Marketing in the Digital World-2
Sa1_Jyyy
1IntrodutiontoMarketing.pptxMN7032SR Marketing in the Digital World
Lesson 1: Introduction to Marketing
londonmet.ac.uk
Module Overview
1. Introduction
2. The Global Marketplace
3. Segmentation, Targeting,
Positioning
(Connected consumers )
4. Developing Value
5.Communicating Value
6.Pricing Value
7. Delivering Value
(Channelnomics)
8. Market Entry
Strategies
9
. International
Sales (Producrts v Services ) B2C & B2B
10. Marketing and
the impact of
Digital
11. The New
Customer Path
12. Summary & Planning
Application
londonmet.ac.uk
Reading Material – Consult The Reading List
Core Text:
Keegan W.J., Green M.C., (2020) Global Marketing, 10e, Pearson
Other Texts:
Solomon M.R., Marshall G.W, & Stuart E.W., (2019) Marketing: Real People, Real Choices Global Edition, 9e, Pearson
Kingsnorth S., (2019), Digital Marketing Strategy, 2e, Kogan Page
Bartnik M., (2019), The 8 Pillars of Social Media: Learn How to Transform Your Online Marketing Strategy For Maximum Growth with Minimum Investment, Independently Published
londonmet.ac.uk
Assessment
Assessment 1 – Due *
Identify a company and critically assess its current digital marketing activities and using appropriate theories suggest justified and measurable improvements
Assessment 2 – Due *
Prepare a marketing plan for a selected product / service in a specific market based on a case study. The detailed case study will be released on xxth April 2023
Module Aim
WHAT IS MARKETING?
Marketing can be defined as 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.
Marketing activities center on an organization’s efforts to satisfy customer wants and needs with products and services that offer competitive value. The marketing mix (product, price, place, and promotion) comprises a contemporary marketer’s primary tools.
Marketing is a universal discipline, as applicable in Argentina as it is in Zimbabwe.
French definition of marketing by Lendrevie, Lévy and Lindon, 2006: Pour pouvoir s’adapter à ses publics, leur faire une proposition de valeur attrayante et les influencer, une entreprise (ou plus généralement une organisation) doit d’abord bien les connaître.
londonmet.ac.uk
The environment of a firm :
Internal and external, current and future, to identify sources of competitive advantage
The Firm
Strategy
Structure
Systems
Skills
Staff
Style
Culture
Ownership
Governance
Resources and
Capabilities
Stakeholders
Governments
Employees
Suppliers
Customers and consumers
Countries, regions, communities
Partners
Competitors
Lenders
External Environment
Macro - Political, Economic, Social, Technological, Environmental, Legal
Industry
Suppliers (Supply Chain)
Buyers
Competitors
Substitutes
Potential market entrants
Complements
Government
Market or Markets
ROE
History
Industry Lifecycle
Government intervention
Competition
Economic environment
Social change
Use of technology
Supply Chain
Products and/or Services
Partners
Value Chain and Value Proposition
Value Chain
Marketing, along with all other functional business areas, create value for the customer
Value Proposition
Perceived value to the customer
The firm’s promise to the customer
CUSTOMER PERCEIVED VALUE
Create value for customers by improving benefits or reducing price
Improve the Product / Service / Image
Find new distribution channels
Create better communications
Cut monetary and non-monetary costs and prices
Value=Benefits/Price
COMPETITIVE ADVANTAGE
When a company succeeds in creating more value for customers than its competitors do
Measured relative to industry rivals
“Created when a firm has value-creating strategy not simultaneously being implemented by an current or potential competitors.”
THE BUYING CYCLE CONCEPT
KEY CONCEPTS
The Buying Cycle
Products are increasingly difficult to differentiate, and time to copy has fallen drastically
In person retaling is losing ground to other channels – internet / online, telesales, CRM systems, etc.
Customers are pushing back to sales messages who just communicate one way...example Curry’s
So, companies need to create even more value than ever before……
Just think…
londonmet.ac.uk
I’ve got an old car ...
Must replace. Let’s look at the process
londonmet.ac.uk
SO WHAT IS THE PROCESS OF BUYING A CAR ?
The Buying Cycle
The Awareness of Needs
THE AWARENESS OF NEEDS
Where the customer assesses their problems (or opportunities) and evaluates their likely scale and urgency
Where the customer defines their needs and starts to outline initial specifications
Where the customer decides to make a decision to resolve their problems (or take advantage of their opportunities)
londonmet.ac.uk
ASSESSMENT OF ALTERNATIVES
ASSESSMENT OF ALTERNATIVES
Where the customer assesses products, solutions
Where the customer seeks information, advice and evaluation
Where the customer establishes ranking criteria
UNCOVERING AND RANKING CRITERIA
Formulate buying criteria
Comparative evaluation
to rank criteria in order
londonmet.ac.uk
ASSESSING RELATIVE PERFORMANCE
Comparative assessment to establish product / service standings relative to competitive offers
ALLEVIATION OF RISK
Risks
We perceive risk in terms of value not materialising, or being destroyed in some way.
•
These risks may be:
Individual
Social
Tactical
Strategic
Achievement of Results
The Buying Cycle
The Buying Cycle is remarkably similar for most purchases although the speed and complexity of the process inevitably changes with scale
Marketing needs to move in tandem with buyers around the cycle – sometimes leading, sometimes following
KEY CONCEPTS
The production concept:
The production concept suggests that people prefer products and services that are easily available and affordable, which is essentially the idea of mass production.
The product concept:
emphasizes that buyers prioritize a product’s quality, features, and benefits. Product-focused buyers seek innovation and uniqueness rather than solely seeking the lowest price.
The selling concept:
The selling concept is founded on the belief that customers will not purchase an adequate quantity of a product or service unless they are actively persuaded to do so.
The marketing concept:
Brands that utilize the marketing concept spend time getting to know their customer’s likes and dislikes. They understand what problems keep their customers awake at night and develop products and services to solve those issues.
The societal marketing concept:
This concept emphasizes focusing on meeting customers’ needs to solve their problems while ensuring no harm comes to them.
A Functional Map for Marketing
Marketing - Points Of Agreement
Management process
Giving customers what they want (critic?)
Identifies and anticipates customer requirements.
Fulfill customers requirements profitably.
Creation of value (existing or new products/services)
The Three Components of Market Orientation
Why Marketing useful?
To succeed a business needs satisfied and happy customers
Marketing more than any other business function deals with the customer
Create value for customers*1
Build strong customer relationships*2
It is about managing profitable customer relationships
It has two main aims;
Attract new customers (best value)
Grow new customers ( satisfaction and retention)
*1&2 Armstrong & Kotler,2006
28
1-
Why the Customer is important ? (some quotes)
A customer is the most important person ever in this office…in person or by mail
A customer is not dependent on us…we are dependent on him
A customer is not an interruption of our work, he is the purpose of it
We are not doing a favour by serving him.. he is doing us a favour by giving us the opportunity to do so
A customer is not someone to argue or match wits with; nobody ever won an argument with a customer (Kotler, 2002)
*Jobber, David. Principles and Practice of Marketing, 8th Edition
Effectiveness of marketing for business success*
Lots of evidence!
Market share and profitability (Pelham, 2000),
Sales growth (Narver, Jacobson and Slater, 1999),
Sales growth and new product success (Slater and Narver, 1994; Im and Workman, 2004),
Perception of product quality (Pelham and Wilson, 1996)
overall business performance (Pulendran, Speed and Wilding, 2003)
Recent studies have found a positive relationship between market orientation and business performance.
26/09/2014
MARKETING
PLACES
PERSONS
GOODS
SERVICES
EXPERIENCES
EVENTS
PROPERTIES
ORGANISATIONS
INFORMATION
IDEAS
Topics for marketing
24
Role of Marketer?
Customer ‘champion’
Researcher
Planner
Co-ordinator
Manager
The Marketing Mix
The Original developed by Borden in his teaching but not written up until 1964:
Product planning
Pricing
Branding
Channels of distribution
Personal selling
Advertising
Promotions
Packaging
Display
Servicing
Physical handling
Fact finding and analysis (Borden, 1964).
The Shortened simplified version by Eugene McCarthy and now more commonly used:
Product
Place (distribution)
Price and
Promotion (McCarthy, 1960).
Extension from 4 to7 Ps for Services
Physical evidence – to emphasize that the tangible components of services were strategically important.
Process –to emphasize the importance of the service delivery. When processes are standardized, it is easier to manage customer expectations.
People – to emphasize the importance of customer service personnel, sometimes experts and often professionals interacting with the customer. How they interact with customers, and how satisfied customers are as a result of their experiences, is of strategic importance.
Discussion: As a rational customer, will you purchase?
No
Yes
50%
50%
Is it OK to be critical about marketing?
Is the customer always right?
What is Globalisation?
‘Globalisation’ is one of the buzz-words of the 21st-century, but it means different things to different people
It is a term that applies to many aspects of our ordinary everyday life, including:
Global business and economics
Global communications, technology and media
Global sport, culture, arts, fashion, and events
Global tourism and leisure
Global politics
Global migration, careers, and movement of workers
Globalisation: Philip Kotler
“Globalization means that companies will move their production to cheaper sites...and the Internet means that people can more quickly compare prices and move to the lowest cost offer. The marketing challenge, then, is to find ways to maintain prices and profitability in the face of these macro-trends. And the answer has to be: better targeting, differentiation and branding.”
(Kotler, P, 2014, http://www.kotlermarketing.com/phil_questions.shtml)
Note: Philip Kotler is considered to be the world’s greatest expert on ‘global marketing’
Globalisation: Theodore Levitt
“Think global, act local.” This phrase (or cliche), first coined by Levitt in 1983, was in response to the changing business and marketing world, as companies began to not only sell their products and services locally, but nationally, internationally, and globally. (Levitt, T 1983 , The Globalization of Markets, Harvard Business Review, available at: http://hbr.org/1983/05/the-globalization-of-markets)
Note: Theodore Levitt is also considered to be the first academic to popularise the terms ‘globalisation’ and ‘global markets’
MARKETING + RESEARCH
Limited Time
Plenty of time
Existing data
New data
No interest
Interest
Recognize research matters
* Marketing Philosophy/Concept
Marketing Philosophy is a marketing idea that considers production, sales and customer satisfaction. The marketing philosophy is regarded as very simple yet of utmost importance. At its very core is the concept of striving to satisfy the customer's needs and wants, while at the same time achieving the organisation's goals.
Marketing Philosophy
Every business, every company and every product is different. Therefore, one strategy of marketing cannot apply to all uniformly. So different entities employ different tactics and concepts known as Marketing Management Philosophies.
Company Orientations to the Marketplace
What philosophy should guide a company marketing and selling efforts? What relative weights should be given to the interests of the organization, the customers, and society? These interest often clash, however, an organization’s marketing and selling activities should be carried out under a well-thought-out philosophy of efficiency, effectiveness, and socially responsibility.
Five Marketing Philosophical Concepts to the marketplace have guided and continue to guide organizational activities.
Focus on 2W1H
WHAT? Understand
WHY? Reason
HOW? Do
Pause for a while.. Let’s recall
Selling vs marketing concept
Source: Marketing, An Introduction, 11th Edition, Armstrong/ Kotler
The Five Concepts
The Production Concept. This concept is the oldest of the concepts in business. It holds that consumers will prefer products that are widely available and inexpensive/highly affordable. Managers focusing on this concept concentrate on achieving high production efficiency, low costs, and mass distribution efficiency. They assume that consumers are primarily interested in product availability and low prices. This orientation makes sense in developing countries, where consumers are more interested in obtaining the product than in its features.
WHATHOW WHY
The Five Concepts
The Production Concept.
This concept is based on the efficient production process of a company. Since the days of the industrial revolution, it is believed that goods are available in excessive quantities and cheap prices will always sell.
So a company can choose the production concept where it will utilize the economies of scale. It will produce large quantities of goods at lower costs and sell them in all markets and inexpensive rates. Here the profits will come from number of goods sold.
But the logic is flawed that the customer chooses a product only based on price. There are many other factors he/she will consider, such as quality and differentiation.
The Five Concepts
2. The Product Concept. This orientation holds that consumers will favor those products that offer the best quality, high performance, or innovative features. Managers focusing on this concept concentrate on making superior products and improving them over time. This will mean the cost of production and the price of the product will be higher. Therefore, those customers who are sensitive to high price or the accessibility of the product will be driven away. In addition, these managers are sometimes caught up in a love affair with their product and do not realize what the market truly needs.
WHATHOW WHY
The Five Concepts
2. The Product Concept.
A great example of the product philosophy is Apple.
They’ve been working on their models for years and coming up with new features, which convince their customers to stay.
Their products are expensive, but you don’t get just any kind of product: you get the most cutting-edge technology.
The Five Concepts
3. The Selling Concept. Here the concept shifts from production of the product to simply selling the product. Even if the goods meet the price and quality requirements of the consumer, the sale is not guaranteed. The company’s goal is to persuade the consumer to buy the product by any means necessary. This is another common business orientation which is an idea that consumers will not buy enough of the organisation’s products unless the organization undertakes an aggressive selling and promotion effort.
The Five Concepts
3. The Selling Concept.
This concept assumes that consumers typically show buying resistance and must be coaxed into buying. It also assumes that the company has a whole battery of effective selling and promotional tools to stimulate more buying.
Companies use promotion, advertising and publicity to convince the consumer to buy their products. At times they can even manipulate consumers. The ultimate aim here is to push the product, without thought of long-term consequences.
Most firms practice the selling concept when they have overcapacity. Their aim is to sell what they make rather than make what the market wants.
WHATHOW WHY
The Five Concepts
4. The Marketing Concept. This is a business philosophy that challenges the above three business orientations. It holds that the key to achieving its organizational/selling company goals consists of the company being more effective and efficient than competitors in creating, delivering the desired satisfactions, and communicating customer value to its selected target customers. It is important to determine the needs, wants, and interests of target markets.
WHAT
The Five Concepts
4. The Marketing Concept.
This concept is one of the newer marketing management philosophy. It is a very 21st century concept that truly believes “the customer is king”. Company’s decision will be strongly influenced by the needs of the customer – right from production and design of the goods to its transportation, every process has the customer in mind.
WHY
The Five Concepts
4. The Marketing Concept.
Since customer satisfaction is the main goal of the marketing concept, companies do not need to worry about selling or production. Since they are fulfilling all the needs of the consumers, it is a given the consumer will pay an appropriate price for the product.
The marketing concept rests on four pillars: target market, customer needs, integrated marketing and profitability.
HOW
The Five Concepts
4. The Marketing Concept.
Out of all the marketing philosophies, this one is probably used the most in marketing nowadays.
This is probably because it is hard to sell anything nowadays without knowing your target audience really well and appealing to them. Hence why this marketing philosophy places a lot of importance on the customer and their wants and needs.
By being the first to come up with a product can give the company a huge head start and enable them to establish themselves as the giant in that market.
But this is not enough; they also need to constantly work on their products and to keep learning about the ever-changing needs of their customers if they don’t want their competitors to beat them.
Pause for a while.. Let’s recall
Selling vs marketing concept
Source: Marketing, An Introduction, 11th Edition, Armstrong/ Kotler
The Five Concepts
Distinctions between the Sales Concept and the Marketing Concept:
1. The Sales Concept focuses on the needs of the seller. The Marketing Concept focuses on the needs of the buyer.
2. The Sales Concept is preoccupied with the seller’s need to convert his/her product into cash. The Marketing Concept is preoccupied with the idea of satisfying the needs of the customer by means of the product as a solution to the customer’s problem (needs).
The Five Concepts
The Marketing Concept represents the major change in today’s company orientation that provides the foundation to achieve competitive advantage. This philosophy is the foundation of consultative selling.
The Marketing Concept has evolved into a fifth and more refined company orientation: The Societal Marketing Concept. This concept is more theoretical and will undoubtedly influence future forms of marketing and selling approaches.
Production concept
Product Concept
Selling concept
Marketing Concept
Societal Marketing Concept
The Five Concepts
5. The Societal Marketing Concept. This concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors (this is the original Marketing Concept). Additionally, it holds that this all must be done in a way that preserves or enhances the consumer and also the well-being of the society or the environment in the process.
This orientation arose as some questioned whether the Marketing Concept is an appropriate philosophy in an age of environmental degrading, resource shortages, explosive population growth, world hunger and poverty, and neglected social services.
THE FIVE CONCEPTS
Are companies that do an excellent job of satisfying consumer wants necessarily acting in the best long-run interests of consumers and society?
The marketing concept possibly sidesteps the potential conflicts among consumer wants, consumer interests, and long-run societal welfare. Just consider:
Example:
The fast-food hamburger industry offers tasty but unhealthy food. The hamburgers have a high fat content, and the restaurants promote fries and pies, two products high in starch and fat. The products are wrapped in convenient packaging, which leads to much waste. In satisfying consumer wants, these restaurants may be hurting consumer health and causing environmental problems.
