, services, ideas, people, and places

Extension to Non-profit marketing Societal marketing : marketing + social

responsibility


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Career in Marketing

Some important marketing jobs Advertising Brand and product management Marketing research International marketing Retailing management Sales and sales management New product planning

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Topic2

Strategic Marketing Planning and Management


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Strategic Marketing Planning & Mgmt. Process

Develop Marketing Objectives

Marketing Mix

Market Segmentation, Target Market Selection, and Product Positioning

Situational Analysis

Develop Marketing Objectives Most companies have

multiple objectives Must be hierarchical,

realistic, and consistent Marketing objectives

includeProfitabilitySales growthMarket share......


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Marketing Mix



Situational Analysis includes the analysis of external and internal marketing environment

We can find market opportunities from situational studies

SWOT analysis


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Marketing Mix



Market Segmentation

Target Market Selection

Product Positioning


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Marketing Mix



Marketing mix strategy involves decisions on 4P’s Product Price Place Promotion


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Marketing Management of Multiple Brands: BCG Matrix

A matrix for managing multiple brands or SBU (strategic business unit) (e.g.,) Toyota’s SBUs

LexusLuxury Sedan (Avalon, Camry)Small Sedan (Corolla, Tercel)Sports CarSport Utility Vehicle


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Each SBU can be classified according to Market Share relative to competition Growth Rate of the industry

These factors are divided into high and low categories

The resulting 2 x 2 grid has 4 quadrants that represent distinct categories of SBUs or major products.


19Copyright © 1998 by The McGraw-Hill Companies, Inc.3-7

Stars

Cash cows Dogs

Question marks

High Low

High

Low

COMPANY’S MARKET SHAREIN

DU

ST

RY

GR

OW

TH

RA

TE


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Stars High market shares with high industry growth rates A need for lots of cash to maintain competition and market share

Cash Cows High market shares with low industry growth rates A company can make a lot of money

Question Marks (or Problem Children) Low market shares with high industry growth rates Needing a lot of investment to build market share

Dogs Low market shares with low industry growth rates



Stars

Cash cows Dogs

Question marks

High Low

High

Low

COMPANY’S MARKET SHAREIN

DU

ST

RY

GR

OW

TH

RA

TE


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Marketing Management of Growth: Product-Market Growth Matrix

In order to grow, a company has to consider both its markets and its products.

The product-market growth matrix depicts the options available in considering markets and products.



PRESENT PRODUCTS

PRESENTMARKETS

NEW PRODUCTS

NEWMARKETS

Marketpenetration

Marketdevelopment

Productdevelopment

Diversification


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Marketing Management of Growth: Product-Market Growth Matrix

Market penetration Sell more of its current product to its present markets (e.g.) Sales promotion

Market development Sell its products to a new market (e.g.) Arms & Hammer Baking Soda to deodorant market

Product Development Develop a new product to sell to existing market (e.g., Intel)

Diversification Develop a new product for new market

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Topic3

Marketing Environment &Situational Analysis


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Marketing Environment

The factors and forces outside marketing that affect marketing activities and performance

Monitoring marketing environment helps identifying.. Changing consumer need Market opportunity


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Marketing Environment

FIRM

MICRO-

ENVIRONMENT

MACRO-

ENVIRONMENT


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Micro Environment

A company’s micro environment includes.. The company Suppliers Intermediaries Customers

More controllable than macro marketing environment


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Macro Environment

Macro marketing environment includes Demography Economic conditions Competition Social and cultural forces Political and legal forces Technology

A company has little control of macro environment


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Macro Environment: Demography

size, density, location, age, gender, race, and occupation of human population

Notable trends Aging baby boomers Generation X Increasing ethnic and racial diversity


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Macro Environment: Demography

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000

0–4

10–14

20–24

30–34

40–44

50–54

60–64

70–74

80–84

90 +age

Male Female


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Macro Environment: Economic Conditions

Factors that affect consumer buying power and spending patterns Business cycle Inflation Interest rate Unemployment Income International trade (globalization)


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Macro Environment: Competition

Direct competition brand competition (e.g., COKE vs. Pepsi) store competition (e.g., Dominion vs. Loblaw) service competition (e.g., Bell vs. Sprint)

Substitute competition Competition between products or services not

being similar but satisfying same customer need (e.g.) Bell long distance calling service vs.

Internet (e-mail) service provider


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Macro Environment: Social and Cultural Forces

Changes of lifestyle, social values, beliefs, and preference

Notable Trends Concern for health and fitness Concern for environment Changing family


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Macro Environment: Technology

Forces that create new technologies, creating new product and market opportunity (e.g.) Computer & telecommunication

enabled internet marketing


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Macro Environment: Political and Legal Forces

Laws, government agencies, and pressure group

Federal legislation affects... Trade practices (e.g., competition act) Product standards and grades (e.g.,

Consumer Packaging and Labeling Act) Health and safety (e.g., Food and Drug

Act)


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SWOT Analysis

A method for situational analysisSWOT consists of ..

Strengths: favorable internal factors Weaknesses: unfavorable internal

factors Opportunity: favorable external factors Threat: unfavorable external

factors


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SWOT Analysis: Example (a health food company)

Strengths low production cost higher product quality, etc

Weaknesses high distribution cost low awareness, etc

Opportunity increased interest in health growth of older population, etc

Threat new competitor government regulation on food products

1 Marketing, Marketing Strategy, and Marketing Environment.

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