Unit 02: CBM 102 MARKETING PRINCIPLES (MP)student.bms.lk/CBM/Slides/34/Slides/MP/1-LESSON ONE... ·...
Transcript of Unit 02: CBM 102 MARKETING PRINCIPLES (MP)student.bms.lk/CBM/Slides/34/Slides/MP/1-LESSON ONE... ·...
Unit 02: CBM 102
MARKETING PRINCIPLES (MP)
UNIT 02: CBM 102 - MARKETING PRINCIPLES (MP)
LEARNING OUTCOMES
2.1 Understand the concepts and scope of marketing
2.2 Understand the elements of the marketing mix
2.3 Explain the concept of Segmentation, Targeting and Positioning
2.4 Describe the types of marketing research and stages of consumer behaviour
UNIT 02: CBM 102 - MARKETING PRINCIPLES (MP)
LESSON ONE
Understand the concepts and scope of marketing
DEFINITIONS OF MARKETING
DEFINITION 1
Marketing is the management process responsible for identifying,anticipating and satisfying customers’ requirements profitably.
(Chartered Institute of Marketing)
DEFINITION 2
Marketing is the activity, set of institutions, and processes for creating,communicating, delivering, and exchanging offerings that have valuefor customers, clients, partners, and society at large.
(American Marketing Association -AMA)
DEFINITION 3
The process by which companies create value for customers and buildstrong relationships in order to capture value from customers in return.
(Phillip Kotler/ Gary Armstrong)
DEFINITION 4
Marketing consists of individual and organizational activities thatfacilitate and expedite satisfying exchange relationships in a dynamicenvironment through the creation, distribution, promotion and pricingof goods, services and ideas.
(Dibb, Simkin, Pride and Ferrell)
KEY FUNCTIONS OF MARKETING
• Identifying customer requirements and satisfying anddelighting them
• Identifying favorable emerging market opportunities
• Facilitating exchange relationships (product or service for apayment)
• Staying ahead in dynamic environments
• Differentiate a product or service from competitors
• Enhancing profitability through customer satisfaction & delight
• Creating value to both the customer and the organisation
WHAT IS MARKETING
THE KEY GOAL OF MARKETING IS:
• Attract new customers by offering superior value
• Retain and grow your current customers by providing satisfaction and delight
EVOLUTION OF THE MARKETING CONCEPT
Marketing Concept is a relatively young philosophy, and has been preceded by
other business philosophies/orientations
EVOLUTION OF THE MARKETING CONCEPT
MARKETING MANAGEMENT PHILOSOPHIES
Production Concept
Product Concept
Selling Concept
Marketing Concept
PRODUCTION CONCEPT
The idea that consumers will favor products that areavailable and highly affordable and that the organisationshould therefore focus on improving production anddistribution efficiency
(Philip Kotler – 12th edition)
Emphasis of Production Orientation
Efficiency of production : a focus on manufacturing, and on improving the process so as to reduce costs and increase efficiency.
Efficiency of distribution: Mass distribution. Making the product available at all possible outlets.
Economies of scale: by this try to achieve lower unit costs and also increasing the supply.
Profitability through production efficiency.
PRODUCT CONCEPT
The idea that consumers will favor products thatoffer the highest quality, performance and featuresand that the organization should therefore devoteits energy to making continuous productimprovements.
(Philip Kotler – 12th edition)
EMPHASIS OF PRODUCT ORIENTATION
• Quality and features: making products designedto incorporate a large number of features andcontinuous quality improvements.
• Profitability through product quality.
MARKETING MYOPIA
Marketing myopia is a term coined by Theodore Levitt.
A business suffers from marketing myopia when a company views marketing strictly from the standpoint of selling a specific product rather than from the standpoint
of fulfilling customer needs.
SELLING CONCEPT
The idea that consumers will not buy enough of theorganizations products unless it takes large-scaleselling and promotion effort.
(Philip Kotler- 12th edition)
EMPHASIS WITH SALES ORIENTATION
Aggressive selling and promotional efforts: itassumes that people will not buy anything unlessthey are persuaded to do so. They will sell whatthey have, rather than the what the customerneeds.
Profitability through sales volume.
THE MARKETING CONCEPT
The marketing concept is a management philosophy that‘achieving organizational goals depends on knowing theneeds and wants of target markets and delivering thedesired satisfactions better than competitors do’.
(Philip Kotler – 12th edition)
Marketing Concept
Customer Orientation Integrated Effort Goal Achievement
KEY COMPONENTS OF THE MARKETING CONCEPT
CUSTOMER ORIENTATION
Customer orientation is the degree to which the organisationunderstands its customers
Identifying customer requirements and then, it attempts to create satisfying products to match customer requirements.
All activities should be focused upon delivering customer satisfaction/delight
All staff should accept the responsibility for creating customer satisfaction.
• The responsibility for the implementation of the marketingconcept lies not just within the marketing Department. Alldepartments should coordinate in providing customersatisfaction
INTEGRATED EFFORT
The belief that corporate goals (profits) can beachieved through customer satisfaction/delight.
• If customers are satisfied/delighted they will buy more ofyour products and thus profit for the organisation.
GOAL ACHIEVEMENT
SOCIETAL MARKETING CONCEPT
Societal Marketing Concept holds that the organisation task is todetermine the needs wants and interests of target markets andto deliver the desired satisfactions more effectively andefficiently than competitors in a way that preserves or enhancesthe consumers and society’s well-being.
(Philip Kotler – 10th edition)
Marketing Ethics are moral philosophies/principles that define right or wrong behavior in marketing.
Ethics are individually defined and may vary from one person to another. Although individual marketers often act in their own self-interest, there must be standards of acceptable
behavior to guide all marketing decisions.
WHAT IS MARKETING ETHICS?
Corporate Social Responsibility (CSR) is a management concept whereby organisations integrate social, economic and
environmental concerns in their business operations and interactions with their stakeholders.
Corporate social responsibility suggests that organisations consider not only their customers and profits, but also the good and
well-being of the society.
CORPORATE SOCIAL RESPONSIBILITY
IMPLEMENTING/FOSTERING THE MARKETING CONCEPT
Review and change of the organization structure
Review and align business processes
Engage in internal marketing
Introducing an effective marketing information system
Effective internal communication systems to be designed
Use of customer service values as recruitment and selection criteria.
Staff empowerment (ability to make decisions)
Training to all staff members on customer care on an ongoing basis
Monitoring and control systems to be implemented
Benchmarking the organisation’s performances and processes
• Customer satisfaction and delight
• Enhanced image and reputation. ( organization/ product)
• Leads to customer loyalty thus provides competitive edge.• Customer retention is high. (cost savings)
• Staff are motivated ( staff turnover is low thus cost savings).
• Responding quickly to changing needs of the customers.
• Increased revenue through customer satisfaction and delight.
• Value created to both the customer and the organization
• Effective utilization of resources.
BENEFITS OF IMPLEMENTING THE MARKETING CONCEPT
Lack of committed leadership and vision
Lack of customer knowledge
Lack of infrastructure
Autocratic leadership
Conflict between marketing and other functions - The power struggle
Preference for a production or sales focus
Transactional approach to business
Managers fail to realize or understand the true concept.
The structure of the organisation may require changing and this can lead to other managers’ resistance and costs.
Staff are frightened and reluctant to change.
DIFFICULTIES IN DEVELOPING A MARKETING ORIENTATION
Customer value is dependent on how the customerperceives the benefits of an offering and the sacrifice thatis associated with its purchase.
Customer value = Perceived Benefits – Perceived Sacrifice
CUSTOMER VALUE
Customer satisfaction occurs when perceived performancematches or exceeds expectations. Once a product has beenpurchased, customer satisfaction depends upon itsperceived performance compared to the buyer’sexpectations.
CUSTOMER SATISFACTION
A superiority gained by an organization when it canprovide the same value as its competitors but at a lowerprice, or can charge higher prices by providing greatervalue through differentiation.
COMPETITIVE ADVANTAGE
“Customer retention has become increasingly recognized as thekey to long-term survival. In the past, most companies haveoperated on a ‘leaky bucket’ basis, seeking to refill the bucketwith new customers while ignoring the ones leaking awaythrough the bottom…a one percent improvement in customerretention will lead to a five-percent improvement in the firm’svalue.”
Jim Blythe – 2006
RELATIONSHIP MARKETING
Relationship marketing is the process of creating, building up and managing long-term relationships with customers,
distributors and suppliers. It aims to change the focus from getting customers to keeping customers.
WHAT IS RELATIONSHIP MARKETING?
RELATIONSHIP MARKETING
Goals of Relationship Marketing
To build maintain a base of committed customers who are profitable for the organization.
Focus on
Attraction
Retention
Enhancement of customer relationships
Customer loyalty is both an attitudinal and behavioraltendency to favor one brand or an organisation over allothers, whether due to satisfaction with the product orservice, its convenience or performance, or simplyfamiliarity and comfort with the brand.
CUSTOMER LOYALTY
Retaining customers is cheaper than recruiting new ones
Repeat customers often cost less to service - Familiarity
Customers should be judged on their lifetime value
Customer defection is damaging to the company(negative word-of-mouth)
Creates Customer loyalty, thus leads to long-term stability and growth
Keeps in constant touch with customers (establishing one-to-one relationship withmost profitable customer’s)
Targeted marketing strategy
Easier to predict revenues, and retaining them will lead to growth.
Loyal and satisfied customers can be an important source of referrals.
BENEFITS OF RELATIONSHIP MARKETING
INTERNAL MARKETING
Internal Marketing (IM) is an ongoing process that occurs strictlywithin a company or organization whereby the functional process is toaligns, motivates and empowers employees at all management levelsto consistently deliver a satisfying customer experience .
Any time a customer interacts with an employee, it affects their overallsatisfaction. Therefore, customer satisfaction is deeply dependent onthe performance of a company's staff.
IM is the use of the appropriate tools of marketing to create a suitableculture, usually one which places the customer at the centre of whatthe firm does.
• Internal Newsletters – these can take the form of emails, notice boards, orA4 documents with the latest company information
• Staff magazines – These can be magazines with relevant articles aboutemployees, promotions, achievements, about family, and articles of generalinterest.
• Staff meetings – between staff and management to discuss issues, tocelebrate success and this could be done in an informal way
• Team-building exercises – these can be particularly important wheninducting new employees into the organisation.
• Awards for employees – Employee recognitions and rewards such asemployee of the month, gifts for exceptional performance etc.
INTERNAL MARKETING TOOLS
A company’s marketing environment consists of the actors andforces outside marketing that affect marketing management’sability to build and maintain successful relationships with targetcustomers.
(Philip Kotler -12th Edition)
THE MARKETING ENVIRONMENT
The marketing environment refers to the internal and external
influences that affect the marketing function.
The internal environment, consisting of the other sub-systems of theorganisation that impact on the operations of the marketing function.
• Financial resources
• Physical resources
• Human resources
• Access to natural resources, patents, copyrights, and trademarks
• Company culture and image
• The role of management and leadership styles
• Corporate governance
THE INTERNAL ENVIRONMENT
THE EXTERNAL ENVIORNMNET
MACRO MICRO
There are two kinds of external marketing environments; micro andmacro. These external factors are beyond the control of marketersbut they still influence the operations and functions of marketing.
THE MICRO ENVIRONMENT
THE MACRO ENVIRONMENT
Macro Environment
Economic
Political
Social & Cultural
Legal
Environmental Technological
An understanding of internal, macro and micro marketing environmentforces is essential for planning.
Helps a business to compete more effectively against its rivals.
Assists in the identification of opportunities and threats.
Enables an organization to take advantage of emerging strategicopportunities
WHY ENVIRONMENTAL SCANNING IS IMPORTANT?
Environmental scanning: monitoring of an organization's internal and external environments for detecting early signs of opportunities and
threats that may influence its current and future plans of the organisation.
THANK YOU