Marketing

Management

Sales & Marketing

Orientations
The Marketing Approach
(Understanding Customer Requirements &
Creating Customer Value)

The Value Chain

Marketing Plan
SWOT Analysis

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 Sales
Orientation
Sales Orientation
The concept holds, the consumers will not buy enough of the organization's
products unless the organization undertake a large selling and promotional
effort.

The selling concept is practiced most aggressively with unsought goods –

goods that buyers normally do not think of buying, such as insurance policies.
The selling concept is also practiced in non profit areas by fund raisers,
college admission offices and political parties.
Most firms practice the concept of selling when they have overcapacity. Their
aim is to sell what they make rather than make what the market wants.

It focuses on creating sales transactions rather than building on long term

profitable relationships with its customers. This can, sometimes lead to a long
term impact on sales because dissatisfied customers do not buy again.
Worse yet, while the average satisfied customer tells three others about good
experiences, the average dissatisfied customer tells ten others about his or
her bad experience.

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 Marketing
Orientation
Marketing Orientation

The marketing orientation holds that the key to achieving organizational goals consists
of the company being more effective than its competitors in creating delivering and
communicating customer value to its chosen target markets.
Theodore Levitt of Harvard drew a perceptive contrast between selling and marketing
concepts: “ Selling focuses on the needs of the seller: marketing on the needs of the
buyer”. Selling is preoccupied with the seller’s needs to convert his product into cash,
marketing with the idea of satisfying the needs of the customer by means of the
product and the whole cluster of things associated with creating, delivering and finally
consuming it.
The marketing concept rests on four pillars;Target market, Customer needs, Integrated
Marketing and profitability. The selling concept takes an inside out perspective. It starts
with the factory, focuses on its existing products and calls for heavy selling and
promoting to produce profitable sales. The marketing concept takes and outside-in
perspective. It starts with a well defined market, focuses on customer needs, co-
ordinates activities that affect customers and produces profit by satisfying customers.

This concept can be widely seen in Nokia phones. Their models are market specific
and aimed at satisfying well defined segments of customers.

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 Sales & Marketing
Orientations

Marketing Orientation
Profit

Sales Orientation

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Time 4
 Key
Differentiators
Marketing and Sales Orientations

 Marketing orientation gives long term profit because

customers do repeat purchases but sales orientation
gives short term profits.
 The market oriented firms conduct researches to find
out customer needs and wants unlike sales orientated
firms that conduct researches only to find out why
sales declined.
 Marketing oriented firms believe that the customer
satisfaction is the thing that the customer wants unlike
sales oriented firms that believe in quality and profits.

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 The Marketing
Approach
 The marketing approach is all about understanding and satisfying
customer needs.
 It is a fundamental idea of marketing that organizations survive and
prosper through meeting the needs and wants of customers. This
important perspective is commonly known as the Marketing Concept.
 The marketing concept is about matching a company's capabilities
with customer wants. This matching process takes place in what is
called the marketing environment.
 Businesses do not undertake marketing activities alone. They face
threats from competitors, and changes in the political, economic,
social and technological environment. All these factors have to be
taken into account as a business tries to match its capabilities with the
needs and wants of its target customers.
 An organization that adopts the marketing concept accepts the needs
of potential customers as the basis for its operations. Success is
dependent on satisfying customer needs.

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 The Marketing
Approach
Need
A need is a basic requirement that an individual wishes to satisfy. People have basic
needs for food, shelter, affection, esteem and self-development. Many of these needs
are created from human biology and the nature of social relationships. Customer
needs are, therefore, very broad.
Want
A want is a desire for a specific product or service to satisfy the underlying need.
For example, consumers need to eat when they are hungry, but what they want to eat
and in what kind of environment will vary enormously. For some, eating at McDonalds
satisfies the need to meet hunger. For others a micro waved ready-meal meets the
need. Some consumers are never satisfied unless their food comes served with a
bottle of fine Chardonnay.
Consumer wants are shaped by social and cultural forces, the media and marketing
activities of businesses.
Demand
Consumer demand is a want for a specific product supported by an ability and
willingness to pay for it.
For example, many consumers around the globe want a Mercedes. But relatively few
are able and willing to buy one.
Businesses therefore have not only to make products that consumers want, but they
also have to make them affordable to a sufficient number to create profitable demand.
Businesses do not create customer needs or the social status in which customer
needs are influenced. It is not McDonalds that makes people hungry. However,
businesses do try to influence demand by designing products and services that are
Attractive
Work well
Affordable
Available
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 The Value Chain

Specific interlinked activities through which an

organization can create competitive advantage are
Collectively termed as Value Chain.
The aim of these activities is to generate value that
exceeds the cost of carrying out these activities, thus
generating a profit margin.
The value chain comprises of two groups of activities.

Primary Activities
Support Activities

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 The Value Chain

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 The Value Chain
Primary Activities
 Inbound logistics include the receiving, warehousing,
and inventory control of input materials.
 Operations are the value-creating activities that
transform the inputs into the final product.
 Outbound logistics are the activities required to get
the finished product to the customer, including
warehousing, order fulfillment, etc.
 Marketing & Sales are those activities associated with
getting buyers to purchase the product, including
channel selection, advertising, pricing, etc.
 Service activities are those that maintain and enhance
the product's value including customer support, repair
services, etc.

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 The Value Chain

Support Activities
 Procurement - the function of purchasing the
raw materials and other inputs used in the value-
creating activities.
 Technology Development - includes research
and development, process automation, and other
technology development used to support the
value-chain activities.
 Human Resource Management - the activities
associated with recruiting, development, and
compensation of employees.
 Firm Infrastructure - includes activities such as
finance, legal, quality management, etc.

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 The Value Chain

Value Chain Analysis

 In order to better understand the activities leading to a
competitive advantage, one can begin with the generic value
chain and then identify the relevant firm-specific activities.
Process flows can be mapped, and these flows used to
isolate the individual value-creating activities.
 Once the discrete activities are defined, linkages between
activities should be identified. A linkage exists if the
performance or cost of one activity affects that of another.
Competitive advantage may be obtained by optimizing and
coordinating linked activities.
 The value chain also is useful in outsourcing decisions.
Understanding the linkages between activities can lead to
more optimal make-or-buy decisions that can result in either a
cost advantage or a differentiation advantage.

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 The Value Chain
The Value System

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 The Value Chain

The Value System

The firm's value chain links to the value
chains of upstream suppliers and
downstream buyers. The result is a
larger stream of activities known as
the value system. The development of a
competitive advantage depends not only
on the firm-specific value chain, but also
on the value system of which the firm is
a part.

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 The Marketing
Plan

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 The Marketing
Plan
The Marketing Plan is a highly detailed, heavily
researched and, hopefully, well written report that
many inside and possibly outside the organization will
evaluate. It is an essential document for both large
corporate marketing departments and for startup
companies. Essentially the Marketing Plan:
 forces the marketing personnel to look internally in
order to fully understand the results of past marketing
decisions.
 forces the marketing personnel to look externally in
order to fully understand the market in which they
operate.
 sets future goals and provides direction for future
marketing efforts that everyone within the
organization should understand and support.
 is a key component in obtaining funding to pursue
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 The Marketing
Plan
The Marketing Plan is generally undertaken for one of the following reasons:
 Needed as part of the yearly planning process within the marketing functional area.
 Needed for a specialized strategy to introduce something new, such as new product
planning, entering new markets, or trying a new strategy to fix an existing problem.
 Is a component within an overall business plan, such as a new business proposal to
the financial community.

There are many ways to develop and format a marketing plan. The approach taken here is
to present a 6-Part plan that includes:
 Purpose and Mission
 Situational Analysis
 Marketing Strategy and Objectives
 Tactical Programs
 Budgets, Performance Analysis and Implementation
 Additional Consideration

The marketing Plan Outline

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 SWOT Analysis
A scan of the internal and external environment
is an important part of the strategic planning
process. Environmental factors internal to the
firm usually can be classified as strengths (S) or
weaknesses (W), and those external to the firm
can be classified as opportunities (O) or threats
(T). Such an analysis of the strategic
environment is referred to as a SWOT analysis.

The SWOT analysis provides information that is

helpful in matching the firm's resources and
capabilities to the competitive environment in
which it operates. As such, it is instrumental in
strategy formulation and selection. The following
diagram shows how a SWOT analysis fits into an
environmental scan:
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 SWOT Analysis
Environmental Scan

Internal External
Analysis Analysis

Strengths Opportunities
Weaknesses Threats

SWOT Matrix

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 SWOT Analysis
Strengths

A firm's strengths are its resources and

capabilities that can be used as a basis for
developing a competitive advantage. Examples
of such strengths include:
 patents
 strong brand names
 good reputation among customers
 cost advantages from proprietary know-how
 exclusive access to high grade natural resources
 favorable access to distribution networks

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 SWOT Analysis
Weaknesses

The absence of certain strengths may be viewed as a weakness. For

example, each of the following may be considered weaknesses:
 lack of patent protection
 a weak brand name
 poor reputation among customers
 high cost structure
 lack of access to the best natural resources
 lack of access to key distribution channels

In some cases, a weakness may be the flip side of a strength. Take

the case in which a firm has a large amount of manufacturing
capacity. While this capacity may be considered a strength that
competitors do not share, it also may be a considered a weakness if
the large investment in manufacturing capacity prevents the firm from
reacting quickly to changes in the strategic environment.

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 SWOT Analysis
Opportunities

The external environmental analysis may

reveal certain new opportunities for profit
and growth. Some examples of such
opportunities include:
 an unfulfilled customer need
 arrival of new technologies
 loosening of regulations
 removal of international trade barriers

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 SWOT Analysis
Threats

Changes in the external environmental

also may present threats to the firm. Some
examples of such threats include:
 shifts in consumer tastes away from the
firm's products
 emergence of substitute products
 new regulations
 increased trade barriers

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 SWOT Analysis
The SWOT Matrix

A firm should not necessarily pursue the more lucrative

opportunities. Rather, it may have a better chance at
developing a competitive advantage by identifying a fit
between the firm's strengths and upcoming
opportunities. In some cases, the firm can overcome a
weakness in order to prepare itself to pursue a
compelling opportunity.

To develop strategies that take into account the SWOT

profile, a matrix of these factors can be constructed.
The SWOT matrix (also known as a TOWS Matrix)

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 SWOT Analysis
The SWOT Matrix

  Strengths Weaknesses

S-O strategies W-O strategies
Opportunities

S-T strategies W-T strategies
Threats

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 SWOT Analysis
 S-O strategies pursue opportunities that are a
good fit to the company's strengths.
 W-O strategies overcome weaknesses to
pursue opportunities.
 S-T strategies identify ways that the firm can
use its strengths to reduce its vulnerability to
external threats.
 W-T strategies establish a defensive plan to
prevent the firm's weaknesses from making it
highly susceptible to external threats.

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