MBA Master of Business Administration Crash Course An association of institutional, professionals, and OFWs Riyadh, Kingdom of Saudi Arabia The National Organization of Certified Public Accountants Riyadh Chapter, Kingdom of Saudi Arabia “To reach our greatest potential, we must set our sights clearly and embrace the unknown confidently” MODULE 4 MARKETI NG MANAGEMENT
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Module 4 - Marketing Management - Mba Crash Course
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MBAMaster of Business Administration
Crash Course
An association of institutional, professionals, and OFWsRiyadh, Kingdom of Saudi Arabia
The National Organization of Certified Public AccountantsRiyadh Chapter, Kingdom of Saudi Arabia
“To reach our greatest potential, we must set our sights clearly and
embrace the unknown confidently”
MODULE 4
MARKETI NGMANAGEMENT
PURPOSE OF BUSINESSPURPOSE OF BUSINESS
CUSTOMERS
EmployeesManagers
Shareholders
SuppliersCreditorsInvestors
Create and maintain value
for stakeholders
BUSINESS SUCCESS
BUSINESS SUCCESS
BUSINESS SUCCESS
PURPOSE OF BUSINESSPURPOSE OF BUSINESS
PETER DRUCKER“Revered as father of
Modern Day Management”
PETER DRUCKER“Revered as father of
Modern Day Management”
PURPOSE OF BUSINESS
CREATE & KEEP CUSTOMERS
MARKETING IS THE PROCESS BY WHICH THIS IS
ACHIEVED
CRITERIA FOR BUSINESS SUCCESSCRITERIA FOR BUSINESS SUCCESSINCREASED PERFORMANCE PURSUED IN TWO (2) FOCI
BUSINESS DO IT BETTER
Maintain Output
Reduced Input
Extract more value from existing
customers
Enhance Customer Satisfaction
Attract more customers
Enhance Customer Satisfaction
BUSINESS PERFORMANCE=DIRECT FUNCTION OF MARKETING EFFECTIVENESS
BUSINESS CAN DO MORE
INPUT
OUTPUT
Increased Output
Incremental Input
LEARNING FROM FAILURELEARNING FROM FAILURE
Mardikakis M – Long Range Planning Example: Exxon, IBM, Texaco, Union Carbide
CAUSES OF CORPORATE FAILURENatural ProcessOrganizational arteriosclerosisTaking risksOverextending resources & capabilitiesBeing overoptimisticIgnoring or underestimating competitionPreoccupation with short termBelieving in quick fixesRelying on barriers to entryOverreactingPersonality and ability of CEOBad LuckIncompatibility
MARKETING REVOLUTIONMARKETING REVOLUTION
THE MARKETING MYOPIA – BUSINESS FAILURETheodore Levin’s Article – Harvard Business Review
PRODUCT ORIENTEDRATHER THAN
CUSTOMER ORIENTED
FORCED BUSINESS IN 1960’s
FOCUS ON CUSTOMER NEEDS AND BEMARKETING LED
MARKETING REVOLUTIONMARKETING REVOLUTION
ENVIRONMENTAL PRESSURES THAT LED TO MARKETING REVOLUTION
Faster Technological Change
Shift to Slow Growth Economy
Third World Economic Capability
Fluctuating Exchange Rate
Communication & Information Trend
Changes in Social Order
MARKETING CHALLENGESMARKETING CHALLENGES
Ability to powerfully communicate your business with laser precision and your ability to deliver a clearly-defined and consistent experience -BRANDING
Create a deep connection with your core target audience - your potential raving fans! – TARGET MARKET - SEGMENTS
Design compelling offerings that pull customers in like a magnet – OFFERINGS PORTFOLIO
80% of all purchase decisions are based on emotion.
Availability of a Marketing Plan - ROADMAP
90% of small business owners do not have a plan
David Lowndes Director of Product Development for Comac, Inc
MARKETING CHALLENGESMARKETING CHALLENGES
Increased specialization of Customer Needs
“Mass Marketing” – “One size fits all”
New Communication ChannelUse of different medium to reach
consumers
David Lowndes Director of Product Development for Comac, Inc
MARKETING CHALLENGESMARKETING CHALLENGES
Increased Competition for Customer Dollars
“Growing global economy – more competitors”
Shorter Product life CycleTechnology- reaching customers quickly – creating new products”
David Lowndes Director of Product Development for Comac, Inc
MARKETING CHALLENGESMARKETING CHALLENGES
Legislation and Regulatory Restrictions
“Imposition of regulations -Standards”
MARKETI NGVS
SELLI NG
MARKETING VS. SELLINGMARKETING VS. SELLING
MARKETING
Determine needs and wants of target market.
Deliver desired satisfaction efficiently and effectively.
SELLING
Customers ability to buy or not buy.
Stimulate consumers interest to the products.
MARKETING VS. SELLINGMARKETING VS. SELLINGMARKETING CONCEPT SELLING CONCEPT
Discovers Market Needs
Product Planning and Development
Distribution of Products and Services
Guaranteed Sales Volume and ProfitsCustomers Satisfaction
Research
Production
Product Planning and Development
Promotional Methods and Selling
Distribution of Products and Services
UnGuaranteed Sales Volume and ProfitsCustomers Satisfaction
Management Guidance to achieve and maintain market share,
growth and profitability
MARKETING CORE CONCEPTSMARKETING CORE CONCEPTS
Customer Orientation
Production Orientation
High Production and DistributionEfficiency
= Low Cost and Better Offering
Product Orientation
Good products and continuous
improvement
Customer Orientation
Determines Needs & wants and
delivering desired satisfaction
Selling Orientation
“We sell what we make”
“We make what we sell”
NOT
MARKETING CORE CONCEPTSMARKETING CORE CONCEPTS
Integration Effort
BUSINESS KEY TASK:
CREATE AND HOLD CUSTOMERS
DEPARTMENT’S SUPPORT
TOTALOFFERINGS
MARKETING CORE CONCEPTSMARKETING CORE CONCEPTS
Competitive Advantage
BUILD ON ADVANTAGES TO MINIMIZE DISADVANTAGES
MARKET SHARE : NOT THE ONLY MEASURE TO DETERMINE COMPETITIVE POSITION
MARKETING CORE CONCEPTSMARKETING CORE CONCEPTS
Competitive Advantage
PETER DOYLE – Professor of Marketing & Strategic ManagementUNIVERSITY OF WARWICK
MEASURES USED BY AMERICAN AND JAPANESE BUSINESSMEN TO EVALUATE PERFORMANCE
Increase in Market Share
New Product Ratio
Return on Investment
Capital Gain for Shareholders
MEASURES USED BY AMERICAN AND JAPANESE BUSINESSMEN TO EVALUATE PERFORMANCE
MARKETING CORE CONCEPTSMARKETING CORE CONCEPTSPETER DOYLE – Professor of Marketing & Strategic Management
UNIVERSITY OF WARWICK
0
0.5
1
1.5
2
2.5
3
USA
JAP
ROI
USA
JAP
CAPITALGAIN
USA
JAP
PROD. RATIO
USA
JAP
MKT SHARE
MARKETING CORE CONCEPTSMARKETING CORE CONCEPTS
Segmentation and Positioning
SEGMENTATIONIdentifying homogeneous market and subdividing them by applying variables
POSITIONING
Choice of target market segment Determine where business will competeChoice of differential advantageDictate how business competes
MARKETING CORE CONCEPTSMARKETING CORE CONCEPTS
Environmental Awareness
Recognizing and responding profitably to unmet needs and
trends of the environment.
ORGANIZATION
MARKETI NG DECI SI ONS
FOUR CORE AREASFOUR CORE AREAS
MARKET SEGMENTATION
SELECTINGTARGETMARKET
MARKETPOSITIONING
MARKETPLANNING
MARKETING DECISIONS
MARKET SEGMENTATIONMARKET SEGMENTATION
IMPORTANCE OFMARKET SEGMENTATION
Better matching of customers’ needs
Enhanced profits
Enhanced opportunities for growth
Retain customers
Targeted communication
Market segment share
MARKET SEGMENTATIONMARKET SEGMENTATION
BASES FOR SEGMENTATION
NEEDS PROFILES
MARKET SEGMENTATIONMARKET SEGMENTATION
MARKET PROFILES
DESCRIPTIVE MEASURABLE CUSTOMER CHARACTERISTICS
GEOGRAPHICregion of the country
urban or rural area
DEMOGRAPHICage, sex, family sizeincome, occupation,
educationreligion, race, nationality
PSYCHOGRAPHICsocial classlifestyle type
personality type
BEHAVIORALproduct usagebrand loyaltytype of user
MARKET SEGMENTATIONMARKET SEGMENTATION
CRITERIA FOR SEGMENTATION
Effective : homogeneous customers but significantly different from the others.
Identifiable: business must be able to identify customers in the proposed segment.
Profitable: more segments - greater opportunity – added value
Accessible: customers can effectively reached and served.
Actionable: taking advantage of the segmentation scheme it develops.
FACTORS OF MARKET ATTRACTIVENESS
SEGMENT SIZE
SEGMENT GROWTH
PROFITABILITY
CAPABI-LITIES
COMPETI-TION
MARKET SEGMENTATIONMARKET SEGMENTATION
MANAGEMENT STRATEGIC CHOICES
MARKET SEGMENTATIONMARKET SEGMENTATION
Undifferentiated marketing : Ignoring actual or potential differences among segments. Designs a product and marketing mix that will appeal to the mass market.
Differentiated marketing: Develop different products and different marketing programs for each segment of the market.
Focused marketing: Specializing in one or small numbers of segments.
MARKET SEGMENTATION-EXAMPLEMARKET SEGMENTATION-EXAMPLEAIRLINE INDUSTRY
CLASS PASSEN-GERS
PRICEVARIABLE
COSTREVENUE
FIXEDCOST
PROFITVARIABLECOST
Undifferentiated Strategy
No Class 240 250 20 60,000 4,800 50,000 5,200
Differentiated Strategy
Economy 144 250 20 36,000 2,880
Business 72 500 40 36,000 2,880
First 24 1,000 100 24,000 2,400
TOTAL 240 96,000 8,160 50,000 37,840
MARKET POSITIONINGMARKET POSITIONING
Designing the company’s offering and image so that they occupy a
Two or more autonomous organizations at the same level cooperate in exploiting
market opportunities
Reduces risks of resources at individual level
Speed to penetrate new market
Access to new technologies and knowledge
Philips & Dupont – Devt of Compact DiscsToyota & Gen Motors – assembly of cars
MULTI CHANNELMULTI CHANNEL
Using multiple channels to satisfy differing needs of segments and customers
HP Sells pc through own sales forceUse computer storesDirect Marketing Value Added Resellers
PROMOTI ONMARKETI NG
COMMUNI CATI ON MI X
PROMOTI ONMARKETI NG
COMMUNI CATI ON MI X
ADVERTISINGAny paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.
MARKETING COMMUNICATION MIXMARKETING COMMUNICATION MIX
PERSONAL SELLINGPersonal presentation by the firm’s sales force for the purpose of making sales and building customer relationships.
SALES PROMOTIONShort-term incentives to encourage the purchase or sale of a product or service.
MARKETING COMMUNICATION MIXMARKETING COMMUNICATION MIX
PUBLIC RELATIONSBuilding good relationships with the public by publicity for a "corporate image.
DIRECT MARKETINGDirect communications with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships.
MARKETING COMMUNICATION MIXMARKETING COMMUNICATION MIX
COMPETITIVE ADVERTISINGEmphasis such as “Better”“Improved” “ No 1”
RETENTIVE ADVERTISING Develop consumer loyalty by repetitive advertising
Marketing Effectiveness
ORGANI-ZATION
ENVIRON-MENT
Measure of quality of relations
EFFICIENCY“Doing things right”
EFFECTIVENESS“Doing the right things”
OVERCOMING CHALLENGESOVERCOMING CHALLENGES
THE COMMUNI CATI ON
OPTI MI ZATI ON PROCESSDavid Lowndes
OPTIMIZATION PROCESSOPTIMIZATION PROCESS
ANALYSISEvaluate current communication materials in relation to the following Critical Success Factors (CSF)
Specific objectives & desired response-campaign materials.Target marketsIndustry norms, best practices, business environmentValue of transaction or salesCustomization and personalization needsAudience demographicsCompetitive program offeringsBusiness and marketing objectivesProduct lifecyclesInventory quantities, shelf life and valueUsage and reorder patternsDesign requirements and constraintsCorporate graphic standardsProduction options and costsDelivery options and costsPrivacy and other regulatory compliance
OPTIMIZATION PROCESSOPTIMIZATION PROCESS
RE-ENGINEERING
REVISERE-DESIGNCOMBINEELIMINATEADD
GOAL : Align copy graphics and production processes to maximize response rates, manage costs.
OPTIMIZATION PROCESSOPTIMIZATION PROCESS
AUTOMATION
Automate production
Integrate technology into designs and strategies to gain competitive advantage.
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