Marketing Management

A Global Perspective in Marketing Management

Engr. Arnold MariñasDiscussant

ME 201 Strategic Management of Engineering Enterprise

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What is Marketing?What is Marketing?

Selling?

Advertising?

Promotions?

Making products available in stores?

Maintaining inventories?

All of the above, plus much more!

Selling?

Advertising?

Promotions?

Making products available in stores?

Maintaining inventories?

All of the above, plus much more!

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Marketing = ?Marketing = ?

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals

American Marketing Association

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals

American Marketing Association

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Marketing = ?Marketing = ?

Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

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Simple Marketing SystemSimple Marketing System

Industry(a collection

of sellers)

Market(a collection

of Buyers)

Goods/services

Money

Communication

Information

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Marketing = ?Marketing = ? Marketing is the sum of all activities that take you to a

sales outlet. After that sales takes over. Marketing is all about creating a pull, sales is all about

push. Marketing is all about managing the four P’s –

product price place promotion

Marketing is the sum of all activities that take you to a sales outlet. After that sales takes over.

Marketing is all about creating a pull, sales is all about push.

Marketing is all about managing the four P’s – product price place promotion

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The 4 Ps & 4CsThe 4 Ps & 4Cs

MarketingMix

Product

Price Promotion

Place

CustomerSolution

CustomerCost

Communication

Convenience

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Difference Between - Sales & Marketing ?

Difference Between - Sales & Marketing ?

Salestrying to get the customer to want what the company produces

Marketing trying to get the company produce what the customer wants

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Scope – What do we marketScope – What do we market

Goods Services Events Experiences Personalities Place Organizations Properties Information Ideas and concepts

Goods Services Events Experiences Personalities Place Organizations Properties Information Ideas and concepts

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Core Concepts of MarketingCore Concepts of Marketing

Based on : Needs, Wants, Desires / demand

Products, Utility, Value & Satisfaction

Exchange, Transactions & Relationships

Markets, Marketing & Marketers.

Based on : Needs, Wants, Desires / demand

Products, Utility, Value & Satisfaction

Exchange, Transactions & Relationships

Markets, Marketing & Marketers.

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Core Concepts of MarketingCore Concepts of Marketing

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Core Concepts of MarketingCore Concepts of Marketing

Need – food ( is a must )

Want – Pizza, Burger, French fry's ( translation of a need as per our experience )

Demand – Burger ( translation of a want as per our willingness and ability to buy )

Desire – Have a Burger in a five star hotel

Need – food ( is a must )

Want – Pizza, Burger, French fry's ( translation of a need as per our experience )

Demand – Burger ( translation of a want as per our willingness and ability to buy )

Desire – Have a Burger in a five star hotel

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In order to understand Marketing let us begin with the Marketing Triangle

In order to understand Marketing let us begin with the Marketing Triangle

Customers

CompetitionCompany

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Who is a Customer ?Who is a Customer ?

Anyone who is in the market looking at a product /

service for attention, acquisition, use or consumption

that satisfies a want or a need

CUSTOMER IS . . . . .

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Customer –Customer –

CUSTOMER has needs, wants, demands and desires

Understanding these needs is starting point of the entire marketing

These needs, wants arise within a framework or an ecosystem

Understanding both the needs and the ecosystem is the starting point of a long term relationship

CUSTOMER has needs, wants, demands and desires

Understanding these needs is starting point of the entire marketing

These needs, wants arise within a framework or an ecosystem

Understanding both the needs and the ecosystem is the starting point of a long term relationship

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How Do Consumers Choose Among Products & Services?

How Do Consumers Choose Among Products & Services?

Value - the value or benefits the customers gain from using the product versus the cost of obtaining the product.

Satisfaction - Based on a comparison of performance and expectations.

Performance > Expectations => Satisfaction

Performance < Expectations => Dissatisfaction

Value - the value or benefits the customers gain from using the product versus the cost of obtaining the product.

Satisfaction - Based on a comparison of performance and expectations.

Performance > Expectations => Satisfaction

Performance < Expectations => Dissatisfaction

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Customers - Problem SolutionCustomers - Problem Solution

As a priority , we must bring to our customers “WHAT THEY NEED”

We must be in a position to UNDERSTAND their problems

Or in a new situation to give them a chance to AVOID the problems

As a priority , we must bring to our customers “WHAT THEY NEED”

We must be in a position to UNDERSTAND their problems

Or in a new situation to give them a chance to AVOID the problems

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Customer looks for ValueCustomer looks for Value

Value = Benefit / Cost

Benefit = Functional Benefit + Emotional Benefit

Cost = Monetary Cost + Time Cost + Energy Cost + Psychic Cost

Value = Benefit / Cost

Benefit = Functional Benefit + Emotional Benefit

Cost = Monetary Cost + Time Cost + Energy Cost + Psychic Cost

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Strategic MarketingStrategic Marketing

Strategic marketing management is concerned with how we will create value for the customer

Asks two main questions

What is the organization’s main activity at a particular time? – Customer Value

What are its primary goals and how will these be achieved? – how will this value be delivered

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Strategic PlanningStrategic Planning

Strategic Planning is the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities.

Also called Strategic Management Process

All organizations have this

Can be Formal or Informal

Strategic Planning is the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities.

Also called Strategic Management Process

All organizations have this

Can be Formal or Informal

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The Strategic-Planning, Implementation, and Control ProcessThe Strategic-Planning, Implementation, and Control Process

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Business Strategic-Planning Process

Business Strategic-Planning Process

External Environment

(Opportunity &

Threat analysis)

Internal Environment

(Strength/ Weakness analysis)

Goal Formulation

Business Mission

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Strategy FormulationStrategy Formulation

Environmental Analysis

Internal AnalysisCompetitorCustomerSupplier

RegulatorySocial/ Political

Technology Know-HowManufacturing Know-How

Marketing Know-HowDistribution Know-How

Logistics

Strength & Weaknesses

Identity Core Competencies

Opportunities & Threats

Identify opportunity

Fit internal Competencies with external opportunities

Firm Strategies

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The Marketing PlanThe Marketing Plan

A written document that acts as a guidebook of marketing activities for the marketing manager

A written document that acts as a guidebook of marketing activities for the marketing manager

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CONTENTS of MARKETING PLAN CONTENTS of MARKETING PLAN Business Mission Statement

Objectives

Situation Analysis (SWOT)

Marketing Strategy Target Market Strategy Marketing Mix

Positioning Product Promotion Price Place – Distribution People Process

Implementation, Evaluation and Control

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The Marketing ProcessThe Marketing ProcessBusiness Mission Stateme

nt

Objectives

Situation or SWOT Analysis

Implementation Evaluation,

Control

Target Market Strategy

Marketing Strategy

Product

Promotion

Place/Distribution

Price

Marketing Mix

Marketing EnvironmentMarketing Environment

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Why a product like radio declined and now once again emerging as an entertainment medium ?

Why a product like radio declined and now once again emerging as an entertainment medium ?

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What Were the Drivers of This Change ?What Were the Drivers of This Change ?

Technology ?

Government policy ?

Other media substitutes ?

Technology ?

Government policy ?

Other media substitutes ?

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Why Market Leaders Suffered ?Why Market Leaders Suffered ?

HMT vs. Titan

HLL vs. Nirma

Bajaj vs. Honda

Dot.com boom, then bust and now resurgence

Market leadership today cannot be taken for granted.New and more efficient companies are able to upstage leaders in a much shorter period.

HMT vs. Titan

HLL vs. Nirma

Bajaj vs. Honda

Dot.com boom, then bust and now resurgence

Market leadership today cannot be taken for granted.New and more efficient companies are able to upstage leaders in a much shorter period.

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Factors Influencing Company’s Marketing Strategy

Factors Influencing Company’s Marketing Strategy

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DemographicsDemographics

SocialChangeSocial

Change

EconomicConditionsEconomicConditions

Political & Legal FactorsPolitical &

Legal Factors

TechnologyTechnology

CompetitionCompetition

EnvironmentalScanning

EnvironmentalScanning

Target Market

ProductDistributionPromotion

Price

ProductDistributionPromotion

Price

External Environment is not controllable

External Environment is not controllable Ever-Changing

MarketplaceEver-Changing

Marketplace

External Marketing EnvironmentExternal Marketing Environment

Physical / Natural

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The macro-environmentThe macro-environment

is the assessment of the external forces that act upon the firm and its customers, that create threats & opportunities

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P r o d u c tP r o d u c tP r o d u c tP r o d u c t

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Anything that is offered to the market for

attention, acquisition, use or consumption that

satisfies a want or a need

Product isProduct is

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Types of ProductsTypes of Products

ConsumerProducts

IndustrialProducts

PRODUCTS

Services

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Product Items, Lines, and MixesProduct Items, Lines, and Mixes

Product ItemProduct Item

Product LineProduct Line

Product MixProduct Mix

A specific version of a product that can be designated as a distinct offering among an organization’s products.

A specific version of a product that can be designated as a distinct offering among an organization’s products.

A group of closely-related product items.

A group of closely-related product items.

All products that an organization sells.

All products that an organization sells.

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Product MixProduct Mix

Width – how many product lines a company has

Length – how many products are there in a product line

Depth – how many variants of each product exist within a product line

Consistency – how closely related the product lines are in end use

Width – how many product lines a company has

Length – how many products are there in a product line

Depth – how many variants of each product exist within a product line

Consistency – how closely related the product lines are in end use

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Gillette’s Product Lines & MixGillette’s Product Lines & Mix

Blades and Writingrazors Toiletries instruments Lighters

Fusion – 5 bladeMach 3 TurboMach 3 Series Paper Mate CricketSensor Adorn Flair S.T. Dupont Trac II Toni S.T. DupontAtra Right GuardSwivel Silkience Double-Edge Soft and Dri Lady Gillette Foamy Super Speed Dry LookTwin Injector Dry Idea Techmatic Brush Plus

Width of the product mixWidth of the product mix

De

pth

of

the

pro

du

ct

line

sD

ep

th o

f th

e p

rod

uc

t lin

es

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What is a Service? Defining the EssenceWhat is a Service? Defining the Essence

An act or performance offered by one party to another (performances are intangible, but may involve use of physical products)

An economic activity that does not result in ownership

A process that creates benefits by facilitating a desired change in customers themselves, or their physical possessions, or intangible assets

An act or performance offered by one party to another (performances are intangible, but may involve use of physical products)

An economic activity that does not result in ownership

A process that creates benefits by facilitating a desired change in customers themselves, or their physical possessions, or intangible assets

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Some Industries - Service SectorSome Industries - Service Sector

Banking, stock broking

Lodging

Restaurants, bars, catering

Insurance

News and entertainment

Transportation (freight and passenger)

Banking, stock broking

Lodging

Restaurants, bars, catering

Insurance

News and entertainment

Transportation (freight and passenger)

Health care

Education

Wholesaling and retailing

Laundries, dry-cleaning

Repair and maintenance

Professional (e.g., law, architecture, consulting)

Health care

Education

Wholesaling and retailing

Laundries, dry-cleaning

Repair and maintenance

Professional (e.g., law, architecture, consulting)

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Classification of ServicesClassification of Services

Pure Tangible Product

Materials / Components

Computers

Major Product withMinor Services

Product = Service

Major Service withMinor Product

Business Hotels

Good Transportation

Banking Pure Intangible Service

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Intangibility – Services are intangibility cannot be seen, tasted, felt, heard or smelled before purchase.

Inseparability - Services are produced and consumed simultaneously.

Variability or Heterogeneity – Services are highly variable

Perishability – Services cannot be stored.

Non Ownership - Services are rendered but there is no transfer of title

Intangibility – Services are intangibility cannot be seen, tasted, felt, heard or smelled before purchase.

Inseparability - Services are produced and consumed simultaneously.

Variability or Heterogeneity – Services are highly variable

Perishability – Services cannot be stored.

Non Ownership - Services are rendered but there is no transfer of title

Major Characteristic of Services Major Characteristic of Services

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The Marketing MixThe Marketing Mix

The conventional view of the marketing mix consisted of four components (4 Ps): Product, Price, Place/ distribution and Promotion.

Generally acknowledged that this is too narrow today; now includes , Processes, Productivity [technology ]People [employees], Physical evidence

Marketers today are focused on virtually all aspects of the firm’s operations that have the potential to affect the relationship with customers.

The conventional view of the marketing mix consisted of four components (4 Ps): Product, Price, Place/ distribution and Promotion.

Generally acknowledged that this is too narrow today; now includes , Processes, Productivity [technology ]People [employees], Physical evidence

Marketers today are focused on virtually all aspects of the firm’s operations that have the potential to affect the relationship with customers.

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The “8Ps” of Integrated Service Management vs. the Traditional “4Ps” The “8Ps” of Integrated Service Management vs. the Traditional “4Ps”

► Product elements

► Place, cyberspace, and time

► Process

► Productivity and quality

► People

► Promotion and education

► Physical evidence

► Price and other user outlays

► Product elements

► Place, cyberspace, and time

► Process

► Productivity and quality

► People

► Promotion and education

► Physical evidence

► Price and other user outlays

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The Give and Get of MarketingThe Give and Get of Marketing

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Great Words on MarketingGreat Words on Marketing

1. “The purpose of a company is ‘to create a customer…The only profit center is the customer.’”

2. “A business has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results: all the rest are costs.”

3. “The aim of marketing is to make selling unnecessary.”

4. “While great devices are invented in the Laboratory, great products are invented in the Marketing department.”

5. “Marketing is too important to be left to the marketing department.”

1. “The purpose of a company is ‘to create a customer…The only profit center is the customer.’”

2. “A business has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results: all the rest are costs.”

3. “The aim of marketing is to make selling unnecessary.”

4. “While great devices are invented in the Laboratory, great products are invented in the Marketing department.”

5. “Marketing is too important to be left to the marketing department.”

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Drivers of Customer SatisfactionDrivers of Customer Satisfaction

Many aspects of the firm’s value proposition contribute to customer satisfaction:

The core product or service offered

Support services and systems

The technical performance of the firm

Interaction with the firm and it employees

The emotional connection with customers

Ability to add value and to differentiate as a firm focuses more on the top levels

Many aspects of the firm’s value proposition contribute to customer satisfaction:

The core product or service offered

Support services and systems

The technical performance of the firm

Interaction with the firm and it employees

The emotional connection with customers

Ability to add value and to differentiate as a firm focuses more on the top levels

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Marketers and MarketsMarketers and Markets

Marketers are focused on stimulating exchanges with customers who make up markets – B2C or B2B.

The market is comprised of people who play a series of roles: decision makers, consumers, purchasers, and influencers.

It is absolutely essential that marketers have a detailed understanding of consumers, their needs and wants.

Much happens before and after the sale to affect customer satisfaction

Marketers are focused on stimulating exchanges with customers who make up markets – B2C or B2B.

The market is comprised of people who play a series of roles: decision makers, consumers, purchasers, and influencers.

It is absolutely essential that marketers have a detailed understanding of consumers, their needs and wants.

Much happens before and after the sale to affect customer satisfaction

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Stages of Customer InteractionStages of Customer Interaction

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What Changed in Marketing…What Changed in Marketing…

• Organize by product units• Focus on profitable transactions• Look primarily at financial

scorecard• Focus on shareholders• Marketing does the marketing• Build brands through advertising• Focus on customer acquisition• No customer satisfaction

measurement• Over-promise, under-deliver

• Organize by product units• Focus on profitable transactions• Look primarily at financial

scorecard• Focus on shareholders• Marketing does the marketing• Build brands through advertising• Focus on customer acquisition• No customer satisfaction

measurement• Over-promise, under-deliver

• Organize by customer segments• Focus on customer lifetime value• Look also at marketing scorecard

• Focus on stakeholders• Everyone does the marketing• Build brands through performance• Focus on customer retention• Measure customer satisfaction and

retention rate• Under-promise, over-deliver

Old Economy New Economy

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Myth 1 – The larger the range of products, the more customer-centric I am.

Myth 1 – The larger the range of products, the more customer-centric I am.

Mythbuster – The range of products has Mythbuster – The range of products has

emerged from beingemerged from being

competition-centric.competition-centric.

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Myth 2 – Better technology (read CRM) leads to

better customer service.

Myth 2 – Better technology (read CRM) leads to

better customer service.

Mythbuster – TechnologyMythbuster – Technology

alone does not deliver, alone does not deliver,

helps people do.helps people do.

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Myth 3 – Launch a product and the customer will start

using instantly.- Give a customer a card and he will learn how to play

with it immediately

Myth 3 – Launch a product and the customer will start

using instantly.- Give a customer a card and he will learn how to play

with it immediately

Mythbuster – Customers needMythbuster – Customers need

To be educated too…To be educated too…

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Mythbuster – Customers Mythbuster – Customers are not only present are not only present where competition is.where competition is.

Myth 4 – The only way to get a customer is from

competition.

Myth 4 – The only way to get a customer is from

competition.

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Myth 5 – Just advertise and - You will sell.Myth 5 – Just advertise and - You will sell.

Mythbuster – Advertising Mythbuster – Advertising will only sell, will only sell,

Not retain customers. Not retain customers.

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Myth 6 – No difference between marketing & selling

Mythbuster – Mythbuster – “Selling focuses on the needs of the “Selling focuses on the needs of the seller; marketing on the needs of the buyer. seller; marketing on the needs of the buyer.

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Myth 7 – In the absence of relationships ‘trust’ builds financial brands

Mythbuster – TMythbuster – Trust is not a differentiator at all…rust is not a differentiator at all…it is the very minimum that the customer expects!!it is the very minimum that the customer expects!!

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So what will the differentiators be :So what will the differentiators be :So what will the differentiators be :So what will the differentiators be :

• Technology ?

• Brand ?

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The real differentiator of The real differentiator of customer – centricity in a customer – centricity in a commoditised world of commoditised world of financial products - financial products - Customer Service !Customer Service !

References:

• Marketing Management: An Asian Perspective 4th ed. By P. Kotler, S. Leong, C, Tan

• Basic Marketing- A Global Managerial Approach W. Perrault

• Handbook of Industrial Engineering

References:

• Marketing Management: An Asian Perspective 4th ed. By P. Kotler, S. Leong, C, Tan

• Basic Marketing- A Global Managerial Approach W. Perrault

• Handbook of Industrial Engineering

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Thank YouThank You