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Manage the Marketing Process Fangxian Zhang13719350566Definitions of marketingMarketing is the management process that identifies,anticipates and satisfies customer requirements profitablyThe Chartered Institute of MarketingThe right product,in the right place,at the right time,and at the right price dcock et al Marketing is the human activity directed at satisfying human needs and wants through an exchange processKotler 1980Marketing 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 othersKotler 1991Implications of marketingWho are our existing/potential customers?What are their current/future needs?How can we satisfy these needs?Can we offer a product/service that the customer would value?Can we communicate with our customers?Can we deliver a competitive product of service?Why should customers buy from us?The marketing conceptchoosing and targeting appropriate customerspositioning your offeringinteracting with those customerscontrolling the marketing effortcontinuity of performanceSuccessful marketing requires:ProfitableOffensive(rather than defensive)IntegratedStrategic(is future orientated)Effective(gets results)Hugh Davidson 1972Marketing management processAnalysis/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 arrivalWhy is marketing planning necessary?Systematic futuristic thinking by managementbetter co-ordination of a companys effortsdevelopment of performance standards for controlsharpening of objectives and policiesbetter prepare for sudden developmentsWhy is marketing planning necessary?Systematic futuristic thinking by managementbetter co-ordination of company effortsdevelopment of better performance standards for controlsharpening of objectives and policiesbetter prepare for sudden new developmentsmanagers have a vivid sense of participationCriticisms of marketing planningFormal plans can be quickly overtaken by eventsElements of the plan my be kept secret for no reasongulf between senior managers and implementing managersthe plan needs a sub-scheme of actionsObjectives of the marketing planActs as a roadmapassist in management control and monitoring the implementation of strategyinforms new participants in the plan of their role and functionto obtain resources for implementationto stimulate thinking and make better use of resourcesAssignment of responsibilities,tasks and timingAwareness of problems,opportunities and threatsEssential marketing information may have been missingif implementation is not carefully controlled by managers,the plan is worthless!The contents and structure of the marketing planThe executive summarytable of contentssituational analysis and target marketmarketing objectivesmarketing strategies marketing tacticsschedules and budgetsfinancial data and controlCautionary notes for effective planningDont blindly rely on mathematical and statistical calculations.Use your judgement as wellDont ever assume that past trends can be exploited into the future foreverif drawing conclusions from statistical data,make sure the sample size is sufficiently largeBehavioural planning problemsPlanning recalcitrance:resistance and non-co-operation by managers in planningfear of uncertainty in planning:a lack of comfort in planning activitiespolitical interests in planning activities:resource bargaining,padding of requirements,and avoidance of consensusplanning avoidance:compliance rather than commitment to planningStandard Planning FrameworkAnalysis-where are we now?Objectives-where do we want to be?Strategies-which way is best?Tactics-how do we ensure arrival?Control-are we on the right track?Marketing Information SystemsMarketing ResearchWhat is Marketing Research?ProcessTerminologyTechniquesMKIS-Marketing Information Systems What is MKISComponents of an electronic MKISMarketing Researchthe systematic gathering,recording and analysing of data about problems relating to the marketing of goods and servicesAmerican Marketing AssociationThe Marketing Research ProcessSet objectivesDefine research ProblemAssess the value of the researchConstruct a research proposalSpecify data collection methodSpecify techniques of measurementSelect the sampleData collectionAnalysis of resultsPresent in a final reportTerminology of Marketing ResearchPrimary data-collected firsthandSecondary data-already exists,desk researchQuantitative research-statistical basisQualitative research-subjective and personalsampling-studying part of a population to learn about the wholeMarketing Research TechniquesInterviewsface-to-facetelephonepostal questionnaireAttitude measurementcognitive component(know/believe about an act/object)affective component(feel about an act/object)conative component(behave towards an object or act)Likert scalestrongly agreeagreeneither agree nor disagreedisagreestrongly disagreeSemantic differential scales-differences between words e.g.practical v impractical Projective techniquessentence completionpsychodrama(yourself as a product)friendly martian(what someone else might do)Group discussion and focus groupPostal research questionnairesDiary panels-sources of continuous dataIn-home scanning-hand-held light pen to scan barcodesTelephone researchObservationhome auditdirect observationIn-store testingWhat is MKIS?MKIS(MIS)is a set of procedures and methods for the regular,planned collection,analysis and presentation of information for use in marketing decisionsAmerican Marketing AssociationThe components of a computerised MKISModel BankData BankStatisticalBankMKISDisplay unitMarketingManagerThe components of a computerised MKISData bank-raw data e.g historical sales data,secondary dataStatistical bank-programmes to carry-out sales forecasts,spending projectionsA model bank-stores marketing models e.g Ansoffs matrix,Boston MatrixDisplay unit-VDU and keyboardThe Marketing Environment and Competitor AnalysisSWOT analysisPEST analysisFive forces analysisSWOT analysisStrengths(internal)Weaknesses(internal)Opportunities(external)Threats(external)PEST analysisPolitical factorsEconomic factorsSocio-cultural factorsTechnological factorsPolitical/legalMonopolies legislationEnvironmental protection lawsTaxation policyEmployment lawsGovernment policyLegislationOthers?Economic FactorsInflationEmploymentDisposable incomeBusiness cyclesEnergy availability and costOthers?Sociocultural factorsDemographicsDistribution of incomeSocial mobilityLifestyle changesConsumerismLevels of educationOthers?TechnologicalNew discoveries and innovationsSpeed of technology transferRates of obsolescenceInternetInformation technologyOthers?Source:Adapted from M.E.Porter,Competitive Strategy,Free Press,1981 04Threat ofThreat ofsubstitutessubstitutesPotentialentrantsThreat ofThreat ofentrantsentrantsSuppliersBargainingBargaining power powerSubstitutesBuyersBargainingBargaining power powerCOMPETITIVE RIVALRYFive forces analysisFive Forces Analysis:Key Questions and ImplicationsWhat are the key forces at work in the competitive environment?Are there underlying forces driving competitive forces?Will competitive forces change?What are the strengths and weaknesses of competitors in relation to the competitive forces?Can competitive strategy influence competitive forces(eg by building barriers to entry or reducing competitive rivalry)?Buyer BehaviourDominant Family Purchase-Cozenza 1985Demographic FactorsThe Consumer Buying ProcessMaslows hierarchy of needsUK socioeconomic classification schemeTypes of buyer behaviourThe Buying Decision ProcessOrganisational Buyer BehaviourDominant Family Purchase-Cozenza 1985Demographic FactorsAgeStage in family life cycleOccupationEconomic circumstancesLifestylesocial influence variablesfamily backgroundreference groupsroles and statusThe Consumer Buying ProcessConsumerPurchase DecisionsProduct ChoiceLocation ChoiceBrand ChoiceOther ChoicesPsychological InputsCultureAttitudeLearningPerceptionBased on Cohen(1991)Marketing InputsProductPricePromotionPlaceMaslows Hierarchy of NeedsPhysiologicalSafetySocialEsteemSelf ActualisationUK socioeconomic classification schemeTypes of buyer behaviourComplex buyer behaviour e.g.Intel Pentium ProcessorDissonance-reducing behaviour(brand reduces after-sales discomfort)Habitual buying behaviour e.g.salt-little differencevariety seeking behaviour-significant brand differences e.g soap powderThe Buying Decision Processrecognition of the need e.g a new PCchoice of involvement level(time and effort justified)e.g.two week endsidentification of alternatives e.g.Dell,PC Worldevaluation of alternatives I.e.price,customer service,software support,printer/scanner packagedecision-choice made e.g Epsom action e.g buy Epsom model from Cometpost-purchase behaviour I.e.use,breakdowns,etcOrganisational Buyer BehaviourThe decision-making process by which formal organisations establish the need for purchased products and services,and identify,evaluate,and choose among alternative brands and suppliersKotler and Armstrong 1989Characteristics of organisational buyer behaviourOrganisation purpose -Goodyear TyresDerived demand-follows cars and lorriesConcentrated purchasing-stockholdings of rubberDirect dealings-large purchaser of basic rubber-no intermediariesSpecialist activities-learns about the productMultiple purchase influences-DMU-Decision making unitStrategic DevelopmentProduct Life Cycle(Revisited in Product)Bowmans Competitive Strategy OptionsNew Product Development(NPD)Five stages of the PLCProduct development-sales are zero,investment costs are highIntroduction-profits do not exist,heavy expense of product introductionGrowth-rapid market acceptance and increasing profitsMaturity-slowdown in sales growth.Profits level-off.Increase outlay to competeDecline-sales fall-off and profits dropPLC exerciseThe Ford Escort The Mini CooperThe Internet PhoneCadburys FuseThe Boeing 747The Millennium DomeKIT KATSource:Based on the work of Cliff Bowman.See C.Bowman and D.Faulkner.Competitive and Corporate Strategy,Irwin,1996.Bowmans Strategy Clock1 Low price/low added valueLikely to be segment specific2 Low priceRisk of price war and low margins/need to be cost leader3 HybridLow cost base and reinvestment in low price and differentiation4 Differentiation (a)Without price premiumPerceived added value by user,yielding market share benefits (b)With price premiumPerceived added value sufficient tobear price premiumThe Strategy Clock:Bowmans Competitive Strategy Options 5 Focused differentiation Perceived added value to a particular segment,warranting price premium6 Increased price/standardHigher margins if competitors do not value follow/risk of losing market share7 Increased price/low value Only feasible in monopoly situation8 Low value/standard priceLoss of market shareNew-Product Development ProcessNew product strategyIdea generationIdea screeningConcept development and testingMarketing strategyBusiness analysisProduct developmentTest Marketing CommercialisationProducts DecisionsProduct and Service Classification SystemThe Product Life CycleIntroduction to product matricesBoston Matrix(Growth/Share)Ansoffs Matrix(Product Market)Product and Service Classification SystemConvenience goods-little effort,relatively inexpensiveShopping goods-e.g white goods,DIY equipment,more expensive,infrequentSpeciality goods-extensive search e.g Jewellery,gourmet foodUnsought goods-e.g.double glazing,Industrial goodsInstallations-speciality goods of industrial markets-plant and machineryAccessories-maintenance and office equipmentRaw materialscomponents Business to business e.g.consultants,accountantsFew:Few:trial of trial of early earlyadoptersadoptersGrowing adopters:Growing adopters:trial of trial of product/service product/service Entry of Entry of competitorscompetitorsGrowing selectivityGrowing selectivity of purchase of purchaseMay be manyMay be manySaturation ofSaturation of users usersRepeat purchaseRepeat purchase reliance relianceFight to maintainFight to maintain share shareDrop-offDrop-offin usagein usageExit of someExit of somecompetitorscompetitorsDevelopmentDevelopmentGrowthGrowthMaturityMaturityDeclineDeclineThe life product cycle modelMarket ShareMarketGrowthHighLowHighLow1.Stars3.QuestionMark(ProblemChild)2.Cash Cows4.DogsThe Boston Matrix(Growth/Share Matrix)Market ShareMarketGrowthHighLowHighLowFUSEMaverickMiniature HeroesKIT KATMARS BARTOPICBOUNTYThe Boston Matrix-Chocolate BarsDiversificationMarket PenetrationMarket DevelopmentProduct DevelopmentExisting MarketsNew MarketsExisting ProductsNew ProductsAnsoffs Matrix(Product/Market Matrix)Diversification-related or unrelatedE.g.Realignments of the marketing mixE.g.Geographical expansionSame outlets and sales strategy-new productExisting MarketsNew MarketsExisting ProductsNew ProductsAnsoffs Matrix(Product/Market Matrix)Products DecisionsProduct and Service Classification System?The Product Life Cycle stages?Growth/Share?Product Market?Pricing DecisionsPricing strategiesPricing exerciseTen ways to increase prices without increasing price-WinklerLowHighLowHighEconomyStrategye.g.Tesco spaghettiPenetratione.g.Telewest cable phonesSkimminge.g.New film or albumPremiume.g.BA first classPriceQualityPricing strategiesPremium pricingUses a high price,but gives a good product/service exchange e.g.Concorde,The Ritz HotelPenetration pricingoffers low price to gain market share-then increases pricee.g.France Telecom-to attract new corporate clients(or Telewest cable)Economy pricingplaced at no frills,low pricee.g.Soups,spaghetti,beans-economy brandsPrice skimmingwhere prices are high-usually during introductione.g new albums or films on releaseultimately prices will reduce to the parityPsychological pricingto get a customer to respond on an emotional,rather than rational basis.e.g 99p not 1.01 price point perspectiveProduct line pricingrationale of a product rangee.g.MARS 32p,Four-pack 99p,Bite-size 1.29Pricing variations off-peak pricing,early booking discounts,etce.g Grundig offers a cash back incentive for expensive goodsOptional product-pricinge.g.optional extras-BMW famously under-equippedCaptive product pricingproducts that complement otherse.g Gillette razors(low price)and blades(high price)Product-bundle pricingsellers combine several products at the same pricee.g software,books,CDs.Promotional pricingBOGOF e.g.toothpaste,soups,etcGeographical pricingdifferent prices for customers in different parts of the worlde.g.Include shipping costs,or place onPLCValue pricingusually during difficult economic conditionse.g.Value menus at McDonaldsTen ways to increase prices without increasing price-WinklerRevise the discount structureChange the minimum order sizeCharge for delivery and special servicesInvoice for repairs on serviced equipmentCharge for engineering,installationCharge for overtime on rushed ordersCollect interest on overdue accountsPro
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