Marketing Strategy Essay
Exchange is the provision or transfer of goods, services or ideas in exchange for something of value - Marketing Strategy Essay introduction. Exchange will not necessarily take place even if all these conditions exist. Marketing can occur even if an exchange does not occur. Marketing entails processes that focus on delivering value and benefits to customers, not just selling goods and services. Value equation Marketing Value for Consumers Purple cows: http://whom. Youth. Com/watch? V=Vivify_VBG Publishing: http://womb. Youth. Com/watch? -?excavators Customer Value Requirements Offer products that perform Earn trust as an organization/brand Avoid unrealistic pricing Give the buyer facts Service after the sale Co-creation with customers Marketing Management Philosophies Evolution Production orientation: a philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace (Field of Dreams Orientation) Falls short because it doesn’t consider whether the goods and services that the firm produces most efficiently also meet the needs of the marketplace.
Sales orientation: the ideas that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits. Problem: lack of understanding the needs and wants of the marketplace. Danger: failing to understand what is important to the firm’s customers. Market orientation: a philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customers decision to purchase a product; it is synonymous With the marketing concept. Marketing concepts: the idea that the social and economic justification for an organization’s existence is the satisfaction of customer wants and needs while meeting organization objectives) Societal marketing orientation: the idea that an organization exists not only to satisfy customer wants and needs and to meet organizational objectives but also to reserve or enhance individuals’ and society long-term best interests.
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Differences between sales and market orientations The organization’s focus Sale-oriented firms: inward looking, focus on selling what organization makes Market-oriented: external, put customers at the center of their business Market-oriented companies put customers at the center of their business in three ways: Customer value: the relationship between benefits and the sacrifice necessary to obtain those benefits. Customers value goods and services that are of the quality they expect and that are sold at prices they are ailing to pay) Marketers interested in customer value: 1) Offer products that perform (minimum requirement) 2) Earn thrust (a stable base of loyal customers can help a firm grow and prosper) 3) Avoid unrealistic pricing (E-marketers are leveraging Internet technology to refine how process are set and negotiated) 4) Give the buyer facts (salesperson need to start with the needs of the customer and work toward the solution) 5) Offer organization-wide commitment in service and after-sales support 6) Co-creation (allow customers to help create their own experience) Customer satisfaction: customers’ evaluation of a good or service n terms of whether it has met their needs and expectations. Building relationships Companies can expand market share in three ways: attracting new customers, increasing business with existing customers, and retaining current customers.
Relationship marketing: a strategy that focuses on keeping and improving relationships with current customers. Successful relationship marketing strategies depends on: 1) Customer-oriented personnel (comes from organizational culture that support its people) 2) The role of training 3) Empowerment: delegation of authority to solve customers’ problems laity- usually by the first person the customer notifies regarding a problem. 4) Teamwork: collaborative efforts of people to accomplish common objective (emphasize cooperation instead of competition, cross-function) The firm’s business Sale-oriented firms define its business in terms of goods and services.
Market-oriented firms define its business in terms of the benefits its customers seek. People spend money; time and energy expect to receive benefits, not just goods and services. Having market orientation and a focus on customer wants does not mean offering customers everything they want. Those to whom the product IS directed Sale-oriented organization targets its products at “everyone” or “the average customer” Market-oriented organization targets aims at specific groups of people (recognize that different customer groups want different features or benefits) The firm’s primary goal Sale-oriented organ action seeks to achieve profitability through sale volume and tries to convince potential customers to buy.
Market-oriented organization make a profit by creating customer value, providing customer satisfaction, and building long-term relationships with customers. Tools the organization uses to achieve its goals Sale-oriented organization: intensive promotional activities, mainly personal selling and advertising Market-oriented organization: product decision, place decision, promotion decision, and pricing decision. And international coordination (instead of only marketing department) Promotion is the means by which organizations communicate with present and prospective customers about the merits and characteristics of their organization and products.
Achieving a Marketing Orientation Information: customers, competitors, and markets Analyze the information, look for opportunity How to deliver superior customer value? Sensory Decisions what delivers value? 44% of luxury sports car consumers indicate that the sound of the car is a primary factor in brand choice 40% of all perfume purchase decisions are based on bottle design Marketing Mix The four activities the firm controls to meet consumer needs within target Product Pricing Distribution Promotion Marketing Process Starts and Ends with the Consumer Why study marketing? 1. Marketing plays an important role in society 2. Marketing is important to businesses 3.
Marketing offers outstanding career opportunities 4. Marketing affects your life every day. Chapter 21 Customer relationship management (CRM) Customer relationship management (CRM): a company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups. It is accomplished by organizing the company around customer segments, establishing and tracking customer interactions with the company, fostering customer-satisfying behaviors, and line king all processes of the company from its customers through its suppliers. Implementing a CRM system: 1 . Customers take center stage .
Business must manage the customer relationship across all points of customer contact 3. Data availability and data management make it possible Why customer relationship management? Improve overall customer experience by meeting needs better Improve profitability thru segmenting You want more of their money… Larger share of wallet from category Create repeat users Reduce churn Customer centric process (Closed-loop system, continuous, circular, with no predefined starting or end point) Some good examples of CRM http://www. Youth. Com/watch? V=wJ63PqPIjcM Discussion of CRM system assumes two points: . Customers take center stage in any organization 2.
The business must manage the customer relationship across all points of customer contact throughout the entire organization. Process: 1. Identify customer relationships Companies that have a CRM system follow a customer-centric focus or model. Customer centric: a philosophy under which the company customizes its product and service offering based on data generated through interactions between the customers and the company. A customer-centric company builds long-lasting relationships by focusing on what satisfies and retains valuable customers. Learning: an informal process of collecting customer data through customer comments and feedback on product or service performance.
Knowledge management: the process by which learned information from customers is centralized and shared in order to enhance the relationship between customers and the organization (overcome problem of departments’ different interests) High investment products- the higher the value, the more individualized approach Collected information includes: Experiential observations Comments Customer actions Qualitative facts Empowerment Interaction: the point at which a customer and a company representative exchange information and develop learning relationships. Customers define the terms of interaction by stating their preferences, and organization respond by designing products and services around customers’ desired experience.
More latitude (empowerment) a company gives its representatives, the more likely the interaction will conclude in a way that satisfies the customer. 2. Understanding interactions with current customer base Touch points: all possible areas of a business where customers communicate with that business. Store visits- point of sale Kiosks Web visits, purchase & habits Us Nee Product registration 3. Capture customer data based on interactions Vast amounts of data can be obtained from the interactions between an organization and its customers. CRM is not how much data can be obtained, but rather what types of data should be acquired and how the data can effectively be used for relationship enhancement.
Channel interactions: store visits, conversations with salespeople, interactions via the Web, traditional phone conversations, and wireless communications. E. G. Consumer companies in twitter, 24 hour online chat) Companies can obtain not only simple contact information (name, address, phone number) but also data retaining to the customer’s current relationship with the organization-?past purchase history, quantity and frequency of purchases, average amount spent on purchases, sensitivity to promotional activities, and so forth. 4. Store and integrate customer data using information technology Customer data are only as valuable as the system in which the data are stored and the consistency and accuracy of the data captured.
Data warehouse: a central repository for data from various functional areas of the organization that are stored and inventoried on a centralized computer system so that the information can be shared across all functional departments of business. Database: a collection of data, especially one that can be accessed and manipulated by computer software. When a company builds its database, usually the first step is to develop a list. Response list: a customer list that includes the names and addresses of individuals who have responded to an offer of some kind, such as by mail, telephone, direct response television, product rebates, contests or sweepstakes, or billing inserts.
Response lists tend to be especially valuable because past behavior is a strong predictor of true behavior and because consumers who have indicated interest in the product or service are more prone to purchase. Compiled list: a customer list developed by gathering names and addresses from telephone directories and membership rosters, usually enhanced with information from public records, such as census data, auto registrations, birth announcements, business Start ups, or bankruptcies. Database enhancement involves purchasing information on customers or prospects to better describe their needs or determine how responsive they might be to marketing programs. Types of enhancement data typically include demographic, lifestyle, or behavioral information.
Database enhancement can increase the effectiveness of marketing programs. Database enhancement also helps a company find new prospects. 5. Identify best customers CRM manages interactions between a company and its customers. Organizations need to develop interactions that target individual customer needs and wants. Data mining is used to find hidden patterns and relationships in the customer data stored in the data warehouse. It is a data analysis approach that identifies patterns of characteristics that relate to reticular customers or customer groups. Type of analysis run on the data: (1) Customer segmentation: the process of breaking large groups of customers into smaller, more homogeneous groups. 2) Regency-frequency- monetary analysis (RFM): Customers who have purchased recently and often and have spent considerable money are more likely to purchase again. (3) Lifetime value analysis (L TV): a data manipulation technique that projects the future value Of the Customer over a period of years using the assumption that marketing to repeat customers is more profitable than marketing to first-time buyers. Whereas RFM looks at how valuable a customer currently is to a company, lifetime value analysis (L TV) a project the future value of the customer over a period of years. Benefits of customer lifetime value: a. It shows marketers how much they can spend to acquire new customers b. It tells them the level of spending to retain customers c.
Facilitates targeting new customers who look as though they will be profitable customers. (4) Predictive modeling: a data manipulation technique in which marketers try to determine, based on some past set of occurrences, what the odds are that some other occurrence, such as response or arches, will take place in the future. 6. Leverage customer information (1 ) Campaign management: developing product or service offerings customized for the appropriate customer segment and then pricing and communicating these offerings for the purpose of enhancing customer relationships. Involves monitoring and leveraging customer interactions to sell a company’s products and to increase customer service.
Campaign management involves developing customized product and service offerings for the appropriate customer segment, pricing these offerings attractively, and communicating these offers in a manner that enhances customer legislations. Interactions among customers must focus on individual experiences, expectations, and desires. (2) Retaining loyal customers Loyalty programs reward loyal customers for making multiple purchases. The objective is to build long-term mutually beneficial relationships between a company and its key customers. (3) Cross-selling Other products or services Marketers can use the database to match product profiles and consumer profiles.
Internet companies use product and customer profiling to reveal cross-selling opportunities while a customer is surfing their site. (4) Designing regarded marketing communications Using transaction and purchase data, a database allows marketers to track customers’ relationships to the company’s products and services and modify the marketing message accordingly. Customers can also be segmented into infrequent users, moderate users, and heavy users. A segmented communications strategy can then be developed based on which group the customer falls into. Communications to infrequent users might encourage repeat purchases through a direct incentive such as a limited-time price discount for ordering again.
Communications to moderate users may use ewer incentives and more reinforcement of past purchase decisions. Communications to heavy users would be designed around loyalty and reinforcement of the purchase rather than price promotions. (5) Reinforcing customer purchase decisions CRM offers marketers an excellent opportunity to reach out to customers to reinforce the purchase decision. By thanking customers for their purchases and telling them they are important, marketers can help cement a long-term, profitable relationship. Updating customers periodically about the status of their order reinforces purchase decisions. Apostates e-mails also afford the hence to provide more customer service or cross-sell other products. 6) Inducing product trial by new customers Marketing managers generally use demographic and behavioral data overlaid on existing customer data to develop a detailed customer profile that is a powerful tool for evaluating lists of prospects. (7) Increasing effectiveness of distribution channel marketing With CRM databases, manufacturers now have a tool to gain insight into who is buying their products. Companies are also using radio frequency identification (RIFF) technology to improve distribution. The main implication Of this technology is that companies will enjoy a reduction in theft and loss of merchandise shipments and will always know where merchandise is in the distribution channel.
Moreover, as this technology is further developed, marketers will be able to gather essential information related to product usage and consumption (8) Improving customer service (wish lists, recommendations, past purchase, search behavior, payment and shipping information) Privacy concerns and CRM Marketers should consider consumers’ reactions to the growing use of databases. Chapter 2 Strategic planning for competitive advantage Strategic planning: the managerial process Of creating and maintaining a fit teen the organizations’ objectives and resources and the evolving marketing opportunities. Goal: protect and grow the firm’s resources Strategic business units (JOBS): a subgroup of a single business or collection of related businesses within the larger organization.
Characteristics of JOBS: A distinctive mission and a specific target market Control over its resources Its own competitors A single business or a collection of related businesses Plans independent of the other Sables in the total organization SIBS should have its own resources for handling accounting, engineering, manufacturing, ND marketing. Sables sometimes share manufacturing facilities, distribution channels, and even top managers. Strategic alternatives (selecting which strategic alternatives depend on when to expect profits): 1. Nations strategic opportunity matrix (match products with markets) 1 ) Market penetration: a marketing strategy that tries to increase market share among existing customers. ) Market development: a marketing strategy that entails attracting new customers to existing products. 3) Product development: a marketing strategy that entails the creation of new products for present markets. Managers can rely on their extensive knowledge of the target audience and established distribution channels) 4) Diversification: a strategy of increasing sales by introducing new products into new markets. (can be risky when a firm is entering unfamiliar markets, can be profitable when a firm is entering markets with little or no competition) Present Product New Product Present Market Market Penetration Cutbacks sells more coffee to customers who register their releasable Cutbacks cards.
Product Development Cutbacks develops powdered instant coffee called via. New Market Market Development Cutbacks opens stores in Brazil and Chile. Diversification Cutbacks launch hear Music and buys ethos Water. 2. The Boston Consulting Group model (use to determine the future cash distributions and cash requirements expected of each SW) Portfolio matrix: a tool for allocating resources among products or strategic business units on the basis of relative market share and market growth rate. Measure of market share used: relative market share: the ratio between the company’s share and the share Of the largest competitor Stars: is a fast-growing market leader. E. G. Pad is Apple’s current star. Star Subs usually have large profits but need lots of cash to finance rapid growth. Marketing tactic is to protect existing market share by reinvesting earnings in product improvement, better distribution, more promotion, and production efficiency. Management must capture new users as they enter the market. Cash cow: is an SIBS that generates more cash than it needs to maintain its market share. It is in a low-growth market, but the product has a dominant market share. E. G. Personal computers and laptops Strategy: maintain market dominance by being the price leader and making technological improvements in the product.
Managers should allocate excess cash to the product categories where growth prospects are the greatest. Problem children (question mark): shows rapid growth but poor profit margins. It has a low market share in a high-growth industry. Problem children need a great deal of cash. Without cash support, they eventually become dogs. Strategy options are to invest heavily to gain better market share, acquire competitors to get the necessary market share, or drop the SIBS. Dogs: A dog has low growth potential and a small market share. Most dogs eventually leave the marketplace. E. G. Mainframe computer Strategy: harvest or divest Four basic strategies to allocate future resources: Build: appropriate for Star.
Decide to give up short-term profits and use its financial resources to achieve goals. Hold: appropriate for Cash Cow Harvest: appropriate for Sables expect Stars Basic goal is to increase the short-term cash return without too much concern for the long-run impact. Divest: Getting rid of Subs with low shares of Iow- growth markets is often appropriate. Problem children and dogs are most suitable for this strategy 3. The General Electric model (market attractiveness and company strength) Business position: refers to how well position the organization is to take advantage of market opportunities. The vertical axis measures the attractiveness of a market, which is expressed both quantitatively and qualitatively.
Red cells: Avoid if the organization is not already serving them Harvest or divest if the firm is in these markets Yellow cells: selectively maintain markets, withdrawal if attractiveness begins to slip Green cells: best candidates for investment. Marketing plan: designing activities relating to marketing objectives and the changing marketing environment. Planning: the process of anticipating future events and determining strategies to achieve organizational objectives in the true Why write a marketing plan: Writing a marketing plan allows you to examine the marketing environment in conjunction with the inner workings of the business. Once the marketing plan is written, it serves as a reference point for the success of future activities.
Finally, the marketing plan allows the marketing manager to enter the marketplace with an awareness of possibilities and problems. Writing the Marketing plan: Having a good marketing information system and a wealth of competitive intelligence, the role of managerial intuition are important in the creation and selection of marketing plans. Marketing plan elements: 1. Defining the business mission Mission statement: a statement of the firm’s business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions. (Focus on markets rather than goods or services) Marketing myopia: defining a business in terms of goods and services rather than in terms of the benefits customers seek. Too narrow, short-term thinking) Care must be taken when stating what business a firm is in: (1) Product (2) Economic (3) social 2. Conducting a situation analysis Marketers must understand the current and potential environment in which the product or service will be marketed. STOW analysis: the firm should identify its internal strengths (S) and weaknesses (W) and also examine external opportunities (O) and threats (T). Environment scanning: collection and interpretation of information about facts, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan.
Marketing Strategy Essay
Select a product or service that you have purchased recently and/or use regularly - Marketing Strategy Essay introduction. Put yourself in the position of marketing manager for the organization and describe in your own words the marketing strategy used for this product/service, including all of the elements of the marketing mix (at least one paragraph for each of “the four p’s”). For example, where is it sold and what is the price? Also include a detailed description of the product or service — what is it, how is it packaged, who is the manufacturer and who or what is the main competition? (more…)