MGT-519 STRATEGIC MARKETING AAMER SIDDIQI

LECTURE 7

R E - CAP What can be Marketed Goods & Services The goods and services continuum Differentiation of Goods and Services The Total Product Offering – The Core Product – The Basic Product – Augmented product – Perceived product Branding

M ARKETING ’ S ROLE IN THE BUSINESS C ROSS - FUNCTIONAL ISSUES Marketing delivers added value through customer satisfaction and quality Customer satisfaction: Product meets or exceeding the buyer’s needs and expectations Customers today want more than products and services, they also want value Value in terms of the quality being commensurate with the price and cost of acquisition Value in terms of a product or service that exceeds expectations

C ROSS - FUNCTIONAL ISSUES ( CONT ’ D ) Value in terms of the brand reputation of the supplier; a reputation for quality Cost of acquisition: concept basic price to incorporate delivery/other charges Quality enhances firm’s competitiveness A slip in quality can damage a firm’s image and ability to compete Equally quality in areas such as Customer service can be palpable in terms of competitive advantage.

Figure shows a conceptual model for value and hints at the complexity involved, this is a primary reason why traditional economics based theory can never explain purchasing behaviour C ROSS - FUNCTIONAL ISSUES ( CONT ’ D )

When customers receive value they are remain satisfied with the company Continue relationship with the company To deliver this marketing has four major goals: 1. To develop deep understanding of customer’s needs, operating procedures and decision making processes 2.To formulate value propositions that meets customers’ needs and creates a differential advantage 3.To move from successful transactions with customers to long-term relationships based upon loyalty and trust 4.To understand that superior value requires superior knowledge, skills, systems and marketing assets C ROSS - FUNCTIONAL ISSUES ( CONT ’ D )

A key concept in Marketing is that of Customer satisfaction and feedback. Information is the foundation of understanding customer wants and needs Successful companies make every attempt to ensure the satisfaction Aastutely and assiduously collecting information. Best way to find customer satisfaction is to obtain customer feedback C ROSS - FUNCTIONAL ISSUES ( CONT ’ D )

Many businesses use of their website for customer feedback like comments and suggestions about products, services and experiences Customer complaints are excellent sources of customer feedback Many customers often feel greater loyalty after a conflict has been resolved than if they had never complained at all Customer service and satisfaction have key roles in marketing Personal selling also has a key role within marketing Personal selling is often a key aspect of such service, especially for products with intangible service elements C ROSS - FUNCTIONAL ISSUES ( CONT ’ D )

C USTOMER S ERVICE C ONCEPT A major change in the way companies organise themselves As firms switch from product-based to customer-based structures. Key driver of this change is the advent of Customer Relationship Management (CRM) Marketing concept is central to CRM CRM comprises of – information systems convergence – development of supporting software – organisational structure and training C ROSS - FUNCTIONAL ISSUES ( CONT ’ D )

S TRATEGIC M ARKETING P LANNING Strategic Marketing planning process:“The process of planning for a set of determinations that guides or directs the managers of an enterprise to reach their desired long-term market position within a certain target market.” The strategic marketing planning process consists of the following sequential activities: - The Strategic Marketing Planning Process (SMP)

Strategic planning process, spans a time period of 3 to 5 Years Marketing planning made every year Process starts from the corporate marketing plan – Provides direction on the company businesses – The company’s growth policies For International company operations, Decentralised Strategic marketing planning process – Company is divided in Strategic Business Units (SBU) Product Divisions (PD). – Each PD split up in Product/Market-Combinations (PMC) Every level has its own input in the strategic marketing process. S TRATEGIC M ARKETING P LANNING (C ONT ’ D )

Market research determining – Political environment – economic factors – entry and exit barriers – degree of concentration – market power via Porter’s Five Forces – The market situation Continuous analysis of the marketing environment is necessary includes analyzing the industry for – market potential – market size, – growth and – actions of competitors E NVIRONMENT AND SITUATION RESEARCH

Figure shows the overall environment that a business operates in and its constituents Environment within the firm is ‘Internal’ Environment outside the firm is termed ‘External’ E NVIRONMENT AND SITUATION RESEARCH (C ONT ’ D )

Internal aspects are directly within the span of control of the firm. Can be – Altered – Stopped – started at its decision Mintzberg’s game theory sums up the ‘internal’ aspects to the 5Ms; – Men – Money – Materials – Machinery – Minutes E NVIRONMENT AND SITUATION RESEARCH (C ONT ’ D )

External aspects – Completely outside the influence of the firm, laws, economics, social and technological changes for example – Substantively outside the control of the firm; suppliers, unions, local community and other stakeholders Firm may be able to influence these but it cannot control them To understand the interplay of factors in the environment a number of models are used E NVIRONMENT AND SITUATION RESEARCH (C ONT ’ D )

S UMMARY Marketing’s role in the business Cross-functional issues Customer Satisfaction & feed back Customer Relationship Management Strategic Market planning process Environment and situation research

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