Transcript What is marketing?

May 31st 2012, Milan
Training Session
Strategic marketing
Internationalization
Industrial associations and districts in Italy
delivered by
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Areas of expertise
 SME and entrepreneurship development
Female & Youth entrepreneurship
Adult learning and links with labour market
Regional development
Training and HR development
Public administration
Fair Trade
Organization of international internships & study
visits
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Geographical areas
 Eastern Europe & Balkans
Russian Federation & Central Asia
Mediterranean region, Middle East, Africa
 South East Asia
Latin America
Other countries
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FORMAPER - Agency of the Milan Chamber
of Commerce, Industry, Craft & Agriculture
Via Santa Marta 18
Milan, Italy 20123
www.formaper.it
Carlos Talamas
Head of International Relations
Tel: + 39 02 8515 5282 // 5346
Fax: + 39 02 8515 5793
E-mail:[email protected]
Olga Nogaeva
International Project Manager
Tel: + 39 02 8515 4244 // 5346
Fax: + 39 02 8515 5793
E-mail:[email protected]
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May 31st 2012, Milan
Training Session
Strategic marketing
Internationalization
Industrial associations and districts in Italy
Marta Jakob
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Strategic marketing
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What is marketing?
“Marketing is the delivery of customer satisfaction to a
profit.”
Philip Kotler “Principles of marketing”
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What is marketing? (2)
“Marketing is changing to meet the changing world. Marketing
remains the business activity that identifies an organization's
customer needs and wants, determines which target markets it
can serve best and designs appropriate products, services and
programmes to serve these markets. However, marketing is
much more than an isolated business function - it is a
philosophy that guides the entire organization…”
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What is marketing? (3)
“(…) The goal of marketing is to create customer satisfaction
profitably by building valued relationships with customers. The
marketing people cannot accomplish this goal by themselves.
They must work closely with other people in their company and
with other organizations in their value chain, to provide
superior value to customers.”
Philip Kotler “Principles of marketing”
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Selling, advertising, promoting, what else?
Selling and advertising are only the tip of the marketing
iceberg, the most visible part, but: “The aim of marketing is to
make selling superfluous. The aim is to know and understand
the customer so well that the product or service fits, and sells
itself.” (Peter Druckler)
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Which philosophy underneath?
Marketing choices could be driven by different philosophies:
 production concept: big quantities at the lowest possible
prices;
 product concept: attention to quality, performance,
innovation, etc.;
 selling concept: no sell without promotion, but productive
capacity rules.
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The marketing concept
Achieving goals depends on determining the needs and wants
of targeted markets and delivering the desired satisfactions
more effectively and efficiently than competitors do.
If a company decides to use a marketing approach, it will use an
outside-in perspective: it will produce what consumers want.
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A step forward: societal marketing concept
The companies should respond to the identified requests of
targeted markets, exactly as in the marketing concept and,
moreover, improve the consumer’s and society’s well being.
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A step forward: societal marketing concept (2)
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Evolving marketing challenges: what’s new?
Companies in 21st century have to face new challenges, like, for
example:
 growing non profit,
 IT boom,
 globalization,
 need for social responsibility.
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Planning in enterprise
Many companies operate without formal plans.
New company often don’t plan, because people are just too
busy.
Small companies often don’t plan, because managers think
planning is for corporations.
Mature companies often don’t plan, because they had done
well without any formal planning in the past.
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How can strategic marketing affect SMMEs?
Looking at small companies, often it seems all about producing
and selling, as though strategies were a sole field for big and
corporate companies.
Despite impressions, every actor on the market needs strategy
to meet fast changing requests.
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How can strategic marketing affect SMMEs? (2)
There is no one strategy good for all companies; each of them
must consider situation, opportunities, objectives and
resources.
Every single entrepreneur has a defined strategy, which guides
him in the market, but often he is not used to collect and
explain these information, keeping them like secrets.
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Strategic planning
Companies could develop a lot of different plans, like:
 strategic plans,
 long-range plans,
 annual plans.
Moreover, companies have to develop plans at different levels,
global, regional, national and so on, which should be coherent
with the mission statement.
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Some brief tools for evaluate strategies
SWOT analysis draws the critical strengths, weaknesses, opportunities and
threats of a company or a product; the number of items should be small.
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Some brief tools for evaluate strategies (2)
BCG growth-share matrix
 Stars High growth, high share businesses or
products, often require heavy investment to
finance their rapid growth.
 Cash cows low growth, high share businesses or
products, established and successful, need less
investment to hold the market share.
 Dogs low growth, low share businesses and
products, may generate enough cash to
maintain themselves.
 Question marks low share businesses or
products in a high growth market.
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Internationalization for SMMEs
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How is it possible to go abroad for an SMME?
Looking at the EU study on internationalization of SMEs
there is a direct link between the level of
internationalization and the size of the company, but,
on the other hand, the smaller the country the more its
SMEs are internationalized.
http://ec.europa.eu/enterprise/policies/sme/marketaccess/files/internationalisation_of_european_smes_final_en.pdf
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Why should SMMEs go abroad?
 To survive, because, for example, often inner market
is not enough to absorb productive capacity, so
companies need new customers.
 To reach well-balanced dimension, because, for
example, mass product for an area could represent
niche product for a different area.
 To diversify, reducing risks, working with a variety of
different countries.
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Why should SMMEs go abroad?
 To optimize investments, because once we decide for
an investment it becomes vital to be able to find a
path for the ROI.
 To compete, because different markets present
different levels of maturity.
 To conquer new market shares, because we want to
grow.
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Steps of internationalization
 Subcontracting: companies start selling abroad via
their clients.
 Export: companies go abroad to sell.
 Internationalization: companies have a international
marketing strategy.
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Opportunities offered by internationalization
 Customs are gradually decreasing.
 Many consumptions are becoming global.
 Many emerging countries are enriching global markets
not only as competitors, but also as new customers.
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Threats of internationalization
 Companies must compete with a larger number of
competitors.
 People working in the company don’t always perceive
the internationalization as positive.
 The company is forced to engage in a financial
exposure.
 Inner procedures often get more complex.
 The company risks to neglect home market.
 Planning is even more important than on domestic
market.
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Industrial associations and districts in Italy
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Peculiarities of Italian economic structure
A low number of big firms, a reduced number of medium
firms and an enormous amount of small and micro firms.
The average number of employees per company is close
to 3 units, and has a descending trend in the last years.
In Italy you can count more than 60 companies every
1,000 people.
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How could Italian firms be successful on
international markets?
Traditional Italian industry structures sees a huge
number of SMMEs, mainly family owned; often one of
the strongest values is their artisan trait, mixed with
flexibility and specialization, often reached them to
success. Moreover, Italian SMMEs often operate in
industrial districts which represent special contexts
where they can profit of economies of scale.
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What are industrial districts?
Industrial districts are homogeneous local systems,
collecting a big amount of SMMEs, specialized in a
specific production (or industry) over a defined territorial
area.
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Whose was the idea of industrial districts?
The concept of industrial districts was first introduced by
the English economist Alfred Marshall in 1920; the
reasons for companies to agglomerate in Marshall’s
opinion are:
knowledge spillovers,
decrease of transaction costs,
easier access to skilled labor.
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Industrial district peculiarities
 Specific product or supply chain.
 Close network of relationships between companies
and institution of the area.
 Presence of competition close to cooperation.
 High level of flexibility, for a prompt response to
changes in demand.
 Strong export vocation.
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Reason for success
 Economies of scale
 High level of specialization
 Highly responsive environment
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Actual strengths of Italian districts
Having a look at last Activity Report of the Osservatorio
dei Distretti, we can see in 2011 companies part of ID
grew a little bit better than others, and in particular
their export ratio had grown. Moreover, the
subcontractor network had strengthen their activities,
innovation is growing (not only in products or processes,
but also in services); social responsibility and
sustainable activities are growing, too.
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Actual weaknesses of Italian districts
 Poor interactions between companies and
bureaucracy, which is still too slow in replying to
requests.
 Access to financing still presents problems for SMMEs
(Basel I, II)
 Generational turnover is often hard to happen.
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Is there any future for industrial districts?
In Lombardia region, Italy’s main industrial area, for
example, OECD stated industrial districts still represent a
key feature of production framework. Local both with
central government is trying to stimulate ID to specialize
and to work in a closer network with local institutions
(universities, but also private and public foundations).
http://www.oecd.org/dataoecd/55/57/49001152.pdf
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