Mktg 10 Principles of marketing Lamb + Hair + mcdaniel

Marketing
First it is a philosophy, an attitude, a perspective, or a management orientation that stresses customers satisfaction
Marketing facet 2
Organization function and a set of processes used to implement this philosophy
Marketing definition
The activity, set of institutions and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
What marketing entails
Processes that focus on delivering value and benefits to customers, not just selling goods, services, and ideas
Exchange defined
People giving up something in order to receive something else they would rather have.
An exchange can only take place if the following conditions exist
1. There must be at least two parties
2. Each party has has something that might be of value to the other party
3. Each party is capable of communication and delivery
4. Each party is free to accept or reject the exchange offered
5. Each party believes it is appropriate or desirable to deal with the other party
Marketing management philosophies four
Production orientation
Sales orientation
Market orientation
Societal marketing orientation
Production orientation
A philosophy that focuses on the internal capabilities of the form rather than on the desires and needs of the marketplace
Sales orientation
The belief that people will buy more goods and service if aggressive sales techniques are used and that high sales result in high profits
Marketing concept
The idea that the social and economic justification for an organization existence is the satisfaction of customers wants and neeeds while meeting organizational objectives
Marketing orientation
A philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customers decision to purchase a product, it is synonymous with the marketing concept
Marketing concept
Satisfaction of customer wants and needs while meeting organizational objectives
Marketing concept includes
-Focusing on customers wants and needs so that the organization can distinguish its product(s) from competitors’ offerings

-interesting all the organizations activities including production to satisfy customers wants

-achieving long term goals for the organization by satisfying customer wants and needs legally and responsibly

Market oriented
Obtaining information about customers, competitors, and markets; examining the information from a total business perspective; determining how to deliver superior customer value and implementing actions to provide value for customers
Societal marketing orientation
The idea that an organization exists not only to satisfy customers wants and needs and to meet organizational objectives but also to preserve or enhance individuals and society’s long term best interests
Who is in charge
Customers
Organizational focus sales oriented firm
Onward looking, focusing on selling what the organization makes rather than making what the market wants
Organizational focus marketing oriented
Put customers at the center of their business in ways most companies do poorly or not at all
Customer value
The relationship between benefits and the sacrifice necessary to obtain those benefits
Customer satisfaction
customers evaluation of a good or service in term of whether it has met their needs and expecitations
Relationship marketing
A strategy that focuses on keeping and imposing relationships with current customers
Empowerment
Delegation of authority to solve customers problems quickly – usually by the first person the customer notifies regarding the problem
Team work
Collaborative efforts of petiole to accomplish common objectives
What is the firms business three important advantages
1. Ensures that the firm keeps focusing on customers and avoids becoming preoccupied with good services of the organizations internal needs
2. Encourages innovation and creativity by reminding people that there are many ways to satisfy customers wants
3. It simulates an awareness of change I. Customers desires and preferences so that product offerings are more likely to remain relevant
Those to whom the product is directed (sales oriented organization)
Targets it’s products at “everybody” or “the average customer”
Those to whom the product is directed (market oriented organization)
Aims a specific groups of people.
Customer relationship management
Company wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups
On demand marketing
Delivering relevant experiences, integrated across both physical and virtual environments, throughout the customers decision and buying process.
The firms primary goal (sales oriented organization)
Seeks to achieve profitability through sales volume and tries to convince potential customers to buy
The firms primary goal (market – oriented organization)
To make profit by creating customers value providing customer satisfaction, and building long term relationships with customers
Tools the organization uses to achieve goals (sales oriented organizations)
seek to generate sales volume through intensive promotional activities, mainly personal selling and advertising
Tools the organization uses to achieve goals (sales oriented organizations)
Recognize that promotion decisions are only one of four basic marketing mix decisions that must be made: product decisions, place (or distribution) decisions, promotion decisions, and pricing decisions
Strategic planning
The managerial process of creating and maintaining a fit between the organizations objectives and resources and the evolving market opportunities
Strategic marketing management addresses what two questions
1. What is the organizations main activity at a particular time?

2. How will it reach its goals

Strategic business unit (SBU)
A subgroup of single business or collection of related businesses within the larger organization
Strategic business unit (SBU) characteristics
– a distinct mission and a specific target market

-control over its resources

-it’s own competitors

– a single business or a collection of related businesses

– plans independent of the other SBUs in the total organization

Market penetration
A marketing strategy that tries to increase market share among existing customers
Market development
A marketing strategy that entails attracting new customers to existing products
Product development
A marketing strategy that entails the creation of new products for present markets
Diversification
A strategy of increasing sales by introducing new products into new markets
Portfolio matrix
A tool for allocating resources among products or strategic business units on the basis of relative market share and market growth rate
The portfolio matrix breaks SBUs into four categories
1. Star
2. Cash cow
3. Problem child (question mark)
4. Dog
Star
In the portfolio matrix, a business unit that is fast growing market leader
Cash cow
In the portfolio matrix, a business unit that generates more than it needs to maintain its market share
Problem child (question mark)
In the portfolio matrix, a business unit that shows rapid growth but poor profit margins
Dog
In the portfolio matrix, a business unit that has low growth potential and a small market share
Allocation of future resources for SBUs basic strategies
1. Build
2. Hold
3. Harvest
4. Divest
Planning
The process of anticipating future events and determining strategies to achieve organizational objectives in the future
Marketing planning
Designing activities relating to marketing objectives and the changing marketing environment
Marketing plan
A written document that acts as a guidebook of marketing activities for the marketing manager
Creation and implementation of a complete marketing plan will allow the organization to?
Achieve marketing objectives and succeed
The marketing plan is only as good as ….
The information it contains and the effort, creativity, and thought that went into its creation
Business mission statements that are stated too narrowly suffer from
Marketing myopia
Marketing myopia
Defining a business in terms of goods and services rather than in terms of the benefits customers seek
Mission statement
A statement on the firms business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions
What question does a mission statement answer?
What business are we in?
The way a firm defines the business mission
Profoundly affects the firms long run resource allocation, profitability, and survival
A situational analysis is sometimes referred to as
SWOT analysis
SWOT analysis
Identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)
Environmental scanning
Collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan
Competitive advantage
A set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition
Environmental scanning helps
Identify market opportunities and threats
Six most often studied macroenvironmental forces are
Social
Demographic
Economic
Technological
Political and legal
Competitive
Cost competitive advantage
Being the low cost competitor in an industry while maintaining satisfactory profit margins
Experience curves
Curves that show cost declining at a predictable rate as experience with a product increases
Product/ service differentiation competitive advantage
The provision of something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition

Examples include brand name (Lexus), a strong dealer network (Caterpillar for construction work), product reliability (maytag appliances), image (Neiman Marcus in retailing), or service (Zappos).

Cost can be reduced in what was
Experience curves
Efficient labor
No-frills goods and services
Government subsidies
Product design
Reengineering
Production innovations
New methods of service delivery
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Niche competitive advantage
The advantage received when a firm seeks to target and effectively serve a small segment of the market

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Sustainable competitive advantage
An advantage that cannot be copied by the competition

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Marketing objectives should be
Realistic
Measurable
Time specific
Compared to a benchmark

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Marking objective
A statement of what is to be accomplished through marketing activities

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Marketing strategy
The activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets

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Market opportunity analysis (MOA)
The description and estimation have of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in these market segments

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Marketing mix (four Ps)
A unique blend of product, place (distribution), promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market

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Four Ps of marketing mix
Product
Place
Promotion
Pricing strategies

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Most flexible of the four Ps
Pricing

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Implementation
The process that turns a marketing plan into actions assignments and ensures that the assignments are executed in a way that accomplishes the plan’s objectives

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Evaluation
Gauging the extent to which the marketing objectives have been achieved during the specified time period

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Control
Provides the mechanism for evaluating marketing results in light of the plan’s objectives and for correcting actions that do not help the organization reach those objectives within budget guidelines

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Marketing audit
A thorough, systematic, periodic evaluation of the objectives, strategies, structure, and performance of the marketing organization

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3 post audit tasks
1. Profile existing weaknesses and inhibiting factors as well as the firm’s strengths and the new opportunities available to it

2. Ensure that the role of the audit has been clearly communicated

3. Make someone accountable for implementing recommendations

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Effective strategic planning requires
Continued attention, creativity, and management commitment

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Ethics
Moral principles or values that generally govern the conduct of an individual or a group

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Social control defined
Any means used to maintain behavioral norms and regulate conflict

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Behavioral norms
Standards of proper or acceptable behavior

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Several modes of social control that are important to marketing
Ethics
Laws
Formal and informal groups
Self-regulation
The media
The active civil society

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Deontological theory
Ethical theory that states that people should adhere to their obligations and duties when analyzing an ethical dilemma

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Utilitarian ethical theory
Ethical theory that is founded on the ability to predict the consequences of an action

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Casuist ethical theory
Ethical theory that compares a current ethical dilemma with examples of similar ethical dilemmas and their outcomes

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People usually base their individual choices of ethical theory on….
Their life experiences

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Moral relativism
An ethical theory of time and place ethics; that is, the belief that ethical truths depend on the individuals and groups holding them

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Virtue
A character trait valued as being good
Morals
The rules people develop as a result of cultural values and norms
Morals are usually characterized as
Good and bad and can also refer to conforming and deviant behaviors
Three levels of ethical development
Preconventional

Conventional

Postconventional

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Preconventional morality
Most basic level, childlike

Calculating, self centered and even selfish

Based on what will be punished or rewarded

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Conventional morality
Expectations of society

Concerned with whether proposed action is Legal and how it will be viewed by others

Postconvetional morality
How they see and judge themselves

Is it right in the long run?

Might it do more harm that good?

Factors that influence ethical decision making
Extent of ethical problems within the organization

Top management actions on ethics

Potential magnitude of the consequences

Social consensus

Probability of a harmful outcome

Length of time in between the decision and the onset of consequences

Number of people affected

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Code of ethics
A guideline to help marketing managers and other employees make better decisions

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Advantages of creating ethics guidelines
– helps employees identify what their firm recognizes as acceptable business practices

-effective internal control of behavior, which is more desirable than external controls such as government regulation

-helps employees avoid confusion when determining whether there decisions are ethical

-facilitates discussion among employees about what is right and wrong and ultimately leads to better decisions

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Foreign corrupt practices act (FCPA)
A law that prohibits us corporations from making illegal payments to public officials of foreign governments to obtain business right or to enhance their business dealings in those countries
Corporate social responsibility (CSR)
A business’s concern for society’s welfare
Stakeholder theory
Ethical theory stating that social responsibility is paying attention to the interest of every affected stakeholder in every aspect of a firms operation.

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Stakeholders in a typical corporation
Employees
Management
Customers
The local community
Suppliers
Owners/stock holders

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Pyramid of corporate social responsibility
A model that suggests corporate social responsibility is composed of economic, legal, ethical, and philanthropic responsibilities and that a firm’s economic performance supports the entire entire structure

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Sustainability
The idea that socially responsible companies will outperform their peers by focusing on the worlds social problems and viewing them as opportunities to build profits and help the world at the same time

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Green marketing
The development and marketing of products designed to minimize negative effects on the physical environment or to improve the environment

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Cause related marketing
The cooperate marketing efforts between for profit firm and a non profit organization

Generates 7 billion annually

Too many causes can lead to customer fatigue

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