Chap 1-2

Maximizing Core Competencies

(Re)define the business concept (Re)shaping the business scope (Re)positioning the company's brand identity

marketing management tasks

- Developing market strategies and plans - Capturing marketing insights - Connecting with customers - Building strong brands - Creating value - Delivering value - Communicating value - Creating successful long-term growth

heightened competition

- Private brands - Mega-brands - Deregulation - Privatization While globalization has created intense competition among domestic and foreign brands, the rise of private labels and mega-brands and a trend toward deregulation and privatization have also increased competition.

establishing strategic business units

- a single business or collection of related businesses - has its own set of competitors - has a manager responsible for strategic planning and profitability

new consumer capabilities

- can use the internet as a powerful information and purchasing aid - can search, communicate, and purchase on the move - can tap into social media to share opinions and express loyalty - can actively interact with companies - can reject marketing they find inappropriate

new company capabilities

- can use the internet as a powerful information and sales channel, including for individually differentiated goods - can collect fuller and richer information about markets, customers, prospects, and competitors - can reach customers quickly and efficiently via social media and mobile marketing, sending targeted ads, coupons, and information - can improve purchasing, recruiting, training, and internal and external communications - can improve cost efficiency

Central Role of Strategic Planning

- managing the businesses as an investment portfolio - assessing the market's growth rate and the company's position in that market - establishing a strategy

marketing and customer value

- the value delivery process - the value chain - core competencies - the central role of strategic planning

good mission statements

-Focus on a limited number of goals -Stress the company's major policies and values -Define the major competitive spheres within which the company will operate -Take a long-term view -Are as short, memorable, and meaningful as possible

mckinsey's elements of success

-strategy -structure -systems ^hardware of success^ -style -skills -staff -shared values ^software^

marketing channels

Communication channels deliver and receive messages from target buyers and include newspapers, magazines, radio, television, mail, telephone, smart phone, billboards, posters, fliers, CDs, audiotapes, and the Internet. Distribution channels help display, sell, or deliver the physical product or service(s) to the buyer or user. To carry out transactions with potential buyers, the marketer also uses service channels that include warehouses, transportation companies, banks, and insurance companies.

Downsizing and Divesting Older Businesses

Companies must carefully prune, harvest, or divest tired old businesses to release needed resources for other uses and reduce costs

key customer markets

Consumer markets Business markets Global markets Nonprofit & governmental markets

intensive growth

Corporate management should first review opportunities for improving existing businesses

integrated marketing

Devise marketing activities and programs that create, communicate, and deliver value such that "the whole is greater than the sum of its parts." Two key themes of integrated marketing are that (1) many different marketing activities can create, communicate, and deliver value and (2) marketers should design and implement any one marketing activity with all other activities in mind.

marketing plan contents

Executive summary Table of contents Situation analysis Marketing strategy Financial projections Implementation controls

company orientation toward the marketplace

Production Product Selling Marketing

paid media

T V, magazine and display ads, paid search, and sponsorships allow marketers to show their ad or brand for a fee

whats creating new opportunities and challenges and significantly changing the management or marketing

Technology, globalization, and social responsibility

marketing

The marketing concept emerged in the mid-1950s as a customer-centered, sense-and respond philosophy. The job is to find not the right customers for your products, but the right products for your customers.

product

The product concept proposes that consumers favor products offering the most quality, performance, or innovative features.

production

The production concept is one of the oldest concepts in business. It holds that consumers prefer products that are widely available and inexpensive. Managers of production-oriented businesses concentrate on achieving high production efficiency, low costs, and mass distribution.

selling

The selling concept holds that consumers and businesses, if left alone, won't buy enough of the organization's products. It is practiced most aggressively with unsought goods—goods buyers don't normally think of buying such as insurance and cemetery plots—and when firms with overcapacity aim to sell what they make, rather than make what the market wants.

internal marketing

The task of hiring, training, and motivating able employees who want to serve customers well Smart marketers recognize that marketing activities within the firm can be as important as, or even more important than, those directed outside the company.

performance

We define performance as in holistic marketing, to capture the range of possible outcome measures that have financial and nonfinancial implications (profitability as well as brand and customer equity) and implications beyond the company itself (social responsibility, legal, ethical, and community related).

Defining the Corporate Mission

What is our business? Who is the customer? What is of value to the customer? What will our business be? What should our business be?

offerings

a combination of products, services, information, and experiences

owned media

a company or brand brochure, web site, blog, Facebook page, or twitter account communication channels marketers actually own

organization and organization culture

a companys organization consists of its structures, policies, and corporate culture, all of which can become dysfunctional in a rapidly changing business environment structures and policies can change, but the culture is hard to change - ADAPTING culture is key to implementing new strategy

satisfaction

a person's judgment of a product's perceived performance in relationship to expectations

value proposition

a set of benefits that satisfy those needs

the value chain

a tool for identifying ways to create more customer value -Every firm is a synthesis of activities performed to design, produce, market, deliver, and support its product Nine strategically relevant activities—five primary and four support activities— create value and cost in a specific business. The primary activities are (1) inbound logistics, or bringing materials into the business; (2) operations, or converting materials into final products; (3) outbound logistics, or shipping out final products; (4) marketing, which includes sales; and (5) service. Specialized departments handle the support activities—(1) procurement, (2) technology development, (3) human resource management, and (4) firm infrastructure. (Infrastructure covers the costs of general management, planning, finance, accounting, legal, and government affairs.)

competition

all the actual and potential rival offerings and substitutes a buyer might consider

marketing opportunity

an area of buyer need and interest that a company has a high probability of profitably satisfying

brands

an offering from a known source

customer relationship management process

building deeper understanding, relationships, and offerings to individual customers

environmental threat

challenge posed by an unfavorable trend or development that, in the absence of defensive marketing action, would lead to lower sales or profit

value delivery process

choosing the value, providing the value, communicating the value

MOA

companies use to evaluate opportunities marketing opportunity analysis: can we articulate the benefits convincingly to a defined target market(s)? can we locate the target market(s) and reach them with cost-effective media and trade channels? does our company possess or have access to the critical capabilities and resources we need to deliver the customer benefits? can we deliver the benefits better than any actual or potential competitors? will the financial rate of return meet or exceed our required threshold for investment?

to deal with environmental threats, the company needs ____

contingency plans

relationship marketing

customers employees marketing partners (channels, suppliers, distributors, dealers, agencies) financial community (shareholders, investors, analysts) aims to build mutually satisfying long-term relationships with key constituents in order to earn and retain their business. ultimate outcome of relationship marketing is a unique company asset called a marketing network, consisting of the company and its supporting stakeholders with whom it has built mutually profitable business relationships. The operating principle is simple: build an effective network of relationships with key stakeholders, and profits will follow.

customer acquisition process

defining target markets and prospecting for new customers

Corporate and Division Strategic Planning

defining the corporate mission, establishing strategic business units, assigning resources to each strategic business unit, assessing growth opportunities

broad environment

demographic environment, economic environment, social-cultural environment, natural environment, technological environment, and political-legal environment

Successful marketing management includes

developing marketing strategies and plans capturing marketing insights connecting with customers building strong brands creating, delivering, and communicating value managing the marketing organization within the global economy

The Royal Dutch/Shell Group pioneered scenario analysis

develops plausible representations of a firm's possible future using assumptions about forces driving the market and different uncertainties. Managers think through each scenario with the question "What will we do if it happens?," adopt one scenario as the most probable, and watch for signposts that might confirm or disconfirm it.

diversification growth

diversification growth makes sense when good opportunities exist outside the present businesses the industry is highly attractive and the company has the right mix of business strengths to succeed

internal environment

evaluating internal strengths and weaknesses

performance marketing

financial accountability environmental impact social impact requires understanding the financial and nonfinancial returns to business and society from marketing activities and programs. When they founded Ben & Jerry's, Ben Cohen and Jerry Greenfield embraced the performance marketing concept by dividing the traditional financial bottom line into a "double bottom line" that also measured the environmental impact of their products and processes. That later expanded into a "triple bottom line" to represent the social impacts, negative and positive, of the firm's entire range of business activities.

market sensing process

gathering and acting upon information about the market

MBO

goal formulation (manage by objectives - MBO) developing specific goals for the planning period goals are objectives that are specific with respect to magnitude over time unit's objectives must be arranged hierarchically objectives should be quantitative goals should be realistic objectives must be consistent once company has performed SWOT, it can proceed to goal formulation

marketers can market

goods, services, events, experiences, persons, places, properties, organizations, information, and ideas in four different marketplaces: consumer, business, global, and nonprofit

holistic marketing concept

includes relationship marketing, integrated marketing, internal marketing, and performance marketing based on the development, design, and implementation of marketing programs, processes, and activities that recognize their breadth and interdependencies Holistic marketing acknowledges that everything matters in marketing—and that a broad, integrated perspective is often necessary. Figure 1.4 provides a schematic overview of four broad components characterizing holistic marketing: relationship marketing, integrated marketing, internal marketing, and performance marketing.

market system loop

inner loop: industry -> goods and services -> market market -> money -> industry industry -> communication -> market market -> information -> industry

peter drucker

its more important to "do the right thing" - be EFFECTIVE than "to do things right" - be EFFICIENT most successful companies do both

strategic marketing plan

lays out the target markets and the firms value proposition, based on an analysis of the best market opportunities

assigning resources to each SBU

management must decide how to allocate corporate resources to each SBU - portfolio-planning models - shareholder/market value analysis

choosing the value

marketers segment the market, select the appropriate target, and develop the offering's value positioning. The formula "segmentation, targeting, positioning (STP)" is the essence of strategic marketing.

measuring marketing productivity

marketing metrics marketing-mix modeling marketing dashboards

providing the value

marketing must identify specific product features, prices, and distribution

External Environment Analysis

marketing opportunity: converging industry trends making a buying process more convenient or efficient meeting the need for info and advice customizing an offering introducing a new capability delivering products or services faster offering a much lower price -environmental threat - contingency plans to deal with major threats

3 sources of marketing opportunity

offer something that is in short supply - requires little marketing talent, need is obvious second is to supply an existing product or service in a new or superior way - the methods *see below* third is consumption chain method - can lead to totally new product or service

strategic formulation

overall cost leadership differentiation focus

SWOT analysis

overall evaluation of the company's strengths, weaknesses, opportunities, and threats monitors external and internal marketing environment

problem detection method

part of the second marketing opportunity source - supply an existing product or service in a new or superior way asks customers for their suggestions

consumption chain method

part of the second marketing opportunity source - supply an existing product or service in a new or superior way asks them to chart their steps in acquiring, using, and disposing of a product can lead to a totally new product or service third main source of market opportunities

ideal method

part of the second marketing opportunity source - supply an existing product or service in a new or superior way has them imagine an ideal version of the product or service

modern marketing management

people processes programs performance

marketing implementation

process that turns marketing plans into action assignments ensures action assignments accomplish the plan's stated objectives

fulfillment management process

receiving and approving orders, shipping goods on time, and collecting payment

processes

reflects all the creativity, discipline, and structure brought to marketing management.

programs

reflects all the firm's consumer-directed activities.

people

reflects, in part, internal marketing and the fact that employees are critical to marketing success. Marketing will only be as good as the people inside the organization.

new-offering realization process

researching, developing, and launching new high-quality offerings quickly and within budget

marketer

someone who seeks a response-attention, a purchase, a vote, a donation-from another party, called the prospect

tactical marketing plan

specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service

Reintermediation

steps are added to the value chain as new players find ways to add value to the business process Now traditional companies are engaging in reintermediation and becoming "brick-and-click" retailers, adding online services to their offerings.

the new marketing realities figure

summarizes the three major market forces, two key market outcomes, and four fundamental pillars of holistic marketing that help to capture the new marketing realities.

new marketing realities

technology, globalization, social responsibility

marketing

the activity, set of institutions, and processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders

task environment

the actors engaged in producing, distributing, and promoting the offering

marketing management

the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value

marketing plan

the central instrument for directing and coordinating the marketing effort at two levels: strategic tactical written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives contains tactical guidelines for the marketing programs and financial allocations over the planning period

disintermediation

the cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries Amazon successfully created disintermediation in the delivery of products and services by intervening in the traditional flow of goods

engagement

the extent of a customer's attention and active involvement with a communication

corporate culture

the shared experiences, stories, beliefs, and norms that characterize an organization

marketing metrics

to assess marketing effects measures that help marketers quantify, compare, and interpret performance -sales metrics -customer readiness to buy metrics -customer metrics -distribution metrics -communication metrics

communicating the value

utilizing the internet, advertising, sales force, and any other communication tools to announce and promote the product. The value delivery process begins before there is a product and continues through development and after launch.

earned media

word of mouth, buzz, or viral marketing streams in which consumers, the press, or other outsiders voluntarily communicate something about the brand

core marketing concepts

•Needs: the basic human requirements such as for air, food, water, clothing, and shelter •Wants: specific objects that might satisfy the need •Demands: wants for specific products backed by an ability to pay

supply chain

•a channel stretching from raw materials to components to finished products carried to final buyers

value

•a combination of quality, service, and price (q s p: the customer value triad)

impressions

•occur when consumers view a communication

Assessing Growth Opportunities

-intensive growth -integrative growth -diversification growth -downsizing and divesting older businesses

marketing mix components

4 Ps product price place promotion

integrative growth

A business can increase sales and profits through backward, forward, or horizontal integration within its industry

core competencies

A source of competitive advantage and makes a significant contribution to perceived customer benefits Applications in a wide variety of markets Difficult for competitors to imitate

core business processes

Market-sensing process New-offering realization process Customer acquisition process Customer relationship management process Fulfillment management process

marketing accountability

Marketers are increasingly asked to justify their investments in financial and profitability terms as well as in terms of building the brand and growing the customer base

types of needs

Stated needs (The customer wants an inexpensive car.) Real needs (The customer wants a car whose operating cost, not initial price, is low.) Unstated needs (The customer expects good service from the dealer.) Delight needs (The customer would like the dealer to include an onboard GPS system.) Secret needs (The customer wants friends to see him or her as a savvy consumer.)