Principles of Marketing- Infrestructure of Marketing Management
Principles of marketing
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Transcript of Principles of marketing
Mktg. 1PRINCIPLES OF
MARKETING
It sells products and services to
consumers at a profit to understand
consumer behavior and market trends.
IMPORTANCE OF MARKETING TO
BUSINESS
The process of continuously and profitably satisfying the
target consumer needs, wants and expectations superior to
competition.
Social and managerial process by which individuals and
groups obtain what they need and want through creating and
exchanging products and value with other.
WHAT IS MARKETING
Customer
Company Competition
STRATEGIC 3C ’s of MARKETING PLUS the
INPUT AND OUTPUT of MARKETING
INPUT OUTPUT
Customer Sales
Company Profit
Competition Market Share
INPUTS AND OUTPUTS OF MARKETING
Needs – it is the state of self deprivation. It is the basic reason/s or quality dimensions in a purchase.
Wants – It is the form taken from by human needs as they are shaped by culture and individual personality.
Demands – Human wants that are backed by buying power. It is also called expectation.
Product – It is anything that can be offered to a market to satisfy a need or want.
Exchange – It is an act of obtaining a desired object from someone by offering something in return.
Value/customer Value – It is the consumer’s assessment of the overall capacity of the product or service in order to satisfy his total needs.
Customer satisfaction – It refers to the extent to which customer are happy with the product offered.
Market – It is the set of actual and potential buyers of a product.
DIFFERENT TERMS USED IN THE
DEFINITION OF MARKETING
Production Era/ Production Concept – This Era focused on the mass production of goods by companies in order to satisfy the needs of other people.
Product Era/ Product Concept – It holds that consumers will favor products that offer the most quality, performance and innovative features.
Sales Era / Concept – The company emphasized sell ing because of increased competition.
Marketing Department Era – Progressive companies adapted the idea that all marketing activities within the firm must be under a control of a single department.
Marketing Company Era – Marketing was recognized as the concern not only of a single department but of the whole company.
Marketing Company with Social concern Era – company begun to consider social issues as a factor in the formulation of marketing strategies.
DEVELOPMENT OF MARKETING
fdfhfdMARKETING
BUSINESS FUNCTION DIAGRAM
(Peter Drucker)
HUMAN RESOURCE
Maximize Consumption
Maximize Consumer Satisfaction
Maximize Choice
Maximize Life Quality
Maximize Relationships
GOAL OF THE MARKETING SYSTEM
Globalization
Digital Age or information Age
Call for more Ethics and Social
Responsibility
Growth of not for Profit Marketing
TRENDS MARKETERS WILL FACE IN THE
21ST CENTURY
– it is the process of developing and
maintaining strategic fit between the
organizations goal and capabilities and it’s
changing marketing opportunities.
STRATEGIC PLANNING
1. Define the company’s Mission and
Vision
2. Set company’s objective or Goals
3. Design the business portfolio
4. Planning Marketing and other
functional strategies.
STEPS IN STRATEGIC PLANNING
Vision – explains the company’s future and what it intends to be and how it can benefit to society.
Mission – It is a statement of the organization’s purpose and what to accomplish in the larger environment.
Objective – defines what you want to accomplished depending on its business activities. Guide in writing an objective is SMARTC: Specific, measurable, relevant, time bound, and challenging.
Business Portfolio – it is the collection of businesses and products that make up the company.
Portfolio Analysis – the process by which the management evaluates the products and business that make up the company.
Strategic business unit (SBU) – it is the unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses.
TERMINOLOGIES
Boston Consulting Group Approach – company classifies all
it’s SBU’s according to the growth -share matrix.
GE Strategic Business planning Grid/ Approach – it is also
called as the strategic business -planning grid. It uses
business strength and industry attractiveness.
Product/ Market Expansion Grid ( Ansoff Matrix) – It involves
finding businesses and products the company should
consider in the future.
TYPES OF PORTFOLIO PLANNING
METHODS
BOSTON CONSULTING GROUP (BCG)
GROWTH SHARE MATRIX
STAR – High Market Share and High
Market Growth.
Doing well, great opportunities.
CASH COW – High Market Share and
Low Market Growth
Doing well in no growth marketwith limited opportunities.
QUESTION MARK – Low Market
Share And High MarketGrowth
Don’t know what to do withopportunities Decided whether toincrease investment
DOGS - Low Market Share and Low
Market Growth
Weak on market, difficult to makeprofit
Invest / GrowInvest / Grow
Selective
Investment
Invest / Grow Selective
InvestmentHarvest/ Divest
Selective
InvestmentHarvest/ Divest Harvest/ Divest
GENERAL ELECTRIC (GE)
STRATEGIC BUSINESS PLANNING GRID
Business StrengthStrong Average Weak
In
du
stry A
ttra
ctive
ne
ss
High
Average
Low
Market Penetration Product Development
Market Development Diversification
PRODUCT/ MARKET EXPANSION GRID
( Ansoff Model)
New ProductsExisting Products
Existing Market
New Market
1. Strategic Marketing Management
2. Marketing Strategy
3. Marketing Tactics
THREE LEVELS OF MARKETING
MARKETING PROCESS MODEL
(Kotler)
Customer
Value and
Relationship
Price
Product
Promotion
Place
Marketing Analysis
Ma
rke
tin
g C
on
tro
l
Marketing Implementation
Marketing
Intermediaries
Competitors
Suppliers Publics
Marketing Strategy – the marketing logic by which the business unit hopes to create customer value and achieve profitable customer relationship.
Customer Value – it is the total worth of the customer to the firm.
Customer Relationship Management – it is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
Market Segmentation – dividing the market into distinct groups of buyers who have dif ferent needs, characteristics, or behavior and who management require separate products on marketing program.
Market Targeting – the process of evaluating each segment’s attractiveness and selecting one or more segments to enter.
TERMINOLOGIES RELATED TO THE
MARKETING PROCESS METHOD
■ Market Positioning – arranging for a product to occupy a clear, distinctive
and desirable place relative to competing products in the minds of
target consumer.
■ Market Differentiation – actually differentiating the market offering to
create superior customer value.
■ Marketing Mix – set of controllable tactical marketing tools (4P’s) that
the firm blends to produce the response it wants to the target
market.
■ 4P’s – This is the concept that was develop by Prof. Jerome E. McCarthy.
It includes the following:
■ Product – goods, services or ideas, or combination the company
offers to the target market.
■ Price – the amount of money customers must pay to obtain the
product.
■ Place – company activities that make the product available to
target customers.
■ Promotion – communicate the merits of the product and
persuade target customer to buy it.
THE 4C’s RELATED TO 4P’s OF
MARKETING
Product = Customer Solution
Price = Customer Cost
Place = Convenience
Promotion = Communication
People – it is maintaining and developing the employees of
the company in order to offer superior service quality to its
customers.
Physical Environment – these are all visible cues that provide
tangible evidence of the firm’s service quality.
Process – it is the method and sequence of actions in the
service performance.
Profitability – the amount of sales or income generated from
the operations of the business.
ADDITIONAL P’s IN THE MARKETING
– it is the process of conceptualizing,
analyzing, planning, implementing,
and controlling marketing activities to
achieve the organization’s desired
result areas.
MARKETING MANAGEMENT
1. Marketing Planning – involves in deciding on marketing
strategies that will help the company attain its overall
strategic objectives.
2. Marketing Analysis – Understanding the strengths,
weaknesses, opportunities and threats a company it will
encounter in the market.
3. Marketing Implementation - the process that turns
marketing strategies and plans into marketing actions in
order to accomplish strategic marketing objectives.
4. Marketing Control – this is the management of marketing
activities and ensuring marketing objectives are met.
FOUR FUNCTIONS OF MARKETING
MANAGEMENT
– it is the actions and forces outside
marketing that affect marketing
management ability to build and
maintain successful relationships
with customers .
MARKETING ENVIRONMENT
1. Microenvironment
2. Macroenvironment
TWO TYPES OF ENVIRONMENT:
– this is the actors or parties close to
the company that affect it’s ability to
serve the customers. The company
has a degree of control to this parties.
MICROENVIRONMENT
Publics – these are the groups that has an actual or potential interest
that has an impact on an org. ability to achieve it’s objectives .
Marketing Intermediaries – firms that help the company to promote,
sell, and distribute it’s goods to the final buyers .
Supplier – these are businesses that provide the necessary materials,
services, labor, or combination to a firm.
Customer – the reasons why the competition exist.
Competitors – these are the companies that offer the same products
and services vs. another firm.
TYPES OF MICROENVIRONMENT
1. Direct Competitor– competitors that are closely related to
the offered products/ services by the company.
2. Indirect Competitors – competitors that are distant to the
offered products/ services by the company.
TYPES OF COMPETITORS
Monopolistic Competition – The price of the product is
determined by the market and not by the buyer or seller.
Pure Competition – there are many sellers that compete with
each other.
Oligopoly – There are only few firms that compete in a given
industry. Prices are set in collusion with one another.
Monopoly – it exist when there is only one single seller in a
particular market and there is no close substitute for it.
COMPETITIVE FORCES
– these are the larger societal forces
that affect the microenvironment.
MICROENVIRONMENT
Demographic Environment – includes human population in
terms of age, size, density, location, religion, gender, etc.
Factors involve in Demographics Environment
1. Changing age structure and population
2. Changing Filipino Family
3. Geographic shifts in population
4. Better Educated society
5. Interest in Minority groups/ regional groups
TYPES OF MICROENVIRONMENT:
Economic Environment – factors that affect consumer buying power and
purchasing patterns.
Factors involved in Economic Environment:
1. Changes in Income
2. Changing Consumer Spending Patterns
Engels Law – pertains on how people shifts their
spending across food, housing, transportation, healthcare
and other goods/ services.
Natural Environment – Natural resources that are needed as inputs by
marketers or that are affected by marketing activities.
Factors involved in Natural Environment:
1. Environmental Sustainability
2. Global Warming
3. Efficient use of resources
Technological Environment – forces that create new technologies,
creating new products and marketing opportunities.
Factors involved in Technological Environment:
1. Increase research and development
2. Speed of technological Innovation
3. Strict quality Standards
4. Growth of E-commerce, the internet and social networking
sites.
Political Environment – laws, government agencies and pressure groups
that influences limits various organizations and individuals in a
given society.
Factors involved in Political Environment:
1. Legislation Regulating business
2. Increase emphasis on business ethics
Cultural Environment – Institutions and other forces that affects
society’s basic values perceptions, preferences and behavior.
Factors involved in Cultural Environment:
1. Persistent of cultural Values
2. Shifts in Secondary Values
3. Peoples views or opinion
MARKETING MIX: THE SERVICE PRODUCT
Service Product – It typically
consists of a core product bundled
with a variety of supplementary
products.
1. Statement of Objectives
2. Market and Competitive Analysis and Resource allocation Analysis
3. Marketing Assets Statement – includes the details of the firm's existing
customer portfolio, marketing Knowledge, product line, etc.
4. Service Marketing Concept – it clarifies the benefits offered to
customers and the cost they will incur in return
5. Service Operations Concept – It stipulates the nature of the processes
involved and how and when the various types of operating assets should
be deployed
6. Service Delivery Process
KEY STEPS IN PLANNING AND CREATING
SERVICES
Core Service – it responds to the customers need for a basic
benefit.
Supplementary Services – Facilitate and enhance the use,
value and appeal of core services.
Delivery Process – it deals with the procedures used to deliver
both the core product and each of the supplementary services
Documenting the Delivery Services over Time
DEFINING THE NATURE OF THE SERVICE
OFFERING
FLOWER OF SERVICES
core
Info
rma
tio
n
Billing Order Taking
Sa
fe K
ee
pin
g
Facilitating Services
Information
Order Taking
Billing
Payment
Enhancing Services
Consultation
Hospitality
Safekeeping
Exception
IDENTIFYING AND CLASSIFYING
SUPPLEMENTARY SERVICES
It is the group of products that are closely related
because they function in a similar manner, are sold
to the same customer groups, are marketers to the
same types of outlets or fall within given price
ranges.
PRODUCT LINE
It is a name, term, sign, symbol, or design or a
combination of these intended to identity the
goods or services of one seller or group of
sellers from those of competitors.
BRAND
Major Services Innovations – are new core products for markets that have not been previously defined.
Major Process Innovations – consists of using new processes to deliver existing core products in new ways with additional benefits.
Product line Extensions – Additions by existing products as to offer more convenience or a different experience to customers.
Process line extensions – delivers new ways to existing products as to offer more convenience or a different experience to customers.
Supplementary services innovations – take the form of adding new facil itation or enhancing service elements to the core services
Service Improvements – involve modest change of performance of current products
Style Changes – it is the simplest type of innovation that is highly visible, create excitement and motivate employees.
CATEGORIES OF NEW SERVICES
• Drive own Car
• Type on own word
processor
• Rent a car and drive it
• Rent a word processor and
type on it
• Hire a Chauffeur to drive a
car
• Hire a typist to se word
processor
• Hire a taxi or limousine
• Send work out to a secretarial
service
SERVICES AS SUBSTITUTES FOR OWNING
AND/OR USING GOODS
Own a Physical Good Rent the Use of Physical good
Perform the
work oneself
Hire someone
To do the work
1. Market Synergy – services fits well with the image of the
firm
2. Organization Factors – strong inter-functional cooperation
and coordination
3. Market Research Factors – it must have a clear idea of the
type of information to be obtained
USING RESEARCH TO DESIGN NEW
SERVICES
Price – amount of money charged
for a product or service sum of the
values that consumers exchange for
the benefits of having or using the
product or service.
PRICING APPROACHES IN SERVICES
PARTICULARS NAME OF PRICE
• School TUITION FEE
• Transportation FARE
• Apartment RENT
• Hotels CHANGE or BILL
• Bank RATES/CHANGES/INTEREST/BONDS
• Insurance INTEREST/PREMIUM/DIVIDEND
• Restaurant BILL/COST/CHIT/TIP
• Movie Houses or Theater TICKETS
• Consultancy Firms CHARGES/HONORARIUM
• Government Assistance SUBSIDY/ALLOWANCES
THE MANY NAMES OF PRICE