innovation
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2.pptxInnovation and marketing
In marketing, innovation could be a completely new product or service, or an innovation in an existing product or service.
Innovation can also be applied to the delivery (supply) or promotion of products and services, or even to their exchange concept (relating to the value exchanged between sellers and buyers).
An example of an innovation in promotion was Coca-Cola replacing its logo on its labeling on bottles with printed personalized names, which proved one of its most successful marketing campaigns (Coca-Cola, 2016).
As an example of innovation in the exchange concept, TOMS Shoes set up its business founded on the big idea of donating a pair of shoes to a child in need for every pair bought by customers (TOMS, 2017).
Even if a product remains seemingly the same over time (such as the original Coca-Cola, Kellogg’s breakfast cereal Corn Flakes), an organization will need to adapt other elements of its marketing (such as advertising, social media presence or labeling) to accommodate the changing environment in which it operates.
The marketing process
To be successful, organizations need to be proactive in not only responding to but anticipating change.
The marketing process involves pursuing the organization's mission, vision and values by analyzing the market, choosing a marketing strategy, formulating the offering and implementing, monitoring and evaluating the marketing programmed.
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Reading 1 - Marketing Definition
There are various definitions of Marketing that have evolved over time, through experience and varied with perspective.
One professional definition of marketing states:
Marketing is 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.
(American Marketing Association,2013)
From an academic perspective, marketing is defined as:
Marketing consists of 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.
(Dibbeta l.,2016, p. 8)
Reading 1: Marketing definition
Marketing Definition
The key points to note from these definitions are that marketing involves:
A process of activities that make possible an exchange .
Something that is offered for exchange – an ‘offering’ (which could be a good, a service or idea) .
The provision of value for the parties involved in the exchange(for example, profit for organizations and the satisfaction of requirements for customers).
Reading 1: Marketing definition
The Marketing Function
Responsibilities of the marketing function:
Monitoring and analyzing the market and developing trends, opportunities, threats and competition
Determining objectives and strategies in alignment with the organization’s mission, vision and values
Identifying the most appropriate consumers to target and ensuring that products and services meet their needs and are suitably positioned in the relevant market
Managing the brand(s) to project a coherent and compelling brand identity that attracts and builds relationships with consumers to secure a strong reputation and consumers’ goodwill and to guarantee future income and ward off competition
Ensuring that products and services are communicated, delivered an offered at a price to consumers that constitutes an attractive proposition and ensuring that all points of contact in the exchange process enhance the purchase experience.
Reading 1: Marketing definition
The Marketing Process
Reading 1: Marketing definition
The Marketing Process
The organization's mission and vision guide the organization during the marketing process, helping to maintain a steady (but not necessarily fixed) course against a dynamic and sometimes turbulent environment.
So, in order to insure that customers want or need what you propose to offer, you will need to do the following;
Step 1: analysis of the market: understand the marketplace and your potential customers’ needs and wants.
Step 2: strategy selection: to which customers to direct your offering and how to offer them value.
Step 3: formulation of the offering: how you would deliver that value to customers.
Step 4: implementation, monitoring and evaluation: If you are able to nurture loyal customers, then you can capture value from them.
Reading 1: Marketing definition
Mission, Vision and Values
An organization's purpose is its reason for being and is typically setout in a formal mission statement.
A Vision is always future-oriented or focused.
Examples;
Lego:
Mission: ‘Inspire and develop the builders of tomorrow’ Vision: Inventing the future of play’
Mission: “to give people the power to share and make the world more open and connected.”
Vision: “People use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them.”
Reading 1: Marketing definition
Corporate strategy
At the corporate (or organizational) level, the mission, vision and values help to determine supporting objectives that direct the whole organization and the allocation of support, resources and functional coordination for its areas of business.
The marketing process features within this to support the overall organization-wide objectives at the level of the business unit, brand or market, as appropriate, to pursue identified marketing opportunities.
Reading 1: Marketing definition
Organizational opportunities and resources
Assessing organizational opportunities and resources involves three considérations:
Evaluating marketing opportunities
Environmental scanning
Understanding the organization's capabilities and assets.
Marketing opportunity is the;
‘circumstances and timing that allow an organization to take action towards reaching a target market’. This relates to the concept of ‘strategic windows’
Reading 1: Marketing definition
Organizational opportunities and resources
Four main types of changes in a market:
Change resulting from new needs in a marketplace (for example, the need to be able to digitally scan documents rather than just photocopy them)
Change prompted from the development of new technology (for example the advent of mobile phones)
Change that redefines a market owing to changes in a product or in competitors’ product market strategies (for example, music-sharing websites)
Change in a channel (for example, online retailing).
Reading 1: Marketing definition
Organizational opportunities and resources
Four strategic options that existing organizations might adopt to respond to marketplace changes were also identified by in descending order of resource commitment:
try to gather the necessary resources to address the gap between market requirements and the organization's capability to meet them.
transfer focus to market segments with a better fit between requirements and the organization's capabilities
scale back future investment in the affected marketplace and extract whatever short-term profit is available
exit the affected marketplace.
Reading 1: Marketing definition
Organizational opportunities and resources
Taking advantage of strategic windows involves matching an organization's strengths to available opportunities.
To do this requires an internal analysis of an organization's strengths and weaknesses and
An external search for opportunities and threats. A commonly used tool to analyze strengths, weaknesses, opportunities and threats is the SWOT analysis
Reading 1: Marketing definition
Reading 2 - The external environment
External environment presents both opportunities and challenges.
Competition can come from organizations offering different solutions to the same customer needs, not just organizations offering similar products or services.
Differential advantage: a factor or trait that sets your offer aside from those of competitors.
Reading 2: The marketing environment
The Marketing Environment
Reading 2: The marketing environment
The Marketing Environment
Analyzing the marketing environment:
Marketing research; (data the organization collects about a particular market)
Marketing intelligence; (publicly available information about the marketing environment).
Reading 2: The marketing environment
The micro environment
The micro environment focuses on the groups of stakeholders and audiences in an organization's immediate environment that affect its activities and success.
These include:
Customers
Intermediaries
Suppliers
Competitors
Publics
Reading 2: The marketing environment
The micro environment
1- Customers:
Five types of customer markets:
Consumer markets – goods and services purchased by individuals and householders for personal consumption
Business markets – goods and services purchased by businesses for use in their operations or manufacturing
Reseller markets – goods and services purchased for reselling at a profit
Government markets – goods and services purchased by governments for the delivery of public services
International markets – goods and services purchased by buyers in other countries who may be any of the preceding four types of buyers – consumers, businesses, resellers or governments.
Reading 2: The marketing environment
The micro environment
2- Marketing intermediaries
They may include physical distributors, for example haulers, resellers, such as wholesalers, retailers, agents, dealers and brokers, or marketing consultants, including advertising, media or marketing research agencies.
3- Suppliers
Suppliers supply organizations with resources such as raw materials, components or finished goods that serve as inputs into organizations' offerings to their customers.
Reading 2: The marketing environment
The micro environment
4- Competitors
Competitors include:
Direct competitors: (who offer similar goods or services),
Substitutes: (who satisfy customers’ needs through some alternative means)
New entrants: (new competitors who may offer some enhanced goods or services).
5- Publics
Any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives“ such as financial organizations or persons; media reporting on business activities, such as television, radio, newspapers, etc.;
Reading 2: The marketing environment
The macro environment
Social factors
Societal changes present opportunities for innovation.
Technological factors
Technological innovations offer the potential for organizations to take advantage of strategic windows. Examples include 3D printing which has myriad uses and potential uses.
Economic factors
Changes in economic conditions can also stimulate innovation. For example Xercise4Less budget fitness clubs ‘offer members of all ages the opportunity to exercise and live a healthy lifestyle in a non-intimidating and judgment-free environment, at an affordable cost’
Reading 2: The marketing environment
The macro environment
Environmental factors
Environmental factors can present challenges, for example, in complying with increasing expectations that products be recyclable, but they can also encourage innovation.
Political factors
Political factors such as changes in political parties, governing political figures or membership of key trading groups can also change the macro environment and present opportunities as well as threats for organizations.
Reading 2: The marketing environment
The macro environment
Legal factors
Changes in legislation and regulation can create strategic windows for organizations with the resources to take advantage of them. For example, the Data Protection Act 1998 provided opportunities for companies offering data protection services to help organizations meet their data protection obligations.
Ethical factors
Consumers’ heightened awareness of the social and environmental impact of some business activities and offerings creates opportunities for organizations to meet demand for ethical offerings. Examples include a range of products that carry various types of ethical certification, for example by the Soil Association, the Fairtrade Labelling Organization (FLO) and the Forest Stewardship Council (FSC).
Reading 2: The marketing environment
Competitive Advantage and Strategies
Competitive advantage : some form of distinct superior value to offer over competitors that matters to customers.
Strategies include;
Cost leadership – being the lowest-cost provider through economies of scale and sizeable market share (for example, the low-cost airline Ryanair)
Differentiation – distinguishing an offering from competitors in some way that is important to customers, examples include Mercedes,
Focus – specializing to serve a niche market segment (for example, developing expertise in a particular area to meet the particular needs of a target group most closely).
Porter proposed two forms of focus strategy: a niche focus on cost and a niche focus on differentiation. An example of the latter is Aston Martin serving the super car niche market
Reading 2: The marketing environment
Competitive positions and differential advantage
Differential advantage has been defined as;
‘an attribute of a brand, product, service or marketing mix that is desired by the targeted customer and provided by only one supplier: it is a unique edge over rivals in satisfying this customer’
In offering a differential advantage, an organization needs to take into account;
Capabilities and resources
Its competitors and the environment
Its customer perspective on the advantage offered.
Reading 2: The marketing environment
