Transcript What Is Marketing Management?

Welcome to
MBA6140
Professor:
E. K. Valentin
What Is Marketing?
MBA
6140
 Is it sales?
 Is it advertising?
 What is the essence of marketing?
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What Is Marketing Management?
Essentially, marketing – or more accurately,
marketing management – entails selecting
customers to be served, communicating with them,
and catering to their needs and preferences to
realize the marketer’s objectives.
Marketing techniques and ideas can be applied in
diverse situations.
We will concentrate on commercial applications.
Other applications include fund drives, politics, and
marketing yourself to a prospective employer
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MBA
6140
Marketing & Management Levels
Corporate
(Long time horizon; great uncertainty; manage uncertainty;
select corporate portfolio of businesses)
Division/Business
Functional Level
of Marketing:
Brands, product
lines, stores, etc.
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Marketing Management
and the Marketing Mix
MBA
6140
Marketing
Mix (4Ps)
Place
Product
Customer
Solutions
Convenience
Price
Promotion
Communication
Customer
Cost
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Models and Strategic Insight
MBA
6140
 The Marketing Mix Model is one of many models,
including theories and conceptual frameworks, that will be
introduced in this class.
 In effect, models are lenses through which we see the world.
 Additionally, they direct inquiry – i.e., they suggest what to
look for.
 Indeed, “[C]ompetition is not just product versus product,
company versus company . . . It is mind-set versus mindset, managerial frame versus managerial frame.”
- Gary Hamel and C. K. Prahalad
“Managerial frames” are the mental models that guide executive.
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Marketing as a Field of Study
MBA
6140
 Abstract: Few hard facts; mostly ideas, heuristics, and
hypotheses backed to varying degrees by empirical evidence.
 Eclectic: Marketers aren’t too proud to steal ideas.
 Dynamic: The world of marketing changes continually;
hence, yesterday’s success formulas may be today’s
prescriptions for disaster.
 Contextual: Situational factors – e.g., type of product and
product life cycle (PLC) stage – often determine whether a
particular marketing strategy succeeds or fails.
 Consequently, there are few, if any, pat answers to
marketing questions or enduring solutions to marketing
problems. Further, the study of marketing is less about
memorizing facts than it is about critical thinking, gaining
perspective, and continuous problem solving.
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MBA
6140
Business Philosophy & Marketing
The product concept – Make what you want to make;
ignore what customers want to buy. Make a better
mousetrap, even if customers don’t want it.
The production concept – Low cost is the key to
success; reduce cost via efficiency, scale economies,
etc. It worked for Henry Ford, at least for awhile.
The selling concept – Focus on the needs of the
seller, rather than the needs of the customer. Good
marketers can sell anything.
The marketing concept:
• The customer is king!
• Find needs, then fill them.
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6140
Pitfalls of the Marketing Concept
 Should businesses always let marketing research be their
guide?
 Unfortunately, marketing research has some serious
limitations.
 Some renditions of the MC assert that pleasing all
customers is the key to success. Companies that delight
their customers realize profits and thwart competitors
“automatically.” Such thinking seems dangerously naive.
 Pleasing customers may not please society. The “societal
MC” directs businesses to seek profits by serving needs of
customers in a socially responsible way.
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Market Orientation:
The “New and Improved” MC
MBA
6140
Market-oriented organizations are customer
oriented and understand that customers buy
benefits, not products – ¼” holes, not ¼” drills.
Being market and customer oriented is not
inconsistent with being technologically innovative
(which may entail inside-out marketing and
leading customers).
Market/Customer Orientation Checklist:
•Are we easy to do business with?
•Do we keep our promises?
•Do we meet the standards we set?
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•Are we responsive?
•Do we work together?
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Strong market
orientation
Higher
Earnings &
Shareholder
Value
Results of a Strong
Market Orientation: A
Virtuous Cycle
Poor understanding
of Customers &
Competitors
Consequences of a Weak
Market Orientation: A
Vicious Cycle
Current Marketing Themes
MBA
6140
In the firm, marketers should be customer advocates.
Profitable enterprise requires a strong market
orientation:
Superior understanding of customers
Superior understanding of competitors
Integrated marketing effort throughout focused on
• delivering superior customer value profitably
• attracting and retaining profitable customers, not all
customers
• employee satisfaction; disgruntled employees create
disgruntled customers
Creating shareholder value hinges on creating customer
value, which is facilitated by a market orientation.
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More Marketing Themes
MBA
6140
 Employees are hired to serve external or internal
customers.
Customers < Employees < . . . < Employees
 Pleasing (external) customers efficiently is essential to a
business' long-term prosperity.
 Marketing executives are well-advised to proceed as if
(external) customers sought "the biggest bang for the
buck," given their varied needs and preferences.
 Often, it is better to distribute marketing functions widely
throughout an organization rather than assign them to a
single department – the marketing department.
 Marketing is too big a job for marketing departments alone;
it requires concerted organizational effort.
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Who’s Correct?
MBA
6140
 Treacy & Wiersema: Creating shareholder wealth is not
the purpose of the business. It is the reward for creating
customer value.
 Ries & Trout: The true nature of marketing is not serving
the customer – it is outwitting, outflanking and outfighting
your competitors
 In truth:
Shareholder value hinges on customer value to varying
degrees – much more so in highly competitive markets
than in others.
Marketing success does not necessarily imply customers
are satisfied or treated fairly.
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Please stay for a few more minutes if you
have questions about the class format,
expectations, grading, online resources, etc.