Marketing Strategy

Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefi

Marketing Strategy

COURSE OUTLINE

Part 1 : What is Marketing ?

Part 2 : Importance of Marketing.

Part 3 : Marketing Plan.

Part 4 : Marketing Strategy.

Part 5 : Positioning.

PART 1 WHAT IS MARKETING ?

What is Marketing?

• It is the most interesting, dynamic, versatile of all academic disciplines

• It is both theoretical and practical in nature

• It yields real results in the form of profits and/or satisfaction of business aims/objectives

• Overall, it enhances human and national

economic development/progress

What is Marketing?

1 Marketing is an organizational function and a set

of processes for creating, communicating and

delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders

2 Marketing is a societal process by which

individuals and groups obtain what they need

and want through creating, offering, and freely exchanging products and services of value with others

Recent formal Definition of

Marketing

• Marketing is an organizational function and a set

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

Source: American Marketing Association, 2004

The Marketing Concept (key issues)

• Organizations must concentrate on the customer and not the product or the company

• Organizations should revolve round the customer and not the other way around

• The purpose of a business is to create and keep a customer (Theodore Levitt)

Some Criticisms of Marketing

• Too many advertisements are annoying,

misleading, or both

• There are too many unnecessary products

• Middlemen raise prices but don’t add value

• Marketing makes people materialistic

• Most of the criticisms result from

misunderstandings about marketing (Perreault & McCarthy, 1999)

Do you know your market?

• What is the product or service being offered?

• What are the market trends in the industry?

• What is the market?

• Who are your customers? And what are they looking for?

• Who are your competitors? And how do they operate/react/behave?

• Why do (should) your customers buy your

product/service rather than that of your

competitors?

Marketing vs Sales

Peter Drucker

“The aim of marketing is to make sales superfluous”

Marketing vs Sales

• Marketing is a more comprehensive process

• Sales – focus on needs of Seller

• Marketing – focus on needs of buyer

• Selling has a short term outlook

• Marketing has a long term vision

PART 2

IMPORTANCE OF MARKETING ?

Importance of Marketing

• According to the Customer Service Institute, it

costs as much as five times as much to acquire a new customer than it does to service an existing one

• Customers tell twice as many people about a bad experience over a good one

• For an average company, 65% of its business

comes from its presently satisfied customers.

What is a Market ?

• According to Kotler (2004), “a market consist of all the potential customers sharing a particular need or want who might be willing and able (i.e., propensity to) to engage in exchange to satisfy that need or want”

Source: Kotler, P (2004), Marketing Management, Prentice-Hall, Englewood Cliff, NJ.

Market Types

• Consumer Markets

• Industrial/Business to Business Markets

• Reseller (Retailers, Distributors) Markets

• Publics (Government

agencies/departments/institutions)

• International/global Markets

Product Orientation

• Focus on the technical perfection of the

product/service seen through the producer’s (firm) eyes

• Assumes customers will perceive

product/service in the same way and thus buy

Selling Orientation

• Focus on persuading (usually aggressive)

customers to buy products which do not usually match their requirements

• This is unlikely to lead to repeat buy/business

Customer Orientation

• Focus on discovering customer needs (basic

survey/question & answer type) and satisfying them

• This is unlikely to make best uses of production and other organizational resources

Marketing Orientation

• Focus on the identification of customers needs, organizational resources and objectives

• Achieve effective match through market

segmentation, targeting, positioning and

resource development

Social Responsibility and

Marketing Ethics

• Social responsibility concerns a firm’s

obligation to improve its positive effects on

society and reduce its negative effects

• Marketing ethics are the moral standards that guide marketing decisions and actions

Needs, Wants, Demand

• Needs are basic human requirements

• Wants are needs directed to specific

objects/services that might satisfy the need

• Demand - this is the wants for specific

products backed by an ability to pay

Segmentation, Targeting,

Positioning

• Segmentation: grouping consumers by some

criteria

• Targeting: choosing which group(s) to sell to

• Positioning: select the marketing mix most

appropriate for the target segment(s)

• Product

• Promotion

• People

• Packaging

5 C's of Marketing

• Customer (customer needs, segments,

consumer behavior)

• Company Skills (brand name, image, production

capability, financial strengths, organization, etc.)

• Competition (actions are interrelated, market

environment)

• Collaborators (downstream wholesalers or

retailers, upstream suppliers)

• Context (culture, politics, regulations, social

norms)

1 Marketing Department to Marketing Organization

2 Focus on Product Unit to focus on Segments

3 Working with fewer suppliers

4 Emphasis on intangible assets

5 Online interactions

6 Market share Vs share of wallet

7 Global

8 Stakeholders Vs Shareholders

3 The firm needs to better define its competitors

and monitor them

4 The firm is not good at finding new opportunities

5 The firm has not managed well its relationship

with stakeholders

Marketing Sins

6 The firm’s market plans and planning processes

are deficient

7 The firm’s products need tightening

8 Weak brand building and communication

9 The firm is not well organized to carry on

marketing

10.Lacking in use of technology

Marketing and Customer Value

Value and Satisfaction

PART 3

MARKETING PLAN

Marketing Plan

• A marketing plan is the central instrument for

direction and coordination the marketing efforts

• The strategic marketing plan lays out the target

markets and the value proposition that will be offered based on an analysis of the best market

Objectives of the marketing plan

• To obtain resources for implementation

• To stimulate thinking and make better use of

resources.

Contents of the Marketing Plan

• Executive summary and table of content.

Brief summary of main goals

• Situation analysis

Data on sales, costs, the market competitors and the various forces in the microenvironment How is market defined, how big it is, how fast it is growing?

Contents of the Marketing Plan

Implications of Marketing

• Who are our existing/potential customers?

• What are their current/future needs?

• How can we satisfy these needs/

• Can we offer a product/service that the customer would value?

• Can we communicate with our customers?

• Can we deliver a competitive product or service?

• Why should customers buy from us ?

Group Activity

• Do a Porter 5 forces analysis for any product of your choice

PART 4

MARKETING STRATEGY

Marketing Strategy

• The selection of a course of action from among several alternatives that involves specific customer groups, communication methods, distribution channels, and

pricing structures.

• It is a combination of target markets and marketing mixes.

Target Market

• A target market is a market segment

selected by a hospitality and travel

organization for marketing attention.

• Market segmentation involves dividing

customers into groups (market segments) with common characteristics.

Marketing Mix

• A marketing mix includes those

controllable factors that have been chosen

to satisfy customer needs.

• The eight controllable factors are product, price, place, promotion, packaging,

programming, partnership, and people.

• These are also know as the 8 Ps.

Relationship Marketing and

Strategic Alliances

Relationship Marketing

• Placing an emphasis on building, maintaining, and enhancing long-term relationships with customers, suppliers, travel trade intermediaries, and perhaps even competitors.

Strategic Alliances

• Special long-term marketing relationships formed between two

or more hospitality and travel organizations, or between a

hospitality and travel organization and one or more other types

of organizations (e.g., KLM and Northwest, STAR alliance).

• Positioning is the development of a

service and a marketing mix to occupy a specific place in the minds of customers within target markets.

Segmented Marketing

Strategies

• Approaches that recognized the differences among target markets by using individualized marketing mixes for each of the target markets selected by a hospitality or travel organization Also known as a differentiated strategy

• The three alternative segmented strategies are:

- Single-target-market strategy

- Concentrated marketing strategy

- Full-coverage marketing strategy

Undifferentiated Marketing

Strategy

• A strategy that overlooks segment

differences and uses the same marketing mix for all target markets.

Alternative Strategies for Product Life Cycle Stages

Alternative Strategies for

Product Life Cycle Stages

• Growth Stage

- Improve service quality and add new

service features and elements

- Pursue new target markets

- Use new channels of distribution

- Lower prices to attract more

price-sensitive customers

- Shift some advertising emphasis away from building awareness to creating desire and action

Alternative Strategies for Product Life Cycle Stages

- Reduce costs and milk the company.

- Sell off or get out of the business.

Alternative Strategies

by Industry Position

Market Leaders

• Expand the size of the total market.

• Protect market share.

• Expand market share.

Market Challengers

• Take on or attack the market leader.

PART 5

POSITIONING

• Positioning is the development of a

service and a marketing mix to occupy a specific place in the minds of customers within target markets.

Reasons for Increased Importance of Positioning

1 Perceptual processes of customers

- They screen out most information

Steps Required for Effective

Positioning (the five Ds)

• What image do you

want your current and

organization different from them?

you have “delivered?”

Positioning Approaches: Six Major Alternatives

• Specific product features.

• Benefits, problem solution, or needs.

• Specific usage occasions.

• User category.

• Against another “product”.

• “Product class” dissociation.

Thank You