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UNIVERSITY COLLEGE OF THE CARIBBEAN
BSc. Degree in Business AdministrationYears 1 & 2 - Principles of Marketing
Course Code: MKT 201
Lecturer: Beverley Price Telephone: 457-6176 / 854-0168
Class Objectives for Today
1. Introduction & Getting to Know You
2. Overview of the Course
3. Discussion of Major Project
4. Class Rules
5. Questions
Learning Objectives for TodayLearning Objectives for Today
At the end of this unit students should be able to:
1. Define what is Marketing 2. Outline the basic concepts
behind Marketing 3. Distinguish between the
major
marketing philosophies 4. Design a basic Business
Portfolio 5. Outline the marketing
process 6. Discuss the process managing
the marketing effort
Introduction to Marketing Management concepts
Marketing Management Philosophies
Strategic Planning and the Marketing Process
Designing a basic Business Portfolio
Outline the Marketing Process
Discuss the process managing the marketing effort
What is Marketing?‘Marketing is the
management process that identifies, anticipates and satisfies customer requirements profitably’
The Chartered Institute of
Marketing - (CIM)
Marketing is a social and managerial process by which individuals and groups obtain what they want and need through creating, offering and exchanging products of value with others’
(Kotler)
Aim of Marketing
To create satisfied customers
What is Satisfaction?
…is a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.
Recap of Marketing
Marketing is managing profitable customer relationships.
Goals: 1. Attract new customers by promising superior value. 2. Keep and grow current customers by delivering
satisfaction.
OLD View of Marketing
Making a Sale –“Telling & Selling”
NEW View of Marketing
Satisfying Customer Needs
Needs
EXAMPLES
Physical Needs : Food, clothing, shelter, safety
Social Needs : Belonging, affection, recognition, respect
Individual Needs : Learning, knowledge, self expression
are states of felt deprivation including physical, social, psychological and individual needs that are felt by all humans .
They are the basic forces that compel consumers to act .
Wants & Demands
Demands – are human wants backed by buying power i.e. money.
Consumer wants for a product much backed by their ability to buy it
Wants + Buying Power = Demand
Wants – are the forms that a human need takes as shaped by his her culture, and or individual personality.
• It reflects a person personal desire for satisfying his needs
(e.g. bread, service club, education, chicken, Grace etc.)
What benefits are derived from using a Drill
Functional Satisfaction
• It bores a hole fast and effectively
Psychological Satisfaction
• It’s a good brand, so it is top of line
• It’s design makes it safe and easy to use
A simple model of the Marketing Process
1. Understand the marketplace and customers’ needs and wants.
2. Design a customer-driven marketing strategy.
3. Construct a marketing programme that delivers superior value.
4. Build profitable relationships and create customer delight.
5. Capture value from customers to create profits and customer quality.
Production ConceptProduction Concept
Product ConceptProduct Concept
Selling ConceptSelling Concept
Marketing ConceptMarketing Concept
Consumers prefer products that are widely available and inexpensive. The focus of the company is on its production capabilities
Consumers favor products that offer the most quality, performance,or innovative features. Thefocus of the company is on the uniqueness of its products
Consumers will buy products only if the company aggressively promotes/sells these products.Customers should coaxed into buying
Focuses on the needs/ wants of its target markets & delivering value better than competitors. The focus of the company is on its customers
Societal Marketing Societal Marketing Focuses on the needs/ wants of target marketand balances these against the greater good of society
The Marketing Concept or Orientation
Developing a Marketing Orientation
Acknowledge that serving the needs and wants of your target customers is the sole reason for the existence of the company
Integrate all departments within the company around delivering value to all customers (internal and external)
Understand the needs of your external customers
Design and sustain a winning strategy for satisfying your customers needs profitably and better than your competitors
Developing a Marketing Orientation
Marketing seeks to build profitable relationship with customers.
Companies benefit by attracting and retaining customer loyalty
Customers benefit by obtaining goods and services that satisfying their needs through the delivery of superior value
These exchanges occur in a market where companies compete to earn customer loyalty
SUMMARY
The aim of marketing is to create satisfied customers.
Marketing Management provides the means for analyzing, planning, implementing and controlling the company’s marketing effort.
Marketing is responsibility of the entire company.
Discussion Question
Discuss the proposition that:
• Marketing is far too important to be left to the marketing department and, to be truly effective, must be viewed as an overall organizational business philosophy rather than merely another functional area of management.
Marketing management is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives.
Kotler, P. Marketing Management.
Definition Marketing Management
Definition Marketing Management
• Marketing Management involves
(1)Analysis,
(2)Planning,
(3)Implementation &
(4)Control
• It rests on the notion of exchange. The goal is to produce satisfaction for the parties involved.
MeasureResults
EvaluateResults
TakeCorrective
Action
Four Marketing Management Functions
Planning
Develop Strategic
Plans
DevelopMarketing
Plans
Implementation
Carry Out the Plans
Marketing Analysis of Company’s Situation & Environment
Control
Marketing Management Process
Analysis/Audit - where are we now?
Objectives - where do we want to be?
Strategies - which way is best?
Tactics - how do we get there?
Implementation - Getting there!
Control - Ensuring arrival
Marketing Mgmt & the Organization
Marketing Management does not occur in a vacuum
It is an integral part of a company’s strategic plan, which results from the strategic planning process.
Strategic Planning
………. is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.
It involves developing an overall company strategy for the long-run survival and growth of company.
Strategic Planning Process Includes
Defining the Company Mission Statement of an organization’s purpose - what it wants
to accomplish in the larger environment.
Setting Company Objectives and Goals Goals are future outcomes that a company wants to
achieve. They become objectives when they are quantifiable and time specific.
Designing the Business Portfolio Business portfolio are a collection of businesses and
products that make up the company
Planning Functional Strategies Detailed planning for each department designed to
accomplish strategic objectives
Board of Directors
GK Investments GK Foods
GKFS
Defines Mission
Set broad strategic goals
Business Units
Functional Strategies
Product Strategies
Marketing’s Role in Strategic Planning
Provides a guiding philosophy
Provides inputs to strategic planners
Designs strategies for reaching company’s objectives in each business unit or functional area
Summary Customers are the lifeblood of any
organization.
Marketing is the responsibility of the entire organization
It starts by ascertaining customers’ needs and wants, it ensures the organization is focused on satisfying those needs and constantly monitor customers to ensure they are happy
Marketing Management provides the framework and tools to make this happen thought 4 key functions, scanning the environment, planning, implementing & controlling
What is Strategic Planning?Finding a fit between an organization and its environment
• Pertains directly to an organization’s ability to adapt to changing environmental forces and matching organizational capabilities to the opportunities that exist within the current marketing environment.
Strategy Planning 1. Where are we now? (Audit)
2. Where do we want to go? (Objective)
3. How will we get there? (Strategy)
4. How much will it cost? (Budget)
5. When will we get there? (Schedule)
Benefits of Planning
1. Encourages management to think ahead in a systematic way
2. Forces managers to clarify objectives, policies and direction
3. Helps companies to anticipate and respond quickly to changes and sudden developments in their marketing environment
Planning is the basis for sound decision making in any situation in
life.
The Strategic Planning The Strategic Planning ProcessProcess
(1) Establish or define the organization’s Mission
(2) Define the Strategic Business Unit (SBUs)
(3) Set the organization’s Objectives & Goals
(4) Analyze The SBU’s performance
(6) Develop the Marketing Plans
(5) Assess the Organizational growth opportunities
Defining The Corporate Mission
The mission defines the competitive scopes within which the company will operate
It answers such questions as What Business Are We In? What Business Should We Be In? Distinctive Competencies Competitive Advantage
A good mission statement should have A limited number of goals Stress major policies and valueshttp://www.bnet.com/2410-13241_23-59931.html?promo=713&tag=nl.e713
No 1
A mission statement
is a statement of an
organization’s
purpose or what it is
trying to accomplish
for its customers
Examples of Mission Examples of Mission StatementsStatements
Mission Statement for 3M
… 3M solves people’s problems by putting
innovation to work for them.”
http://www.3m.com/
GraceKennedy & Com
“….is to satisfy the unmet needs of Caribbean people wherever they may be in the world through the timely delivery of products and services of the highest quality
Merck"To preserve and improve human life."
Microsoft“…. To help people and business throughout realize their full potential
Walt Disney"To make people happy."
Other Mission Statements
Define the Strategic Business Unit
Another name for defining the SBC is Portfolio Analysis
Strategic Business Units (SBUs) are groups of smaller divisions
or closely related companies set up to facilitate planning and specific business operations
No 2
Define the Organizational Objectives
Well developed organizational objectives should be SMART
Specific Measurable Achievable Relevant Time-bound
No 3
Analyze the SBU Performance
The company must:
analyze its current business portfolio or Strategic Business Units (SBU’s),
decide which SBU’s should receive more, less, or no investment,
develop growth strategies for adding new products or businesses to the portfolio.
utilize five (5) resource allocation strategies
No 4
Analyze the SBU Performance
Five resource allocation strategies
1) Build—improve the SBU’s position in the marketplace by investing additional resources.
2) Maintain—hold steady the SBU’s current position in the market place.
3) Niche—narrow the focus of the SBU’s intended market.
4) Harvest—utilize the SBU to generate resources for other SBUs.
5) Divest—discontinue all investment in an SBU so that resources can be redirected to other SBUs.
No 4
Growth-Share Matrix
20%-18%-16%-14%-12%-10%- 8%- 6%- 4%- 2%- 0
Mar
ket
Gro
wth
Rat
e
3 ?Question marks
? ??2
1
Cash cow
6
Dogs
8
710x 4x 2x 1.5x 1x
Relative Market Share.5x .4x .3x .2x .1x
Stars
5
4
Cash Cows
•Low growth, high share •Established, successful SBU’s• Produce cashHarvest or Maintain
Cash Cows
•Low growth, high share •Established, successful SBU’s• Produce cashHarvest or Maintain
Dogs
• Low growth & share • Low profit potential Maintain, Niche / Divest
Dogs
• Low growth & share • Low profit potential Maintain, Niche / Divest
? or Problem Child• High growth, low share • Build into Stars or phase out • Require cash to hold market shareBuild / Niche / Divest
? or Problem Child• High growth, low share • Build into Stars or phase out • Require cash to hold market shareBuild / Niche / Divest
Stars• High growth & share• Profit potential • May need heavy investment to growBuild or Maintain
Boston Consulting Group Matrix
Assessing Organizational Growth Opportunities
1) Developing growth within current operations—intensive - growth
2) Achieving growth by acquiring other businesses that are directly related to existing operations—integrative - growth
3) Developing growth by acquiring other businesses not directly related to existing operations—diversification - growth
No 5
Assess the Organizational Growth Opportunities
Market Penetration: Sell more of existing products to existing market - making more sales to current customers without changing products.
How? Cut prices, increase advertising, get products into more stores
Market Development: Find new markets for existing products. Identifying and developing new markets for its current products.
• How? Identify new demographic or geographic markets segments
Product Development: Develop new products for existing markets - offering modified or new products to current markets.
• How? New styles, sizes, colors, or other modified products.
Diversification: Develop new products for new markets.• How? Start up or buy new businesses outside of its current products and markets.
No 5
Intensive Growth Strategies
Assess the Organizational Growth Opportunities
Integrative Growth Strategies
a) Backward integrationb) Horizontal integrationc) Forward integration
Diversification Growth Strategies
1. Growth through the acquisition of other businesses that are not directly related to existing operations.
2. Can be accomplished through concentric diversification, horizontal diversification and conglomerate diversification
No 5
Summary
Strategic planning seeks to find a fit between an organization and its environment.
In strategic planning management uses a range of analytical and planning tools to assess the environment and the organization in order to determine the best options available for growth
Two important tools that are utilized are Boston Consulting Matrix and Ansoff Matrix.
What do you call the tools that are utilized by a company to achieve its marketing objectives?
Marketing MixMarketing Mix
TargetMarket
ProductQuality
FeaturesStyles
OptionsBrand name
PriceList PriceDiscounts
AllowancesCredit Terms
Payment period
PromotionAdvertising
Personal SellingSales Promotion
POSPublicity
PlaceChannelsCoverageInventory Number
4 P’s of Marketing4 P’s of Marketing
What is a Marketing Plan
A Marketing Plan is a written document that details the actions necessary to achieve a specified marketing objective(s).
It can be for a product or service, a brand, or a product line.
It can cover one year (referred to as an annual marketing plan), or cover up to 5 years. It is normally part of an overall business plan for the company
It clarifies for the company, the target markets, marketing programmers, responsibilities, time-scales, controls and resources.
Objectives of the Marketing Plan
1. Acts as a roadmap
2. Assists in the management, control and implementation of strategy
3. Informs participants in the plan of their role and function
4. Serves a basis to secure resources for implementation
5. Stimulates thinking and make better use of resources
Elements of a Basic Marketing Plan
1) Executive Summary
2) Situational Analysis
3) SWOT (Strengths, Weaknesses, Opportunities & Threats)
4) Target Market
5) Marketing Objective
6) Marketing Strategies
7) Marketing Tactics
8) Implementation Schedule
9) Budget &Controls
Elements of the Marketing Plan
1. Executive Summary…synopsis of entire plan, including past year’s performance, objectives, planned activities and resources required to support.
3. SWOT Analysis…a planning exercise to identify strengths and weaknesses inside and organization and opportunities and threats within the business environment.
2. Market Situation Assessment…breakdown of brand’s current status in marketplace & impact of environmental forces relevant to marketing efforts.
Formulate the Marketing Plan
4. Target Market……..is the market segment to which a particular product is marketed
5. Marketing Objectives….set out what the company is seeking to achieve in either sales or marketing terms
6. Marketing Strategies….are the broad activities that a company will pursue to achieve its marketing objectives.
Formulate the Marketing Plan
7. Marketing Tactics……..tells the specific activities that will be undertaken to implement each strategy.
8. Implementation Schedule …… tells when each activity will be done and by whom
9. Budget & Control …..are the projected sales and revenue that will be generated by the plan
How do companies grow?
How Do Companies Grow?
1. Market Penetration More sales from existing products
2. Market Development More sales from entering new markets
3. Product Development More sales from new products
4. Diversification More sales from new products to new
markets
Growth Strategy:Product/Market Expansion
Grid
4. Diversification2. Marketdevelopment
Newmarkets
1. Marketpenetration
Existingmarkets
Existingproducts
3. Productdevelopment
Newproducts
Review Questions
1. What is marketing plan
2. List 2 benefits of a marketing plan?
3. What are elements of a marketing plan?
4. What are the ways in which a company can grow?
MARKETING & THE ECONOMY
The HERSHEY STORY
NEXT WEEK
Marketing Research Information System