Chapter 1 STRATEGIC PLANNING AND THE MARKETING MANAGEMENT PROCESS 3/16/2016 1 Introduction Marketing combines economics, psychology, anthropology, sociology, statistics and demographic. Identifies and provides tools to satisfy need and wants. It is around us every day. Improves quality of life. Resolves conflicts between consumer and societal needs/wants. 3/16/2016 2 The Essence of Marketing Customer focus: needs and wants Research emphasis Exchange process Relationship basis Competitive environment Satisfaction emphasis Efficiency Process to satisfy needs/wants 3/16/2016 3 Definition of marketing Process Planning and executing Conception, pricing, promotion and distribution Goods and services Create exchanges Individuals and organizational goals 3/16/2016 4 The Complexity of Marketing Multiple decision making process Interrelated factors Interaction between buyer and seller Global factor-important for survival 3/16/2016 5 History of Marketing Thought Production Concept-industrial revolution (late 18th century) Product Concept-innovation (1920s) Selling Concept-promotion (1940s) Marketing Concept-customer satisfaction (1960s) Social Responsibility-consumerism and improve quality of life (1970s) 3/16/2016 6 Marketing Theory Goods Vs. services-tangible/intangible Product categories-durable/nondurable Consumer Vs. industrial markets Profit Vs. nonprofit Intermediaries Vs. end users Domestic Vs. international Small firms Vs. large firms 3/16/2016 7 The Marketing Mix Product Place Price Promotion 3/16/2016 8 Selling versus Marketing Inward-looking Vs. outward-looking Short-term Vs. long-term Sales volume Vs. customer satisfaction Mass production Vs. innovation (needs) Profit focus Vs. Brand loyalty 3/16/2016 9 Marketing and Strategic Planning Understanding customers Understanding Competitors Planning concepts (medium and long term) Marketing intelligence (need discovery) Strengths and weaknesses Strategy assessment-long term goals Organization response to environmental 3/16/2016 challenge 10 Marketing and Strategic Planning (Cont.) Top management concerns Follow the environmental changesMicrosoft Corporation Global approach-Sears Vs Wall-Mart The organizational strategic plan: Organizational mission Organizational objectives Organizational Strategies Organizational portfolio plans 3/16/2016 11 Organizational Mission Organization’s history The organization’s distinctive competencies The organization’s environment 3/16/2016 12 Organizational Objectives Market standing Innovations Productivity Physical and financial resources Profitability Manager responsibility Workers performance Social responsibility 3/16/2016 13 Organizational Strategies Strategies based upon product/market Market penetration Market development Product development Diversification Strategies based upon competitive advantage Porter’s competitive advantage-low cost advantage-Wal-Mart Differentiation-Microsoft, Rolex, L.L.Bean 3/16/2016 14 Organizational Strategies(Cont.) Organizational strategies based upon value Product leadership-innovative approach Operational excellence-Dell computer Customer intimacy-relationship marketing Organizational Portfolio Plan Boston Consulting Group model GE model 3/16/2016 15 Product/Market Strategy Market penetration-to use more, changing product offering and positioning:exp. tuna fish in water. Product development-adding new features Market development-taking the product to a new market: internationalization Diversification:(a) related, and (b)unrelated industries. 3/16/2016 16 Product Portfolios Criticism of BCG matrix: (1) cash flow is applicable to limited number of markets, (2)brand leader should not be milked because new brand may not be a leader. Economies of scale-the more are sold, the more are made, and the lower the unit cost. Product mix-product width and depth Product mix decision: 1.line stretching, 2.line rationalization 3/16/2016 17 MARKETING MANAGEMENT PROCESS Process of planning, execution, pricing, promotion, distribution of goods and services. Situation analysis Organizational – – – – – objectives and mission Cooperative environment-suppliers, resellers Competitive environment Economic environment Social environment-cultures and traditions Political and Legal environment 3/16/2016 18 MANAGEMENT PROCESS (CONT.) Marketing Planning Setting the objectives Selecting the target market Developing the marketing mix Implementation and Control 3/16/2016 19