Understanding Marketing

Topic 1
 OBJECTIVES

 Be able to define marketing and discuss its core

concepts.
 Be able to define marketing management and
compare the five marketing management
orientations.
 Realize the major challenges facing marketers in
the new “connected” millennium.

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 WHAT IS MARKETING?

 Marketing is managing profitable customer relationships

Attracting new customers
Retaining and growing current customers
 “Marketing” is NOT synonymous with “sales” or “advertising”

Sales
Marketing
Advertising
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 WHAT IS MARKETING?
Marketing: Kotler’s social
a function and set of definition:
processes for creating,
communicating and “Marketing is a
delivering value to societal process by
customers and for which individuals and
groups obtain what
managing customer
they need and want by
relationships in ways creating, offering, and
that benefit the freely exchanging
organization and its products and services
stakeholders. of value with others.”

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 MANY ENTITIES CAN BE MARKETED

Places Organization

Goods Events Services Persons

Information Experiences Ideas Properties

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 Marketing Orientations
MARKETING ORIENTATION
• Holds that consumers prefer products which are widely available and affordable.
Marketers focus: making the products easily available and affordable to most customers
The
Production & production and quantity of the production are key to success in marketing.
Concept

• Holds that consumers favor products which offer the most quality, performance or
innovative features. Product quality is an important marketing focus & is the key to
The Product success in marketing.
Concept

• Holds that consumers & businesses will ordinarily not buy enough of the organization’s
products, therefore, the organization must undertake aggressive selling and promotion
The Selling efforts.
Concept

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 Marketing Orientations
MARKETING ORIENTATION
• Holds that the key to achieve organizational goals is via the company being more
The effective than competitors in creating, delivering and communicating superior customer
Marketing value to the selected target markets.
Concept

• Holds that the organization’s task is to determine the needs, wants and interests of target
markets and to deliver the desired satisfaction more effectively and efficiently than
Societal competitors. All of these must be done in a way that preserves or enhances the
Marketing consumers’ and the society’s well-being.
Concept

• Holistic marketing acknowledges that everything matters in marketing and a broad,

integrated perspective is necessary. It includes relationship marketing, integrated
The Holistic
Marketing marketing, internal marketing and performance marketing.
Concept

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 MARKETING MANAGEMENT

Marketing Management
The art and science of choosing target
markets and building profitable
relationships with them

Creating, delivering and

communicating superior
customer value is key

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 MARKETING MANAGEMENT

Demand Management
Customer Management
Marketers must deal with
Marketers select
different demand states
customers that can be
ranging from no demand
served well and profitably
to too much demand

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 To sum, marketing management is important

Reasons
 Acts as a roadmap to direct companies in achieving long term goals and objectives
 Assists in the planning of strategies to capitalize on future opportunities and
minimize threats
 Strategies protects and prevents companies from making future mistakes
 Strategy become the master plan to achieve long term business goals and
objectives
 Facilitates organization to find, arrange, allocate, distribute and use resources
efficiently to meet company’s goals
 Offers insights on how company would implement their marketing plan and
strategies
 Facilitates marketing controls
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 Analysis Plan:
In-depth research on Select segment/s &
market of company’s formulate objectives and
interest marketing mix strategies

Control:
Implement: Monitor and review
Carry out the marketing performance. Take
plan corrective actions when
necessary

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 MARKETING PLANNING

Marketing planning is
the ongoing process of
developing and
implementing market- The resulting document that
driven strategies for an records the marketing
organization planning process in a useful
framework is the marketing
plan

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 Everyone in an
All internal
organization must
organizational
understand and
processes and
support the
systems must be
concept of
aligned around
customer
the customer
orientation

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 Establish
Develop
marketing
marketing
goals and
strategies
objectives

Perform any
Marketing mix
needed market
strategies
research

Marketing plan
Framework
for Develop
is connected to
implementation
the firm’s Marketing plans
business plan
Planning

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 ELEMENTS OF MARKETING PLANNING

Marketing planning does not occur in a vacuum

 A mission statement articulates an organization’s
purpose, or reason for existence.
 Most mission statements also include a discussion of
what the company would like to become in the future – its
strategic vision.
 Goals eventually become refined into specific,
measurable, and (hopefully) attainable objectives for the
firm.

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 ELEMENTS OF MARKETING PLANNING

Organizational Strategies

A strategy is a comprehensive plan Three primary categories

stating how the organization will achieve
its mission and objectives of competitive strategy:
1. Low Cost
2. Differentiation
3. Focus (or Niche)
A firm’s generic strategy is its overall
directional strategy at the business level

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 SITUATION ANALYSIS: ENVIRONMENTAL
ANALYSIS
Political, Legal, and
Ethical

Socio-Cultural/
Economic Demographic
Macro-level
external
environment

Natural Technological
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 SITUATION ANALYSIS: INDUSTRY ANALYSIS
Rivalry
among
existing
firms

Threat of
Threat of substitute
new entrants products
STRUCTURAL
FORCES OF AN
INDUSTRY

Bargaining Bargaining
power of power of
suppliers buyers

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 SITUATION ANALYSIS: INTERNAL ANALYSIS
Firm
structure
and
systems

Firm Internal Firm

Environmental
resources Factors culture

Firm
leadership

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 ELEMENTS OF MARKETING PLANNING

 Summarize the SITUATION ANALYSIS into a SWOT analysis:

 A convenient way to summarize key findings into a matrix of

strengths, weaknesses, opportunities, and threats.
 Internal analysis reveals strengths and weaknesses, while
external analysis points to potential opportunities and threats.

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 INTERNAL Strengths (S) Weaknesses (W)
FACTORS
(IFAS) List 5–10 internal List 5–10 internal
EXTERNAL strengths here weaknesses here
FACTORS
(EFAS)

Opportunities (O) S/O Based Strategies W/O Based Strategies

List 5–10 external Generate strategies here Generate strategies here

opportunities here that use strengths to take that take advantage of
advantage of opportunities opportunities by
overcoming weaknesses

Threats (T) S/T Based Strategies W/T Based Strategies

List 5–10 external Generate strategies here Generate strategies here

threats here that use strengths to that minimize weaknesses
avoid threats and avoid threats

Source: J. David Hunger and Thomas H. Wheelen, Essentials of Strategic Management, 4th ed. (Upper Saddle River, NJ: Prentice Hall, 2007).

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 ELEMENTS OF MARKETING PLANNING

Additional Aspects of Marketing Planning

Perform Any Needed Market Research

Establish Marketing Goals and Objectives
 Develop Marketing (4P’s/7P’s)& Growth Strategies
• Market penetration strategies
• Product development strategies
• Market development strategies
• Diversification strategies

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 Product Emphasis

Existing Products New Products

Strategy = Strategy =
Market Market
Penetration Development
Existing
Markets Seek to increase Create growth
sales of existing by selling new
products to products in
existing markets existing markets
Market
Emphasis Strategy = Strategy =
Market Diversification
Development
New Emphasize both
Markets Introduce existing new products and
products to new new markets to
markets achieve growth

Source: H. Igor Ansoff, The New Corporate Strategy (New York: John Wiley & Sons, 1988).

1 - 30 McGraw Hill/Irwin Copyright © The McGraw Hill Companies, Inc. All rights reserved
 ELEMENTS OF MARKETING PLANNING

Implementation Plan
What is to be done?
Who is to do it?
When will it be done?
How much will it cost?
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 ELEMENTS OF MARKETING PLANNING

Develop
Marketing Control
Contingency Plans

• Process of • Plans that can be

measuring implemented
marketing results should something
and adjusting the happen that
marketing plan as negates the viability
needed of the marketing
plan
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