NPC

Lecture 1

Marketing Management

Dr. Derek N. Hassay

NPC

Lecture 1

What is Marketing?

“Satisfying consumer needsand wants… profitably!”

NPC

Lecture 1

Core Conceptsin Marketing

Goods &Services

Needs, wants,and demands

Exchange, transactions,and relationships

Markets

Value, satisfaction,and quality

NPC

Lecture 1

What is Marketing?

“In the factory we make cosmetics;in the drugstore we sell hope.”

Charles Revson

NPC

Lecture 1

General Management Philosophies

ProductionConcept

SocietalMarketingConcept

MarketingConcept

ProductConcept

Selling Concept

NPC

Lecture 1

The Societal Marketing Concept

Consumers(Satisfaction)

Company(Profits)

Society(Public Welfare)

NPC

Lecture 1

MaximizeConsumptionMaximize

Choice

Maximize Quality of Life

MaximizeSatisfaction

Marketing System Goals

NPC

Lecture 1

“Worshipping themarketing conceptstifles innovation.”

NPC

Lecture 1

Customer Value

-

=

Total CustomerValue

Total CustomerCost

(Product, Service, Personnel,& Image Values)

(Monetary, Time, Energy,& Psychic Costs)

CustomerDelivered Value

(Profit to the Consumer)

NPC

Lecture 1

Value-Building Approaches

FinancialBenefits

Social benefits

StructuralTies

NPC

Lecture 1

Customer Satisfaction

CustomerDelight

CustomerDelight

ExpectationsExpectations SatisfactionSatisfactionThe Goal

of CustomerSatisfaction

Expectations Met

Expectations Exceeded

NPC

Lecture 1

Types of Loyalty

Loyalty

Spurious Loyalty

Latent Loyalty

No Loyalty

Positive

Negative

Always/Often Seldom/Never

Att

itu

de

/Aff

ec

t

Frequency of Purchase

NPC

Lecture 1

Retaining Customers

NewCustomer

Costs

LostCustomer

Costs

CustomerLifetime

Value

NPC

Lecture 1

Elements of a Marketing Strategy

TargetConsumers

Product

Place Price

Promotion

NPC

Lecture 1

“Marketing is not an event, but a process…It has a beginning, a middle, but never an end, for it is a process. You improve it, perfect it, even pause it. But you never stop it completely.”

Philip Kotler

Marketing Management

NPC

Lecture 1

Steps in Strategic Planning

Defining theCompany Mission

Defining CompanyObjectives and Goals

Designing theBusiness Portfolio

Production, Marketing and Other Functional Strategies

Corporate Level

Business Level

PlaceTarget

Market

ProductProduct

Price

Promotion

Marketing Strategy Elements

Marketing Mix (the 4Ps) + Target Market = Marketing Strategy

AnalysisAnalysis Planning

PlaceTarget

Market

Control

Product

Product

Price

Implementation

Marketing Management Framework

Objectives

MissionStrategies Portfolio

TheMarketingManagementFramework

TheCorporateStrategicPlan

EconomicEnvironment

Analysis Planning

Place

Control

Product

Price

Promotion

Implementation

Target

Market

Resources

Marketing

Intermediaries

PublicsCompetition

Corporate

Objectives

Suppliers

Political/Legal Environment

Natural Environment

TechnologicalEnvironment

Demographic Environment

Social/CulturalEnvironment

The Marketing Environment

Analysis Planning

Place

Control

Product

Price

Promotion

Implementation

Target

Market

Resources

Marketing

Intermediaries

PublicsCompetition

Corporate

Objectives

Suppliers

EconomicEnvironment

Political/Legal Environment

Natural Environment

TechnologicalEnvironment

Demographic Environment

Social/CulturalEnvironment

NPC

Lecture 1

“Induce your competitors not to invest in those products, markets and services where you expect to invest the most … that is the fundamental rule of strategy.” Bruce Henderson, Founder of BCG

“One does not rely on the enemy not attacking, but relies on the fact that he himself is unassailable.” Sun Tsu, The Art of War

Competitive Strategy

NPC

Lecture 1

Strategies of Firms in aHypothetical Market Structure

40%

Marketleader

30%

Marketchallenger

20%

Marketfollower

Expand Market

Defend Market Share

Expand Market Share

Attack leader

Status quoImitate

10%

Marketnicher

Specialize

NPC

Lecture 1

Pursuing a Niche Strategy

• End-user specialist• Vertical-level specialist• Customer-size specialist• Specific-customer specialist• Geographic specialist• Product or product-line specialist• Product-feature specialist• Job-shop specialist• Quality-price specialist• Service specialist• Channel specialist

NPC

Lecture 1

Defensive Strategies

Attacker

(3) Preemptivedefense

(4) Counter-offensivedefense Defender

(1)Positiondefense

(5)Mobile

defense

(2) Flank defense

(6) Contractiondefense

NPC

Lecture 1

Position Defense

NPC

Lecture 1

Offensive Strategies

Defender

(3) Encirclement attack

(4) Bypass attack

(2) Flank attack

(5) Guerilla attack

(1) Frontal attack

Attacker

NPC

Lecture 1

Management Decision-making with “Case Analysis”

• Situation Analysis• Identification of Key Marketing Issue• Identification of Objectives (Decision Criteria)• Generation & Evaluation of Alternatives• Recommendation• Implementation Plan

NPC

Lecture 1

Situation Analysis

External Environment: • Opportunities & Threats

– Industry (barriers to entry, sales trends)– P.E.S.T. (stability, forecasted changes)– Competition (resources, position)– Customers (preferences)– Channels

Internal Environment:• Strengths & Weaknesses

– Marketing Mix– Consumer Awareness– Assets, Skills,Resources

NPC

Lecture 1

Key Marketing Issue(s)

• Idea is to present the issue facing the firm in a succinct manner (2-3 sentences).

• May not be a problem, may be an opportunity.

• Caution: Make sure that you have identified the cause and not the symptom of a problem?

NPC

Lecture 1

Generation of Objectives(Decision Criteria)

Qualitative:• Issues of “fit”• Timeliness• Available Skills• Capacity

Quantitative:• Profit• Market share• Awareness• ROI

NPC

Lecture 1

Generation & Evaluation of Alternatives

• Selection of 3-4 feasible, mutually distinct alternatives• Doing nothing (i.e., status quo) is rarely a

feasible alternative• Evaluation (advantages, disadvantages)

of alternatives based upon decision criteria

NPC

Lecture 1

Recommendation

Brief statement outlining:• Why the recommended course of action is the best available

alternative. • Decision must be based upon criteria and must be an evaluated

alternative

Implementation Plan

Specifically what is to be done:• By whom• When• Where