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Marketing Process - Coggle Diagram
Marketing Process
STAGE 5 - FORMULATE MARKETING STRATEGY
1) A business unit requires a strategic focus for achieving its objectives -> set strategic focus
based either of increasing volume or improving productivity
INCREASE VOLUME
attempt to expand the total market or aim to penetrate and increase its share of the market
expansion can be achieved through identifying new uses for the product or service, or by increasing the usage rate of existing users, or by attracting new users to the product or service
market penetration is usually achieved by winning competitors' customers in the marketplace, or sometimes more indirectly, via acquiring competitors or merging with them in some way
IMPROVE PRODUCTIVITY
aim to reduce costs — fixed or variable or both
aternatively, or in addition to cost reduction, it can increase price
may choose to rationalise the product mix in some way -> would involve the removal or "weeding out" of products which are performing poorly, and instead concentrating effort on those which are more financially viable
2) It must select the customer segment(s) it will serve -> Select Customer Targets
segmentation involves the sub-division of markets into distinct subsets of customers -> is based on:
1) Customers usually differ in some respect
2) They can be grouped into relatively homogeneous segments in terms of some relevant aspect of their behaviour
3) Segmentation thereby enables the firm to isolate and target specific markets
in attempting to segment market -> in the company's interest continually to seek new and creative ways of defining its market, in order to gain new insights and thereby a potential competitive advantage
after segmenting, must select its target segment(s)
in undifferentiated marketing, the entire market is targeted with one marketing mix designed to appeal to the broadest number of buyers
in a differentiated or concentrated approach aims to target either a number of specific segments or a single segment
3) It must select its targets and choose its competitive battleground - > Select Competitor Targets
aiming to satisfy customer needs and wants better than the competition
he selection of competitor targets should hinge around the evaluation of competitors in the light of the company's relative strengths and weaknesses and ability to compete
4) It must define its competitive advantage -> Define Competitive Advantage
develop a competitive advantage which will distinguish the company's offer from those of its competitors in the segment
make the offer as unique as possible to customers, so they will be less likely to switch to competitors for minor price advantages
essential factor -> deliver something of value to the customer
competitive advantage can be created out of any of the company's strengths or "distinctive competences" relative to the competition
a competitive advantage should be embodied within the firm's positioning strategy
5) It must assemble its marketing mix — i.e. the four Ps (product, price, promotion, and place) — which activates the plan -> Assemble the Marketing Mix
each mix should be tailored so that target customers regard it as being superior to those offered by competitors, by reflecting the firm's choice of competitive advantage
product -> development of the "right" product and/or service for the target market, i.e. one which will satisfy customer needs
price -> ensuring that product is offered for sale at a price which makes the whole mix as attractive as possible to target customers
promotion -> all methods of communicating to the target market about the product's existence and its benefits
place -> ensuring the product is available to target customers when and where they want it. Hence, the marketer will need to make distribution channels decisions, regarding where, when, and by whom
STAGE 6 - DESIGN MARKETING ORGNAISATION
build the organisation around the marketing plan rather than to force the plan into a predetermined organisational arrangement
no single "best" solution
4 different structures -> Functional, Product-centred, Market-centred and Combinational
FUNCTIONAL
marketing staff are grouped by functional specialisation and their activities are co- ordinated by the chief marketing executive
advantages of this approach stem from its simplicity; ain advantages of this approach stem from its simplicity; all elements of the marketing mix can be easily co-ordinated by the chief marketing executive, there are clear lines of responsibility, and staff can develop specialist skills leading to greater efficiency
tendency for functional specialists to become too restricted in outlook so that when the firm increases its product range, co-ordination and control can become increasingly difficult
most appropriate when the number of products is small and/or their similarities are great
PRODUCT - CENTRED
advantage of allowing talented managers to devote all of their attention to a particular product or group of products
constant need for product managers to negotiate the allocation of company resources to their product areas
this may result in the under development of certain product lines if some managers are less skilled negotiators than others
the strong emphasis on the success of the product suggests an incomplete marketing orientation, with a tendency towards the "hard- sell" of all product lines regardless of customer requirements and other market considerations
-most appropriate when product complexities and differences are great, and viable only when sales volumes are of a sufficient scale to justify the inevitable duplication of effort
MARKET-CENTRED
similar to a product-centred approach, except that product managers are substituted for market managers
enjoy similar benefits to product managers
markets are seen as profit centres, however, there can be potential problems associated with this approach
an over-emphasis on market success can easily lead to an incomplete marketing orientation with implications similar to those already discussed
most appropriate when it is possible to distinguish definite differences in the needs and buying behaviour of separate
customer groups and when these customer groups are large enough to justify special attention
COMBINATIONAL APPROACHES
combination of the previous three structures
functional manager/ product manager matrix
aims would be to develop concentration in each of the marketing functions, plus integration and planning in the product groups, while avoiding additional layers of management
potential advantage -> seeking to reduce any duplication of effort while still retaining the benefits associated with specialisation
difficulties of implementation
creates two channels of command, and hence lines of responsibility may become confused, leading to sub-optimal decision-making
most appropriate when the product range is diverse and/or when product market requirements are complex
STAGE 3 - CONDUCT SITUTATION ANALYSIS
to analyse the company's long-run strategic situation, in order to plan an appropriate set of marketing objectives and strategies capable of moving the firm towards the realisation of its mission
summarise its major internal strengths and weaknesses and external opportunities and threats (SWOT analysis)
purpose of SWOT is to capitalise on company strengths, minimise any weaknesses, exploit market opportunities and avoid any threats
INTERNAL (COMPANY) ANALYSIS
firms strengths and weaknesses
all areas of firm should be assessed
include aspects like financial capabilities, technical competence, location, physical plant and equipment, personnel, distributor relationships, customer relationships, etc
identify its distinctive competences
emphasises the need to consider market opportunities in the light of a company's particular skills and strengths relative to its competitors
COMPETITOR ANALYSIS
analysis of actual/potential competitors -> important because the nature of the competition has a direct influence on all aspects of the strengths, weaknesses, opportunities and threats profile facing the firm
identify the firm's potential for creating a sustainable competitive advantage in the market
identifying an industry's key success factors -> what is the key to competitive success in that industry
MARKET ANALYSIS
immediate market -> specific market(s) in which the firm actually/potentially operates with customers and more general market characteristics comprising the most important aspects of this analysis
why customers buy and what benefits they seek, when and where they buy and who is involved in the purchase decision
marketing segmentation -> involves the identification of groups of 'similar' customers with common characteristics which are, or may become, significant for determining a separate marketing strategy
assessment of their relative 'attractiveness' to the firm -> involves estimating market size and growth rates, competitive structure (e.g. degree of competitive-rivalry/change and other factors affecting the potential for profitability
the wider world -> comprises of factors such as the social economic, technical and legal environments -> reshape both buyer and competitor behaviour
'build-in' environmental sensitivity by analysing these factors
STAGE 7 - IMPLEMENT MARKETING CONTROL
regular, systematic monitoring and controlling of the marketing effort
need for such control is simple — plans can either go wrong or become inappropriate
strategic control is concerned with a longer-term orientation, checking the suitability of overall objectives and strategies, monitoring levels of marketing effectiveness and achievement and generally providing a means of coping with an increasingly fast-changing and hostile business environment
control can be achieved by the effective use of marketing information systems, and contingency planning
THE MARKETING INFORMATION SYSTEM
INTERNAL ACCOUNTING SYSTEM
provides continuous information on sales figures, costs and profits which can be related back to the original objectives of the strategy being pursued
comparing actual with planned performance level
aware of any significant divergence from the plan
MARKETING INTELLIGENCE SYSTEM
e ongoing routine surveillance of the firm's general environment
purpose of providing management with the full range of strategic intelligence, from defensive intelligence — oriented towards avoiding surprises, to offensive intelligence
identifying new opportunities
focus should roughly correspond to those outlined earlier when conducting the firm's situation analysis
MARKETING RESEARCH SYSTEM
ongoing marketing intelligence system, provides focused studies on specific problem and opportunity areas as and when required
supply reliable, objective information that can reduce the level of uncertainty in specific decision-making situations
ANALYTICAL MARKETING SYSTEM
provide a data analysis "service" within the firm's overall marketing information system
provide user- friendly access to a wide range of statistical methods which can help in analysing marketing data
CONTINGENCY PLANNING
ready to cope with unfavourable or favourable events before they even occur
more time and thought goes into a plan developed in advance of, rather than in reaction to, unexpected events
facilitate a faster corrective action than would otherwise be possible
in the event of crisis, a well-conceived contingency plan reduces the potential for myopic, reactive decision making usually based on expediency
requires forecasting a range of likely futures and making assumptions about competitive moves -> is termed "scenario planning", a process which relies completely on quality information generated by an effective marketing information system
STAGE 4 - DEVELOP MARKETING OBJECTIVES
marketing objectives should flow directly from, and be compatible with, the key issues identified in the firm's summary of the its strengths, weaknesses, opportunities and threats
marketing objective may be defined as what is to be achieved in contrast to a marketing strategy which is how it is entered it is intended to go about achieving it
HIERARCHAL
objectives relating to each of the various planning levels within the firm
achieving corporate-level goals in an interlocking, hierarchal fashion
MEASURABLElittle point in setting objectives unless performance can be measured against them and the degree of achievement evaluated
should be stated in quantitative terms and given a time-scale
REALISTIC
choose target levels for its objectives on the basis of what is realistic and achievable rather than on wishful thinking
CONSISTENT
attention should be paid to ensuring internal consistency when setting objectives
STAGE 1 - ADOPT MARKETING PHILOSOPHY
involves the firm aiming all its effort at satisfying customers at a profit
useful to distinguish between two related ways of thinking about marketing
a total business approach which affects all the various functional areas of the business
a more specific, functional notion of marketing which defines he principal tasks of marketing managers, such as identifying new marketing opportunities, developing policies on advertising, selling, sales promotions, pricing, etc
a marketing-oriented company views the customer as the central controlling influence
STAGE 2 - DEFINE BUSINESS MISSION
a clear, long-term vision of where the company is going and what it is striving to achieve
three things that need to be defined:
1) The firm's basic business in terms of products and/or services to provide and markets to serve
2) The identification of future directions to be pursued by the firm
3) The establishment of business values, attitudes and beliefs, i.e. how the firm should conduct its affairs
the benefit of a well-chosen mission statement is that is can provide a powerful source of motivation for all company personnel -> based on a shared sense of purpose, opportunity and direction