Marketing Management Irina P.

Shirochenskaya, PhD (Marketing)

Marketing Management: course outline The course is specially tailored to enlarge knowledge in the field of strategic marketing, and to give a clear picture of new trends in marketing as well as to give more practical skills in the field of marketing.

The course structure

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Duration: 17/6 weeks (February, 2 – May, 25) Weeks 1 - 7 : strategic planning issues, segmentation, positioning Week 8 : mid-term test – March, 23 Weeks 9 – 16 : marketing mix strategies Week 17 : group project presentations

including :  Lecture (theoretical issues)  Seminar (case analysis. question discussion)  Mini-Project presentation (individual or in small groups of 2-4 students).The course structure 3 classes per week. project discussion .

Written report (15 pages) .Group project presentation       Prepared in small groups of 4-5 students Choose a company Russian or overseas or imaginary Develop a strategic plan for its development Present your plan during an oral 20 minute presentation The presentation is assessed both by the tutor (50%) and the students (50%).

Coursework    Attending at least 75% of the classes Active participation in all class activities Contributing to the topics discussed .

. 2005 Lambin J. McGraw Hill.-J. 1980 Rudelius W.Text: Essential reading: Ph. Marketing Management 12-th edition. 2001 ” . 1998 Porter M. 2000 Peter Doyle. Kotler Marketing Management –The Millennium Edition Prentice Hall 2000 Recommended reading:  Phillip Kotler. Free Press. Strategic Marketing. Marketing Management and Strategy –2 Edition Prentice Hall. Marketing. 6th edition.      – Pearson Int. Competitive strategy: Techniques for Analysing Industries and Competitors.

E-mail : .

Lecture 1 Introduction to marketing management. . Marketing concepts.

offering. and freely exchanging products and services of value with others.MARKETING: some definitions (1)   Marketing is a societal process by which individuals and groups obtain what they need and want through creating. . Marketing is the art of selling products.

Ideally. be need for some selling. Peter Drucker . The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. All that should be needed then is to make the product or service available.MARKETING: some definitions (2) There will always. one can assume. But the aim of marketing is to make selling superfluous. marketing should result in a customer who is ready to buy.

Types of marketing (1) 1. 2. 3. Marketing as business philosophy and managerial concept Marketing as a set of effective and efficient tools needed for a company’s successful activity in competitive environment Marketing as a vital part of a company’s managerial system .

Strategic Marketing Operational/Tactical Marketing Holistic Marketing .

The STP formula is the essence of strategic marketing (Ph.Strategic marketing   Strategic marketing – company’s activities directed at achieving business goals by creating and delivering value to the market. Strategic marketing looks at creating and maintaining long-term profitability and maximizing company’s stock value. The marketing staff must segment the market. Kotler) . select the appropriate target and develop the offer’s value positioning.

price and promotion) Developing specific product features. prices. place. Kotler) .Operational/Tactical marketing   Tactical/operational marketing – company’s activities aimed at getting a certain sales volume at established markets by using tactical operations (i. promotion and distribution – part of tactical marketing (Ph.e. directed at product.

Traditional physical progress sequence Make the product Sell the product Des ign pro duc t Pro duc e Ma ke Pri ce Se ll Adv ertis e/Pr om ote Dis trib ute Ser vice .

Value creation and delivery sequence

Choose the value
Cust ome r seg men tatio n Ma rke t sel ect ion

Provide the value
Pro duct dev elop men t Ser vic e de vel op me nt

Communicate the value Sales force Sales promo tion Adv ertis ing

Val ue posi tion ing

Pri cin g

So urc ing Ma kin g

Strategic marketing

Tactical marketing

Holistic marketing
Company’s activity viewed as a universal, all-embracing process, including certain types of marketing:

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Integrated marketing Internal marketing Relationship marketing Social (oriented) marketing

Marketing management
Marketing (management) is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals
The American Marketing Association

skills and resources and its changing market opportunities. . The aim of strategic planning is to shape the company’s business and products so that they yield target profits and growth.Market-oriented strategic planning   A managerial process of developing a viable fit between the organization’s objectives.

Marketing planning process    In order to understand MM it is vitally important to understand marketing planning process. It starts from marketing concepts. marketing audit. through to developing objectives and marketing strategies. Implementing the plan is one the most challenging areas in business .

Тendencies of modern business development     Business globalization Emergence of multinational and transnational (Unilever. Siemens. City bank. IKEA. etc) Development of Franchising International branding . Microsoft. Coca-cola.

earning extraordinary rates of return. Personal selling can increasingly be conducted electronically. Outsourcing: From making everything inside the company to buying more goods and services from outside if they can be obtained cheaper and better. each managed by multidiscipline teams. . Business-to-business purchasing is growing fast on the Internet. therefore. E-commerce: From attracting customers to stores and having salespeople call on offices to making virtually all products available on the Internet.Current trends of changes in modern companies (1)    Reengineering: From focusing on functional departments to reorganizing by key processes. making them virtual companies owning very few assets and. A few companies are moving toward outsourcing everything.

Market-centered: From organizing by products to organizing by market segment. Global and local: From being local to being both global and local." Alliances: From trying to win alone to forming networks of partner firms.Current trends of changes in modern companies (2)       Benchmarking: From relying on self-improvement to studying "world-class performers" and adopting "best practices. Partner-suppliers. From using many suppliers to using fewer but more reliable suppliers who work closely in a "partnership" relationship with the company. Decentralized: From being managed from the top to encouraging more initiative and "entrepreneurship" at the local level .

Procter & Gamble .

Strategic Alliances .

Customer share: From a focus on gaining market share to a focus on building customer share. . Customer lifetime value: From making a profit on each sale to making profits by managing customer lifetime value. and channels. Companies build customer share by offering a larger variety of goods to their existing customers. profitable customer relationships. Companies focus on their most profitable customers.Major marketing themes as the millennium approaches (1)    Relationship marketing: From focusing on transactions to building long-term. They train their employees in cross-selling and upselling. products.

Recognition of corporate social responsibility is an important part of business behaviour and a key marketing issue in today’s world . that is carry out marketing activity in the way that is socially acceptable. ethically driven proactively incorporated into the organization’s vision. culture and day-to-day business activity. mission.Relationship marketing Marketing should be considered in the broader context of the wider public and society.

.Major marketing themes as the millennium approaches (2)     Target marketing: From selling to everyone to trying to be the best firm serving well-defined target markets. and profitability. demographics. Customer database: From collecting sales data to building a rich data warehouse of information about individual customers' purchases. From heavy reliance on one communication tool such as advertising or sales force to blending several tools to deliver a consistent brand image to customers at every brand contact. Customers will be able to design their own product features on the company's Web page. preferences. Integrated marketing communications. Individualization: From selling the same offer in the same way to everyone in the target market to individualizing and customizing messages and offerings.

Major marketing themes as the millennium approaches (3)    Channels as partners: From thinking of intermediaries as customers to treating them as partners in delivering value to final customers. . and customer support personnel to recognizing that every employee must be customer-focused. Every employee a marketer: From thinking that marketing is done only by marketing. sales. Model-based decision making: From making decisions on intuition or slim data to basing decisions on models and facts on how the marketplace works.

Concepts in marketing      Production concept Product concept Selling concept Market concept Societal concept .

Production concept  Consumers will prefer products that are widely available and inexpensive Developing or underdeveloped marketers Mass production and low costs Price sensitive customers    .

performance and innovative features Constant product improvement Consumers admire well-made products and appreciate quality Products with little or no marketing input “Marketing myopia” .Product concept      Consumers will favour the products that offer most quality.

Selling concept     Consumers and businesses if left alone will not buy enough. The organizations must undertake the aggressive selling and promotion effort Overcapacity and unsought goods To sell what we want rather than make what the market wants Public identifies marketing as promotion and selling .

Marketing concept  The key to achieving its organizational goals consists of a company being more effective and efficient in creating customer value to its chosen target markets .

Selling is preoccupied with the seller’s need to convert his products into cash.Marketing vs. delivering and finally consuming.” Theodore Levitt . marketing on the needs of the buyer. selling concept “Selling focuses on the seller. 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.

Determinants of Customer Delivered Value Factory Products Selling and Promotion Profits through Sales Promotion The selling concept Target market Customer needs Integrated marketing Profits through Customer satisfaction The marketing concept .

2.Four pillars of marketing concept 1. 4. Target market Customer needs Integrated marketing Profitability . 3.

not its initial price. 2.S. is low) Unstated needs (the customer expects good service from the dealer) Delight needs (the customer would like the dealer to include a gift of a U.Types of Customer Needs 1. Stated needs (the customer wants an inexpensive car) Real needs (the customer wants a car whose operating cost. 4. 5. 3.road atlas) Secret needs (the customer wants to be seen by friends as a savvy consumer .

1. Creative marketing A creative marketer discovers and produces solutions customers did not ask for but to which they enthusiastically respond. . 3. A responsive marketer finds a stated need and fills it. 2. Anticipative marketing An anticipative marketer looks ahead into what needs customers may have in the near future.Types of marketing based on needs Responsive marketing.

2.sales force. the various marketing functions . . marketing research .Integrated Marketing Integrated marketing takes place on two levels: First. marketing must be embraced by the other departments. product management." ("Marketing is far too important to be left only to the marketing department!“ David Packard of Hewlett-Packard ) 1. advertising. Second. they must also "think customer. customer service.must work together.

Internal marketing must precede external marketing. .Integrated Marketing    External marketing is marketing directed at people outside the company. Internal marketing is the task of hiring. training. It makes no sense to promise excellent service before the company's staff is ready to provide it. and motivating able employees who want to serve customers well.

The major objective of private firms is profit. A company makes money by satisfying customer needs better than its competitors. The major objective of nonprofit and public organizationst is surviving and attracting enough funds to perform useful work.Profitability The ultimate purpose of the marketing concept is to help organizations achieve their objectives. . Private firms should not aim for profits as such but to achieve profits as a consequence of creating superior customer value.

Traditional Organization Chart versus Modern Customer-Oriented Company Organization Chart a) Traditional organization chart (b) Modern customer-oriented organization chart Source: Ph. Kotler “Marketing Management” .

In your opinion. how many companies follow this concept? .

Unfortunately. not many! .

Lego. Disney And some others … . Electrolux. Cannon. Nordstrom. Toyota. IKEA.And still ……. Sony. Nokia. Body Shop Procter & Gamble . Marriot Hotels. Wal-Mart. Marks & Spencer.

How about Russian companies? Are there any? If you know. please share with us! .

Why follow this concept?      Sales decline Slow growth Changing buying patterns Increasing competition Increasing marketing expenditures .

Societal concept    Determine the needs. wants and interests of target markets and deliver desired satisfaction more effectively and more efficiently than competitors in a way that preserves consumer’s and society’s wellbeing Build social and ethical consideration to the marketing practices Balance between conflicting criteria of profits. consumer wants and public interest .

(McWilliams and Siegel.Social responsibility: definitions The obligations and accountability to society of individuals and organizations above and beyond their primary functions and interests. 2001) . Corporate social responsibility relates to actions which are above and beyond that required by law.

Social responsibility: definitions (2) Corporate social responsibility is one of business' contributions to achieving sustainable development. whilst minimizing any downsides. processes and products on the economy. regional. maximizing benefits to the business as well as society and the environment. society and the environment on a local. . national and global level. It is a term describing the way in which businesses take account of the impacts of their operation. It is about business behaving responsibly towards society and the environment ensuring economic development is sustainable.

Marketing and social responsibility Corporate social responsibility (CSR) refers to the attention of business to:  community involvement  socially responsible products and processes  socially responsible employee relation .

We respect our people's individuality and diversity. . encouraging them to develop their careers in a stimulating environment in keeping with our values.Egg's Corporate Social Responsibility Statement Our core values at Egg are honesty.egg. integrity and respect for people. Our customers are the reason we exist and we constantly look to offer them the products and services that put them in control of their money.

gales and significant flooding. the environment is under constant threat from global warming. All of this relates to environmentalism and as such means that organizations must in the future consider their strategy in relation to these issues. emissions of fumes and acid rain have to be taken seriously by marketing Wastage. Due to the high level of industrialization in the modern world. effluent. In recent times we have experienced severe weather effects. .Environmentalist™ . such as heavy rain.

Marks and Spencer go Carbon Neutral In January 2007 Marks and Spencer announced a £200 million 'eco-plan to make it carbon neutral in 5 years. This is a very good example of 'green marketing' particularly as Marks and Spencer confirmed that they will continue to sell great qualify. send no waste to landfill and 'set new standards in ethical trading'. Marks and Spencer will also focus on sourcing its food from the UK and Ireland as it looked to reduce air freight costs. as its contribution to the battle against climate change.marksandspencer. and aim to cut energy consumption and use renewables. www. It suggests that the plan they have in place would be consistent with taking 100 000 cars off the road each year. Food brought into the UK by plane would be labeled 'flown'. making the customer experience as important and valuable but changing business practices to retain profitability. stylish and innovative products. but want to increase sales as opposed to costs. Marks and Spencer are contributing towards the significant debate about long-term sustainability of business and resources. Marks and Spencer's actions signal the first in a range of changes that see organizations aiming to tackle the enormous challenges of climate change and . By 2012 MS said it would be carbon neutral.

The consumerist movement is a way of taking agreed action for specific purposes. for many years.The rise in consumerism    A major element of social responsibility is considering the impact of consumerism. . enforceable by law. they have not really been effective because of the cost of taking legal action. such as opposing the building of an additional airport terminal at Heathrow in London. Such schemes are often associated with local initiatives. The consumer movement is a diverse collection of independent individuals. Although consumers have had rights. groups and organizations seeking to protect the rights of consumers.

1995) (Strategic Marketing for Non-Profit Organizations.Consumerism: what is it?  Consumerism is an organized movement of concerned citizens and government to enhance the rights and powers of buyers in relation to sellers (Kotler. (1970) 'Consumerism: A Perspective for Business'. and Hills. G. Prentice Hall). moral and economic pressures on business (Cravens. 13. D.  Is a social force designed to protect the consumer by organizing legal. 5th edition. 2123). Business Horizons.. P. .

What is the situation concerning consumerism in Russia? What about other countries? .

Thank you for attention .

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