HBNF02 - MARKETING

Lecture 3: Marketing Roles

• INTRODUCTION
• MARKETING ROLE IN ORGANIZATION
• MARKETING RESEARCH DEPARTMENT
• SALES DEPARTMENT
• PROMOTION DEPARTMENT
 THE STARBUCKS EXPERIENCE
• More than 30 years ago, Howard Schultz transformed the coffee industry
by bringing a European-style coffeehouse to America
• Largest coffee house in America & the world
• He believed that people needed to slow down—to “smell the coffee” and
to enjoy life a little more
• The result was Starbucks, founded with a whole new strategy for engaging
customers and creating customer value
• Starbucks gave customers what it calls a “third place”— a place away from
home and away from work
• At Starbucks, the smells, the sound of beans grinding, watching baristas
blend and brew the brand’s specialty coffees—all became as much or
more a part of the customer experience as the coffee itself
• Every week, Starbucks serves more than 70 million customers face to face
in 20,200 stores in 64 countries
• The more Starbucks grew, however, the more it drifted away from the core mission and values that had made it so successful
• The company’s almost obsessive focus on growth for growth’s sake began to take a toll on the prized Starbucks Experience
• Far from its roots as a warm and intimate coffeehouse, Starbucks began to evolve into more of a caffeine filling station
• Founder Howard Schultz, who had stepped down as CEO in 2000, expressed concern
• In a 2007 memo to Starbucks management, Schultz lamented that the company’s push for growth had “led to the watering down of the Starbucks Experience”
and that Starbucks was “losing its soul.”
• Schultz was right that something was wrong, by early 2008, when Schultz reassumed his role as Starbucks president and CEO, the company found itself in hot
water
• For the first time ever, the average number of transactions per U.S. store fell off and same-store sales growth slowed and within just the previous two years,
Starbucks’s stock had tumbled nearly 80%
• Schultz reacted quickly to restore its luster. He cooled the pace of Starbucks’s growth, closed underperforming locations, and replaced most of the company’s top
executives
• Most important, Schultz laid plans to reestablish the brand’s core mission and values and to refocus the company on giving customers the authentic Starbucks
Experience
• “As we grew rapidly and had phenomenal success,” Shultz announced, “we started to lose sight of our focus on the customer and our commitment to continually
and creatively enhance the Starbucks Experience.”
• Starbucks needed to shift its focus back to customers—to "reignite the emotional attachment with customers”
• Today, a rejuvenated Starbucks is once again fully engaged with customers and delivering the one-of-a-kind Starbucks Experience and once again, sales and
profits are really perking
• The moral of the Starbucks story: Good marketing strategy means keeping your eye squarely on delivering customer value. The objective isn’t just growth or
sales or profits; it’s engaging customers in a meaningful way and creating value for them
What is the Starbucks
Marketing Role?
• https://www.starbucks.com/careers/find-
a-job/corporate/
• https://news.microsoft.com/transform/sta
rbucks-turns-to-technology-to-brew-up-a-
more-personal-connection-with-its-
customers/
• https://martinroll.com/resources/articles/
strategy/secret-starbucks-brand-success/
 INTRODUCTION
• Many companies think about potential markets and customers when
they start
• E.g: Apple’s engineers began working on the iPod by looking at the
available technology and thinking about how customers would like to
have their music more available, as well as more affordable, through
downloading
• Marketing as a set of activities
• Is also a functional area in companies
• Within a company, marketing might be the title of a department
• But some marketing functions, such as sales, might be handled by
another department
• Similarly, a marketing strategy is not created solely by a firm’s
marketing personnel
• Instead, it flows from the company’s overall strategy
 MARKETING ROLE IN AN ORGANIZATION
• The Marketing Department plays a vital role in promoting the business and mission of an organization
• It serves as the face of the company, coordinating and producing all materials representing the business
• To reach out to prospects, customers, investors and/or the community, while creating an overarching image
that represents the company in a positive light
• Associated with the responsibilities and functions that the marketing department is supposed to manage
• The department is further responsible for creating the right reporting relationships and ensuring that the
organization has adequate resources
• marketing is the way in which an organisation determines its best opportunities in the marketplace, given its
objectives and resources
• With the help of other business function/ departments
• Marketing functions include research and development, pricing, distribution, customer service, sales and
communications
 MARKETING RESEARCH DEPARTMENT
• According to Harvard Business School each year more than 30,000 new consumer products are launched and
80% of them fail
• The first question that comes to one’s mind after reading this is “What causes all these products to fail?”
• Well, a number of factors can lead to this
• The biggest problem businesses encounter is lack of preparation
• Companies are so focused on designing and manufacturing new products that they postpone the hard work of
getting ready to market them until too late in the game
• In today’s environment, market research plays a critical role for businesses to identify and reach their target
audiences and also to increase their profit
• This type of research also helps companies figure out marketing and advertising essentials such as tag lines,
value propositions, pricing, promotions, metrics and much more
• It’s how company know what thier competitors are doing, the pricing compares to their peers, and whether
new offerings will land in new markets
• Marketing research is the systematic gathering, recording, and analysis of qualitative and quantitative data about
issues relating to marketing products and services
• Marketing research can be concerned with any of a variety of aspects of the market: the product, sales, buyer
behaviour, promotion, distribution, pricing, packaging, etc
• The goal is to identify and assess how changing elements of the marketing mix impacts customer behavior
• Marketing research department responsible to analyze anything about the market
• Including market trend, opportunities, rivals, etc
• Determining the feasibility of a new service or product through research conducted directly with potential customers
• To provide management with relevant, accurate, reliable, valid, and up to date market information
• Crucial in helping businesses identify and reach their target audiences
• Help with decision making to avoid error and the cost that comes with it/ avoid failure
• When an organization skip out on market research, they miss valuable opportunities that will help their business in
the long run
• Successful business owners know their markets, understand their competitors’ and customers’ wants and needs, and
gather all the information necessary for their businesses to be competitive
 New Coke: A Market Research Failure and Recovery
• Coke’s prominence in the soft drink industry is well established, and its iconic marketing
campaigns have contributed to its loyal following. But even Coke isn’t immune to making a
marketing misstep. When sales began to fall off in the 1970s and the first part of the 1980s,
the company thought taste was the cause of the decline. To fix the situation, they introduced
New Coke, a beverage sweeter than both the original version of Coke and Pepsi.
• Taste tests indicated that success was on the horizon. Market research indicated that more
people preferred the taste of New Coke to original Coke and Pepsi. But the product’s
introduction had many flaws. Market researchers did not factor in the emotional impact
Coke, with its specific design, has on people. They also did not explain to taste test subjects
that they would eventually have to choose between drinking original Coke and New Coke.
• Disaster occurred when the company withdrew original Coke from shelves to sell only New
Coke. Rather than boosting sales, this move proved a huge flop. Consumers missed their
familiar beverage and were put off by a differently designed Coke announcing “NEW.”
• Marketing and sales should have designed their research into the decline in Coke sales to
factor in consumers’ emotional connection to the brand’s products. The story has a silver
lining. Customers asked for their Coke back (reincarnated as “Coke Classic”). Coca-Cola
listened, and brand loyalty spiked. Conspiracy theories swirled that Coke had intentionally
trashed its brand name to inspire loyal followers.
 SALES DEPARTMENT
• The sales department consists of a set of business activities and processes that help a sales
organization run effectively, efficiently and in support of business strategies and objectives
• The sales department generally includes sales, sales support or business operations
• Is to engage in a variety of activities with the objective to promote the customer purchase
of a product or the client engagement of a service
• Often tasked with meeting certain targets of product or service sales
• The sales division takes the lead in setting strategies and decides what marketing
communications it needs to support its efforts
• Sales department advises the marketing department based on its feedback with customers
and focuses on customer contact to drive sales
• Marketing department tells the sales staff what to emphasize and what sales tools is will
use
• A sales and marketing department has the responsibility for deciding where the company
should sell and what its prices should be
• Must ensure their goals align with the company goals
• Without profitable sales, the company will not be in business long enough to build a
marketing department or pay its employees
• Important for customer engagement, revenue generation and organizational growth
• Sales play a key role in the building of loyalty and trust between customer and business
• One of the keys to customer retention through sales is to perform sales follow-ups
• Pepsi introduced a new clear cola, believing it would quickly grow to be a billion-dollar brand
• They named it Crystal Pepsi because it was bottled without the dye that gives standard Pepsi its caramel
hue
• Unfortunately for Pepsi, consumers weren’t buying it — not “right now,” not weeks or months later. By
1995, the product was discontinued.
• In hindsight, pundits have argued that Crystal Pepsi failed, in large part, because no explanation was
given for its atypical colour
• The company didn’t help consumers make sense of the new product and, in turn, consumers rejected it
• Sales can’t help this product too
 PROMOTION DEPARTMENT
• The marketing division is responsible for informing and persuading consumers to buy the company's products
• Refers to any type of marketing communication
• Aims to stimulate demand for a company's goods or services
• about strategies and techniques that help communicate a product to the audience
• The goal of promotions is to present the product, increase demand, and differentiate it
• Promotion is the basic element of marketing
• It combines various activities, such as advertising, sales promotion, personal selling, direct marketing,
sponsorship, and public relations
• Responsible for planning and managing campaigns to promote their company's products and services
• Promotions can help increase short-term sales and improve the results of other marketing programs
• E.g: Word of mouth, website, social media, advertisement, business card, flyers, charity events, etc
• Aim to marketing the product through promoting, distributing, planning, packaging and, etc
• Available data and create more useful data from it
• Collect information of thousands and millions of customers
• By using the right database software company can know the trends, patterns
and inclinations of customers
• By using this data company can launch targeted promotions
• May not know about new products or upcoming sales, reducing their chances
of becoming a repeat customer
• Lose to competitors
• Unaware of business existence
• Survival of business
Further reading
• https://hbr.org/2016/10/4-roles-every-marketing-
organization-needs-now
• https://martinroll.com/resources/articles/strategy/the-
secret-of-zaras-success-a-culture-of-customer-co-
creation/
• https://www.traqline.com/newsroom/blog/top-5-
examples-market-research-failure/
• https://www.mashed.com/111261/crystal-pepsi-flop/
• https://www.thrillist.com/drink/nation/what-is-crystal-
pepsi
• https://hbr.org/1990/05/getting-the-most-out-of-
advertising-and-promotion
 DISCUSSION
1. Why does everything start with customers? Or is it only marketing that
starts with customers?
2. What are the key parts of a marketing plan?
3. Assume you are about to graduate. How would you apply marketing
principles to your job search? In what ways would you be able to
create, communicate, and deliver value as a potential employee, and
what would that value be, exactly? How would you prove that you can
deliver that value?