Marketing Management misilamani@yahoo.

com

16/6/2012

The Presenter
This module is presented by,

R.MASILAMANI(Masi in short)(misilamani@yahoo.com) He has more than 30 years of working, training & consulting

experience Has acquired a profound knowledge and exposure to management, in general, and some specific disciplines, in particular His specifics include performance management, leadership, finance and project management His exposure includes, Mc Kenzie, Dale Canegie, INTAN, PETRONAS, OUM, UTM and some other private educators and companies, both local (Msia) and international Marketing is one of his passionate areas of focus

16/6/2012

THE MARKETING CONCEPT

16/6/2012

Agenda

Objectives Introduction Managing the Marketing Mix Marketing Management Philosophies Competitive Strategies Impact of IT on Marketing Mix

16/6/2012

The Objectives
In this course, we will learn, Why is marketing important? What is the scope of marketing? What are some core marketing concepts? How has marketing management changed in recent years? What are the tasks necessary for successful marketing management
Principal Source: Marketing Management, Philip Kotler and Kevin Keller(12th,13th &14th editions)

16/6/2012

The Introduction

Case 1: Is Wal-Mart in a mid-life crisis?

16/6/2012 6

Wal-Mart Stores, Inc

It is branded as Walmart since 2008 and Wal*Mart before then, is an American multinational retailer corporation that runs chains of large discount department stores and warehouse stores It is the world's 18th largest public corporation, according to the Forbes Global 2000 list It is the largest public corporation when ranked by revenue by FORTUNE 500 list. It is the biggest private employer in the world with over two million employees It is also the largest retailer in the world

but

IT TOO has MARKETING CHALLENGES!

16/6/2012 7

Walmart logo, used since June 30, 2008

Type Traded as Industry Founded Founder(s) Headquarters Number of locations Area served Key people
Public NYSE: WMT Dow Jones Industrial Average Component S&P 500 Component Retailing 1962 (1962) Sam Walton Bentonville, Arkansas, U.S. 362151N 0941259W / 36.36417N 94.21639W / 36.36417; -94.21639 8,970 (2011) Worldwide Mike Duke (President & CEO) S. Robson Walton (Chairman) Apparel/Footwear Specialty, Cash & Carry/Warehouse Club, Discount Department Store, Discount Store, Hypermarket/Supercenter/Superstore, Supermarket US$ 446.950 billion (2012) US$ 026.558 billion (2012) US$ 015.699 billion (2012) US$ 193.406 billion (2012) US$ 071.315 billion (2012)

Services

Revenue Operating income Net income Total assets Total equity Owner(s) Employees Divisions
Subsidiaries Website

Walton family
2.2 million (2012) Walmart Canada Asda, Sam's Club, Seiyu Group, Walmex Wal-Mart Stores.com Walmart.com References: [1][2][3]

16/6/2012

First Among Top 20 companies in the U.S, 2012

1 Wal-Mart Stores 2 Exxon Mobil 3 Chevron 4 General Electric 5 Bank of America Corp. 6 ConocoPhillips 7 AT&T 8 Ford Motor 9 J.P. Morgan Chase & Co. 10 Hewlett-Packard

11 Berkshire Hathaway 12 Citigroup 13 Verizon Communications 14 McKesson 15 General Motors 16 American Internatlonal Group 17 Cardinal Health 18 CVS/Caremark 19 Wells Fargo 20 Intl. Business Machines

16/6/2012

The Wal-Mart Saga

Wal-Mart was the largest company on the list in 2007 and 2008. ExxonMobil was in second place in 2007 and 2008, but overtook Wal-Mart in 2009. Wal-Mart once again regained the top spot in 2010and 2011. One should note that the revenue and profit numbers are for the year previous to the named year: therefore the 2010 list ranks companies by 2009 revenues.

Top Global companies: Most Revenue Earners-From FORTUNE 500 List

2011 1.Wal-Mart Stores 2.Royal Dutch Shell 3.Exxon Mobil 4.BP 5.Sinopec Group 6.China National Petroleum 7.State Grid 8.Toyota Motor 9.Japan Post Holdings 10.Chevron
16/6/2012

2010 1.Wal-Mart Stores 2.Royal Dutch Shell 3.Exxon Mobil 4.BP 5.Toyota Motor 6.Japan Post Holdings 7.Sinopec 8.State Grid 9.AXA 10.China National Petroleum

2009 1. Exxon Mobil 2. Wal-Mart Stores 3. Chevron 4. ConocoPhillips 5. General Electric 6. General Motors 7. Ford Motor 8. AT&T 9. Hewlett-Packard 10. Valero Energy
10

What is Marketing
Oxford defines marketing as the action or business of

promoting and selling products or services, including market research and advertising. The management process responsible for identifying, anticipating and satisfying customer requirements profitably Institute of Marketing Marketing is a customer orientation, backed by marketing programs aimed at generating customer satisfaction, as the key to achieving organisational goals- - Philip Kotler
16/6/2012 11

Dr. Philip Kotler Defines Marketing

Philip Kotler, one of the worlds leading authorities on marketing, and the S.C. Johnson Professor of International Marketing at the Kellogg Graduate School of Management, Northwestern University, includes the following three definitions of marketing in his classic textbook, Marketing Management: Analysis, Planning, Implementation and Control:
1) Marketing is the process by which an organization relates creatively, productively, and profitably to the marketplace. 2) Marketing is the art of creating and satisfying customers at a profit. 3) Marketing is getting the right goods and services to the right people at the right places at the right time at the right price with the right communications and promotion.. Your thoughts on Dr. Kotlers definition of marketing? Does this 1991 definition apply to current social media trends? Social media did not exist when he wrote this definition. It exists now. Traditional principles apply to the present as well as the future!

Stuart Atkins-Atkins Marketing Solutions Philip Kotler, Marketing Management: Analysis, Planning, Implementation, and Control, 7th ed. (Upper Saddle River, NJ: Prentice Hall, 1991), 31

16/6/2012

12

MARKETING - DEFINITION

16/6/2012

13

Two Perspectives of Marketing

Business is about making money from satisfied customers. Without them there can be no long term future for any commercial organisation John Eagan

I thought we were doing marketing. We have a corporate Vice President for marketing, a top-notch sales force, a skilled advertising department and an elaborate marketing planning procedures. These fooled us. When the crunch came, I realized that we were not producing the cars that people wanted. We were not responding to new needs. Our marketing operation was nothing more than a glorified sales department -Lee Iococca

16/6/2012

14

Priorities for Marketing Improvement

In what areas of marketing management would you most like your company to improve? Top Priority:____________
16/6/2012 15

A philosophical Definition of Marketing:

Marketing is concerned with all the exhilerating big things and all the troublesome little things that must be done in every nook and cranny of the creative organisation in order to achieve the corporate purpose of holding the clients
-Theodore Levitt-Guru of Marketing Criticism
16/6/2012 16

Todays Winning Marketing Approaches

Lessons from the New Economy:

Brands are NOT built on advertising, they are built on trust in the brands promise of value (Amazon)
Demonstrate value: SciQuest Defend your price: AOL Build bridges to the Old Economy Leverage synergies: AOL-Time Warner Click-and-Mortar: ToyRUs
Ref: Kotler
16/6/2012 17

Toyotas Marketing Approach

In 2010, Toyota Motor Corporation( TMC), was declared as the largest manufacturer of automobiles in the world in terms of production Japanese companies tend to have a different strategy when it comes to marketing, selling, and achieving The first difference which Toyota have form the rest is their outlook Therefore, if Toyota feels like launching something new it will probably do it Japanese, owing to their intelligence are (TMC makes better cars this way) also considerably fast with the art of imitation people are then drawn towards that particular product and they are not scared of becoming the initial buyers Toyota considers the buyer as the master while the company itself plays the role of the slave-serve the master what you think he needs Japanese companies waste less time, money, and space on marketing The people in Toyota seem to worry more about the product then the marketing of that product. It has gained enough confidence from the public that its name should be enough to convince an individual to buy a car from the great Toyota.
16/6/2012 18

Keys for Success

Customer Segment Focus Brand Positioning Value-Based Pricing Channel Entry Strategies Low Cost Product Innovation Strategies
16/6/2012 19

Goals of a Marketing System

Marketing Affects everyone Marketing is controversial Maximise Consumption Maximise Choice Maximise Consumer satisfaction Maximise Life Quality

16/6/2012

20

Marketing management
Is the analysis, planning, implementation and control of programs designed to create, build and maintain mutually beneficial exchanges and relationships with target buyers for the purpose of achieving organisational objectives It is synonimous with demand management
16/6/2012 21

Production Orientation VS Marketing Orientation

Business firms can be either production oriented or marketing oriented In general a PO firm tries to get customers to buy what the firm has produced AND the MO firm tries to sell what customers want Most often firms cannot be so clearly classified
Assignment: Try this exercise to identify whether the following firms are POs or MOs.
16/6/2012 22

Selling VS Marketing
FOCUS
PRODUCTS

MEANS
SELLING AND PROMOTING

END
PROFITS THROUGH SALES VOLUME

THE SELLING CONCEPT

NEEDS

INTEGRATED MARKETING

PRFITS THROUGH CUSTOMER SATISFACTION

THE MARKETING CONCEPT

16/6/2012

23

Modern Marketing Management- an example

1. Obama for America presidential campaign story. His last Presidential Campaign Includes a thoroughly integrated modern marketing strategy A well managed campaign serves as a good marketing success too
Reference: Marketing Management, 14th Edition, by Philip Kotler & Kevin Lane Keller
16/6/2012 24

Marketing Environment
The market environment refers to factors and forces that affect a firms ability to build and maintain successful relationships with customers Three levels of the environment are: Micro (internal) environment - marketing forces within the company that affect its ability to serve its customers. Meso environment the industry in which a company operates and the industrys market(s). Macro (national) environment - larger societal forces that affect the microenvironment
16/6/2012 25

Macro Environmental Factors Influencing Business

Demographic Environment

Economic Environment

Social Cultural Environment

Internal Organizational processes

Natural Environment

Political-Legal Environment

Technological Environment
16/6/2012 26

What is Strategic Marketing?

o The intent of marketing is simply to shorten the sales cycle o Strategic Marketing is doing this, well, strategically. Many smaller or mid-size companies (and even big ones for that matter) recognize the need for marketing, but dont understand whats involved to put together a successful, strategic campaign o Strategic Marketing calls for a more structured approach where we define what were trying to accomplish, measure and analyze the markets and media options and implement an integrated campaign that will help you capture the most value for your budgeted marketing dollars by achieving your defined objectives

16/6/2012

27

The Basic Thought Process of Strategic Marketing

After you have defined your business objectives, the basic thought process should go something like this:
,

1. IDENTIFY your audience or market 2. Thoroughly UNDERSTAND your audience or market 3. SELECT the marketing mediums that your target is most engaged with 4. DEVELOP a messaging strategy to effectively communicate with your audience

5. EXECUTE a consistent, integrated campaign across your selected mediums

16/6/2012

28

Marketing Plan
The marketing plan is the central instrument for directing and coordinating the marketing effort. Market Planning is the managerial process of developing and maintaining a viable fit between the organizations objectives, skills and resources and its changing market opportunities. The aim of strategic planning is to shape and reshape the companys businesses and products so that they yield target profits and growth.
16/6/2012 29

Marketing Plan
The marketing plan operates at two levels. The strategic marketing plan develops the broad marketing objectives and strategies based on an analysis of target market and value proposition. The tactical marketing plan outlines specific marketing tactics, including advertising, merchandising, pricing, channels, service and so on.
16/6/2012 30

The Strategic Planning, Implementation and Control Process

PLANNING IMPLEMENTING CONTROLLING CORPORATE PLANNING

MEASURING RESULTS
ORGANISING DIAGNOSING RESULTS TAKING CORRECTIVE ACTION/S

DIVISIONAL PLANNING
SECTIONAL PLANNING PRODUCT PLANNING

IMPLEMENTING

16/6/2012

31

Marketing and Business

There is only one valid definition of business purpose: to create a customer. It is the customer who determines what a business is. Hence the enterprise has only two basic functions: Marketing and Innovation. Marketing is the distinguishing, unique function of the business".
(Peter F. Drucker, "Management Tasks, Responsibilities, Practices", Heinemann, 1974.)

16/6/2012

32

Peter Drucker has mentioned the following questions to be asked for setting corporate mission
1.What is our business?
5.What should our business be? 4.What will our business be?
16/6/2012

2.Who is the customer ? 3.What is of value to the customer?

33

Assigning Resources to each SBU

BCG / Growth-Share Matrix

16/6/2012

34

Ansoff has proposed Product/ Market Expansion Grid for the same
Current Products New Products 3. Product Development Strategy 1. Market Penetration Strategy

Current Markets

New Markets

2. Market-development strategy

4. Diversification strategy

16/6/2012

35

Steps in Marketing Plan

Designing Business Mission

Analysis of the Market situation

Formulation of Marketing Strategies

Preparing Action Programs and Budgets

Developing Control Procedures

16/6/2012 36

SWOT Analysis
Internal Factors Strength Technological skills Leading Brands Distribution Channels Customer Loyalty/Relationship Quality of Product/Service Economies of Scales Opportunities New Distribution Channels Changing customer tastes Liberalisation of Geographical Markets Technological advances Changes in govt. policies Lower personal taxes Weaknesses Absence of Important skills Weak Brands Illogical Distribution Low customer Retention Unreliable product/se

External Factors

Threats Changing customer tastes Closing of geographical market Technological advances Changes in govt. policies Tax increases Change in population age structure
37

16/6/2012

Stages of Development in Marketing Organisation

Stage I Simple Sales Department
PRESIDENT

SALES VICE PRESIBENT

SALES FORCE

OTHER MARKETING FUNCTIONS (hired from outside}

16/6/2012

38

Stages of Development in Marketing Organisation

Stage II- Sales Department with ancillary Marketing Functions
PRESIDENT

SALES VICE PRESIDENT

SALES FORCE

MARKETING DIRECTOR OTHER MARKETING FUNCTIONS(internal staff & external support)

16/6/2012

39

Stages of Development in Marketing Organisation

Stage III Separate Marketing Department

PRESIDENT

SALES VICE PRESIDENT

MARKETING VICE PRESIDENT

SALES FORCE

OTHER MARKETING FUNCTIONS

16/6/2012

40

Stages of Development in Marketing Organisation

Stages IV & V Modern / Effective Marketing Company
PRESIDENT EXECUTIVE VICE PRESIDENT MARKETING & SALES MARKETING VICE PRESIDENT

SALES VICE PRESIDENT

SALES FORCE

OTHER MARKETING FUNCTIONS

16/6/2012

41

Stages of Development in Marketing Organisation

Stage VI Process and Outcome Based Company

CROSS DISCIPLINARY TEAM WITH PROCESS LEADERS

MARKETING DEPARTMENT
MARKETING PERSONNEL

16/6/2012

42

Product Price Place

Promotion

16/6/2012

43

Types of Marketing Organisations

Functional OrganizationThe most common form of marketing organization consists of functional specialists reporting to the marketing vice-president, who coordinates their activities Product oriented- In large companies with multiple products, individual managers look after each brand, product or product-line. In such organizations, product managers develop and implement a complete strategy and marketing program for specific products, brands or product lines. Market Oriented(Geographic Organisation)-Most of the companies that sell across the country or internationally often use a geographic or market-oriented or territory-oriented organization. In such an organization, marketing and sales people are assigned to specific territories, geographic locations, countries, regions or market segments.
16/6/2012 44

Functional Organisation
Marketing VP

Mktg. Admin Mgr.

Advertising & Sales Promotion Mgr.

Sales Mgr

Mktg Research Mgr

New Products Mgr

16/6/2012

45

Product Oriented Organisation

GENERAL MANAGER

MANUFAC TURING

MARKETING

FINANCE

PUBLIC RELATIONS & CORPORATE COMMUNICATIONS SUPPORT

MARKETING RESEARCH

PRODUCT MANAGEMENT

PRODUCT MGR 1
16/6/2012

PRODUCT MANGER 2

PRODUCT MANAGER 3
46

Market Oriented Organisation

GM

MNFG

MKTG

FIN

PR & CC

MGR REGION 1

MGR REGION 2

MGR REGION 3

16/6/2012

47

Product vs Market
Market Managers Mens Wear Womens Wear Home Furnishings Industrial Markets

P r o d u c t M a n a g e r s

Rahul

Radzi

Rayon

Ravin

16/6/2012

48

The Marketing strategy Process

Corporate Strategy BUSINESS PURPOSE

INDUSTRIAL ANALYSIS

CORE STRATEGY

COMPANY ANALYSIS

MARKAT TARGET

COMPETITIVE POSITIONING

DIFFERENTIAL ADVANTAGE

CONTROL

IMPLEMENTATION

ORGANIZATION

MARKETING MIX
16/6/2012 49

The Holistic Marketing Concept - Concept Summary

Holistic marketing recognizes that there are many variables and activities related to these variables that matter in marketing and therefore a broad integrative perspective is often necessary. Kotler and Keller highlighted four components of holistic marketing. Relationship marketing Integrated marketing Internal marketing Social responsibility marketing.
Marketing Management, 14th Edition, Philip Kotler - Book Information, Review, Concept and Chapter

16/6/2012

50

Catalyst for GLOMAC

PLAN Malaysias Glomac Bhd is expected to be more than RM500mil strong, buoyed by demand in its three major townships, compared to RM400mil in 2011.

. The sales of its township development in Sungai Buluh, Rawang and sri ir Saujana in
Johore did very well.

. About 97% of the of the Reflection Resiednces in Mutiara Damansara launched in April
have been taken up.

. We have been expanding our land our land bank quite robustly in the last 18 months
said Iskandar, its Group CEO. We will be launching the SG Buluh development by year end. We will also be looking at developing our land in Sepang, 4.5 Km to International Airport he added. STRATEGY On its strategies, Iskandar revealed thatGlomac is keen to build landed property as there is good demand for it currently. We are also interested in acquiring more land in the Greater Kuala Lumpur area with the right prices he said further.
Source: STAR Biz, 20 June, 2012 16/6/2012
51

Managing the Marketing Mix

16/6/2012

52

The Marketing Environment

16/6/2012

53

Marketing Mix
Marketing mix (Product, Price, Place, Promotion) When marketing their products firms need to create a successful mix of:
the right product sold at the right price in the right place using the most suitable promotion

Case Study-Mall Mania In Malaysia

Read more: http://businesscasestudies.co.uk/business-theory/marketing/marketing-mix-priceplace-promotion-product.html#ixzz1xs22sOK8

16/6/2012

54

There could be also 7Ps

Once you've developed your marketing strategy, there is a "Seven P Formula" you should use to continually evaluate and re-evaluate your business activities (generally its 4Ps)

These seven are:

product, price, promotion, place,

packaging, positioning & people

Take charge of your marketing efforts and beat the competition with this simple formula..

16/6/2012

55

Marketing Mix
Marketing Mix or the 4Ps of Marketing are the variables that marketing managers can control In order to best satisfy customers in the target market. The Marketing Mix can be diagramatically portrayed AS:

PRODUCT

PLACE

TARGET MARKET

PRICE

PROMOTION

16/6/2012

56

Domestic vs International Marketing Mix

Qestion: Consider the marketing mix. How does the marketing mix differ in the domestic and international environments? ? How is it the same? Should international marketing managers standardize the marketing mix? Why or why not? Answer: Differences : Vast differences. Are they literate or not? Is there broadcast radio/tv or not? Is there a newspaper or a shaman? Free press or government controlled access? I mean, come on. Is this even a legitimate question? In the US, the marketing mix differs from town to town in the same state. You think it's the same globally? What are you smoking? Similarities : We are all human. We all want the same thing: something for nothing, or as close to that as we can get. But that has nothing to do with the marketing mix. Conclusion: Marketing is primarily based on available media. Different markets have different media strengths and weaknesses
16/6/2012 57

Marketing Mix
To create the right marketing mix, businesses have to meet the following conditions: The product has to have the right features - for example, it must look good and work well. The price must be right. Consumer will need to buy in large numbers to produce a healthy profit. The goods must be in the right place at the right time. Making sure that the goods arrive when and where they are wanted is an important operation. The target group needs to be made aware of the existence and availability of the product through promotion. Successful promotion helps a firm to spread costs over a larger output
Read more: http://businesscasestudies.co.uk/business-theory/marketing/marketing-mix-price-place-promotionproduct.html#ixzz1xs2VtqVB

16/6/2012

58

Elements of the global marketing mix

The Four Ps of marketing: product, price, placement, and promotion are all affected as a company moves through the five evolutionary phases to become a global company. Ultimately, at the global marketing level, a company trying to speak with one voice is faced with many challenges when creating a worldwide marketing plan. Unless a company holds the same position against its competition in all markets (market leader, low cost, etc.) it is impossible to launch identical marketing plans worldwide.
Ref:Nisant Chakram(Marketing Management)
16/6/2012 59

Elements of the global marketing mix Coco Cola

Product

A global company is one that can create a single product and only have to tweak elements for different markets. For example, Coca-Cola uses two formulas (one with sugar, one with corn syrup) for all markets. The product packaging in every country incorporates the contour bottle design and the dynamic ribbon in some way, shape, or form. However, the bottle can also include the countrys native language and is the same size as other beverage bottles or cans in that same country. Price Price will always vary from market to market. Price is affected by many variables: cost of product development (produced locally or imported), cost of ingredients, cost of delivery (transportation, tariffs, etc.), and much more. Additionally, the products position in relation to the competition influences the ultimate profit margin. Whether this product is considered the high-end, expensive choice, the economical, low-cost choice, or something in-between helps determine the price point Placement How the product is distributed is also a country-by-country decision influenced by how the competition is being offered to the target market. Using Coca-Cola as an example again, not all cultures use vending machines. In the United States, beverages are sold by the pallet via warehouse stores. In India, this is not an option. Placement decisions must also consider the products position in the market place. For example, a high-end product would not want to be distributed via a dollar store in the United States. Conversely, a product promoted as the low-cost option in France would find limited success in a pricey boutique
16/6/2012 60

Elements of the global marketing mix

Promotion . After product research, development and creation, promotion (specifically advertising) is generally the largest line item in a global companys marketing budget. At this stage of a companys development, integrated marketing is the goal. . The global corporation seeks to reduce costs, minimize redundancies in personnel and work, maximize speed of implementation, and to speak with one voice. If the goal of a global company is to send the same message worldwide, then delivering that message in a relevant, engaging, and cost-effective way is the challenge. . Effective global advertising techniques do exist. The key is testing advertising ideas using a marketing research system proven to provide results that can be compared across countries. The ability to identify which elements or moments of an ad are contributing to that success is how economies of scale are maximized. . Market research measures such as Flow of Attention, Flow of Emotion and branding moments provide insights into what is working in an ad in any country because the measures are based on visual, not verbal, elements of the ad
16/6/2012 61

Creating a Winning Marketing Mix

A JD Sports case study
INTRODUCTION

By focusing on the needs of consumers, an organisation creates a business that can outperform its competitors. Being closer to consumers and providing exactly what they want is known as market orientation. A market-orientated business carries out research to find the needs and wants of consumers. It then uses the findings to design products and marketing strategies to satisfy these needs...
This marketing mix case study describes how JD (part of the JD Sports Fashion PLC Group of companies), a large and well-known retailer, manages the balance of its marketing mix around its consumers' needs in order to achieve business growth

Read more: http://businesscasestudies.co.uk/jd-sports/#ixzz1xs4JtYBw

http://businesscasestudies.co.uk/jd-sports/creating-a-winning-marketing-mix/#ixzz1xs0vI9Hv

16/6/2012

62

The 4Ps

The 4Ps Address the Consumer

16/6/2012

63

The contents of 4Ps

PRODUCT brand packaging warranties service features PLACE channels locations transport delivery stocks PRICE credit terms payment methods discounts installments commissions PROMOTION advertising sales promotion publicity selling media

Creating a winning marketing mix. A JD Sports case study

16/6/2012 64

What is a product?
a product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. It includes physical objects, services, persons. places, organisations and ideas. - Philip Kotler, Principles of Marketing
A JD Sports case study: Product

Case Highlight: Flying into aviation history: Singapore Airlines scores

another first with the Airbus A380
16/6/2012 65

5 PRODUCT or SERVICE Questions

Ask yourself the following five questions regarding your product or service:

1. For each product or service you offer, do you know which stage of the product life cycle they fit? 2. Are there any changes you can make to mature and declining products that may allow new life? 3. For mature products or services, are there new markets or segments open for expansion (geography, demographics, and so forth)? 4. Plug in product life cycle awareness to new or future products you may be planning to release. 5. Are there price changes needed for your products or services based on their current PLC stage?
Your product, price, place, and promotional strategies also apply differently, depending on how young or how mature your product is. Dont just manage a product, but plan its life. Like an investment, it may need some thoughtful guidance

JD Sports case study: Introduction

16/6/2012 66

THREE LEVELS OF PRODUCT

Core Product

Core Benefit of Service

Augmented Product
(Installation , delivery and credit, after sales service, warranty)
16/6/2012

Tangible Product
(packaging, style , features, brand quality)
67

Whats Product Life Cycle?

To say that a product has a life cycle is to assert three things: Products have a limited life, and thus every product has life cycle Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller, Products require different marketing, financing, manufacturing, purchasing, and human resource strategies in each life cycle stage
16/6/2012 68

The four main stages of a product's life cycle and the accompanying characteristics are: Stage
1. Market introduction stage

Characteristics
1.costs are very high 2.slow sales volumes to start 3.little or no competition 4.demand has to be created 5.customers have to be prompted to try the product 6.makes no money at this stage 1.costs reduced due to economies of scale 2.sales volume increases significantly 3.profitability begins to rise 4.public awareness increases 5.competition begins to increase with a few new players in establishing market 6.increased competition leads to price decreases

2. Growth stage

3. Maturity stage

1.costs are lowered as a result of production volumes increasing and experience curve effects 2.sales volume peaks and market saturation is reached 3.increase in competitors entering the market 4.prices tend to drop due to the proliferation of competing products 5.brand differentiation and feature diversification is emphasized to maintain or increase market share 6.Industrial profits go down
1.costs become counter-optimal 2.sales volume decline 3.prices, profitability diminish 4.profit becomes more a challenge of production/distribution efficiency than increased sales 69

4. Saturation and decline stage

16/6/2012

Limitations of PLC
Factors Sales Investment Cost Introduction Low Growth High High(Lower than intro stage) Maturity High Decline/Satur ation Low

Very High

Low

Low

Competition

Low or no competition Very High Low

High

Very High

Low

Advertising Profit

High High

High High

Low Low

16/6/2012

70

Product Life Cycle

$sales

Time Introduction Growth Maturity Decline Saturation

16/6/2012

71

ADOPTION OF NEW PRODUCTS

Number of Custom ers

Time Innovators Early Adopter Early Majority Late Majority Laggards

16/6/2012

72

MARKETING ACTIVITIES AND PRODUCT LIFE CYCLES

LEVEL OF INDUSTRYS MANUFACTURING CAPACITY

SATURATION

SPARE

MATURITY

RECYCLE
GROWTH

INTRODUCTION

DECLINE MARKETING EMPHASIS

Product Quality
16/6/2012

Sales Product Promotion Advertising Development Selling

Pricing Moves

Market Segmentation

Cost Sales Control Market Promotion Pricing development 73 Moves

Designing products
New product Development Strategy: Primary Decision Idea Generation Idea Screening Concept Development Testing Marketing Strategy Development Business Analysis Product Development, and Market Testing
JD Sports case study: Product
16/6/2012 74

Designing products
Product Life Cycle Strategies:
Preliminary discussion Introduction stage Growth stage Maturity Stage

Case Study 2: Decline Stage Apple iPhone versus HTC Touch: Which brand of
touch-screen phone will the Asian consumer bite into?
16/6/2012 75

The Three Levels of a Product-revisit

TANGIBLE PRODUCT Brand name Packaging Features Styling Quality of components Core Benefit or Service CORE BENEFIT of SERVICE

AUGMENTED PRODUCT(INTAN GIBLE) Delivery and credit Installation After sales service warranty

16/6/2012

76

Classical Shape of Product Life Cycle Curve

O U T P U T

INTRODUCTION

GROWTH

MATURITY TIME

DECLINE

16/6/2012

77

Capacity Marketing effort Profitability Yearly sales

Market Build development up Filling the backlogs Excess capacity Price war Replace Normal growth market(survival of the ment market( fittest) mature)

capacity

Relative intensity of marketing effort

Sales

Saturation

Time
16/6/2012

Typical profitability
78

The Product Life Cycle Curve May Have More Than One Shape
1.The high learning product life cycle 2.The missing link and other low learning substantive product life cycles 3.1.The fad With a significant residual market

3.The fad

4.The instant bust

5.The market speciality

16/6/2012

79

The Product Life Cycle Curve May Have More Than One Shape
.The pyramid cycle 7.The aborted introduction

Re-growth periods

9.The fashion cycle

16/6/2012

80

Six Steps in the New Product development Process

STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 STEP 6
16/6/2012

IDEA ACQUITITION

INITIAL SCREENING
BUSINESS ANALYSIS PRODUCT DEVELOPMENT MARKET TESTING INTRODUCTION
81

Brand Equity
Definition: Brand equity is a phrase used in the marketing industry to try to describe the value of having a well-known brand name
Case 3:

A sauce "on its course" - The Lee Kum Kee brand and its longevity as a family business through building strong brand recognition
16/6/2012 82

What is PRICE?
PRICE is the value placed on what is exchanged. PRICE is not always money paid The profit factor can be determined mathematically(P*Q-TC) PRICE is the only variable in the marketing mix that can be adjusted quickly and easily
JD Sports case study: Price
16/6/2012 83

Pricing Objectives
Pricing objectives is the overall goals that describe what the firm wants to achieve through its pricing efforts The objectives must be consistent with the companys overall mission and purpose First the company has to decide ways to accomplish with its particular product. If the company has selected its target market and market positioning carefully, then its marketing mix strategy, including price, will follow.
16/6/2012 84

Additional Pricing Strategies

Company survival Maximum Current Profit Maximum Current Revenue Product-Quality Leadership Maximum Market Skimming Maximum Sales Growth

16/6/2012

85

Factors affecting Pricing Decisions

ORGANISATIO NAL & MARKETING OBJECTIVES PRICING OBJECTIVES COSTS OTHER MARKETING MIX VARIABLES

PRICING DECISIONS

CHANNEL MEMBER EXPECTATIONS

BUYERS PERCEPTIONS

COMPETITION

LEGAL & REGULATORY ISSUES

16/6/2012

86

Price Guidelines
Dont overestimate the importance of price Value for money Is price a barometer of Quality Beware of dealing with the lowest bidder If you deal with the lowest bidder it is wise to add something for the risk you run. And if you do that you will have enough to pay something better
87

16/6/2012

Pricing Options
Psychological Pricing Company Pricing Policies Geographical Pricing Discounts Promotional Pricing Product Bundling Pricing Optional Feature Pricing Two part pricing
88

16/6/2012

Pricing Options
Marginal cost too Low Price limit Price Limit Average Price Going Per Unit Rate Price Too High Price Limit

Discretionary Range for the Company

16/6/2012

89

Strategic Pricing Policies

EITHER Skimming

- high initial price moving down experience curve at slower rate

OR Penetration

- low initial price, fast rate of product adoption, hence steeper experience curve

16/6/2012

90

Circumstances Favouring Skimming

Demand is Likely to be Price Inelastic There are Likely to be different PRICEMARKET segments, Thereby Appealing to Those Buyers First Who Have A Higher Range of Acceptable Prices Little is Known About the Costs of Producing and Marketing the Product

16/6/2012

91

Circumstances favouring Penetration

Demand is Likely to be Price Elastic Competitors are Likely to Enter the Market Quickly There are no Distinct and Separate PRICEMARKET Segments There is a Possibility of Large Savings in Production and marketing Costs if a large Sales Volume can be Generated(the experience factor)
16/6/2012 92

Price Determinants
CUSTOMERS COMPETITION

COSTS

The Three Cs
16/6/2012 93

What is PLACE?
Marketing experts know that the best product in the world will never make an impact in the business world if no one can locate and obtain it (Delaney, 1994). So the location of your business is PLACE Place is the location of business
A JD Sports case study: Place
16/6/2012 94

Distribution Channels
Channels
Supplier Wholesaler Agent Distributer Retailer Customer

Flows
Information Product Finance Communication

Logistics
Information Processing Product Availability Service Delivery Account Management

16/6/2012

95

Evolving Distribution strategies

PRODUCER
DIRECT MARKET ING

DIRECT SALES

DISTRIBU TERS

DEALERS

AGENTS

JOINT DISTRIBU TION

LICENSING

PRIVATE LABLE

RETAIL OUTLETS

BROKERS

COMPUT ER TO COMPUT ER

16/6/2012

96

Distribution Analysis
Is the desired market access being achieved? How are the individual distribution channels evolving? Are outlets giving appropriate service? Does the strategy give competitive advantage? Are distributers regularly assessed? Are individual distributers becoming too powerful? Is competition among distributers becoming too strong?
16/6/2012 97

The Key Elements of Place

Channels of Distribution Types of Intermediary Criteria for Selection of distribution Channels Finance, Price and Profit Margin in Distribution Motivation of Intermediaries The Elements of a Physical Distribution System
16/6/2012 98

What is PROMOTION
It is fair and accurate to say that promotion is one of the pillars of success The success of the promotional message is evidenced by the cross-generational loyalty of customers and many other factors in companies PROMOTION is just selling at the right place and right time
JD Sports case study: Promotion
.
16/6/2012 99

Promotional Mix
Unawareness Advertising Public Relations Awareness

Brochures Direct Mail Comprehension

Personal Selling Conviction Sales Promotion After Sales Service Satisfaction
16/6/2012 100

Action

Promotion Mix
Fast Moving Consumer Customer Durable Fast moving Industrial Industrial durable

Personal Selling

Sales Promotion

Publicity

Advertising

16/6/2012

101

Communications process

SENDER

MESSAGE

RECEIVER

SENDER

RESPONSE

CIRCULAR MODEL

STIMULUS

16/6/2012

RECEIVER

102

COMMUNICATIONS STRATEGY
E.g. What shall we say? How shall we say it? What should they think? What should they do Decisions
Why(objectives) Who(target) What(Copy platform) Where(media) How(creative platform)
16/6/2012

When(timing) How Much(budget) Schedule Response Evaluatory

Interdependent Many Constraints

103

What channel of distribution will they use?

Two types of channel of distribution methods are available. Indirect distribution involves distributing your product by the use of an intermediary. For example a manufacturer selling to a wholesaler and then on to the retailer.. Direct distribution involves distributing direct from a manufacturer to the consumer. For example Dell Computers providing directly to its target customers. The advantage of direct distribution is that it gives a manufacturer complete control over their product
16/6/2012 104

What channels of distribution will they use?

Manufacturer Manufacturer

Wholesaler

Retailer

Consumer

Consumer

Above indirect distribution (left) and direct distribution (right)

16/6/2012 105

Distribution Strategies
Depending on the type of product being distributed there are three common distribution strategies available:

1. Intensive distribution 2. Exclusive distribution 3. Selective Distribution

If a manufacturer decides to adopt an exclusive or selective strategy they should select a intermediary which has experience of handling similar products, credible and is known by the target audience A JD Sports case study: Conclusion
16/6/2012 106

Distribution Strategies
Depending on the type of product being distributed there are three common distribution strategies available: 1.Intensive distribution : Used commonly to distribute low priced or impulse purchase products eg chocolates, soft drinks. 2. Exclusive distribution : Involves limiting distribution to a single outlet. The product is usually highly priced, and requires the intermediary to place much detail in its sell. An example of would be the sale of vehicles through exclusive dealers 3. Selective Distribution : A small number of retail outlets are chosen to distribute the product. Selective distribution is common with products such as computers, televisions household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread.
16/6/2012 107

Marketing Management Philosophies

16/6/2012

108

The Philosophies of Marketing

Marketing concepts/marketing orientations: The Production Concept The product Concept The Selling Concept The Marketing concept The Societal Marketing Concept
16/6/2012 109

Marketing concepts
The Production Concept The philosophy that consumers will favour the product that is available and highly affordable and that management should focus on improving production and distribution efficiency The Product Concept
The idea that consumers will favour products that offer the most quality performance and features and that the organisation should therefore devote its energy to making continuous product improvements

The selling Concept The idea that consumers will not buy enough of the organisations products unless the organisation undertakes a large scale selling and promotion effort

The Marketing Concept

The marketing management philosophy which holds that achieving organisational goals depends on determining the wants and needs of the target markets and delivering the desired satisfactions more effectively and efficiently than competitors do

The Societal Marketing Concept The idea that the organisation should determine, the needs, wants and interests of the target marketnts and deliver the desired satisfactions mare effectively and efficiently than competitors in a way that maintains or improves the consumers and societys well being
16/6/2012 110

Production Oriented VS Marketing Oriented

A firm should focus all its efforts for satisfying customer needs In general, a production oriented firm tries to produce and sell what it can produce while a customer oriented firm produces and sells what the customer wants A total management commitment is:
Customer orientation An integrated company effort Profit rather than just sale

16/6/2012

111

Some tips that your business can follow

Dont promise something you cant deliver Ethical behaviour starts at the top level of managementlead by example Establish a written code of ethics that can be followed Unethical behaviour can tarnish a companys image and reputation. If a company is unethical, they may have to spend additional money to increase their reputation to an acceptable level
16/6/2012 112

Competitive Strategies within Product Policy

16/6/2012

113

Analysing the Marketing Environment

Market Segmentation Target marketing Positioning

16/6/2012

114

Understanding The Market Environment

The Open market The Regulated market The Company Markets
there are three types of companies: those who make things happen; those who watch things happen; and those who wonder what happened

16/6/2012

115

Competitive Analysis
What environmental factors are affecting the organisation? What of these have most impact now and in the future? You may analyse using the PEST concept Michael porters five forces of competitive framewok Using the structural determinants
16/6/2012 116

The Components of a Competitor Analysis

What drives the future GOALS Competitors response Profile
Is the competitor satisfied with its current position? What moves or strategy shifts is the competitor likely to make? Where is the competitor vulnerable? What will provoke the greatest and most effective retaliation by the competitor?

What the competitor is doing and can do CURRENT STRATEGY

Assumptions

Capabilities

16/6/2012

117

Concept Check Quiz Developing Marketing strategies and Plans

1 The first phase of the value creation and delivery sequence is _________.

communicating the value planning the value choosing the value providing the value creating the value
expertise, distinctive capabilities tend to describe _________.

2. Whereas core competencies tend to refer to areas of special technical and production

distinctive labour practices excellence in research capabilities competitive advantages excellence in broader business processes distinguishing features of the company from its competitors
118

16/6/2012

Concept Check Quiz Developing Marketing strategies and Plans

3. The _________ is the central instrument for directing and coordinating the marketing effort.

marketing plan strategic marketing plan tactical marketing plan mission statement growth matrix
4. A company's organization consists of its _________.

staff; policies; commitment structures; policies; corporate culture staff; policies; corporate culture structures; policies; competitive culture strategies; policies; corporate culture

16/6/2012

119

5. SWOT analysis refers to an analysis of a company's _____ systems; withholdings; operations; technology strategic units; workers; opportunities; technology systems; weaknesses; operations; threats strengths; weaknesses; opportunities; threats strengths; weaknesses; opportunities; technology 6. The last section in a marketing plan should contain _________. a situation analysis an executive summary and table of contents implementation controls a marketing strategy financial projections

Concept Check Quiz Developing Marketing strategies and Plans

16/6/2012

120

Concept Check Quiz Developing Marketing strategies and Plans

7.The traditional view of marketing is that the firm makes something and then sells it. True False 8. Michael Porter proposed the value chain as a tool for identifying ways to create more customer value. True False 9. The value chain identifies nine strategically relevant activities. True False 10. Competitive advantage ultimately derives from how well the company has fitted its core competencies and distinctive capabilities into tightly interlocking "activity systems. True False 11. A marketing plan is a written document containing tactical guidelines for the marketing programs and financial allocations over the planning period.

True False
12. Value exploration is concerned with how a company can efficiently create more promising new value offerings.

True False
16/6/2012 121

Impact of IT on Marketing Mix

16/6/2012

122

Internet Marketing Types and Models

There are different types of internet marketing There are also different business models You should know that you can use a type depending on what you offer and what you want to achieve

Thus, Internet Marketing may seem an easy and simple way to buy or sell different products as well as services
16/6/2012 123

16/6/2012

124

various types of internet marketing

display advertising includes the use banners that are placed on a website of a third party SEM or search engine marketing increases the visibility of a site in the results of search engine via contextual advertising through unpaid or natural search results. Social media marketing is the way of driving attention via various social networks such as Facebook. email marketing directly advertises a chosen message via e-mail to a certain group of people referral marketing entails that a product is promoted by word of mouth Affiliate marketing is when an affiliate is actually rewarded for each customer that he/she brings inbound marketing where you freely create and share the informative content to attract and make customers and convert them into regular buyers

16/6/2012

125

the Internet business models

The e-commerce - business and consumers are directly sold the products The lead-based websites -a strategy where the value is made when sales leads are acquired from an organizations website and services; also called organic leads The affiliate marketing model is similar to the affiliate market type of internet marketing whereby an entity develops a service or product which is then sold by other sellers for a certain profit Local internet marketing is also a strategy where usually a small company uses the Internet in order to establish and foster relationships that can be advantageous in the real world.
16/6/2012 126

the Internet business models

Internet marketing has become the most popular way of buying or selling products and services via the Internet It is also called online marketing, web marketing, webvertising and e-marketing Not only does it include the exchange of products and services on the Internet, but it also includes the exchange that goes on via wireless media and e-mail ECRM or the so-called electronic customer relationship management and digital customer also fall into the category of internet marketing
16/6/2012 127

the benefits of selling and buying via the Internet

the marketing is quite inexpensive the whole process of researching, deciding and purchasing goes on a lot more quickly the marketers on the Internet can measure the needed statistics quite easily and also with not a lot of money there are many different methods that advertisers may use
Thus, the offerings and messages that will be presented to the audience can be carefully chosen according to the results of the abovementioned analysis
16/6/2012 128

some diadvantagous features of the internet marketing

scams that we are all familiar with there is no factor of human touch the potential consumers are only influenced by the advertisements and blogs or websites there are many products which are called empty boxes and which actually have nothing in there you are not really sure what you are buying
16/6/2012 129

Perfect Internet Marketing Strategy

Becoming a part of internet marketing requires a lot of skills as well as knowledge concerning trading, people relations and, of course, some computer software Supposing you have already mastered all of these create your own strategy of promoting your products or services You will acquire a lot of customers and make them regular ones as well
16/6/2012 130

10 Steps to a Perfect Internet Marketing Strategy

good development strategy acquire the top ranking in some of the major search engines ; find and practice good techniques of SEO search engine optimization use e-mail marketing in an effective way your marketing niche should be dominated by different programs request an analysis of the market from a coach or consultant for internet marketing
16/6/2012 131

10 Steps to a Perfect Internet Marketing Strategy

have a design that is effective and yet not too tacky be careful and create a productive and responsive e-mail list publishing articles or appearing in news stories, will also improve your popularity and you will gain some more points facilitating giveaways and interact with your customers and blog often through your own website
16/6/2012 132

Microsofts Strategic Game is Exemplary

Business and Marketing Strategy of Microsoft
They like to keep the marketing strategy of Microsoft up-to date with the demands of the time Variety and addition are two things that are extremely important and have always been in the marketing strategy of Microsoft Microsoft's vision is to make a successful business strategy that, leads to a successful business Microsoft does its best to create a corporate culture, which gives a broad business environment. Microsoft is what you call a relationship that combines all the ideas, cultures, creativity, and different views together as a company. They do their best to bring further, the innovation and creativity of people.
16/6/2012 133

The pillars of Microsofts global marketing strategy are:

Microsoft is focused on building an employ channel, by hiring the world's greatest minds marketing strategy of Microsoft includes a bond with different schools and colleges, or professional organizations The biggest strength of Microsoft is that, they believe in building the best software out there.
They are committed to their work, and to supplier diversitythat Microsoft provides their leaders with the very best cultural capability training and GD&I.
Combining all the right ingredients, gives them the right result, which is why they have been on the top, and maintained their status
16/6/2012 134

Market Research

16/6/2012

135

The Purpose of Market Research

search for an analysis of information relevant to the identification of any problem in the field of marketing-Green

the systematic and objective problem analysis, model building and the fact finding for the purposes of improved decision making and control in the marketing of goods and services Kotler
16/6/2012 136

MARKETING RESEARCH TO ASSIST IN BALANCING THE BUSINESS

SUPPLIER

MARKET RESEARCH

BUYER

16/6/2012

137

MARKETING RESEARCH IN ASSISTING TO BALANCE THE OPERATION

ENVIRONMENT FORCES

Company Resources Goodwill Skills Know-how Patent People Materials Money Marketing Research and Measurem ent

Company programs Organization Marketing Manufacturing Procurement Personnel Finance Research Development
COMPETITIVE, TECHNOLOGICAL etc.
138

CONOMIC, POLITICAL, SOCIAL, LEGISLATIVE etc.

16/6/2012

Main Elements of Marketing Research

Market size, segmentation and trends Competitor shares, strengths and weaknesses Product specification and trends Pricing Channels of distribution Structure and trends of retailing Effectiveness of promotion, advertising and image building
139

16/6/2012

Main techniques of marketing Research

Literature survey Telephone data gathering Structured (personal) interviewing Interactive (group) discussions Market modeling
BUT FIRST: What

are the right questions to ask?

16/6/2012

140

MARKETING RESEARCH

CONTRIBUTE TO THE MARKETING STRATEGY SPECIAL PROJECTS

CONTINUOUS MARKET INTELLIGENCE SYSTEM

KNOW YOUR CUSTOMERS KNOW YOUR MARKETS KNOW YOUR COMPETITORS KNOW YOUR RESOURCES KNOW YOUR OBJECTIVES
16/6/2012

141

Why & Where of Marketing Research

WHY do marketing research? Marketing research is a management tool. Its purpose is to aid in the decision making process It is needed to:
Produce information Provide options Test viability Monitor results

WHERE is marketing research used? Setting objectives Problem solving Helping the business to grow
16/6/2012 142

Only if you KNOW the Answers!

1. 2. 3. 4. 5. 6. 7. 8. Who are your potential customers? Where are they? How big is the total estimated market? What share do you hope to obtain? Are there similar products already on the market? Who are your competitors? How do their products compare with yours? What advantage has your product?
143

16/6/2012

Only if you KNOW the Answers!

9. What share of the market do your competitors have? 10. Can any competitor respond quickly? 11.What is the estimated frequency of purchase? 12.What are seasonal fluctuations in demand? 13.What is the best time of year to introduce product? 14.What are the most/least attractive product features? 15.Do you have existing products whose demand will be affected? 16.What are present and estimated future trends in demand?
16/6/2012 144

Research Objectives
Research objectives should be set with possible actions and decisions in mind; ask yourself:-what information do I need? -how will I use the research data? SETTING OBJECTIVES PROBLEM SOLVING HELPING THE BUSINESS TO GROW IDENTIFY EXISTING AND POTENTIAL CUSTOMER GROUP

ESTABLISH YOUR MARKET PROFILE

IDENTIFY PROBLEM

SEGMENT AND TARGET POTENTIAL GROWTH SECTORS

LIST ALL POSSIBLE HYPOTHESIS

PREPARE CUSTOMER PROFILES FROM EXISTING INFORMATION

EVALUATE THE NEED FOR ADDITIONAL MARKET DATA

16/6/2012

HIGHLIGHT RELEVANT HYPOTHESIS SET RESEARCH OBJECTIVES

PRODUCE LIST OF QUESTIONS

145

TYPES OF RESEARCH
Desk research
Study of public information 1. Provides an economic background 2. Assesses market size and trends 3. Analyses market structure 4. Obtains data on companies 5. Obtains data on products and services

Field research
Collecting information directly from the market 1. Customers attitudes and perceptions of companies and products and services 2. Awareness of a company/brand 3. Awareness of an advertising campaign 4. Reaction to a potential action by a supplier, e.g. a price rise, product improvement
16/6/2012 146

Problems with Marketing Research

Accuracy of information collected Timescales Cost and Resources Flexibility Ability to brief outside consultants In-house research may not be objective Research for researchs sake
ASSUMPTION: RESEARCH=ANSWERS=RESULTS

Ability to analyse and interpret findings

16/6/2012 147

Global Marketing

16/6/2012

148

16/6/2012

149

Why Global Marketing is Imperative

Saturation of Domestic Markets: Domestic market saturation in the industrialized parts of the world and marketing opportunities overseas are evident in global marketing.
Global Competition: Competition around the world and proliferation of the Internet are on the rise.

Need for Global Cooperation: Global competition brings global cooperation.

16/6/2012

150

Why Global Marketing is Imperative (contd.)

Internet revolution: The Internet and electronic commerce (e-commerce) are bringing major structural changes to the way companies operate worldwide. The term global epitomizes both the competitive pressure and expanding market opportunities.

Whether a company operates domestically or across national boundaries, it can no longer avoid competitive pressures from around the world

16/6/2012

151

Globalization of Markets: Convergence and Divergence

International trade consists of exports and imports. International business includes international trade and foreign production. Extensive international penetration of companies is called global reach. International trade and foreign production activities are managed on a global basis. Growth of Multinational Corporations (MNCs) and intra-firm trade is a major aspect of global markets

16/6/2012

152

Globalization of Markets: Convergence and Divergence (contd.)

International trade versus international business: o International trade consists of exports and imports. o International business includes international business trade and foreign production. Who manages international trade? o Intrafirm trade: Trade between MNCs and their affiliates.

16/6/2012

153

Evolution of Global Marketing

What is marketing? Marketing involves the planning and execution of the conception, pricing, promotion, and distribution of ideas, products, and services. Marketing involves customer satisfaction and their current and future needs. Marketing is much more than selling and involves the entire company. Within marketing strategies, companies are always under competitive pressure to move forward both reactively and proactively.

These concepts invariably apply in all markets.

16/6/2012 154

Evolution of Global Marketing (contd.)

Five stages in the evolution of global marketing 1. Domestic Marketing (domestic focus; home country customers; ethnocentric orientation). 2. Export Marketing (indirect vs. direct exporting; country choice, exports; ethnocentric orientation; home country customers). 3. International Marketing (markets in many countries; polycentric orientation; use of multidomestic marketing when customer needs are different across national markets).

16/6/2012

155

Evolution of Global Marketing (contd.)

4. Multinational Marketing (many markets; consolidation on regional basis; regiocentric orientation; standardization within regions). 5. Global Marketing (international, multinational & geocentric; companys willingness to adopt a global perspective; global products with local variations).

16/6/2012

156

Evolution of Global Marketing (contd.)

Global Marketing: Global marketing refers to marketing activities that emphasize the following: Standardization efforts Coordination across markets. Global integration.

16/6/2012

157

Evolution of Global Marketing (contd.)

Global marketing does not necessarily mean that products can be developed anywhere on a global scale. The economics, geography, climate, and culture affect how companies develop certain products. The Internet adds a new dimension to global marketing. E-commerce retailers gain substantial savings by selling online.

16/6/2012

158

Good Marketing is No Accident!

-Kotler
16/6/2012 159