Marketing explained and defined

Marketing orientation:
Organization devotes resources to understand

needs and buying behaviour of customers

competitors activities
strategies
market trends
external forces

Also focused on identifying how they will evolve -> Organizations strategy and
capabilities modified to reflect future market conditions
Important alongside marketing orientation:

Inter-functional coordination ensures that the organizations activities and

capabilities are aligned to this marketing intelligence

Not all organizations have marketing orientation: sales led, production oriented
(product development and production efficiency)
Marketing orientation advantages

better understanding of customers

helps a business prepare for external market developments, threats and
opportunities

Marketing defined
Marketing: individual and organizational activities that facilitate and expedite
satisfying exchange relationships in a dynamic environment through the
creation, distribution, promotion and pricing of goods, services and ideas.
Marketing: management process responsible for identifying, anticipating and
satisfying customer requirements profitably.
The importance of marketing

Understand customers and stakeholders

Address competitors activities
Address market developments
Harness its capabilities

Effective marketing results

Enhanced customer satisfaction and retention

Improved market share in key target markets
Stronger financial performance

Marketing rationale

Receive a product or service that satisfies customers needs

Product acceptable level of quality, reliability, customer service and
support
Available at places convenient for the customer
Exchange for something of value
Satisfied and happy customers
Customers return to the organization

Customers requirements change as their needs alter with time -> Marketers
must constantly assess their customers requirements and competitors offers &
prepare to modify their marketing activity.
Marketing environment: External changing forces within the trading
environment: laws, regulations, political activities, societal pressures, economic
conditions and technological advances.

Marketing strategy

Identify groups of customers where each market segment has similar

needs. Each offered a tailored product or service proposition and a
marketing mix programme.
Organization have limited resources, thus must prioritize which particular
groups of customers it has the ability to serve and which will provide
satisfactory returns & gives it an edge over its competitors.

Marketing mix: Product or offer must be clearly defined in line with

target customer needs

service levels and guarantees determined
pricing and payments decided
channels of distribution established
promotional strategies devised and executed

Marketing process (ASP)

Analysis first
Strategy decisions
Programmes (marketing) formulation

The definitions of marketing explored

Marketing facilitates satisfying exchange relationships
1. Two or more individuals, groups or organizations must participate.
2. Each party must possess something of value that the other party
3. Each party must be willing to give up its something of value to receive
the something of value held by the other party. The objective of a
marketing exchange is to receive something that is desired more than that
which is given up to get it that is, a reward in excess of costs.
4. The parties to the exchange must be able to communicate with each other
to make their something of value available

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Marketing occurs in a dynamic environment (external changing forces)

Marketing involves products, distribution, promotion, pricing and people
Marketing focuses on goods, services and ideas

The marketing process

Marketing analyses, strategy formulation and the creation or modification

of marketing programmes
Required when an organization contemplates entering new markets,
launching new or replacement products, modifying the brand strategy,
changing customer service practices, rethinking advertising and
promotional plans, altering pricing or evaluating distribution policies.
Unexpected sales patterns also require such a process of understanding,
thinking and action

(A) Marketing Analysis:

Customers needs, buying behaviour, expectations and product or brand

perceptions: -> Marketing programmes likely to attract, satisfy and retain
customers.
Competitors activities and plans: -> Marketing programmes combat
rivals and to differentiate an organizations product.
Marketing environment: -> Marketing programme sustainable in the longer
term. (As environment changes, important for organizations capabilities
are modified in order to reflect market conditions and likely demands)
Organizations capabilities, marketing assets and performance.

Internal organizational factors

Organizational objectives
Financial resources available
Managerial skills
Organizational strengths and weaknesses
Cost structures

Marketing environment forces

Political
Economic/competitive forces
Societal
Technological
Environmental
Legal/regulatory

Cannot predict changes in the marketing environment with certainty

Uncertainty also create opportunities
Identify emerging opportunities

How environment forces affect marketing?

Influence customers by affecting or regulating their lifestyles, standards of

living, preferences and needs for products (marketing tries to adapt
marketing mix to satisfy consumers)
Determine whether and how a marketing can perform certain activities
(cease or adapt new strategies)
Influence buyers reactions to the companys marketing mix
Provide an organization with a window of opportunity over rivals

(B) Marketing strategy:

Selecting the opportunities to be pursued and focus on specific target

markets
Develop a compelling brand positioning
Create a strong basis for competing rivals
Create marketing objectives, designed to hone the creation of marketing
programmes

Marketing opportunity

Exists when circumstances allow an organization to take action towards

reaching a particular group of customers
Provides a favourable chance or opening for a company to generate sales
from identifiable markets for specific products or services
Long-term survival depends on developing products that satisfy its
customers

Target market: Group of people for whom a company creates and maintains a
marketing mix that specifically fits their needs and preferences

Before identifying target market

Evaluate possible markets to see how entering would affect the companys
sales, costs and profits
Determine whether the organization has the resources to produce a
marketing mix that meets the needs of a particular target market
Determine whether satisfying those needs is consistent with the
companys overall objectives/mission
Consider size and number of competitors already marketing products

(C) Marketing programmes/mix

Specifying product, people, promotion (communication), pricing and place

(distribution channel) attributes and policies, designed to appeal to and
serve those customers identified as being in the priority target markets
(factors over which an organization has control)
Marketing programmes must be rolled out and controlled

Marketing mix development

Marketers develop a marketing mix that precisely matches the needs of

consumers

Collect in-depth, up-to-date information about those needs

Mix decision variables: Product, Place (distribution), Promotion and Price,
also People, who interact with customers & organizations within the
supply chain
Mix is built around the buyer
Variables are often viewed as controllable (but limitations to the extent
they can be altered)

Variable: Product

Researching consumers product wants and designing a product with the

desired characteristics
Creation or alteration of packaging and brand names
Decisions about guarantees, repair services and customer support

Variable: Place (distribution)

Products must be available at the right time and in a convenient location

Total inventory, transport and storage costs as low as possible
Supply chain (wholesalers, retailers and dealers etc.)

Variable: Promotion

Communication activities to inform groups about an organization and its

products (increasing public awareness)

Variable: Price

Activities associated with establishing pricing policies and determining

product prices
Often used as a competitive tool

Variable: People (used for services)

Customer service, advice, sales support and after-sales back-up

Recruitment policies, training, retention and motivation of key personnel

(D) Marketing management

Planning, organizing, implementing and controlling marketing activities to

facilitate and expedite exchanges effectively and efficiently
Planning: assessing opportunities and resources, determining marketing
objectives, developing a marketing strategy and constructing plans for
implementation and control. Determines when and how marketing
activities will be performed and who is to perform them

Organizing: developing the internal structure of the marketing unit by

function, product, region, type of customer or a combination
Implementing: Coordination of marketing activities, motivation of
marketing personnel and effective communication within the unit
Controlling: establishing performance standards, evaluating actual
performance by comparing it with established standards and reducing the
difference between desired and actual performance

Effectiveness (degree to which an exchange helps achieve an

organizations objectives) and efficiency (minimization of resources an
organization must spend to achieve a specific level of desired exchanges)
are important dimensions
Facilitate highly desirable exchanges and to minimize as much as possible
the costs

Marketing strategy and understanding competitors (B)

Strategic market plan

Outline of the methods and resources required to achieve an

organizations goals within a specific target market
Also takes into account all the functional aspects that must be
coordinated, such as production, IT, logistics, finance and personnel
Environmental issues considered

Strategic business unit (SBU)

A division, product line or other profit centre within a parent company

Sells a distinct set of products to an identifiable group of customers
Competes with a well-defined set of competitors
Revenues, costs, investments and strategic plans separated from parent
company and evaluated
Operate in a variety of markets, which have differing growth rates,
opportunities, degrees of competition and profit-making potential

Marketing plan

framework and entire set of marketing activities to be performed

Written document or blueprint for specifying, implementing and controlling
an organizations marketing activities and marketing mixes

Strategic market plan is not the same as a marketing plan. It is a plan of all
aspects of an organizations strategy in the marketplace while a marketing plan
deals primarily with implementing the marketing strategy as it relates to target
markets and marketing programmes
Marketing programme: Marketing mix activities and implementation processes
designed to operationalize the marketing strategy

Organizational mission, goals and corporate strategy

Organizational goals should be derived from its mission the broad, longterm tasks that the organization wants to accomplish

Mission answers three questions:

1. What is the companys core business/areas of activity?
2. How should these evolve?
3. What behaviours are required and expected?
A mission statement:

Gives the organization a clear purpose and direction, keeping it on track

and preventing it from drifting
Describes the unique aim of the organization that helps to differentiate it
from similar competing organizations
Keeps the organization focused on customer needs rather than its own
abilities. This ensures that the organization remains externally rather than
internally focused
Provides specific direction and guidelines to top managers for selecting
alternative courses of action. It helps them decide which business
opportunities to pursue, as well as which opportunities not to pursue
Offers guidance to all employees and managers of an organization, even if
they work in different parts of the world. As a result, the mission
statement acts like glue to hold the organization together

Organizational goals:

Examples of organizational goals include profit, return on investment, an

increase in market share, an increase/decrease in the number of active
markets, the desire to enter specific market sectors, to develop a
particular reputation and track record, to contribute to society in specific
ways, and to touch employees in a manner desired by them
Short-term and long-term goals (often sacrifice short-term results to
achieve long-term)

Corporate strategy

Determines the organizations vision and goals, and how best to utilize
resources and capabilities in the areas of production, logistics, finance,
research and development, human resources, IT, sales, business
development and marketing to reach the organizations goals.
Determines resource deployment, differential advantages and overall
coordination of its functional areas, people and their activities

Issues such as diversification, internationalization, acquisitions and

mergers, competition, differentiation, interrelationships among business
units and environmental issues
Match the resources of the organization with the various opportunities and
risks in the external environment

Organizational opportunities and resources

There are three major considerations in assessing opportunities and resources:
1. Evaluating marketing opportunities
2. Environmental scanning
3. Understanding the organizations capabilities and assets
Marketing opportunities: Circumstances and timing that allow an organization
to take action towards reaching a target market
Strategic window: A temporary period of optimum fit between the key
requirements of a market and the particular capabilities of a company competing
in that market
Market requirements: Requirements that relate to customers needs or desired
benefits
Environmental scanning: The process of collecting information about the
marketing environment to help marketers identify opportunities and threats, and
assist in planning
Capabilities: A companys distinctive competencies to do something well and
efficiently
Marketing assets: Customer, distribution and internal capabilities that
managers and the marketplace view as beneficially strong

SWOT analysis

Examination of an organizations strengths and weaknesses, opportunities

and threats, usually depicted on a four-cell chart
Strengths: refers to relate to those internal operational, managerial,
resource and marketing factors that managers believe provide a strong
foundation for their organizations activities and for their ability to
compete effectively in the marketplace
Weaknesses: Aspects of the organization, its products and activities in the
marketplace that place the organization at a disadvantage vis--vis
competitors and in the view of targeted customers
Strengths and weaknesses analysis fundamental for developing a
marketing strategy
Opportunities and threats: External facing issues of the trading
environment
Opportunities and threats analysis fundamental for developing strategic
windows

Strategic objectives and strategic focus

Having evaluated the overall corporate vision, must build on the analysis of
opportunities and internal capabilities by analytically assess the most promising
directions for their organization and marketing activity

Ansoffs productmarket matrix

Tool for determining competitive strategies: market penetration, market

development, product development or diversification
Assist in this decision-making
Helps in determining growth that can be implemented through marketing
strategies
Identifies sources for growth by addressing
1. Existing customers existing products/programmes.
2. Existing customers new products/programmes.
3. New customers existing or new products/programmes.
4. Adjacent/new markets existing or new products/programmes.

Intense growth: Growth that occurs when current products and current markets
have the potential for increasing sales

Market penetration: Strategy of increasing sales in current markets

with current products
Market development: Strategy of increasing sales in new markets with
current products
Product development: Strategy of increasing sales in current markets
by improving current products or developing new products
Diversification: Strategy in new markets of selling new products

Horizontal diversification: New products not technologically related to

current products are introduced into current markets

Concentric diversification: New products related to current products are

introduced into new markets
Conglomerate diversification: A process that occurs when new products
unrelated to current technology, products or markets are introduced into
new markets

Integrated growth: Growth that occurs in three possible directions; forwards,

backwards or horizontally
Forward integration: A company growing through takes ownership or increased
control of its distribution system
Backward integration: A company takes ownership or increased control of its
supply systems
Horizontal integration: A company takes ownership or control of some of its
competitors

Target market strategy and brand positioning

Central to companys corporate vision is to build up a loyal customer base of
satisfied customers
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