Post on 20-Aug-2015
What is ‘Marketing’?
1.Marketing is an organisational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders
2.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.
Marketing vs Sales
• Marketing is a more comprehensive process
• Sales – focus on needs of Seller• Marketing – focus on needs of buyer
• Selling has a short term outlook.. Marketing has a long term vision
Importance of Marketing
• According to the Customer Service Institute, it costs as much as five times as much to acquire a new customer than it does to service an existing one.
• Customers tell twice as many people about a bad experience over a good one.
• For an average company, 65% of its business comes from its presently satisfied customers.
Marketing Myopia
There is no ‘growth’ industry
• Belief that growth is assured by an expanding and affluent population
• Belief that there is no competitive substitute for the industry’s major product
• Too much faith in mass production• Preoccupation with the product and with R&D
Demand
1. Negative Demand2. Non-existent Demand3. Latent Demand4. Declining Demand5. Irregular Demand6. Full Demand7. Overfull Demand8. Unwholesome Demand
5 C's
• Customer (customer needs, segments, consumer behavior)
• Company Skills (brand name, image, production capability, financial strengths, organization, etc.)
• Competition (actions are interrelated, market environment)
• Collaborators (downstream wholesalers or retailers, upstream suppliers)
• Context (culture, politics, regulations, social norms)
Changes
1.Marketing Department to Marketing Organisation
2.Focus on Product Unit to focus on Segments
3.Working with fewer suppliers
4.Emphasis on intangible assets
5.Online interactions
6.Market share vs share of wallet
7.Glocal
8.Stakeholders vs Shareholders
Marketing Challenges
The danger of 1P marketing
Training
Getting reliable/useful customer info
Low cost, high quality competition
Power of distributors/retailers
Measuring impact of marketing
Marketing Sins
1. The firm is not sufficiently market-focused or customer-driven
2. The firm does not fully understand its target customers
3. The firm needs to better define its competitors and monitor them
4. The firm is not good at finding new opportunities
5. The firm has not managed well its relationship with stakeholders
Cont..
6. The firm’s market plans and planning processes are deficient
7. The firm’s products need tightening
8. Weak brand building and communication
9. The firm is not well organised to carry on marketing
10.Lacking in use of technology
Core Competency
• It is a source of competitive advantage• It has an application in a wide variety of
markets• It is difficult for competitors to emulate
SWOT
• Only accept precise, verifiable statements
• Ruthlessly prune long lists of factors, and prioritize factors so that you spend your time thinking about the most significant factors.
• Apply it at the right level - for example, at product or product line level, rather than at the much vaguer whole company level.
• Supplement it with other option-generation tools - none is likely to be completely comprehensive.
Supplier Power
• The market is dominated by a few large suppliers • There are no substitutes for the particular input,• The suppliers customers are fragmented• The switching costs from one supplier to another
are high,• There is the possibility of the supplier integrating
forward • The buying industry hinders the supplying industry
in their development • The buying industry has low barriers to entry.
Customer Power
• They buy large volumes, • There is a concentration of buyers,• The supplying industry comprises a large number of
small operators• The supplying industry operates with high fixed costs• The product is undifferentiated • Switching to an alternative product is relatively simple• Customers have low margins and are price-sensitive, • Customers could produce the product themselves,• The product is not of strategic importance for the
customer,• There is the possibility for the customer integrating
backwards.
Entry Barriers
• Economies of scale • High initial investments and fixed costs,• Cost advantages of existing players due to experience
curve • Brand loyalty of customers• Protected intellectual property like patents, licenses etc,• Scarcity of important resources, e.g. qualified expert
staff• Distribution channels are controlled by existing players,• Existing players have close customer relations• High switching costs for customers• Legislation and government action
Competitive Rivalry
• There are many players of about the same size,• Players have similar strategies• There is not much differentiation between
players and their products, hence, there is much price competition
• Low market growth rates (growth of a particular company is possible only at the expense of a competitor),
• Barriers for exit are high