Task of a firm & Role of Marketing

JWI 518 Marketing in Global Environment, Week1, 10/14/12



Tremendous exposure to core marketing concepts in week1 itself.

Ia. Kotler 2012, Chapter 1: Defining Marketing for the Twenty-First Century
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Marketing is about identifying and meeting human and social needs profitably.
Marketing management is the art and science of choosing target markets and getting,keeping, growing customers through delivering and communicating superior customer value.
The aim of marketing is to make selling superflous - know and understand the customer so well that the product or service fits him and sells itself.

Ib.Task of the firm & Role of Marketing
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Identify needs, wants, interests of target customers
satisfy more effectively and efficiently than competitors
while preserving or enhancing consumers' and society's long-term well-being

The bottom line of marketing (JWI 518, week1, lecture1)
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Why your customer makes a purchase is in large part within your control.
(a) Convey a persuasive message to target audience
(b) Design marketing pieces to stop customers, attract eyeballs and present a message
(c) Reinforce brand's image and communicate it is still around
(d) Create subconscious images to influence customer behavior
(e) People like to do business with people they like - so use right spokespersons to influence buying decisions at a later date

Ic. Task of Marketing Management
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(i) Develop marketing strategies and plans - based on core competencies and market experience, identify organization's long-run opportunities
(ii) Capture market insights - research to closely monitor market, information; assess market potential & forecast demand; assess market environment
(iii) Connect with customers - determine how to best create value for target customers; develop strong long-term relationships with customers
(iv) Build strong brands - understand how customers perceive brand's strengths and weaknesses; develop positioning strategy & how to deal with competition
(v) Shape market offerings - product (quality, design, features, packaging), services, critical marketing decisions related to pricing
(vi) Deliver value to target market - channel activities; retailers, wholesalers, distribution firms & how they make decisions
(vii) communicate value of products & services to target market - integrated marketing communications program;
    individual & collective contribution of marketing activities; mass communication - advertising & PR; personal communications - direct & indirect marketing
(viii) Create successful long-term growth - consider changing global opportunities & challenges; put in place a marketing org capable of implementing marketing plan

Id. Implement with 4P + 4P framework
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McCarthy's 4 Ps of Marketing
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Product: variety, quality, design, fetaures, brand name, packaging, sizes, services, warranties, returns; which offers competitive advantage?
Price: List price, discounts, allowances, payment period, credit terms; what are the financial as well as non-monetary costs ?
Promotion: Sales promotion, advertising, sales force, public relations, direction marketing; which offers competitive advantage over rivals ?
Place: Channels, Coverage, Assortments, Locations, Inventory, Transport; how convenient is it to get ?

Modern Holistic Marketing Management's 4Ps
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People - employees and internal marketing; understand people are not just as they shop but as people whose lives need to be understood broadly
Processes - creativity, discipline, structure of marketing managment; right set of processes to guide activities and programs for beneficial long term relationships;
    generate insights; create breakthrough products, services, marketing activities
Programs - consumer directed activities online and offline; 4Ps + 4Ps
Performance - financial (profitability) and non-financial (brand, customer equity)

Ie. Marketing Fundamentals
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what is marketing? Identification, creation, communication, delivery of customer value
What is marketed ? Goods, Services, Events, Experiences, Persons, Places, Properties, Organizations, Information, Ideas
Who Markets? A marketer is one who seeks a response - attention, purchase, vote, donation - from a prospect to achieve a sale.
What is a Market? Market is a collection of buyers and sellers who transact over a product.
Market types? based on needs, product, demographic, geographic, vote, labor, donor
Markets served? consumer, business, gloabl, non-profit or combos.
Marketplace can be physical or digital
Metamarket - cluster of complementary products and services closely related in minds of customers but spanning diverse industries.

What Sellers give and get
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Sellers send goods, services, advertising communications
Sellers get money and information (customer attitudes and sales data)

If. Core Marketing Concepts
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(ia) Needs preexist marketers
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Basic human needs: air, water, food, clothing, shelter
Secondary human needs: recreation, education, entertainment
Some customers have needs they are not conscious of or they cannot articulate

(ib) Types of Needs are:
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Stated need - customer says "I want a car.."
Real need - going deeper, customer wants something very specific; "a car whose operating cost is low - not necessarily initial price"
Unstated need - customer expects good service
Delight needs - customer would like GPS
Secret needs - customer wants to be seen as a savvy customer

(ii) Wants are needs that are directed to specific objects.
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Demands are wants for specific projects backed by an ability to pay.
Measure demand not just by want but by ability of people to pay for it.
Marketers, along with societal factors, influence wants


(iii) Target markets, Segmentation
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Identify and profile distinct buyer groups - who prefer varying products and services through demographic, psychographic, behavior differences

(iv) Positioning - Develop offering and position in the minds of target buyers as delivering specific benefits
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(v) Offering
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value proposition - address customer needs with a set of beliefs that satisfy those needs
Offer - a combinatin of products, services, information and experiences

(vi) Brand - an offering from a known source; build a strong, favorable, unique brand image
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(vi) value
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value - combo of quality, service, price; value perception increase with quality and service but decrease with price

(vii) satisfaction
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a person's judgment of product's perceived performance vs expectations
sum of tangible and intangible benefits must deliver the most value in the marketplace and exceed customer expectations

(viii) marketing channels
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marketers must choose the right mix of 3 channels to reach a customer
communication: deliver and receive messages from target buyers using newspapers, magazines, radio, TV, mail, phone, billboards, posters, internet, retail stores, websites, media, email, blogs, toll free number
distribution: display, sell, deliver product or service to buyer; direct & indirect (distributors, wholesalers, retailers, agents)
service:warehouses, transportation companies, banks, insurance companies

(ix) Supply chain
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raw materials to finished products delivered to buyers
each company captures a certain percentage of total value generated by supply chain's value delivery system

(x) Competition
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All actual and potential rival offerings and substitutes a buyer might consider
Key to think broadly about who the competition is

Ig. New Marketing Realities
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(i) Major societal forces
    IT allows accurate levels of production, targeted communications, relevant pricing
    Globalization in transport, shipping and communication gives consumer choices
    Deregulation creates more competition and growth opportunities
    Privatization increases efficiency
    Intense competition raises marketing costs, shrinks profit margins
    Strong brands extended into other product categories and became megabrands
    Industries converging - New opportunities are at intersection of two or more industries
    Retail in transformation - store based vs nonstore competition; brick-and-click
    Consumers seek new shopping experiences
(ii) New consumer capabilities
    Disintermediation gives consumers buying power: removal of middle men by getting information for any offering online
    Social media like Facebook, Flickr, Wiki, YouTube- Personal connections, user generated content; marketers inviting customers to help design and market offerings
    Perception that product differences are minimal - customers less brand-loyal, more marketing resistant
   
(iii) New company capabilities
    Internet for communicating and receiving information as a sales channel
        augment geo reach; collect rich information about markets, customers, prospects, competitors
         Social media like Twitter, Facebook - create online and offline buzz through brand advocates and user communitites
        improve internal communications - purchasing, recruitment, employee training
        pressure from corporate buyers pushing for increased cost efficiency with online technology
    Special interest TV channels and magazines
        micro-target audiences to deliver ads, coupons, personalized messages
    Mobile marketing to target customers on the move
    Make and sell individually differentiated goods - through Factory customization, computer technology, db marketing software

(iv) New Age of Turbulence is the new normal
    chaos, risk and uncertainty characterize markets, industries, companies - spurts of periodic ups and downs

Ih. Choose among Five Competing Concepts to compete
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(i) Production Concept - Customers prefer products that are widely available and are inexpensive
    Production efficiency, low cost, mass distribution key to also expand the market
(ii) Product Concept - Consumers prefer products that offer most quality, performance, or innovative features
    Beware the "better mousetrap fallacy" - a better product by itself may not succeed in the market - pricing, distribution, advertising and proper selling are key
(iii) Selling Concept - Aggressive hard-selling effort key to push products into the marketplace
(iv) Marketing Concept - Sense and respond to customer need - being more effective than competitors in creating, delivering, communicating superior customer value to target markets
    Find not right customers for your products but right products for your customers
(v) Selling vs Marketing - Seller vs Buyer focus; Selling focuses on needs of seller - convert product to cash
    Marketing focuses on satisfying needs of customer - through the product creation, delivery, consumption

Ii. Marketers use consistent and holistic marketing concept
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Key Points for an integrated approach:
(i) Secure core customer segments against competitive moves
(ii) Aggressively take market away from weak competitors
(iii) Research customer needs and wants that are in flux
(iv) maintain or increase marketing budget rather than cutting it
(v) emphasize core values, safety and security of the firm and offerings
(vi) Act quickly to drop programs that are not working
(vii) Don't discount the best brands of the firm
(viii) save the strongest brands and products; lose the weakest

Ij. Four components of Holisting marketing are:
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Relationship marketing
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Customer Relationship Management (CRM) & Partner Relationship Management (PRM) -" build an effective network and profits will follow"
    customers; employees; marketing partners - channels, suppliers, distributors, dealers, agencies; financial community - shareholders, investors, analysts
    past trasactions, demographics, psychographics, media, distribution preferences
    focus on most profitable customers, products, channels - achieve profitable growth, capture large share of customers' expenses, build customer loyalty
    estimate customer lifetime value - design offerings and prices to make profit over customer lifetime   
   
Integrated marketing
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Design marketing activities such that "whole is greater than sum of parts"
    Many different activities can create, communicate and deliver value
    Marketerrs should design and implement any one activity with all other activities in mind
    Choose communication options that reinforce and complement each other
    Develop integrated channel strategy - optimize number of channels & resolve conflict among channels
   
Internal marketing
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Marketing is a company-wide undertaking - all departments must work together to succeed
Must communicate a vision of how the company's marketing orientation and philosophy serves customers.
Ensure organization and senior managers embrace marketing principles
    Engineering - design right products
    finance - provide right amount of funding
    purchasing - buy right materials
    production - make right tools in right time horizon
    accounting - measure profitability in right ways
Build mutually satisfying long-term relationships with stakeholders
    Select employees and managers - Must have positive attitude towards company, products, customers;  must want to serve customers well
    Train, motivate and empower entire staff - they should have knowledge, tools, authority to provide value to customers; give booklet outlining attitude about how to interact with guests
    Establish standards for employee performance - remind them to deliver on brand promise; help them understand the brand and become effective advocates
    Monitor employee actions - reward and reinforce good performance

Performance marketing
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Understand financial and non-financial returns to business and society from marketing activities
Go beyond sales revenue - examine scorecard, interpret market share, customer loss rate, customer satisfaction, product quality
    Financial Accountability
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    assess direct and indirect value created
    - financial: impact to profitability
    - intangible assets: brand building, growth of customer base, employees, distributor & supplier relations, IP capital
    Social responsibility
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    PESTEL concerns including Ethical, Social, Environmental, Legal impact
    Use social responsibility as a differentiator - for socially conscious consumers and firms; build consumer preference, increase sales, profits

II. Kotler, Wolcott and Chandrasekhar, Playing Well with Others
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The key message is:
The entire organization, from R&D to Marketing, must be brought together to think and act together from a customer point of view.

III. Video: Jack Welch, A Great Idea
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Nice thing about US is,
(a) there are fewer business regulations than any other place in the world and
(b) there is lots of money that most people in other countries don't have

Problem is, we have too few ideas and we are dying to find people with ideas.
If you have got an idea, just gotta have patience, knock on doors, show them your passion, sell like hell, get some capital to sell your idea. But you gotta have the ability to take no, Punches in the nose over and over again to sell, because it won't be an easy sell.


awesome training

Dr DP