Marketing_571

1. Marketing Concepts, trends, and tasks. * How is marketing management both an art and a science' Marketing is both an art and a science. There is constant tension between the formulated side of marketing and the creative side. It is easier to learn the formulated side, which will occupy most of our attention. From a managerial point of view, marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals. Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value. A marketing manager is tasked with drawing customers to a specific good or service.   Increasing profit while keeping cost down, this is a marketing managers main purpose. * * * What marketing challenges and opportunities do businesses face today' Competition....as the buyer is the king in today’s market. Businesses today face a number of challenges and opportunities, including globalization, the effects of advances in technology, and deregulation. They have responded by changing the way they conduct marketing in very fundamental ways. * * * Why are the production concept, product concept, and selling concept of limited use for conducting business operations today' There are five competing concepts under which organizations can choose to conduct their business: the production concept, the product concept, the selling concept, the marketing concept, and the holistic marketing concept. The first three are of limited use today. The competing concepts under which organizations have conducted marketing activities include: the production concept, product concept, selling concept, marketing concept, and holistic marketing concept. The Production Concept The production concept is one of the oldest concepts in business. It holds that consumers will prefer products that are widely available and inexpensive. Managers of production oriented businesses concentrate on achieving high production efficiency, low costs, and mass distribution. This orientation makes sense in developing countries such as China where the largest PC manufacturer, Legend, and domestic appliances giant Haier take advantage of the country’s huge inexpensive labor pool to dominate the market. It is also used when a company wants to expand the market. The Product Concept The product concept holds that consumers will favor those products that offer the most quality, performance, or innovative features. Managers in these organizations focus on making superior products and improving them over time. However, these managers are sometimes caught up in a love affair with their products. They might commit the “better mouse trap” fallacy, believing that a better mousetrap will lead people to beat a path to their door. A new or improved product will not necessarily be successful unless the product is priced, distributed, advertised, and sold properly. The Selling Concept The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organization’s products. The organization must, therefore, undertake an aggressive selling and promotion effort. The selling concept is epitomized in the thinking of Sergio Zyman, Coca-Cola’s former vice president of marketing: The purpose of marketing is to sell more stuff to more people more often for more money in order to make more profit. * * * 2. Marketing Plan and Information System What are the key components of an effective marketing plan' The marketing plan is the central instrument for directing and coordinating the marketing effort. The marketing plan operates at two levels: strategic and tactical. The strategic marketing plan lays out the target markets and the value proposition that will be offered, based on an analysis of the best market opportunities. The tactical marketing plan specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service. Today, teams develop the marketing plan with inputs and sign-offs from every important function. These plans are then implemented at the appropriate levels of the organization. A marketing plan is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives. Contents of the Marketing Plan ■ Executive summary and table of contents. The marketing plan should open with a brief summary of the main goals and recommendations. The executive summary permits senior management to grasp the plan’s major thrust. A table of contents that outlines the rest of the plan and all the supporting rationale and operational detail should follow the executive summary. ■ Situation analysis. This section presents relevant background data on sales, costs, the market, competitors, and the various forces in the macroenvironment. How is the market defined, how big is it, and how fast is it growing' What are the relevant trends affecting the market' What is the product offering and what are the critical issues facing the company' Pertinent historical information can be included to provide context. All this information is used to carry out a SWOT (strengths, weaknesses, opportunities, threats) analysis. ■ Marketing strategy. Here the product manager defines the mission and marketing and financial objectives. The manager also defines those groups and needs that the market offerings are intended to satisfy. The manager then establishes the product line’s competitive positioning, which will inform the “game plan” to accomplish the plan’s objectives. All this is done with inputs from other organizational areas, such as purchasing, manufacturing, sales, finance, and human resources, to ensure that the company can provide proper support for effective implementation. The marketing strategy should be specific about the branding strategy and customer strategy that will be employed. ■ Financial projections. Financial projections include a sales forecast, an expense forecast, and a break-even analysis. On the revenue side, the projections show the forecasted sales volume by month and product category. On the expense side, the projections show the expected costs of marketing, broken down into finer categories. The break-even analysis shows how many units must be sold monthly to offset the monthly fixed costs and average per-unit variable costs. ■ Implementation controls. The last section of the marketing plan outlines the controls for monitoring and adjusting implementation of the plan. Typically, the goals and budget are spelled out for each month or quarter so management can review each period’s results and take corrective action as needed. A number of different internal and external measures must be taken to assess progress and suggest possible modifications. Some organizations include contingency plans outlining the steps management would take in response to specific environmental developments, such as price wars or strikes. * * Why is the marketing plan one of the most important elements of the marketing process' Each product level within a business unit must develop a marketing plan for achieving its goals. The marketing plan is one of the most important outputs of the marketing process. * * Why are marketing information systems necessary' A marketing information system (MIS) consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. Such a system is developed from internal company records, marketing intelligence activities, and marketing research. * * How are both internal and records and marketing intelligence systems of value' Internal Records Marketing managers rely on data from internal reports about orders, sales, prices, costs, inventory levels, receivables, payables, and so on. By analyzing this information, they can spot important opportunities and problems. The heart of the internal records system is the order-to-payment cycle. Sales representatives, dealers, and customers dispatch orders to the firm. The sales department prepares invoices and transmits copies to various departments. Out-of-stock items are back ordered. Shipped items are accompanied by shipping and billing documents that are sent to various departments. Companies need to perform these steps quickly and accurately, because customers favor firms that can promise timely delivery. Marketing Intelligence System The internal records system supplies results data, but the marketing intelligence system supplies happenings data. A marketing intelligence system is a set of procedures and sources used by managers to obtain everyday information about developments in the marketing environment. Marketing managers collect marketing intelligence by reading books, newspapers, and trade publications; talking to customers, suppliers, and distributors; checking Internet sources; and meeting with other company managers. A company can take six steps to improve the quality of its marketing intelligence (see Table 3.1). In some companies, staff members collect marketing intelligence, summarizing relevant developments and distributing the information through internal news bulletins, intranet postings, and other methods. This enables marketing managers to stay in touch with the latest market happenings and assess the effect on marketing decisions and programs. * 3. Marketing Research and business solution. What are some trends or megatrends that you have personally recognized in the macroenvironment' There are three mega trends that I have personally recognized in the macro-environment. First, there is a trend toward the production of Eco-friendly products. This trend is expressing itself in textiles, electronics, and consumer goods. Second, there is a trend toward using mobile devices to accomplish everyday tasks, including trading stocks, dating, and ordering food via WiFi enabled devices. Finally, there is a trend toward buying products over the internet. Many stores don't even have a physical storefront anymore. People are only able to purchase their products online. If I were a marketer, I would target all three of these trends, because they are all extremely profitable at this time. Marketers find many opportunities by identifying trends in the macroenvironment. A trend is a direction or sequence of events that has some momentum and durability. In contrast, a fad is “unpredictable, short-lived, and without social, economic, and political significance.”13 A new product or marketing program is likely to be more successful if it is in line with strong trends rather than opposed to them. This is why marketers have to develop their trendspotting skills (see “Marketing Skills: Spotting Trends”). Still, detecting a new market opportunity does not guarantee its success, even if it is technically feasible. Companies and their suppliers, marketing intermediaries, customers, and competitors all operate in a macroenvironment of forces and trends that shape opportunities and pose threats. Within the rapidly changing global picture, six major forces represent “noncontrollables” which the company must monitor and to which it must respond: demographic, economic, social-cultural, natural, technological, and political-legal. Although these forces will be described separately, marketers must pay attention to their interactions, because these set the stage for new opportunities as well as threats. For example, population growth (demographic) leads to resource depletion and pollution (natural environment), which leads consumers to call for more laws (political-legal). The restrictions stimulate new technological solutions and products (technology). If the solutions and products are affordable (economic environment), they may actually change attitudes and behavior (social-cultural). Which of these trends or megatrends do you think marketers should target' Why'