MKT 3401

The 4 types of marketing management philosophies

The 4 types of marketing management philosophies

• production orientation

• sales orientation

• market orientation

• societal marketing orientation

CRM

Customer relationship management

Production orientation

a philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace

Sales orientation

the belief that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits

Market orientation

a philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customer’s decision to purchase a product; it is synonymous with the marketing concept

Societal marketing orientation

the idea that an organization exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve of enhance individuals’ long-term best interests

Marketing

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

Exchange

people giving up something in order to receive something else they would rather have

Customer value

the relationship between benefits and the sacrifice necessary to obtain those benefits

Achieving a market orientation involves:

• Obtaining information about customers, competitors,
  and markets

• Examining the information from a total business perspective

• Determining how to deliver superior customer value

• Implementing actions to provide value to customers

The 4 P’s

• price

• product

• place

• promotion

Product

• The product is the starting point of the marketing mix. It is difficult to decide on a promotion campaign, determine a price, or design a distribution strategy until the product offering and product strategy are defined

• The product is not only the physical unit but also its package, warranty, after-sale service, brand name, company image, value, and other factors

• Product involves tangible goods, ideas, or services

Promotion

• Includes advertising, public relations, sales promotion, and personal selling

• Brings about mutually satisfying exchanges by informing, educating, persuading, and reminding buyers about the product

• Each element of the promotion mix is coordinated with the others to create a promotional blend

• A good promotion strategy can increase sales

Price

• What a buyer must give up to obtain a product

• Most flexible of the “four Ps”

• Price is an important competitive weapon. Of the four Ps, it can be changed most quickly

• Price multiplied by the number of units sold equals total revenue for the firm

Place

• Physical distribution that includes storage and transportation

• Making product available where and when customers
  want them

• Ensuring that products arrive in usable condition at designated places when needed

Strategic planning

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

Strategic Business Unit (SBUs)

a subgroup of a single business or collection of related businesses within the larger organization

SWOT and situation analysis

identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)

Marketing myopia

defining a business in terms of goods and services rather than the benefits customers seek

Mission statements

a statement of the firm’s business based on a careful analysis of benefits

Environmental scanning

collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan

Ethics

the moral principles or values that generally govern the conduct of an individual or a group

Code of Ethics

a guideline to help marketing managers and other employees make better decisions

Morals

the rules people develop as a result of cultural values and norms

Advantages of ethical guidelines

• Helps employees identify acceptable business practices

• Helps control behavior internally

• Avoids confusion in decision making

• Facilitates discussion among employees about right and wrong

Corporate social responsibility (CSR)

a business’s concern for society’s welfare

Stakeholder theory

ethical theory stating that social responsibility is paying attention to the interest of every affected stakeholder in every aspect of a firm’s operation

Components of the Pyramid of Social Responsibility

• Economic- be profitable

• Legal- obey the law

• Ethical- be ethical

• Philanthropic- be a good corporate citizen

Brand

a name, term, symbol, design, or combination that identifies a seller’s products and differentiates them from competitors’ products

Brand equity

the value of a company or brands name

Brand loyalty

consistent preference for one brand over all others

Benefits of branding

• Product identification

• Repeat sales

• New-product sales

Consumer’s expectations of decision and buying related experiences

• Interaction anywhere, anytime

• To do new things with varied kinds of information in ways that create value

• Expect data stored about them to be targeted specifically to their needs or to personalize their experiences

• Expect all interactions with a company to be easy

• Companies MUST constantly develop new ways to make a consumer’s experience memorable and personal!!

Touch points

areas of a business where customers have contact with the company and data might be gathered

Social CRM

traditional CRM with a social media twist

Net promoter score

measures how much a customer influences the behavior of other customers through recommendations on social media

Target market

a group of people or organizations for which an organization designs, implements, and maintains a marketing mix to meet the need of that group, resulting in mutually satisfying exchange

Environmental scanning involves:

• Understanding current customers

• Understanding how customers make decisions

• Identifying the most valuable customers and understanding their needs

• Understanding the competition

Social factors that influence marketing

• made consumers:

  • interact

  • share beliefs, values, ideas, and interests

  • purchase as a dizzying rate

Demographic factors that influences marketing

• generation groups (gen z, millennial, baby boomers)

Economic factors that influences marketing

• consumers’ incomes

• inflation

• recession

Technology & Innovation factors that influences marketing

• Building scenarios

• Enlisting the Web

• Talking to early adopters

• Using marketing research

• Creating an innovative environment

• Catering to entrepreneurs

Political and Legal factors that influences marketing

• Business needs government regulation to protect innovators of new technology, the interests of society, and consumers

• Government needs business in order to generate taxes that support public efforts

Consumer behavior

processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and product use

Perceived value

the value a consumer expects to obtain from a purchase

Psychological ownership

Consumers sometimes develop feelings of ownership without even owning the good, service, or brand

Perception

the process by which people select, organize, and interpret stimuli into a meaningful and coherent picture

Selective distortion

a process whereby a consumer changes or distorts information that conflicts with his or her feelings or beliefs

Selective retention

a process whereby a consumer remembers only that information that supports his or her personal beliefs

Nonmarketing-controlled information source

a product information source that is not associated with promotion

Marketing-controlled information source

a product information source that originates with marketers promoting the product

Steps to the Traditional Consumer Decision Making Process

1. need recognition

2. information search

3. evaluation of alternatives

4. purchase

5. postpurchase behavior

Elements of a marketing plan

• business mission statement

• situation, or SWOT Analysis

• Objectives

• Marketing strategy

  • product

  • place

  • promotion

  • price

• Implementation Evaluation Control

Flow model of CRM model

• Identify customer relationships

• Understand interactions with current customer base

• Capture customer data based on interactions

• Store and integrate customer data using information technology

• Identify best customers

• Leverage customer information