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THE COMMERCIAL AND MARKETING FUNCTION, Garazi García Antruejo - Coggle…
THE COMMERCIAL AND MARKETING FUNCTION
Orientation of Companies towards the Market
Production Orientation
Context
Demand exceeds supply; minimal competition
Focus: Increase productivity
Commercial Activity
Post-manufacture tasks: order processing, invoicing, shipping
Product Orientation
Context
Increased competition; greater supply/demand balance
Focus: Best quality/performance
Risk
Marketing Myopia (Focus on product, not need)
Sales Orientation
Context
Supply exceeds demand; intense competition
Focus: Aggressive sales and communication
Scope
Short-term sales increase only
No input on product development or pricing
Customer, Market or Marketing Orientation
Key principle
Identify needs, deliver satisfiers better that the competition
Customer at the core of business activity
Departamental Alignment
Commercial & Marketing departments should be well-aligned
Marketing: Philosophy and Activity
Marketing as a philosophy
Definition
Conducting activity placing customer at the center
Objective: Identify, anticipate, and solve customer satisfaction
Marketing as an activity or technique
execution of exchange relationships
organized via the Marketing Mix (4P)
AMA definition
activity, institutions, and processes for creating, communicating, delivering, and exchanging value
Market research and information systems
Purpose
Understand buying behavior & influencing variables
obtain information for profitable customer satisfaction
Information sources
Internal sources
located within the firm; inexpensive, immediate
External sources
found outside the firm
Information Acquisition methods
Electronic Survey
Advantage: low cost, rapid collection
Disadvantage: representative sample difficulty
Personal interview
Adv: reduced evasive answers, adaptability
Disadv: slow pace, need for trust
Consumer Panel
Analyzes brand loyalty, campaign effectiveness
Big data & AI
Big data: managing immense volumes
AI aplications
Data analysis & trend prediction
personalization & task automation
Segmentation and Positioning strategies
Market segmentation
definition
subdivision of market into homogeneous groups
Strategies
undifferentiated marketing (whole unit, single product)
differentiated marketing (specific policies for each homogeneous segment)
cocentrated marketing (targeting one or two profitable segments)
Positioning strategy
Goal: influence customer perception to associate brand with specific qualities/values
Key framework: Marketing Mix (used after identifying target segment and differentiators)
Marketing Mix (4 P)
Product (Attributes satisfying a need)
Product Levels
Core Benefit (Basic Product)
Actual product (quality, features, design, brand, packaging)
Augmented product (waranties, advice, services)
Product Range & Lines
Lead products (Greatest profits)
Attraction products (brand hook)
Future-builder products
Balancing (Regulator) products
Tactical products (countering threats)
Products Life Cycle
Introduction phase
Sales/Profit: slow growth, negative/low profit
Actions: High communication, high price, limited distribution
Growth phase
market quickly acception, substantial profit increase
Actions: high promotion, seek new channels, lower prices
Maturity phase
sales stabilize, margins low due to competition
Actions: steady promotion, price reduction, find new uses/markets
Decline phase
Sales/Profit: downward trend, profits lower
Action: withdrawal (while respectiong customer rights)
Price (sacrifice for utility)
Objectives
achieve given return on invested capital
achieve given market share (may sacrifice short-term profit)
maintain stance relative to competitors
Strategies
Cost-based pricing
target profit pricing
break-even pricing (Q*)
minimum price (unit variable cost)
customer value-based pricing
factors affecting price sensitivity
price-quality effect
substitute products
difficulty of comparison
shared-cost effect
Competition-based pricing
Pricing by Product Life Cycle
Introduction phase options
skimming strategy (High initial price)
Penetration strategy (low initial price)
Place (Distribution)
Objective: create place and time utility
functions
transport products
break bulk and assemble assortments
inform about market needs
distribution policy by life cycle stage
Introduction: specialty stores only
Growth: additional outlets
Maturity: mass and intesive distribution
Structure
Direct circuit (manufacturer -> final client)
Short circuit (includes 1 intermediary)
Long circuit (multiple intermediates)
Types of intermediates
wholesalers (sell in bulk to retailers)
Retailers (sell to final consumers)
Agents/Brokers (connect seller/buyer, assume no risk)
Modes
Exclusive distribution (grants exclusivity)
selective distribution (limited distributors)
Intensive distribution (maximum points of sale)
Promotion (Communication)
Objectives
Image creation (impressions like prestige, status)
product differentiation (highlighting unique aspects)
(Re)positioning
Reinforcement/modification of attitudes
Communication tools
Advertising (mass media, controlled message)
Direct marketing (immediate contact: telemarketing, e-mail)
Sales promotion (incentives for short-term demand)
Merchandising (point of sale display)
Internet/online marketing (social media, blogs, direct tools)
Public Relations (image building, press releases, not paid media space)
Personal Selling (direct person-to-person interaction)
Communication Policy & PLC
Introduction/Growth: focus on awareness (advertising/PR important)
Maturity: focus on reinforcement (personal selling/sales promotion increase)
Garazi García Antruejo