NPC Lecture 1 Marketing Management Dr. Derek N. Hassay

NPC Lecture 1 What is Marketing? “Satisfying consumer needs and wants… profitably!”

NPC Lecture 1 Core Concepts in Marketing Goods & Services Needs, wants, and demands Exchange, transactions, and relationships Markets Value, satisfaction, and quality

NPC Lecture 1 What is Marketing? “In the factory we make cosmetics; in the drugstore we sell hope.” Charles Revson

NPC Lecture 1 General Management Philosophies Production Concept Societal Marketing Concept Marketing Concept Product Concept Selling Concept

NPC Lecture 1 The Societal Marketing Concept Consumers (Satisfaction) Company (Profits) Society (Public Welfare)

NPC Lecture 1 Maximize Consumption Maximize Choice Maximize Quality of Life Maximize Satisfaction Marketing System Goals

NPC Lecture 1 “Worshipping the marketing concept stifles innovation.”

NPC Lecture 1 Customer Value - = Total Customer Value Total Customer Cost (Product, Service, Personnel,& Image Values) (Monetary, Time, Energy,& Psychic Costs) Customer Delivered Value (Profit to theConsumer)

NPC Lecture 1 Value-Building Approaches Financial Benefits Social benefits Structural Ties

NPC Lecture 1 Customer Satisfaction Customer Delight Customer Delight Expectations Satisfaction The Goal of Customer Satisfaction Expectations Met Expectations Exceeded

NPC Lecture 1 Types of Loyalty Loyalty Spurious Loyalty Latent Loyalty No Loyalty Positive Negative Always/OftenSeldom/Never Attitude/Affect Frequency of Purchase

NPC Lecture 1 Retaining Customers New Customer Costs Lost Customer Costs Customer Lifetime Value

NPC Lecture 1 Elements of a Marketing Strategy Target Consumers Product PlacePrice Promotion

NPC Lecture 1 “Marketing is not an event, but a process…It has a beginning, a middle, but never an end, for it is a process. You improve it, perfect it, even pause it. But you never stop it completely.” Philip Kotler Marketing Management

NPC Lecture 1 Steps in Strategic Planning Defining the Company Mission Defining Company Objectives and Goals Designing the Business Portfolio Production, Marketing and Other Functional Strategies Corporate Level Business Level

Place Target Market Product Price Promotion Marketing Strategy Elements Marketing Mix (the 4Ps) + Target Market = Marketing Strategy

Analysis Planning Place Target Market Control Product Price Implementation Marketing Management Framework

Objectives Mission StrategiesPortfolio The Marketing Management Framework The Corporate Strategic Plan

Economic Environment AnalysisPlanning Place Control Product Price Promotion Implementation Target Market Resources Marketing Intermediaries PublicsCompetition Corporate Objectives Suppliers Political/Legal Environment Natural Environment Technological Environment Demographic Environment Social/Cultural Environment The Marketing Environment

AnalysisPlanning Place Control Product Price Promotion Implementation Target Market Resources Marketing Intermediaries PublicsCompetition Corporate Objectives Suppliers Economic Environment Political/Legal Environment Natural Environment Technological Environment Demographic Environment Social/Cultural Environment

NPC Lecture 1 “Induce your competitors not to invest in those products, markets and services where you expect to invest the most … that is the fundamental rule of strategy.” Bruce Henderson, Founder of BCG “One does not rely on the enemy not attacking, but relies on the fact that he himself is unassailable.” Sun Tsu, The Art of War Competitive Strategy

NPC Lecture 1 Strategies of Firms in a Hypothetical Market Structure 40% Market leader 30% Market challenger 20% Market follower Expand Market Defend Market Share Expand Market Share Attack leader Status quo Imitate 10% Market nicher Specialize

NPC Lecture 1 Pursuing a Niche Strategy End-user specialist Vertical-level specialist Customer-size specialist Specific-customer specialist Geographic specialist Product or product-line specialist Product-feature specialist Job-shop specialist Quality-price specialist Service specialist Channel specialist

NPC Lecture 1 Defensive Strategies Attacker (3)Preemptive defense (4)Counter- offensive defense Defender (1) Position defense (5) Mobile defense (2) Flank defense (6) Contraction defense

NPC Lecture 1 Position Defense

NPC Lecture 1 Offensive Strategies Defender (3) Encirclement attack (4) Bypass attack (2) Flank attack (5) Guerilla attack (1) Frontal attack Attacker

NPC Lecture 1 Management Decision-making with “Case Analysis” Situation Analysis Identification of Key Marketing Issue Identification of Objectives (Decision Criteria) Generation & Evaluation of Alternatives Recommendation Implementation Plan

NPC Lecture 1 Situation Analysis External Environment: Opportunities & Threats –Industry (barriers to entry, sales trends) –P.E.S.T. (stability, forecasted changes) –Competition (resources, position) –Customers (preferences) –Channels Internal Environment: Strengths & Weaknesses –Marketing Mix –Consumer Awareness –Assets, Skills,Resources

NPC Lecture 1 Key Marketing Issue(s) Idea is to present the issue facing the firm in a succinct manner (2-3 sentences). May not be a problem, may be an opportunity. Caution: Make sure that you have identified the cause and not the symptom of a problem?

NPC Lecture 1 Generation of Objectives (Decision Criteria) Qualitative: Issues of “fit” Timeliness Available Skills Capacity Quantitative: Profit Market share Awareness ROI

NPC Lecture 1 Generation & Evaluation of Alternatives Selection of 3-4 feasible, mutually distinct alternatives Doing nothing (i.e., status quo) is rarely a feasible alternative Evaluation (advantages, disadvantages) of alternatives based upon decision criteria

NPC Lecture 1 Recommendation Brief statement outlining: Why the recommended course of action is the best available alternative. Decision must be based upon criteria and must be an evaluated alternative Implementation Plan Specifically what is to be done: By whom When Where