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MG220 MARKETING MANAGEMENT

PART - I:
Understanding Marketing Management

SESSION 1 - 3
IMPORTANCE OF
MARKETING
SCOPE OF
MARKETING
CORE MARKETING
CHAPTER 1
CONCEPTS

Instructor:
Muhammad Talha Salam | talha.salam@nu.edu.pk

Welcome to the
world of
MARKETING

MG220 Marketing Management | Part - 1

Importance of Marketing
WHY IT IS REQUIRED?
3

Financial success Marketing Ability

Making the right decision - Simple?

Skillful marketing: A never-ending


pursuit

MG220 Marketing Management | Part - 1

Scope of Marketing
DEFINITIONS
4

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
American Marketing Association (AMA)

Marketing is the activity, set of institutions, and processes for creating,


communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large.
Approved: July 2013 | Retrieved: Aug 2015

MG220 Marketing Management | Part - 1

Scope of Marketing
DEFINITIONS
5

Marketing management is the art and science of choosing target


markets and getting, keeping, and growing customers through
creating, delivering, and communicating superior customer value
Philip Kotler

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
Societal definition of marketing
MG220 Marketing Management | Part - 1

Scope of Marketing
DEFINITIONS
6

A simple yet comprehensive definition:


Marketing is..

Meeting Needs
Profitably
MG220 Marketing Management | Part - 1

Scope of Marketing
WHAT CAN BE MARKETED?
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Can you market?

Ideas
People
Information
Experiences

How?
What else?
REF: BOOK FOR COMPLETE DISCUSSION

MG220 Marketing Management | Part - 1

Scope of Marketing
EXCHANGES & TRANSFERS
8

Exchange
Transaction
Transfer

What is the difference?


REF: BOOK FOR COMPLETE DISCUSSION

MG220 Marketing Management | Part - 1

Scope of Marketing
WHO MARKETS?
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Marketer, someone who seeks a


Response from another party, called
Prospect

Response can be ?

Marketers are responsible for Demand Management


Different Demand States

Negative | Non-Existent | Latent | Declining


Irregular | Full | Overfull | Unwholesome
REF: BOOK FOR COMPLETE DISCUSSION
MG220 Marketing Management | Part - 1

Scope of Marketing
WHO MARKETS?
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Markets, collection of buyers and sellers who transact


over a particular product or product class

MG220 Marketing Management | Part - 1

Scope of Marketing
WHO MARKETS?
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MG220 Marketing Management | Part - 1

Scope of Marketing
WHO MARKETS?
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Key

Customer Markets

Consumer
Branding | Mass selling | Insights

Business
Professional buyers | well-informed

Global
Adaptability | Operational matters

Non-profit & Government


Highly price sensitive | Competitive pricing

MG220 Marketing Management | Part - 1

Scope of Marketing
WHO MARKETS?
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Marketplaces
Physical | buying yourself

Marketspaces
Online | Ordering

Metamarkets
Complimentary products

MG220 Marketing Management | Part - 1

Core Marketing Concepts


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Needs

Wants

Basic Human Requirements

Needs which are directed to a specific object

Demands

Wants for specific products backed by ability to


pay (acquire)

MG220 Marketing Management | Part - 1

Core Marketing Concepts


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Understanding Needs (Example: Buying a Jeans)

Pair of jeans

Stated
=>
Quality
Real
=>
Affordable, Branded
Unstated
=>
A good discount deal
Delight
=>
wanna look cool!!!
Secret
=>

ANOTHER
PRODUCT?
MG220 Marketing Management | Part - 1

Core Marketing Concepts


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Satisfying everyoneYes/No? How? Why?

Target Markets & Segmentation

Different segments based on several factors

Segments presenting greatest opportunity

Positioning

Positioned carefully as delivering certain benefits

MG220 Marketing Management | Part - 1

Core Marketing Concepts


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Offering & Brand

Value Proposition by a company to fulfill a need is


crafted into an offering
An offering from a known source

e.g.
Whats the offering of (pick a brand)

MG220 Marketing Management | Part - 1

Core Marketing Concepts


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Value is perceived tangible and intangible


benefits and costs to customers

Satisfaction is fulfillment of a need

*WRONG*

Satisfaction is Persons comparative judgments


resulting from a products perceived performance

If performance < expectations:


dissatisfied/disappointed

If performance>=expectations: satisfied/delighted

MG220 Marketing Management | Part - 1

Core Marketing Concepts


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Marketing Channels
Communication channels

Interacting with target buyers with the message

Distribution channels

Display, sell or deliver the product or service

Service channels

Facilitating transactions with buyers

MG220 Marketing Management | Part - 1

Core Marketing Concepts


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Supply Chain (vs. Marketing


Channel)
Marketing Channel: Marketer to target buyer
While
Supply Chain: A complete value delivery system

From Raw materials to components to final buyers

Raw materials

MG220 Marketing Management | Part - 1

Core Marketing Concepts


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Competition

All the actual and potential rival offerings and substitutes


that a buyer might consider
Think about major competitor(s) brands OR products for:

MG220 Marketing Management | Part - 1

Core Marketing Concepts


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Marketing Environment

MG220 Marketing Management | Part - 1

Marketing in Practice
Part - 1

Defining

Marketing for Online Retailer:

Daraz.pk

TCS Connect

A review of industry & business model

How this particular industry (of e-shops) evolved?


What all is included in this business?
Is it an easy business?

Discussion Questions (TCS Connect):

Whats in it for TCS? Its so different from their main business (logistics and
shipping) why not focus on the existing business
So why they did it? WHATS CREATIVE ABOUT THIS?
OWN ACTIVITY:
VISIT: www.tcsconnect.com and www.daraz.pk

MG220 MARKETING MANAGEMENT | Fall 2014

PART - I:
Understanding Marketing
Management

SESSION 4 - 5
COMPANY ORIENTATIONS
THE NEW MARKETING
REALITIES
MARKETING & CUSTOMER
VALUE
CORPORATE & BUSINESS
CHAPTER
1-2
PLANNING

Instructor:
Muhammad Talha Salam | talha.salam@nu.edu.pk

Company Orientations toward the


marketplace
25

What are orientations (or concepts) toward the marketplace?

CLASS DISCUSSION: This discussion is important as it deviates slightly


Production
Company
Orientations

from textbook
and helps understand
this critical concept

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Company Orientations toward the


marketplace
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The Production Concept

Consumers will favor products that are widely available


& inexpensive
Focus on Production
Examples?

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Company Orientations toward the


marketplace
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The Product Concept

Consumer will favor those products that offer the most


quality, performance or innovation
Focus entirely on Product development
What if: not priced, distributed, advertised and sold
properly?
Examples?

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Company Orientations toward the


marketplace
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The Selling Concept

Customers (consumers & businesses), if not engaged,


will not buy enough
Aggressive selling & promotion is required
Practiced with unsought goods
Examples?

MG220 Marketing Management | Part - 1

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Company Orientations toward the


marketplace
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The Marketing Concept

Replace product-centered make-and-sell with senseand-respond


Reactive market orientation
Proactive market orientation
Examples?

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Company Orientations toward the


marketplace
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The Holistic Marketing Concept

Everything matters
Based on the development, design and implementation
of marketing programs, processes, and activities that
recognizes their breadth and interdependencies
4 Components:
Relationship marketing | Integrated marketing
Internal marketing | Social responsibility marketing / Performance
Marketing

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Company Orientations toward the


marketplace
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The Holistic Marketing Concept


Other departments
Marketing Department
Senior Management

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Company Orientations toward the


marketplace
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The Holistic Marketing Concept

Evolution of
Marketing Mix
[Traditional]

32

The New Marketing Realities


How businesses are changing
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The Marketplace isnt what it used to


be
(Selected List*)
General discussion from Pakistani perspective

Changing technology Information Age


Globalization

Deregulation & Privatization

Industry convergence blurring boundaries (what is technology sector)


Retail transformation
Disintermediation new options to deliver
Consumer Information
Consumer Resistance consumers resist to marketing & advertising

* This is selected List For complete list, see book

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Marketing in Practice

Qarshi

Part - 1
Qarshi
Pakistans leading herbal products brand

Local company
following

Holistic
marketing

Strategy review (Holistic marketing)

Internal marketing (taking employees on board / decisionmaking)

Integrated marketing (following the 4Ps)

Socially responsible marketing

Relationship marketing
(with customers / with channel partners)

Downsides in strategy

Centralized / personal decision-making


OWN ACTIVITY: Visit www.qarshi.com
Review different sections of the site to understand the company, its
history, its brands and strategies FORM YOUR OWN OPINIONS

Marketing & Customer Value


The Value Chain
35

Value Chain: A tool for identifying ways to create more


customer value

Every firm is a synthesis of activities for value-creation/delivery


etc.

Primary Activities (producing & marketing)


Support Activities (management of firm)

35

Marketing & Customer Value


The Value Chain
36

Firm should estimate its competitors costs and

performances as benchmarks against which it


compares its own costs and performance
Market
sensing
Success
Core
business
dependsprocesses
on core business processes
i.e.

MG220 Marketing Management | Part - 1

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Marketing & Customer Value


Core Competencies
37

Outsource the less critical and


Focus on Core Competency
Characteristics of Core Competency:

A Source of competitive advantage


Has Application in a wide variety of markets
Difficult for competitors to imitate

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Marketing & Customer Value


A Holistic marketing orientation & customer value
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Customer

Conceiving/
Designing

Company

Partners
These are the
activities/
considerations a
firm is involved in

Developing/
Producing

Delivering

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Marketing & Customer Value


The Central Role of Strategic Planning
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What makes companies/brands


successful?
These are some COMMON factors

Focus on Customers
Respond effectively to changing customer needs
Have well-staffed marketing departments
And all other departments in their organizations
understand:
CUSTOMER IS THE KING

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Marketing & Customer Value


The Central Role of Strategic Planning
40

Levels in Strategic Planning


[Typical]

Corporate Level

Division Level

Business Unit Level


Product Level

Marketing Plan
is central instrument for directing and coordinating
marketing effort
Strategic Marketing Plan lays out target markets &
value proposition
Tactical Marketing Plan specifics of marketing activities
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Marketing & Customer Value


The Central Role of Strategic Planning
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MG220 Marketing Management | Part - 1

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Corporate & Division Strategic Planning


Different

Planning Activities

42

Four Planning Activities


(at Corporate & Division level)
1.
2.
3.
4.

Defining the Corporate Mission


Establishing Strategic Business Units
Assigning Resources to each SBU
Assessing Growth Opportunities

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Corporate & Division Strategic Planning


1.

Defining the Corporate Mission

43

Peter Druckers classic questions

What is our business?


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

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Corporate & Division Strategic Planning


1.

Defining the Corporate Mission

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Mission Statements

Focus on LIMITED goals


Stress companys major policies & values
Define the major competitive spheres:
Industry

(in which company operates)


Products & Applications
Competence
Market Segment
Vertical (channels)
Geographical
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Corporate & Division Strategic Planning


2 & 3.

Defining Business / Establishing SBUs & Assigning Resources to SBUs

45

A business?

is a Customer-satisfying process
is NOT a Goods-producing process

Company

Product
definition

Market definition

Daewoo
Pakistan

We run buses

We are a people-and-goods
mover

Xerox

We make copying
equipment

We improve office
productivity

PSO

We sell gasoline

We supply energy

Columbia
Pictures

We make movies

We entertain people

Beaconhouse

We run schools &

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We educate people

Corporate & Division Strategic Planning


2 & 3.

Defining Business / Establishing SBUs & Assigning Resources to SBUs

46

A Strategic Business Unit (SBU) is:

Assigning
Resources
to SBU isis done
done using
using

portfolio
portfolio management
management tools
tools
and
and techniques
techniques
e.g.
e.g. BCG
BCG Matrix
Matrix // GE
GE Matrix
Matrix
etc.
etc.
(Not
(Not covered
covered here
here
Google
Google for
for own
own interest)
interest)

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Corporate & Division Strategic Planning


4.

Assessing Growth Opportunities

47

Strategic Planning Gap

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Corporate & Division Strategic Planning


4.

Assessing Growth Opportunities

48

Intensive Growth

Ansoff Product-Market Expansion Grid

48

Corporate & Division Strategic Planning


4.

Assessing Growth Opportunities

49

Integrative Growth

Integrations
Backward:
Acquire Suppliers
Forward: Acquire distributors/suppliers
Horizontal: Acquire Competitors

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Corporate & Division Strategic Planning


4.

Assessing Growth Opportunities

50

Diversification Growth

When good opportunities can be found


outside current business

N.B. This relates to new line of business NOT products

Downsizing & Divesting

Pruning & harvesting current portfolio

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Business Unit Strategic Planning


Process
51

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Business Unit Strategic Planning


SWOT Analysis
52

SWOT

Internal Environment Analysis


Strengths
Weaknesses

External Environment Analysis


Opportunities
Threats

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Business Unit Strategic Planning


Goal Formation
53

Setting objectives &


MBO - Managing by Objectives

Goals should have these characteristics


1.
They must be arranged hierarchically from the
most to least important
2.

Objectives should be
whenever possible

3.

Goals should be

4.

stated quantitatively

realistic
Objectives must be consistent

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Business Unit Strategic Planning


Strategic Formulation
54

Goals: What a business wants to achieve


Porters Generic Strategies

Strategy:
A game plan for getting there

Examples of Strategies
>>

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Business Unit Strategic Planning


Program Formulation & Implementation
55

Great Marketing Strategy can fail - If poorly


implemented

Strategy is one the seven elements in business


practice! (McKinsey) other elements are
Structure
Skills
StrategyValues
Style
Systems
Shared
Staff
important in implementation

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Business Unit Strategic Planning


Feedback & Control
56

track results and monitor


new developments

Need to

Need to

continuously examine
changing environment and to adopt
to new goals and behaviors

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Product Planning: Marketing Plan


57

Marketing Plan
A written document that summarizes
what the marketer has learned about the
marketplace and indicates how the firm
plans to reach its marketing objectives

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Product Planning: Marketing Plan


58

Typical Contents of a
MARKETING PLAN>>
Executive Summary & TOC

Very important: Self Read Exercise


Review marketing plan given in book
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Marketing in Practice
Part - 1
Lakson Group - One of most prolific conglomerates

Planning horizons
What kind of planning will be done at:

Corporate / Division level

Lakson group
(The complete conglomerate)

Media division
(one of the divisions )

Business Unit planning

Express News
(an SBU within media division)

Product Planning

Launching a new News show


(a product for the SBU)

OWN ACTIVITY:
Visit www.lakson.com.pk
Learn about the complete group

Lakson
Group

Planning at different
levels