Marketing Philosophy and Strategy

Marketing Marketing PhilosophyPhilosophy

and and StrategyStrategy

Chapter OneChapter One

Copyright ©2011 Pearson Education, Inc., Publishing as Prentice Hall 1-2

Key Learning PointsKey Learning Points

The marketing conceptThe marketing conceptDifferent organizational philosophies Different organizational philosophies about marketingabout marketingImportance of being customer focusedImportance of being customer focusedThe job of the marketing managerThe job of the marketing managerTypical marketing organizational Typical marketing organizational formsformsHow marketing is changingHow marketing is changingThe focus of this bookThe focus of this book


What is Marketing?What is Marketing?

Marketing is the set of activities Marketing is the set of activities that attempts to influence that attempts to influence choice.choice.

Think about Think about “marketing” “marketing” and the type of people and the type of people who help to market a who help to market a service. service.

Which of the hotel Which of the hotel employees listed at left are employees listed at left are involved in marketing?involved in marketing?

Desk clerkDesk clerk

ValetValet

ConciergeConcierge

WaitressWaitress

Reservation Reservation

clerk clerk



Who engages in marketing?Who engages in marketing? Product manufacturersProduct manufacturers GovernmentGovernment Not-for-profit organizationsNot-for-profit organizations ChurchesChurches UniversitiesUniversities PoliticiansPoliticians Utility companies . . . Etc.Utility companies . . . Etc.



Successful marketing is difficult:Successful marketing is difficult: There is no “formula” for marketing There is no “formula” for marketing success. success. Requires considerable interaction with Requires considerable interaction with customers. customers. Customers often cannot accurately Customers often cannot accurately describe describe their needs. their needs. Competitive action is difficult to predict.Competitive action is difficult to predict. Customer tastes and societal trends change Customer tastes and societal trends change

frequently. frequently. Implementing strategy precisely is difficult.Implementing strategy precisely is difficult.


Discussion Discussion

Why do you Why do you think that think that 3Com’s 3Com’s internet internet appliance, appliance, “Audrey” “Audrey” failed?failed?


Table 1.1Table 1.1Top 10 Brands 1923 and 2005Top 10 Brands 1923 and 2005


Organizational PhilosophiesOrganizational Philosophies

The Marketing ConceptThe Marketing Concept Emphasizes a customer focus:Emphasizes a customer focus:

Organizing resources toward Organizing resources toward understanding customers’ understanding customers’ needsneeds Offering products or services Offering products or services designed to meet needs designed to meet needs

Profits result from serving Profits result from serving customers customers better than the competition. better than the competition.


““The purpose of a business is to The purpose of a business is to create and keep a customer. To create and keep a customer. To do that you have to produce and do that you have to produce and deliver goods and services that deliver goods and services that people want and value at prices and people want and value at prices and under conditions that are reasonably under conditions that are reasonably attractive relative to those offered by attractive relative to those offered by others to a proportion of customers others to a proportion of customers large enough to make those prices large enough to make those prices and conditions possible.and conditions possible.””

- Theodore Leavitt


IllustrationIllustration

ING Direct is one of is one of the fastest growing the fastest growing banks in the world.banks in the world.

ING meticulously ING meticulously “fires” customers “fires” customers who cost too much who cost too much or who desire or who desire exceptions to exceptions to operating policies.operating policies.


Figure 1.1Figure 1.1Strategic Approaches to the Strategic Approaches to the

MarketplaceMarketplace



Sales Driven:Sales Driven:Focus: “What we make, we sell.”Focus: “What we make, we sell.”

Little attention paid to the Little attention paid to the customercustomer

Very aggressive selling effortsVery aggressive selling efforts

Seeks to maximize volume, not Seeks to maximize volume, not profitprofit



Technology (or product) driven:Technology (or product) driven:Focus: Research and development; Focus: Research and development; customer needs are secondarycustomer needs are secondary

Problem: developed technology Problem: developed technology may not satisfy needsmay not satisfy needs

Great technology does not Great technology does not guarantee company successguarantee company success

““Feature fatigue” commonly resultsFeature fatigue” commonly results



Marketing driven:Marketing driven:Focus: Embraces marketing, but Focus: Embraces marketing, but to the point of excessto the point of excess

Enormous investments in Enormous investments in marketing researchmarketing research

Common in consumer goods firmsCommon in consumer goods firms

Problem: Very slow to respond to Problem: Very slow to respond to changes in the marketplacechanges in the marketplace


““Customers do Customers do notnot inherently inherently want to buy products. want to buy products. Products cost money and, for Products cost money and, for corporate buyers, reduce corporate buyers, reduce profits. Customers buy profits. Customers buy products for the products for the benefitsbenefits that that the product features provide.”the product features provide.”

- Russell S. Winer


ActivityActivity

Customer driven firms focus on selling Customer driven firms focus on selling benefits rather than products or benefits rather than products or services. Supply one or more benefits services. Supply one or more benefits for each of the sentences below:for each of the sentences below:Don’t sell me a house, sell me . . .Don’t sell me a house, sell me . . .Don’t sell me toothpaste, sell me . . .Don’t sell me toothpaste, sell me . . .Don’t sell me a movie, sell me . . . Don’t sell me a movie, sell me . . . Don’t sell me dry-cleaning, sell me . . .Don’t sell me dry-cleaning, sell me . . .Don’t sell me life insurance, sell Don’t sell me life insurance, sell me . . .me . . .



Customer driven:Customer driven:Focus: Benefits desired by Focus: Benefits desired by buyersbuyers

Stresses long-term relationships:Stresses long-term relationships:Conflicts: marketing versus Conflicts: marketing versus financefinance

Company reactions to crisisCompany reactions to crisis

Attitudes toward marketing: Attitudes toward marketing: expenseexpense or or investmentinvestment??



How do organizations achieve a How do organizations achieve a customer orientation?customer orientation?

Information is shared among Information is shared among corporate functions.corporate functions.Strategic and tactical decisions are Strategic and tactical decisions are made cross-functionally and across made cross-functionally and across divisions.divisions.Divisions and functions are Divisions and functions are committed to execution of committed to execution of coordinated decisions.coordinated decisions.


Table 1.2Table 1.2Customer Orientation ChecklistCustomer Orientation Checklist


Figure 1.2Figure 1.2Reversing the Value ChainReversing the Value Chain


Figure 1.3Figure 1.3The Dangers of Being Customer-The Dangers of Being Customer-

LedLed



Does a customer orientation Does a customer orientation and the marketing concept and the marketing concept inhibit companies from inhibit companies from developing revolutionary new developing revolutionary new products?products?

No. Marketing managers need to No. Marketing managers need to translate new technology into translate new technology into benefits that customers desire. benefits that customers desire.



Marketing as a Value-Added Marketing as a Value-Added Activity:Activity:

Marketing adds value to some Marketing adds value to some segments of the population.segments of the population.

Capturing value is also important.Capturing value is also important.

Sustaining value is a final concern.Sustaining value is a final concern.


Marketing Manager’s JobMarketing Manager’s Job

The main job of the The main job of the marketing manager marketing manager depends upon:depends upon:

The organizational The organizational structure.structure.The industry.The industry.The level in the The level in the organization that is organization that is being focused upon.being focused upon.

Eli Lilly adds value to Prozac through the brand name.


Figure 1.4Figure 1.4Desserts Division Desserts Division

Organizational Chart, General Organizational Chart, General Foods CorporationFoods Corporation


Figure 1.5Figure 1.5Partial Organizational Chart, Partial Organizational Chart,

Grasse Fragrances SAGrasse Fragrances SA


Figure 1.6Figure 1.6Regional Bell Operating Regional Bell Operating

Company Marketing Company Marketing OrganizationOrganization


““The main job of anyone in The main job of anyone in marketing is to create or marketing is to create or implement a marketing strategy implement a marketing strategy for the product or service that for the product or service that meets the needs of the targeted meets the needs of the targeted customers better than the customers better than the competitorscompetitors’’ offerings and offerings and achieves the objectives set by achieves the objectives set by the organization.the organization.””

- Russell S. Winer


Figure 1.7Figure 1.7The Marketing Managers The Marketing Managers

InteractionsInteractions


Discussion QuestionDiscussion Question

Should Segway consider targeting college students?

Why or why not? Consider competitive, consumer, and external environmental factors as you develop your answer.


““A marketing plan is a A marketing plan is a written document written document containing the guidelines containing the guidelines for the productfor the product’’s marketing s marketing programs and allocations programs and allocations over the planning period.over the planning period.””

- Russell S. Winer


Figure 1.8Figure 1.8Hierarchy of PlanningHierarchy of Planning


Figure 1.9Figure 1.9Marketing Planning SequenceMarketing Planning Sequence


Table 1.3Table 1.3Marketing Plan SummaryMarketing Plan Summary


Mobile technologyMobile technologyCustomer powerCustomer powerInteractive marketingInteractive marketingGlobalizationGlobalizationCustomer relationshipsCustomer relationshipsCommunication challengesCommunication challengesEmphasis on ROIEmphasis on ROISustainable marketing practicesSustainable marketing practices

The Changing Nature of The Changing Nature of MarketingMarketing


Figure 1.10Figure 1.10Anywhere, Any TimeAnywhere, Any Time



Diffusion of Mobile Diffusion of Mobile Technology:Technology:

Allows increasingly Allows increasingly complex applicationscomplex applications

Serves as mobile Serves as mobile marketing platformmarketing platform

Widely available; acts Widely available; acts as an information as an information access “flattener”access “flattener”



Customers are becoming more Customers are becoming more powerful due to:powerful due to:

The Internet.The Internet.

Web sites and services which Web sites and services which enhance interaction capabilities. enhance interaction capabilities.

Mobile technology revolution.Mobile technology revolution.


““Consumers want a conversation, Consumers want a conversation, dialogue, to participate, to be more in dialogue, to participate, to be more in control. Consumers expect more control. Consumers expect more personal attention personal attention –– communication, communication, products and services that are tailored products and services that are tailored to their wants and needs. Consumers to their wants and needs. Consumers will expect customization, so products will expect customization, so products and services reflect their unique wants and services reflect their unique wants and needs. Marketing is being and needs. Marketing is being redefined.redefined.””

- A.G. Lafley- A.G. Lafley


The Internet is an The Internet is an indispensable indispensable tool for marketers with respect tool for marketers with respect to:to:

Communications.Communications.

Pricing.Pricing.

Distribution channels.Distribution channels.



Globalization is a key concern, as Globalization is a key concern, as it creates both opportunities and it creates both opportunities and threats. Several factors influence threats. Several factors influence globalization.globalization.

The EuroThe EuroDemocratization of RussiaDemocratization of RussiaLatin America emerges as a marketLatin America emerges as a marketGeopolitical eventsGeopolitical eventsThe emergence of China and IndiaThe emergence of China and India



China’s global impact:China’s global impact: One-fifth (1.3 billion) of the world’s One-fifth (1.3 billion) of the world’s population population Very low-cost supplierVery low-cost supplier Acquisition of global brandsAcquisition of global brands

India’s global impact:India’s global impact: OutsourcingOutsourcing Significant consumer goods marketSignificant consumer goods market Acquisition of global brandsAcquisition of global brands



Customer relationship Customer relationship management and database management and database marketing:marketing:

Customer retention is paramount.Customer retention is paramount.Lifetime customer valueLifetime customer valueRelationship marketing relies upon:Relationship marketing relies upon:

Database marketingDatabase marketing•Mass customization Mass customization NikeID.com

Customer satisfactionCustomer satisfactionPersonalization often leads to loyalty.Personalization often leads to loyalty.



Marketers face many marketing Marketers face many marketing communication challenges:communication challenges:

Decline in media usage.Decline in media usage. Increase in DVRs.Increase in DVRs. Increase in time spent on online Increase in time spent on online and audience fragmentation. and audience fragmentation. Decline in prime time Decline in prime time viewership.viewership. 18-24 year olds are increasingly 18-24 year olds are increasingly difficult to attract to TV.difficult to attract to TV.



Figure 1.11Figure 1.11Kimberly Clark’s Media MixKimberly Clark’s Media Mix


ROI and marketing ROI and marketing investments:investments:

Pressure to measure ROIPressure to measure ROI

Pressure to develop better Pressure to develop better strategies and programs strategies and programs

Sustainable marketing Sustainable marketing practicespractices



Focus of the BookFocus of the Book

Ch 1: Marketing manager’s job, Ch 1: Marketing manager’s job, marketing function, changes in marketing function, changes in marketingmarketingCh 2: Components of marketing Ch 2: Components of marketing strategy, differentiationstrategy, differentiationCh 3, 4, 5, 6: Collecting information Ch 3, 4, 5, 6: Collecting information useful for marketing decisionsuseful for marketing decisionsCh 7, 8: Product positioning, Ch 7, 8: Product positioning, branding, packaging, new productsbranding, packaging, new products


Focus of the BookFocus of the Book

Ch 9, 10, 11, 12, 13: Pricing, communication, sales promotion, distribution, sales, and direct marketing decisionsCh 14: Building long-term customer relationshipsCh 15: Marketing services


Executive SummaryExecutive Summary

Marketing is pervasive.Marketing is pervasive.Marketing is difficult.Marketing is difficult.Customer retention is critical.Customer retention is critical.Marketing concept is customer and Marketing concept is customer and competitor focused.competitor focused.Customer-oriented organizations invest in Customer-oriented organizations invest in the customer.the customer.Technological innovation is compatible Technological innovation is compatible with a customer-orientation.with a customer-orientation.Changes in the marketing environment Changes in the marketing environment impact the marketing manager’s job.impact the marketing manager’s job.


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Marketing Philosophy and Strategy

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