WHY IS MARKETING MANAGEMENT IMPORTANT? - Chapter 1

Marketing

• Brings in customers, and customers bring in money.

• Helps to build brand equity and the company’s reputation.

• Helps engage the customer and the company can learn from its customer relationships.

• Helps a company stay ahead of the competition.

Marketing (AMA Defintion)

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

What can we Market?

• Goods

• Services

• Experiences

• Events

• People

• Places

• Information

• Ideas

• Companies

The Production era (1860s - 1920s)

Consumers are interested in:

• Product availability

• Price

not the product features.

The Product Concept (1920s - 1950s)

Consumers are interested in:

• Quality

• Performance

• Innovative features

The Sales Concept (1950s - 1980s)

Market became saturated. Consumers had little unfulfilled demands.

• Advertising and Personal selling started.

• The aim is to sell what is produced not what consumer wanted.

The Marketing Concept (Customer oriented) 1980s

Organization achieves its goal only and only when it is able to satisfy the needs and wants of consumer.

• Consumer needs were put before production

• This led to start of relationship marketing.

• Aim became to have a long-term relationship with consumer

The Societal Marketing Concept

Product development decisions are made by not only considering the needs and wants of the consumers but also of the interests of the society. (Sustainable Marketing)

WHO IS RESPONSIBLE FOR MARKETING?

Marketing and customer satisfaction is everyone’s responsibility.

• Marketing should permeate (spread throughout) the firm:

  • Accounting/finance

  • Sales

  • Research and development

MEASURING MARKETING SUCCESS

Sometimes you can easily quantify the effectiveness of marketing programs.

• Did the coupon promotion lift sales?

• Measure the percentage increase in sales, etc.

• Did the direct mail campaign increase web usage?

• Measure the number of web visits, etc.

• However, sometimes the

effectiveness is not easy to quantify.

• Was the segmentation study

  effective?

  • Did the advertising campaign

  increase sales?

  • Difficult to quantify because

  great advertising is geared

  toward long-term brand

  building, not short-term

  results

5Cs of Marketing

• Customer

• Company

• Context

• Collaborations

• Competitors

STP

• Segmentation

• Targeting

• Positioning

4Ps of Marketing

• Product

• Price

• Place

• Promotion

Customer

• The firm’s current and potential customers

  • What are current customers’ preferences, buying trends, etc.?

  • What are potential customers’ preferences? Should they be targeted?

Company

• The firm’s capabilities, resources, etc.

  • What does it do well?

  • What doesn’t it do well?

Context

• Macro-environmental forces facing the firm:

  • What is going on politically or legally that might affect the firm?

  • What is going on with the economy that might affect the firm?

  • What trends are occurring in society that might affect the firm?

  • What technological innovations might affect the firm?

Collaborators

• The companies/people a firm works with

  • Are these relationships strong? Can these relationships be improved or leveraged?

Competitors

The companies/people a firm works against and how they compare to the firm in terms of resources, capabilities, customer preferences, reaction patterns, etc.

Segmentation

Grouping customers with similar needs

Targeting

Pursuing segment who makes the most sense for the firm

Positioning

Communicating product’s benefits clearly to the intended target

• Developed through the 4Ps

Products

Goods or services customers need or want

What should constitute your product mix? What features and benefits should comprise each product?

Price

How much should you charge given your costs, competitive pricing, and customer demand?

Place

How will you get the product into customers’ hands?

Will you go directly to customers or use channel partners?

Promotion

What communications mix will you use to communicate with your targets?

What message will you use?

CONSIDERATIONS (For the Firm)

• The situation facing the company changes over time.

  • Customer preferences change.

  • Competitors change offerings.

  • Government passes new laws, etc.

• Firm must consistently monitor the 5Cs.

5Cs, STP, and 4Ps are interdependent.

• With a change in contextual factor, what would be the impact on distribution channels?

• What would a collaborator’s shifting demands do to our pricing structure?

• What impact might the sell-off of a nonperforming function of the company have on our positioning and customer satisfaction?

Marketers must understand the interdependencies.