Understanding the marketplace and

Marketing customer needs

Chapter 2

Marketing Concepts Marketing Concepts

Marketing offering: • Value:
– Benefits gained versus costs of obtaining product
• Is the sum/combination of products,
services, information, and experiences • Satisfaction:
– Degree of meeting consumer’s expectations
offered to the market to satisfy a need or
• Exchange:
want.
– Trade of value between parties
Markets: • Transaction:
• The set of all actual and potential buyers of – Two things of value
a product or service. – Agreed-upon conditions
– Time/place of agreement
 Designing customer-driven marketing
Marketing management
strategy
What is marketing management?
Strategy Vs. Plan
A strategy is a blueprint, layout, design, or idea The art and science of choosing target markets
used to accomplish a specific goal and building profitable relationships with
them
A plan is an arrangement, a pattern, a program,
or a scheme for a definite purpose.

Marketing management The new marketing landscape

• Market: 1. The Internet
– Set of actual or potential buyers (eg: Education market) 2. One to one marketing
3. Selective relationship
• Marketing management: management
– Choosing target markets 4. Increase share of
– Building profitable relationships with them (eg: Barber/Beautician) customer
5. Partner relationship
• De-marketing: management
– Reduce, not destroy demand 6. Supply chain
– Temporarily or permanently (eg: Cigarette smoking) management
7. Strategic alliances
 Strategic Planning
Marketing transition
Old marketing thinking: New marketing thinking: Health and
• Sales/product centered… • Market/customer centered Well-Being
• Practice mass marketing… • Selected market segments
• Focus on product/sales… • Focus on customer satisfaction/value
• Make sales to customers… • Develop customer relationships
Mission Statement: Objective: Delight the
• Get new customers… • Keep old customers provide products of consumer with sustainable Beauty &
• Grow share of market… • Grow share of customer superior quality and innovations that improve Grooming
value that improve the environmental profile
• Serve any customer… • Serve profitable customers the lives of the of our products.
• Use mass media… • Connect with customers directly consumers all over
• Standardized products… • Customized products the world GOAL: Develop and
market at least $50 billion
• Sales/marketing responsible for • Enlist all departments to deliver in cumulative sales of
customer satisfaction/value… customer satisfaction/value “sustainable innovation
• Go it alone… • Partner with others products
Household
• Market locally… • Market locally and globally Care
• Profit responsibility… • Social/environmental responsibility
• Corporations… • Non-profits
• Use marketplaces… • Use marketspaces

Strategic Planning Strategic Planning

BCG Matrix
Vision Statement • Cash Cow - a business unit that has a large market
share in a mature, slow growing industry. Cash cows
require little investment and generate cash that can be
• A vision statement is sometimes called a picture used to invest in other business units.

of your company in the future but it’s so much • Star - a business unit that has a large market share in a
more than that. Your vision statement is your fast growing industry. Stars may generate cash, but
inspiration, the framework for all your strategic because the market is growing rapidly they require
investment to maintain their lead. If successful, a star
planning. will become a cash cow when its industry matures.

• A vision statement may apply to an entire • Question Mark (or Problem Child) - a business unit that
company or to a single division of that company. has a small market share in a high growth market.
These business units require resources to grow market
Whether for all or part of an organization, the share, but whether they will succeed and become stars
vision statement answers the question, “Where do is unknown.

we want to go?” • Dog - a business unit that has a small market share in a
mature industry. A dog may not require substantial
cash, but it ties up capital that could better be deployed
elsewhere. Unless a dog has some other strategic
purpose, it should be liquidated if there is little
prospect for it to gain market share.
 Strategic Planning PEST ANALYSIS
SWOT Analysis
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a business venture. It involves specifying the
objective of the business venture or project and identifying the internal and external factors that are
favorable and unfavorable to achieve that objective.

A SWOT analysis must first start with defining a desired end state or objective. A SWOT analysis may be
incorporated into the strategic planning model. Strategic Planning, has been the subject of much
research.

• Strengths: characteristics of the business or team that give it an advantage over others in the
industry.

• Weaknesses: are characteristics that place the firm at a disadvantage relative to others.

• Opportunities: external chances to make greater sales or profits in the environment.

• Threats: external elements in the environment that could cause trouble for the business.

Identification of SWOTs are essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs.

Political Factors Economic Factors

• 1.How stable is the political environment? • 1. Interest rates.

• 2.Will government policy influence laws that regulate or tax • 2. The level of inflation Employment level per capita.
your business?
• 3. Long-term prospects for the economy Gross Domestic Product (GDP)
• 3.What is the government’s position on marketing ethics? per capita, and so on.

• 4. What is the government’s policy on the economy?

• 5. Does the government have a view on culture and

religion?
 Social Factors Technological Factors
• 1.What is the dominant religion? • 1. Does technology allow for products and services to be
made more cheaply and to a better standard of quality?
• 2.What are attitudes to foreign products and services?

• 3.Does language impact upon the diffusion of products onto markets? • 2.Do the technologies offer consumers and businesses
more innovative products and services such as Internet
• 4.How much time do consumers have for leisure? banking, new generation mobile telephones, etc?

• 5.What are the roles of men and women within society? • 3.How is distribution changed by new technologies e.g.
books via the Internet, flight tickets, auctions, etc?
• 6.How long are the population living? Are the older generations wealthy?

• 7.Do the population have a strong/weak opinion on green issues? • 4.Does technology offer companies a new way to
communicate with consumers e.g. banners, Customer
Relationship Management (CRM), etc?

Strategic Planning Strategic Planning

Value Chain Product/market
expansion grid
(Ansoff’s Matrix) is a
tool for identifying
company growth
opportunities
through market
penetration, market
development,
product
development, or
diversification
 Strategic Planning Strategic Planning
Market penetration is a growth Product development is a growth
strategy increasing sales to strategy that offers new or
current market segments
without changing the product modified products to existing
market segments
Market development is a Diversification is a growth strategy
growth strategy that identifies
and develops new market through starting up or acquiring
segments for current products businesses outside the company’s
current products and markets

Positioning/Image/Identity Marketing Mix (4 P’s)

Positioning has come to mean the process by which Product – A tangible object or an intangible service that is mass
produced or manufactured on a large scale with a specific volume of
marketers try to create an image or identity in the minds units. Intangible products are service based. It includes three more
of their target market for its product, brand, or classifications: Actual (Core), Augmented (Core+)and
organization. extended(Augmented+)

Identity is the desired perception of any product or any Price – The price is the amount a customer pays for the product.
brand by the company offering. Place – Place represents the location where a product can be
purchased.
Image is the perception of any product or any brand by
the consumer. Promotion – represents all of the communications that a marketer
may use in the marketplace. Promotion has four distinct elements:
advertising, public relations, personal selling and sales promotion.
 Levels of Product Marketing Mix (7 P’s)
People – All companies are reliant on the people who
run them from front line Sales staff to the Managing
Director. Having the right people is essential because
they are as much a part of the business offering as the
products/services

Processes –The delivery of your service is usually done

with the customer present so how the service is
delivered is once again part of what the consumer is
paying for

Physical Evidence – Almost all services include some

physical elements even if the bulk of what the
consumer is paying for is intangible. For example a hair
salon would provide their client with a completed
hairdo and an insurance company would give their
customers some form of printed material. Even if the
material is not physically printed (in the case of PDF’s)
they are still receiving a “physical product” by this
definition.

Segmentation Product Life Cycle (PLC)

Demographics is dividing the population into different groups in
accordance with characteristics and traits (age, income, gender etc)

Psychographics is dividing the population into different groups in

accordance with characteristics and traits (Life Style, Social Class, Shake-out
Family Composition etc)

Behavioral is dividing the population into different groups in

accordance with characteristics and traits (Interests, Activities and
Objectives)

Geographic is dividing the population into different groups in

accordance with location

Target markets are groups of people separated by distinguishable and

noticeable aspects within the segmentation.
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THANKS