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Principles of Marketing

<<< Previous MARKETING PROCESS:Analyzing marketing opportunities, Contents of Marketing Plan Next >>>
 
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Principles of Marketing ­ MGT301
VU
Lesson ­ 8
Lesson overview and learning objectives:
In last Lesson we tried to understand the concept of Portfolio in detail and had a brief concept
regarding the marketing process. The marketing process consists of four steps: analyzing market
opportunities; developing marketing strategies; planning marketing programs, which entails
choosing the marketing mix (the four Ps of product, price, place, and promotion); and organizing,
implementing, and controlling the marketing effort. Today we will be covering Marketing process
in more detail:
A. MARKETING PROCESS
The Marketing Process
Once the strategic plan has defined the company's overall mission and objectives, marketing plays
a role in carrying out these objectives.
The marketing process is the process of analyzing market opportunities, selecting target markets,
developing the marketing mix, and managing the marketing effort. Target customers stand at the
center of the marketing process. There are following steps in Marketing Process:
5. Analyzing marketing opportunities
6. Selecting target markets
7. Developing the marketing Mix
8. Managing the marketing effort
a. Analyzing marketing opportunities
First step of the marketing process is analyzing market opportunities and availing these
opportunities to satisfy the customer's requirements to have competitive advantage. The marketing
function of analyzing market opportunities is important in the marketing planning process. Any
marketing manager must analyses the long-run opportunities in the market to improve the business
unit's performance. To evaluate its opportunities firms needs to operate a reliable marketing
information system.
Marketing research is an indispensable marketing tool for this purpose. Researching the market
allows the company to gather information about their customers, competitors and any
environmental changes to determine the market opportunities. Once the market opportunities
have been analyzed then modern marketing practice calls for dividing the market into major
market segments, evaluating each segment, and selecting and targeting those market segments that
the company can best serve
b. Selecting the target Market:
To succeed in today's competitive marketplace, companies must be customer centered. They must
win customers from competitors and keep them by delivering greater value.
 Sound marketing requires a careful, deliberate analysis of consumers.
 Since companies cannot satisfy all consumers in a given market, they must divide up the
total market (market segmentation), choose the best segments (market targeting), and
design strategies for profitably serving chosen  segments better than the competition
(market positioning).
Market segmentation is the process of dividing a market into distinct groups of buyers with different
needs, characteristics, or behavior who might require separate  products or marketing mixes.
Market targeting is the process of evaluating each market segment's attractiveness and selecting one
or more segments to enter. A company should target segments in which it can generate the greatest
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Principles of Marketing ­ MGT301
VU
customer value and sustain it over time. A company may decide to serve only one or a few special
segments, or perhaps it might decide to offer a complete range of products to serve all market
segments. Special segments may be called "market niches." Most companies enter a new market
by serving a single segment, and if this proves successful, they add segments.
Market positioning is arranging for a product to occupy a clear distinctive and desirable place relative
to competing products in the minds of target consumers. In positioning a product, a company
first needs to identify possible competitive advantages upon which to build the position. To gain
competitive advantage, the company must offer greater competitive advantage to the target
segment. The company's entire marketing program should support the chosen positioning strategy.
Effective positioning begins with actually differentiating the company's marketing offer so that it
gives consumers more value than they are offered by the competition.
c. Developing the Marketing Mix
Once the company has decided on its overall competitive marketing strategy, it is
ready to
begin planning the details of the marketing mix. The marketing mix is the set of controllable
marketing variables that the firm blends to produce the response it wants in the target market. The
marketing mix consists of everything that the firm can do to influence the demand for its product.
These variables are often referred to as the "four Ps."
1). Product stands for the "goods-and-service" combination the company offers to the target
market.
2). Price stands for the amount of money customers have to pay to obtain the product.
3). Place stands for company activities that make the product available to target consumers.
4). Promotion stands for activities that communicate the merits of the product and persuade
target consumers to buy it.
An effective marketing program blends all of the marketing mix elements into a coordinated
program designed to achieve the company's marketing objectives by delivering value to consumers.
Some critics feel that the four Ps omit or underestimate certain important activities.
1). "Where are services?" they ask.
2). "Where is packaging?"
3). The 4 Ps seems to take the seller's view rather than the buyer's view.
4). Perhaps a better classification would be the 4 Cs:
a). Product = Customer Solution.
b). Price = Customer Cost.
c). Place = Convenience.
d). Promotion = Communication.
d. Managing the Marketing Effort
The company wants to design and put into action the marketing mix that will best achieve its
objectives in target markets. This involves four marketing management functions. The four
functions are: analysis, planning, implementation, and control
a. Marketing Analysis:
Marketing analysis involves a complete analysis of the company's situation. The company performs
analysis by Identifying environmental opportunities and threats. Analyzing company strengths and
weaknesses to determine which opportunities the company can best pursue. Feeding information
and other inputs to each of the other marketing management functions.
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Principles of Marketing ­ MGT301
VU
b. Marketing Planning:
Within each business unit, functional plans must be prepared, including marketing plans. Such
plans include marketing plans which are aggregate plans consisting of plans for product lines,
brands and markets.
Marketing planning involves deciding on marketing strategies that will help the company to attain
its overall strategic objectives. A detailed plan is needed for each business, product, or brand. A
product  or  brand  plan
should contain the following
sections:
executive
C ontents o f a M a rketing Pla n
summary, current marketing
situation,
threats
and
opportunity
analysis,
Executive Summary
objectives
and
issues,
Current M arketing Situation
marketing strategies, action
Threats and Opportunity Analysis
programs,  budgets,  and
controls.
Objectives and Issues
M arketing Strategy
Contents
of
Marketing
Action Program s
Plan
Budgets
1. Executive
Controls
summary - The
opening section
of the marketing plan that presents a short summary of the main goals and
recommendations to be presented in the plan.
2. Current marketing situation - The section of a marketing plan that describes the
target market and the company's position in it. The current marketing situation is the
section of a marketing plan that describes the target market and the company's position
in it. Important sections include:
1). A market description.
2). A product review.
3). Analysis of the competition.
4). A section on distribution.
3. Opportunities and Issues Analysis- This section requires the marketing manager to
look ahead for threats and opportunities that the product(s) might face. A company
marketing opportunity would be an attractive arena for marketing action in which the
company would enjoy a competitive advantage. In the threats and opportunities
section, managers are forced to anticipate important developments that can have an
impact, either positive or negative, on the firm. Having studied the product's threats
and opportunities, the manager can now set objectives and consider issues that will
affect them.
4. Objectives - Objectives should be stated as goals the company would like to reach
during the plan's term.
5. Marketing strategy - The marketing logic by which the business unit hopes to achieve
its marketing objectives. Marketing strategy consists of specific strategies for target
markets, marketing mix and marketing expenditure level. Strategies should be created
for all marketing mix components. The marketing budget is a section of the marketing
plan that shows projected revenues, costs, and profits. The last section of the
marketing plan outlines the controls that will be used to monitor progress. This allows
for progress checks and corrective action.
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Principles of Marketing ­ MGT301
VU
6. Action programs - This section sets out what will be done, when, by whom and how
much will be spent doing it.
7. Projected profit-and-loss statement - The marketing budget section of the plan
shows projected revenues, costs and profits/surpluses.
8. Controls - This last section outlines the control measures that will be used to monitor
progress. Goals may be set out weekly, monthly, quarterly, annually or for all such
periods. Following evaluation of results, actions are recommended and implemented in
the next period.
c. Marketing Implementation:
Marketing Implementation is the process that turns marketing plans into marketing actions in
order to accomplish strategic marketing objectives. Whereas marketing planning addresses the and
"why" of marketing activities, implementation addresses the "who", "where", "when", and "how".
One firm can have essentially the same strategy as another, yet win in the market- place through
faster or better execution. Successful implementation depends on an action program that pulls all
of the people and activities together and forms sound formal organizational structure its decision
and reward structure (HRM functions and procedures) and the firm's marketing strategies fitting
with its company culture (the shared system of values and beliefs).
Marketing Department Organization
The company must design a marketing department that can carry out marketing analysis, planning,
implementation, and control. Formats for organizing the department include:
1). The functional organization where different marketing activities are headed by a
functional specialist (such as a sales manager, advertising manager, etc.).
2). The geographic organization where sales and marketing people are assigned
to
specific countries, regions, or districts.
3). A product management organization where a product manager develops a complete
strategy for a product or brand. Today, many firms are shifting to customer equity management
where customer profitability is important.
4). A market or customer management organization where a specific market plan is
developed for each specific market or customer.
5). A combination plan where large companies many times combine elements of any of the
above.
d. Marketing Control
Marketing control is the process of measuring and evaluating the results of marketing strategies
and  plans,  and  taking
M a r k e tin g C o n tr o l
corrective action to ensure
that marketing objectives
P ro c e s s
are
attained.
Implementation  requires
four steps:
1). Set specific goals
M e a s u re
E v a lu a te
Take
Set
(What do we want to
P e rfo rm a n c e
P e rfo rm a n c e
C o r r e c tiv e
G o a ls
achieve?).
A c tio n
2).
Measure
performance  (What  is
happening?).
3).
Evaluate
performance (Why is it happening?).
4). Take corrective action (What should we do about it?).
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Principles of Marketing ­ MGT301
VU
Two broad forms of control are important:
1). Operating control involves checking ongoing performance against the annual plan and
taking corrective action when necessary.
2). Strategic control involves looking at whether the company's basic strategies are well
matched to its opportunities. The major tool for accomplishing this form of control is the
marketing audit. The marketing audit is a comprehensive, systematic, independent, and periodic
examination of a company's environment, objectives, strategies, and activities to determine
problem areas and opportunities. The purpose is to recommend a plan of action to improve the
company's marketing performance.
1). The marketing plan covers all major marketing areas of a business, and not just trouble
spots.
2). If done correctly, the audit is normally conducted by an objective and
experienced outside party who is independent of the marketing department.
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Table of Contents:
  1. PRINCIPLES OF MARKETING:Introduction of Marketing, How is Marketing Done?
  2. ROAD MAP:UNDERSTANDING MARKETING AND MARKETING PROCESS
  3. MARKETING FUNCTIONS:CUSTOMER RELATIONSHIP MANAGEMENT
  4. MARKETING IN HISTORICAL PERSPECTIVE AND EVOLUTION OF MARKETING:End of the Mass Market
  5. MARKETING CHALLENGES IN THE 21st CENTURY:Connections with Customers
  6. STRATEGIC PLANNING AND MARKETING PROCESS:Setting Company Objectives and Goals
  7. PORTFOLIO ANALYSIS:MARKETING PROCESS,Marketing Strategy Planning Process
  8. MARKETING PROCESS:Analyzing marketing opportunities, Contents of Marketing Plan
  9. MARKETING ENVIRONMENT:The Companyís Microenvironment, Customers
  10. MARKETING MACRO ENVIRONMENT:Demographic Environment, Cultural Environment
  11. ANALYZING MARKETING OPPORTUNITIES AND DEVELOPING STRATEGIES:MIS, Marketing Research
  12. THE MARKETING RESEARCH PROCESS:Developing the Research Plan, Research Approaches
  13. THE MARKETING RESEARCH PROCESS (Continued):CONSUMER MARKET
  14. CONSUMER BUYING BEHAVIOR:Model of consumer behavior, Cultural Factors
  15. CONSUMER BUYING BEHAVIOR (CONTINUED):Personal Factors, Psychological Factors
  16. BUSINESS MARKETS AND BUYING BEHAVIOR:Market structure and demand
  17. MARKET SEGMENTATION:Steps in Target Marketing, Mass Marketing
  18. MARKET SEGMENTATION (CONTINUED):Market Targeting, How Many Differences to Promote
  19. Product:Marketing Mix, Levels of Product and Services, Consumer Products
  20. PRODUCT:Individual product decisions, Product Attributes, Branding
  21. PRODUCT:NEW PRODUCT DEVELOPMENT PROCESS, Idea generation, Test Marketing
  22. NEW PRODUCT DEVELOPMENT:PRODUCT LIFE- CYCLE STAGES AND STRATEGIES
  23. KEY TERMS:New-product development, Idea generation, Product development
  24. Price the 2nd P of Marketing Mix:Marketing Objectives, Costs, The Market and Demand
  25. PRICE THE 2ND P OF MARKETING MIX:General Pricing Approaches, Fixed Cost
  26. PRICE THE 2ND P OF MARKETING MIX:Discount and Allowance Pricing, Segmented Pricing
  27. PRICE THE 2ND P OF MARKETING MIX:Price Changes, Initiating Price Increases
  28. PLACE- THE 3RD P OF MARKETING MIX:Marketing Channel, Channel Behavior
  29. LOGISTIC MANAGEMENT:Push Versus Pull Strategy, Goals of the Logistics System
  30. RETAILING AND WHOLESALING:Customer Service, Product Line, Discount Stores
  31. KEY TERMS:Distribution channel, Franchise organization, Distribution center
  32. PROMOTION THE 4TH P OF MARKETING MIX:Integrated Marketing Communications
  33. ADVERTISING:The Five Mís of Advertising, Advertising decisions
  34. ADVERTISING:SALES PROMOTION, Evaluating Advertising, Sales Promotion
  35. PERSONAL SELLING:The Role of the Sales Force, Builds Relationships
  36. SALES FORCE MANAGEMENT:Managing the Sales Force, Compensating Salespeople
  37. SALES FORCE MANAGEMENT:DIRECT MARKETING, Forms of Direct Marketing
  38. DIRECT MARKETING:PUBLIC RELATIONS, Major Public Relations Decisions
  39. KEY TERMS:Public relations, Advertising, Catalog Marketing
  40. CREATING COMPETITIVE ADVANTAGE:Competitor Analysis, Competitive Strategies
  41. GLOBAL MARKETING:International Trade System, Economic Environment
  42. E-MARKETING:Internet Marketing, Electronic Commerce, Basic-Forms
  43. MARKETING AND SOCIETY:Social Criticisms of Marketing, Marketing Ethics
  44. MARKETING:BCG MATRIX, CONSUMER BEHAVIOR, PRODUCT AND SERVICES
  45. A NEW PRODUCT DEVELOPMENT:PRICING STRATEGIES, GLOBAL MARKET PLACE