Strategic Marketing Management
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Transcript of Strategic Marketing Management
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STRATEGIC MARKETING MANAGEMENT –
Basic Marketing concepts
Dr. Kalliopi Chatzipanagiotou
Lecturer in Marketing
University of Glasgow
Lecture 1
The overall aims of this module are:
Review the essentials of marketing management
Understand the impact of strategic marketing decisions on the firm
Gain insight into the “real world” frustrations/rewards of making strategic marketing decisions
Learn how to develop a marketing plan
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Understand the key concepts and strategic planning not only as a process for achieving organizational goals but also as a means of building long-term relationships with customers
Understand the importance of the planning process within the context of strategic marketing and developing a marketing plan
Utilize the tools, concepts and models for strategic marketing evaluation, decision and implementation
Design a marketing programme based on conducting effective marketing research, developing marketing capabilities and competitive advantages
Implement and coordinate a strategic marketing programme
By the end of the course you should be able to:
Learning Objectives
Course Schedule
Week Topics
1Course IntroductionMarketing: A Basic Review
2Writing a Marketing Plan
3Collecting and Analyzing Marketing Information
4Developing Competitive Advantage and Strategic FocusDeveloping Goals and Objectives
5Customers, Segmentation, and Target Marketing
6Product Strategy/ Branding and Positioning
7Pricing and Distribution Strategy
8Integrated Marketing Communication I
9Integrated Marketing Communication II
10 Marketing Implementation and Control/ Developing Long-Term Customer Relationships
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Information regarding the course:
10 sessions, 2 hours each
Moodle 2 siteYou automatically gain access to the classes you are registered for. If not, contact the course administrator
The course exam constitutes 100% of the overall mark. The examination (2 hours) will be based on essay questions.
Tutorials
3 tutorialsThese cases are as follows:• USA Today: Innovation and Evolution in a Troubled Industry (is included in textbook)
• IKEA Looks to Further Penetrate the U.S. Market (is included in textbook)
• Apple's Winning Marketing Strategy (download it from MOODLE 2)
Effective tutorials require conscientious preparation before class. Thus, in order to be ready for class discussion of a case, please
Read the case through rather quickly for familiarity. Read the case a second time. Study all the exhibits carefully. Decide what the strategic issues are. Try to answer the case questionsStart your analysis of the issues with some number crunching. Use whichever tools and techniques of strategic analysis are called for. Support your opinions with reasons and evidence. Develop an appropriate action plan and set of recommendations.
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Organize your study:
Core reading:O. C. Ferrell and M. Hartline, (2011), Marketing Management Strategies - 5thedition (ISBN 9780538467445), Cengage Learning.
Supplementary texts and readings: o J. Fahy and D. Jobber (2012) (4th ed.). Foundations of Marketing. Mc Graw Hill o Hollensen, S. (2011) (5th ed.), Global Marketing: A decision-oriented approach, London: Financial
Times Prentice Hall.o D. West, J. Ford, Essam Ibrahim (2010), Strategic Marketing: Creating Competitive Advantage,
Second Edition, Oxford University Press.o Kotler P. & Keller K., 2006, Marketing Management, Pearson Prentice Hall, 12th Edition. o Hollensen, S. (2011) (5th ed.), Global Marketing: A decision-oriented approach, London: Financial
Times Prentice Hall.o Lambin J.J., Chumpitaz R., Schuiling I., 2007, Market- Driven Management, MacMillan, 2nd
edition.
The slides should be the guide for the topics. It is VERY IMPORTANT to study more thoroughly the concepts covered in our sessions based on the books that are given to you as references.
What is Marketing?
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Identifying the Marketing Concept
CUSTOMERBUSINESS
The Management of this Exchange
Business Consumer (B2C)
Business Business (B2B)
Business Government (B2G)
… …
2
2
2
Identifying the Marketing Concept
The process of obtaining something of value by offering something in return;typically obtaining products for money
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Basic Marketing Concepts:What Is Exchange?
Five Conditions of Exchangeo There must be at least two parties to the exchange.
o Each party has something of value to the other party.
o Each party must be capable of communication and delivery.
o Each party must be free to accept or reject the exchange.
o Each party believes it is desirable to exchange with the other party.
Goods/ServicesPrice ValueBrand
WarrantyConvenience
MoneyTime
EnergyCommitment
Experience Knowledge
Expectations
CUSTOMERBUSINESS
‘The Give and Get of Marketing’
The customer gives the business gets
The business gives the customer gets
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• Marketing (2005 AMA definition)– “… an organizational function and a set of business processes
for creating, communicating, and delivering value to customersand for managing customer relationships in ways that benefitthe organization and its stakeholders.”
• Marketing (2007 AMA definition)– “… the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that havevalue for customers, clients, partners, and society at large.”
Basic Marketing Concepts:Marketing Defined
Classical Conditioning is the process of using
established relationship between a stimulus and
a response to cause a learning
Operant Conditioning
Classical Conditioning
Reinforcement results from rewards : the more rewarding the response , the strongest the likelihood of the purchase being repeated.
Conditioning Learning
Behaviors with satisfying results are repeated.Behaviors with unsatisfying results are avoided.
Marketing Concept dimensions
“Think” in Marketing way
BehaviouralPhilosophical
“Act” in Marketing way
Marketing Concept Dimensions
4PsCustomer OrientationCompetitor OrientationInterfunctional Coordination
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4 P’s
Target Market
Product
Price
Promotion
Place
Product- Decisions regardingPhysical good features
Quality levelAccessoriesPackagingWarrantiesBranding
Price-Decisions regardingPrice levelFlexibilityDiscounts
TermsDifferentiation
Promotion-Decisions regardingSalespeople (selection, training,
Incentives)Advertising (media types, types
of advertising)Sales promotion
PublicityInternet/web strategy
Place-Decisions regardingChannel type
IntermediariesOutlet locationTransportation
StorageManaging channels
Did he do Marketing?
Albert Winstone, selling ice-cream, circa 1930.All photography Copyright Ben Vear at Winstones Ice Cream, www.winstonesicecream.co.uk.
Product: Ice-Cream
Promotion: “Stop me and Buy”
Place: A motorcycle and sidecar-Through the
different neighborhoods
Price:5 Cents
Excellent Customer Relationship MarketingHe knew everything about his customersHe was aware of their needs, about the competition, the market opportunities and so on.
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From these humble beginnings, Winstones has grownconsiderably and is now a substantial supplier to a number ofnational supermarket chains and major retail outlets
He was not only “doing” Marketing BUTHe was “thinking” in a Marketing Way!
Three conditions must be met before the marketing concept can be applied
Marketing Concept
Customer Orientation
Integrated Effort
Goal Achievements
Corporate activities
focus upon providing
customer satisfaction
All staff accept the
responsibility for
creating customer
satisfaction
The belief that
corporate goals can
be achieved through
customer satisfaction
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The evolution of Marketing Thoughts
Production Capabilities
Manufacture
ProductCustomers
(a) Production Orientation
This orientation refers in an environment which had a shortage of manufactured goods relative to demand, so goods sold easily.
Implications of this orientation includes:• Pricing based on the costs of production and distribution• Research limited to technical product research• Packaging design primary to protect product• Minimal promotion and advertising, limited to raising awareness of
the existence of the product
The evolution of Marketing Thoughts
Products and Services
Aggressive Sales Effort
Customers
(b) Sales Orientation
Refers to business ability to make profits on using powerful selling techniques topersuade consumers to buy them, rather than on customer needs
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The evolution of Marketing Thoughts
Customer Needs
Potential Market
Opportunities
Marketing Products and
ServicesCustomers
(c) Customer Orientation
It is a culture rather than an individual process.It’s the norms, mindsets, values and behaviours of employees; alongside the structure, systems and control of the company, that put the customer’s needs in the center of all firm’s activities.
These three orientations are presented as being chronological…
Production Capabilities
Manufacture
ProductCustomers
Products and Services
Aggressive Sales Effort
Customers
Customer Needs
Potential Market
Opportunities
Marketing Products and
ServicesCustomers
(a) Production Orientation
(b) Sales Orientation
(c) Customer Orientation
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Transactional and Relationship Marketing
In other words…
The modern Marketing Concept can be expressed as
“the achievement of the corporate goals through meeting and exceeding customers’ needs better
than the competition”
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The nature of customer value
Customer Value Perceived Benefits Perceived Sacrifice (Costs)
(Functional benefits + Emotional benefits)
(Monetary costs + Time costs + Energy costs +Psychic costs)
=
•The value of a product is the mental estimation a consumer makes of it.•Customers and not organizations define what represents value.•The value in the marketplace varies from place to place as well as from market to market.
Perceived benefits: can be derived from the product, the associated service and the image of the company/product
Perceived Sacrifice: is the total cost associated with buying the product
-
Perceived Benefits can be derived from…
Functional features
Performance
TechnologyBrand
Quality
Design
Packaging
Country of origin
Staff behaviour
Size
Image Delivery GuaranteesAfter-sales service
Spare parts
Company Reputation
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Four Forms of Customer Value
Price ValuePerformance
Value
Emotional Value
Relational Value
Customer Value
One of the most powerful customer motivations to purchase
A product is perceived as being cheaper than those offered by competitors
The performance of the product is perceived as high quality
Quality of service received by the customers
The emotional ‘bond’ consumers built with the product
(a) Price Value
(c) Performance Value (e.g Dyson)
(d) Relational Value
EXAMPLES
(b) Emotional Value
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Health Care (medical practice, hospital, eye care, dentistry)
Financial Services (banking, investment services, insurance)
Professional Services (accounting, legal, architectural)
Hospitality (restaurant, hotel/motel, bed & breakfast, ski resort, rafting)
Travel (travel agency, airline, theme park)
Others (hair styling, plumbing, lawn maintenance, health club, interior design)
Characteristics of Services
Intangibility
Heterogeneity
Inseparability
Services are intangible cannot be seen,
tasted, felt, heard or smelled before
purchase.
Services are produced and consumed
simultaneously.
Services are highly variable
Services cannot be stored.Perishability
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-Services cannot be inventoried-Services cannot be easily patented-Services cannot be readily displayed or communicated-Pricing is difficult
Tangible
Goods Services
Standardized
Production separate from consumption
Nonperishable
Intangible
Heterogeneous
Simultaneous production and
consumption
Perishable
-Service delivery and customer satisfaction depend on employee and customers action-Service quality depends on many uncontrollable factors-There is no sure knowledge that the service delivered in matches what was planned and promoted
vs.
-Customers participate in and affect the transaction-Customers affect each other-Employees affect the service outcome-Mass production is difficult
-It is difficult to synchronize supply and demand with services -Services cannot be returned or resold
Resulting Implications
Source:Parasuraman et al. (1985)
“Servuction” Model
Processes and systems
Personnel
Backstage Frontline
Service1
Direct Relationships
Indirect Relationships
Customer
Customer
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Servuction in a real world
Invisible Visible
ProceduresEmployeesIngredientsEquipment Logistics
Employees Customers Environment (Tangibles +Intangibles)
Servuction in a real world
Invisible Visible
ProceduresEmployeesEquipment LogisticsPlanning
Major Service Producer Audience /Customers Environment (Tangibles +Intangibles)
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PeopleAll human actors who play a part in service delivery and thus influence the
buyer’s perceptions: namely, the firm’s personnel, the customer, and other customers in the service environment.
Physical EvidenceThe environment in which the service is delivered and where the firm and
customer interact, and any tangible components that facilitate performance or communication of the service.
ProcessThe actual procedures, mechanisms, and flow of activities by which the
service is delivered—the service delivery and operating systems.
“Servuction” Model
7 P’s
Target Market
Product
Price
Promotion
Physical evidence
Processes
People
PlacePEOPLEEmployees(Recruiting, Training, Motivation, Rewards, Teamwork)Customers (Training)
PROCESSESFlow of activities(Standardized, customized)Number of stepsCustomer involvement
PHYSICAL EVIDENCE-Facility designEquipmentSignageEmployees dressOther tangibles(e.g Business cards; lecture notes)
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Source: Czinkota and Ronkainen (1995, p. 526)
Scale of elemental dominance
Good
good
B2B vs. B2C Marketing
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BUSINESSBUSINESS
The Management of this Exchange
Identifying the B2B Marketing Concept
•The management process responsible for the facilitation of exchange between
producers of goods and services and their organisational customers.
•B2B marketing and purchasing is a complex and risky business involving a number of
different parties.
Definition of B2B Marketing
A material, item or service that company sells to another company (customer) in order to use them for one of the following reasons:
– To produce its own products/services
– To facilitate company operations
– To incorporate them as components on its own products (OEMs)
– To sell them (as intermediary) to other companies or end-customers
In B2B the products and the services are sold for any other reason than the personalconsumptionIt is NOT the nature of the product; it is the reason for the TRANSACTION
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B2B customers
Commercial Enterprises (Banks; Hotels; etc.)
Retailers or Wholesalers that purchase products for resale to others.
Public and Private institutions (hospitals, colleges and universities, churches, museums etc.)
Government (federal, state, local)
B2B vs. B2C market
Fewer and larger buyersGeographical concentration Many buyersMarket
Relatively technical in natureCustomizationDelivery, services very important
StandardizationService important but less than for business products
Product
Competitive bidding for unique items, list prices standardized items
List prices
Price
Emphasis on personal selling Emphasis on advertisingPromotion
Direct channel to market A number of intermediariesPlace
Buying Center. Diverse group of organization members makes decisions
Individual or household unit makes the decisions
Decision buying process
B2B B2C
Relatively Enduring and complexComparatively, infrequent contact, short duration
Customer relationship