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Introduction

Marketing Management Tim P. McMahon

MBA 761: Marketing Management


Goal Syllabus

Attendance
Grading
Threaded Discussion 50% Written Assignments 20% Case Study Write-up 30%

Explore Course Content: What is

brand strategy?

Learning Sources

Textbook

Case Study

Business Press

Course PPs

Case Method
Allows us to illustrate what we have learned by showing real-life theories and concepts in practice. In this sense, one becomes a better analyst by virtually testing responses to various theories or actions. Further, because we work collaboratively, one becomes keenly aware of the importance of the contribution of each member in: identifying the problem, creating a workable solution, and committing to its solution In this sense, the lines between marketing and management are blurred but the picture is clear: it takes extraordinary leadership and keen understanding of the role of marketing to develop and execute competitive advantage.

Marketing Management

1. Strategy

Foundation for Action

Learning Objectives
Review of Marketing 101 Explain the conceptual schematic used in this

course Discuss strategy in the 21st Century

Marketing Roots
In his landmark book on marketing, Theodore Levitt (1983) wrote: The purpose of a business is to create and keep a customer (p. 7). Customers are a requisite for an organization to generate commerce.

Marketing Simplified: Get and keep customers

Marketing Roots
Michael Porter (1998) pointed to value creation as the condition for customer development and retention: [v]alue is what buyers are willing to pay, and superior value stems from offering lower prices than competitors for equivalent benefits or providing unique benefits that more than offset a higher price (p. 3).

How do you get and keep customers? Create Value

Strategic Marketing
Marketing is an organizational function and a

set of processes for creating, communicating and delivering value to customers and for managing relationships in ways that benefit the organization and stakeholders (Akhter, p. 5) Strategic marketing is the configuration of marketing offerings for specific product-markets to achieve a sustainable competitive advantage (p. 5)

Marketing & Information Age


Purpose is who we are and what makes us distinctive. Its

what we as a company exist to achieve, and what were willing and not willing to do to achieve it (Prokesch, 1997, p. 153). So, it is essential for members of a firm to understand their collective purpose because it informs their decisions and causes them to act. Information then is basic to human organizations, and with it comes access to power, authority, and influence, as well as the ability to hold advantage (Cleveland, 1985).

Schematic of the marketing process


Customers Company Competitors Collaborators Context

Marketing Segmentation
Creating Value

Target Market Selection

Product/Service Positioning

Product/Service Capturing Value

Place/Channels Pricing

Promotion

Sustaining Value

Customer Acquisition
PROFITS

Customer Retention

This figure is derived from a variety of similar representations developed over the years by the Harvard Business School. From Silk, A. J. (2009). What is marketing? Boston: Harvard Business Press.

5 Cs
Customer Needs: What needs does the firm seek to satisfy?
Company Skills: What special competence does the firm

possess to meet those needs? Competition: Who competes with the firm in meeting those needs? Collaborators: Whom should the firm enlist to help it and how can the firm motivate them? Context: Which cultural, technological, and legal factors limit the possibilities?
These questions lead to specification of a target market and desired positioning and then to the marketing mix. This results in customer acquisition and retention strategies driving the firms profitability.

Target Market Selection


Strategic marketing development begins with the customer. Prerequisite: who will you serve?

The Central Role of Marketing


1. Marketing is the process through which a firm creates 2.

3.
4.

5.

value for its chosen customers. Value is created by meeting customer needs. So, a firm must define itself not by the product it sells, but by the customer benefit provided. If a firm creates value for its customers, the firm is entitled to capture a portion of that value through pricing. To remain viable, the firm must sustain this process of creating and capturing value over time.

Marketing Roots
Strategy: How do we construct a firms assets and specific capabilities to successful outcomes?
A FIRMS ASSETS DESIRED OUTCOMES

It is the requisite of business to make a profit, its purpose is to keep and get customers

brand names trade secrets know-how technology contracts more

STRATEGICALLY LINKED THRU:


objectives scope policies

profits competitive advantage sustainability betterment

Keep it simple: get and keep customers. Customers are the core around which firms develop marketing strategies. Both the survival and growth potential of a firm depend on how well it satisfies the needs and wants of customers relative to its competitors. (Akhter, 2006, p. 28)

Marketing Roots
To accomplish the task of creating strategic marketing

We will develop a framework that includes:

Business Model

Marketing Process

The business model is the logical set of components that make up a business, including the physical elements, markets, and the financial requirements

The marketing process is the roadmap we will use for constructing and executing the marketing strategy that connect marketing to the business model
(Treacy & Wiersema, 1995, p. 19)

Strategy
Business Strategy has often been centered on war concepts. Consider: Overcome with wisdom, not force. Know yourself and the

enemy to achieve victory. Dont take things for granted, strategy needs to be dynamic. (Sun Tzu 500 BC) World is ruled by strength and self-interest. Be good and courageous. (Thucydides. 400 BC) Politics is central and war is uncertain. (vonClausewitz, 1832) Firms are pools of unique resources that capitalize on interaction. (Penrose, 1968) Economic progress results from economic destruction. Innovation is the primary agent that causes change. (Schumpeter,
1942)

Strategic Marketing
The concept cradled in war terms makes sense because business

operates and is often stimulated by a competitive environment.


However, as Wally Armbruster (1982) wrote: we ought to stop

making war on the competition and start making love to the consumer (p. 64). He introduces the idea that effective strategy considers the importance of the competitor but not at the expense of the customer.
The reality is that great strategies are only great if they are

executed well and meaningfully. This perspective considers the many resources it takes to be successful with strategy.

Management Orientation
The marketing mix is often called the 4 Ps: product, price, place, and promotion. In reality, when firms plan and execute marketing, they are informed by their unique perspective and this shapes decision making.
PRODUCTION
Efficiencies and cost minimization

SOCIETAL
Build a better mousetrap

THE FIRM

PRODUCT
Build a better mousetrap

Research shows this one leads to better performance

MARKET
Superior value = competitive advantage

SALES
Grow sales and increase share (Akhter, 2006, pp. 7-9)

Management Orientation
The marketing mix is often called the 4 Ps: product, price, place, and promotion. In reality, when firms plan and execute marketing, they are informed by their unique perspective and this shapes decision making.
Components of Market Orientation
Customer: Understanding the target markets to create superior value continuously Competitor: Understanding the strengths and weaknesses of current and potential competitors Interfunctional Coordination: Coordinate the firms resources for creating superior valueits people, its stuff, and its money.

MARKETING

Superior value = competitive advantage

(Akhter, 2006, pp. 7-9)

Strategic Marketing
Lets take a look at the most visible aspect of marketing, persuasion. Cut and paste this URL in your browser:
http://www.pbs.org/wgbh/pages/frontline/shows/persuaders/etc/synopsis.html

Then, click on WATCH ONLINE

Then, click on A High Concept Campaign

RUNNING TIME: 13:12 As you view, the business model and how management orientation influences strategic marketing decision making

Definitions

Marketing: A broad general responsibility. Not just an organizational function, It is a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization. Strategic marketing: The configuration of marketing offerings for specific product-markets to achieve a sustainable competitive advantage. Mission statement: Specifies the current business of the company (purpose). Vision: Where are we going? What is the gap we must bridge to get us there? Strategic vision: Specifies the future business of the company. Market responsiveness: Ability of firms to capitalize on market developments. Marketing strategy: The plan by which value is created on a sustained basis. It involves (a) selecting a target market and determining the desired positioning of the product in the target customers minds, and (b) specifying the plan for the marketing activities to achieve the desired positioning. Corporate level strategy: Developed at headquarters by top level executives. Execution: Specifies who will do what, how, when, and where. Strategic analysis: The process through which managers arrive at decisions. Strategic inertia: The tendency to maintain status-quo. Strategic planning: Process through which firms arrive at decisions to employ their scarce resources for achieving organizational goals.

References
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