Marketing Management

Sales & Marketing Orientations The Marketing Approach
(Understanding Customer Requirements & Creating Customer Value)

The Value Chain Marketing Plan SWOT Analysis
12/03/10 1

Sales Orientation
Sales Orientation
The concept holds, the consumers will not buy enough of the organization's products unless the organization undertake a large selling and promotional effort. The selling concept is practiced most aggressively with unsought goods – goods that buyers normally do not think of buying, such as insurance policies. The selling concept is also practiced in non profit areas by fund raisers, college admission offices and political parties. Most firms practice the concept of selling when they have overcapacity. Their aim is to sell what they make rather than make what the market wants. It focuses on creating sales transactions rather than building on long term profitable relationships with its customers. This can, sometimes lead to a long term impact on sales because dissatisfied customers do not buy again. Worse yet, while the average satisfied customer tells three others about good experiences, the average dissatisfied customer tells ten others about his or her bad experience.



coordinates activities that affect customers and produces profit by satisfying customers. Customer needs. marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating.Target market. focuses on customer needs. The selling concept takes an inside out perspective. It starts with a well defined market. focuses on its existing products and calls for heavy selling and promoting to produce profitable sales. Selling is preoccupied with the seller’s needs to convert his product into cash. delivering and finally consuming it.Marketing Orientation Marketing Orientation The marketing orientation holds that the key to achieving organizational goals consists of the company being more effective than its competitors in creating delivering and communicating customer value to its chosen target markets. Their models are market specific and aimed at satisfying well defined segments of customers. Theodore Levitt of Harvard drew a perceptive contrast between selling and marketing concepts: “ Selling focuses on the needs of the seller: marketing on the needs of the buyer”. This concept can be widely seen in Nokia phones. 12/03/10 3 . The marketing concept rests on four pillars. It starts with the factory. The marketing concept takes and outside-in perspective. Integrated Marketing and profitability.

Sales & Marketing Orientations Marketing Orientation Profit Sales Orientation 12/03/10 Time 4 .

12/03/10 5 . Marketing oriented firms believe that the customer satisfaction is the thing that the customer wants unlike sales oriented firms that believe in quality and profits.Key Differentiators Marketing and Sales Orientations    Marketing orientation gives long term profit because customers do repeat purchases but sales orientation gives short term profits. The market oriented firms conduct researches to find out customer needs and wants unlike sales orientated firms that conduct researches only to find out why sales declined.

and changes in the political. It is a fundamental idea of marketing that organizations survive and prosper through meeting the needs and wants of customers. An organization that adopts the marketing concept accepts the needs of potential customers as the basis for its operations. Businesses do not undertake marketing activities alone. They face threats from competitors. social and technological environment. All these factors have to be taken into account as a business tries to match its capabilities with the needs and wants of its target customers. This matching process takes place in what is called the marketing environment. The marketing concept is about matching a company's capabilities with customer wants. 12/03/10 6 . Success is dependent on satisfying customer needs.The Marketing Approach      The marketing approach is all about understanding and satisfying customer needs. This important perspective is commonly known as the Marketing Concept. economic.

Consumer wants are shaped by social and cultural forces. but what they want to eat and in what kind of environment will vary enormously. many consumers around the globe want a Mercedes. Some consumers are never satisfied unless their food comes served with a bottle of fine Chardonnay. esteem and self-development. the media and marketing activities of businesses. For example.The Marketing Approach Need A need is a basic requirement that an individual wishes to satisfy. Customer needs are. but they also have to make them affordable to a sufficient number to create profitable demand. therefore. Want A want is a desire for a specific product or service to satisfy the underlying need. People have basic needs for food. For some. eating at McDonalds satisfies the need to meet hunger. For others a micro waved ready-meal meets the need. consumers need to eat when they are hungry. affection. For example. But relatively few are able and willing to buy one. businesses do try to influence demand by designing products and services that are Attractive Work well Affordable Available 12/03/10 7 . Businesses therefore have not only to make products that consumers want. It is not McDonalds that makes people hungry. Demand Consumer demand is a want for a specific product supported by an ability and willingness to pay for it. Many of these needs are created from human biology and the nature of social relationships. very broad. However. shelter. Businesses do not create customer needs or the social status in which customer needs are influenced.

The aim of these activities is to generate value that exceeds the cost of carrying out these activities. The value chain comprises of two groups of activities. thus generating a profit margin.The Value Chain Specific interlinked activities through which an organization can create competitive advantage are Collectively termed as Value Chain. Primary Activities Support Activities 12/03/10 8 .

The Value Chain 12/03/10 9 .

The Value Chain Primary Activities  Inbound logistics include the receiving. order fulfillment.  Operations are the value-creating activities that transform the inputs into the final product. including channel selection. 12/03/10 10 .  Service activities are those that maintain and enhance the product's value including customer support. advertising. including warehousing.  Outbound logistics are the activities required to get the finished product to the customer.  Marketing & Sales are those activities associated with getting buyers to purchase the product. repair services. and inventory control of input materials. etc. etc. pricing. warehousing. etc.

Human Resource Management . legal. 11 12/03/10 . and other technology development used to support the value-chain activities.includes activities such as finance. development. etc. quality management. and compensation of employees. Firm Infrastructure .the activities associated with recruiting.The Value Chain     Support Activities Procurement . process automation. Technology Development .the function of purchasing the raw materials and other inputs used in the valuecreating activities.includes research and development.

The Value Chain Value Chain Analysis  In order to better understand the activities leading to a competitive advantage. and these flows used to isolate the individual value-creating activities. one can begin with the generic value chain and then identify the relevant firm-specific activities.  The value chain also is useful in outsourcing decisions.  Once the discrete activities are defined. Understanding the linkages between activities can lead to more optimal make-or-buy decisions that can result in either a cost advantage or a differentiation advantage. Competitive advantage may be obtained by optimizing and coordinating linked activities. 12/03/10 12 . Process flows can be mapped. A linkage exists if the performance or cost of one activity affects that of another. linkages between activities should be identified.

The Value Chain The Value System 12/03/10 13 .

The result is a larger stream of activities known as the value system. 12/03/10 14 . The development of a competitive advantage depends not only on the firm-specific value chain.The Value Chain The Value System The firm's value chain links to the value chains of upstream suppliers and downstream buyers. but also on the value system of which the firm is a part.

The Marketing Plan 12/03/10 15 .

well written report that many inside and possibly outside the organization will evaluate. hopefully. It is an essential document for both large corporate marketing departments and for startup companies.     12/03/10 .The Marketing Plan The Marketing Plan is a highly detailed. is a key component in obtaining funding to pursue 16 new initiatives. sets future goals and provides direction for future marketing efforts that everyone within the organization should understand and support. heavily researched and. Essentially the Marketing Plan: forces the marketing personnel to look internally in order to fully understand the results of past marketing decisions. forces the marketing personnel to look externally in order to fully understand the market in which they operate.

such as a new business proposal to the financial community. There are many ways to develop and format a marketing plan. The approach taken here is to present a 6-Part plan that includes:  Purpose and Mission  Situational Analysis  Marketing Strategy and Objectives  Tactical Programs  Budgets. Performance Analysis and Implementation  Additional Consideration The marketing Plan Outline 12/03/10 17 . or trying a new strategy to fix an existing problem. such as new product planning.The Marketing Plan The Marketing Plan is generally undertaken for one of the following reasons:  Needed as part of the yearly planning process within the marketing functional area. entering new markets.  Needed for a specialized strategy to introduce something new.  Is a component within an overall business plan.

Such an analysis of the strategic environment is referred to as a SWOT analysis. and those external to the firm can be classified as opportunities (O) or threats (T). As such. The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. The following diagram shows how a SWOT analysis fits into an environmental scan: 12/03/10 18 . it is instrumental in strategy formulation and selection.SWOT Analysis A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W).

SWOT Analysis Environmental Scan Internal Analysis External Analysis Strengths Weaknesses Opportunities Threats SWOT Matrix 12/03/10 19 .

Examples of such strengths include: patents strong brand names good reputation among customers cost advantages from proprietary know-how exclusive access to high grade natural resources favorable access to distribution networks 20       12/03/10 .SWOT Analysis Strengths A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage.

      12/03/10 21 . For example. While this capacity may be considered a strength that competitors do not share.SWOT Analysis Weaknesses The absence of certain strengths may be viewed as a weakness. each of the following may be considered weaknesses: lack of patent protection a weak brand name poor reputation among customers high cost structure lack of access to the best natural resources lack of access to key distribution channels In some cases. a weakness may be the flip side of a strength. Take the case in which a firm has a large amount of manufacturing capacity. it also may be a considered a weakness if the large investment in manufacturing capacity prevents the firm from reacting quickly to changes in the strategic environment.

SWOT Analysis Opportunities The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include: an unfulfilled customer need arrival of new technologies loosening of regulations removal of international trade barriers     12/03/10 22 .

Some examples of such threats include: shifts in consumer tastes away from the firm's products emergence of substitute products new regulations increased trade barriers     12/03/10 23 .SWOT Analysis Threats Changes in the external environmental also may present threats to the firm.

Rather.SWOT Analysis The SWOT Matrix A firm should not necessarily pursue the more lucrative opportunities. In some cases. To develop strategies that take into account the SWOT profile. a matrix of these factors can be constructed. The SWOT matrix (also known as a TOWS Matrix) 12/03/10 24 . the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity. it may have a better chance at developing a competitive advantage by identifying a fit between the firm's strengths and upcoming opportunities.

SWOT Analysis The SWOT Matrix   Strengths Weaknesses Opportunities S-O strategies W-O strategies Threats S-T strategies W-T strategies 12/03/10 25 .

12/03/10 26 . S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats. W-O strategies overcome weaknesses to pursue opportunities.SWOT Analysis     S-O strategies pursue opportunities that are a good fit to the company's strengths.

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