From Attracting Customers Through Stores And Salespeople To Making

Consumers cat) access pictures of products, read ihe specs, shop among online vendors far the best prices and terms, and click to order and pa v. iiusiness-in-business purchasing is growing fast on the Internet. Personal selling can increasingly be conducted electronically, with buyer and seller seeing each ntlier on iheir computer screens in real time.

FROM SELLING TO EVERYONE TO TRYING TO BE THE BEST FIRM SERVING W£LL-

Target marketing is being facilitated by the proliferation of Sped ni-int prest magazj ties. TV channels, ami Internet newsgroups. {Companies arc also making ¡substantial in ves intents in information systems as the key to lowering costs and gaining a competitive edge, They are assembling information about individual customers' purchases, preferences, demographics, and profitability.

FROM FOCUSING ON PROFITABLE TRANSACTIONS TO FOCUSING ON CUSTOMER Companies normallv would aim to make a profit on each transaction. Now; companies are Hocusing on their most profitable customers, products, and channels. They estimate individual customer lifetime value and design marker úfferinj;s and prices to make a profit over the customer's lifetime. Companies now are placing much more emphasis on customer retention. Attracting a new customer may cusi five times as much as doing a good fob to retain existing customers,

FROM A FOCUS ON GAINING MARKET SHARE TO A FOCUS ON fiUII-DING A bank aims to increase its share of the customer's wallet: the-ilj per -market aims to Capture a larger share of the customer's "stomach." Companies build customer share by offering a larger variety of goods to existing customers. They train their employees in cross -selling and up-selling.

FROM BEING LOCAL TO BEING "GLOCAL" —BOTH GLOBAL AND LOCAL Firms are adopting a combination qIcentralisation and decentralization to better balance local adaptation anil global standardisation. I he goal is to encourage more initiative and 'imrcpre-neurship" at the local level, While preserving the necessary global guidelines and standards.1"'

DEFINING MARKETING POR 21ST CÜMTuRY CHAPTER 1

FROM FOCUSING ON THE FINANCIAL SCORECABD TO FOCUSING ON THE ...■■..■ ;. SCORECARD Top management isgoing beyond sales revenue alone to examine the marketing scoieeard to Interpret whal is happening to marked share, customer loss rate, customer satisfaction, product quality, and oilier measures, fhey know that changes in marketing indicators predict changes in financial results.

FROM FOCUSING ON SHAREHOLDERS TO FOCUSING ON STAKEHOLDERS Top manage mem respects the importance of creating to -prosperity among all business partners and customers. These managers develop policies and strategies ¡o hala nee the returns to all the key stakeholders.

Marketing Management Tasks these core concepts and others provide the input for a set of tasks that make uj> successful marketing management. We'll use the following situation to illustrate these tasks in the context of the plan of the hook.

Xetis, Inc. (name disguised), operates in several industries, including chemicals, cameras, and film. The company is organized into SlUJs, Corporate management is considering what to du with its Atlas camera division. At present. Atlas produces it range of mm and digital cameras. The market for Cameras is intensely competitive. Although Zeus has a sizable market Share and is producing much revenue lor the company, the mm market itself is growing very Slowly and its market share is slipping. In the faster-growing digital camera segment, /ens is facing strong competition a nil lias been slow to gall! sales. Zeus's corporate management wants Atlas's marketing group to produce a strong turnaround plan for the division. Marketing management has to come up with a convincing market ing plan, sell corporate management on the plan, and then implement and control it.

DEVELOPING MARKETING STRATEGIES AND PLANS The first task facing Atlas is to identify its potential long-run opportunities given its market experience and core competencies (see Chapter 2], Adas can design its cameras With better features. It can also consider making a line of video cameras, or it can tise its core competency in optics to design a line of binoculars and tqlestJOpcs, Whichever direction it chooses, it must develop concrete marketing plans that specify the marketing strategy and tactics going forward.

CAPTURING MARKETING INSIGHTS To understand what is happening inside and outside the company. Atlas needs a reliable marketing information system: it will Want to closely monitor its marketing environment. Atlas's micro envim n merit consists of all the players »"ho affect the company's ability 10 produce atld sell cameras—suppliers, marketing intermediaries, customers, and competitors. Its macroenvironraent consists of demographic, economic, physical, technological political-legal, and social-cultural forces that affect sales and profits (seeChapter 3).

Atlas also needs a dependable marketing research system, Marketing research is an indispensable tool for assessing buyer wants and behavior and actual aurt potential market size. An important part of gathering environmental Information includes measuring market potential and forecasting future demand. To transform marketing strategy into marketing programs, marketing managers must make hasic decisions on marketing expenditures, marketing activities, and marketing allocation. "1 How many dollars should support Atlas's two or three camera lines? Direct versus distributor sales? Direct-mail advertising versus trade-magazine advertising? Gast Coast markets versus West Coast markets? TO make these a I locati tins, marketing managers may use sales-response functions that show how sales and profits would he affected by tlie amount of money Spent iu each application (see Chapter 4}.

",c NN : ."i::c WIT! Alias must consider how to best create value for Its chosen target markets and develop strong, profitable, long-term relationships with customers (see Chapter 5). To do so, Atlas needs to understand consumer markets (see Chapter 6). How many households plan io buy cameras? Who buys and why do they buy? What are they looking for In the way of features and prices? Where do they shop? What are dieir images of different brands? I low does the digital segment differ from the.85 nun segment? Atlas also

30 PART 1

understanding marketing management sells cameras to business markets. including hrge corftoratiihis., professional firms, retailers, and government agencies (sec Chapter 7), Purchasing agents or buying committees make the decisions. Atlas needs to gain a full tindcrsinnding of how organizational buyers buy. It needs a sales force liiat is well Lmined in presenting product benefits,

Atlas will not Wan I to market to all possible customers. Modern marketing practice calls for dividing the market into major market s^muiis. evaluating each segment, and targeting

II lose market segments that Hie company can best serve (see Chapter 8).

Ull )ING ¡ Atlas must understand the strengths and weaknesses of the

Zeus brand with customers [see Chapter SU- Is it so strongly associated with certain icch-no fogies that h could not be used to brand new producía in related categories? is lis 3 5 mm

III in heritage a detriment in the digital camera market? Suppose Alfas decides to focus on the consumer market and develop a positioning strategy (see Chapter 10}. Should Atias position its cameras :is the "CudtUiac" brand, offering superior cameras al a premium price with excellent service and strong advertising? Sbrwki it iwihf a pimple, low-priced camera aimed at more price-conscidus consuméis? Should ii develop a medium-quality, medium -priced camera? After launch the product's strategy will need modification at the different stages in the product life cycle: introduction, growth, maturity, and decline. Furthermore, strategy choice will depend on whetiier the firm is a market leader, challenger, follower, o* nicher, Atlas mtts-t also pay close attention to competitors [see Chapter It), anticipating n> competitors' urnves aud biowiin^ta« Wi ra« qpÑcMty wvi detfetaty. may warn to initiate some surprise moves, in which case ii meeds to anticipate how its competitors wilf respond,

5HAPIN< <E OF :. ■'"■.■■ Ajtthe heart of die marketing program is the prod uct—the firm's tangible offering to the market, which includes the product quality, design, features, and packaging (see Chapter 12). As part of iss product offering, Atlas may provide various services, such as leasing, delivery, repair, and training (see Chapter 13). Such support services can provide a competitive advantage in die global marketplace.

A criiicaJ marketing decision relates to price (see Chapter II) .Atlas has to decide on wholesale and retail prices, discounts, allowances, and credit terms, lis price should be commensurate Willi the offer's rife rce i veil value; otherwise, buyers will turn to competitor^ products,

Atlas must also determine how to properly deliver the value embodied by these products and services to ihf targLn market. Channel activities include tile various activities the company undertakes to make the product accessible and available 101 argel customers (see Chapter Ui). Atlas must identify, recruit, and tink various marketing facilitators to supply its products ami services efficiently to tint target market, il must understand the various types of retailers, wholesalers, and physical-distribution firms gild how ihcy make their decisions (see Chapter lij).

Alias tinist a 1st» adequately communicate the value embodied by its proqucts and services to the target market. M a rke ting communications activities art* i he means by which firms attempt I o inform, persuade, and remind consumers direetk or mdftectly—about the br¿iritis they sell. Atlns lias to develop att Integrated marketing communication program that maximizes the individua] and collective contribution of all communication activities (set Chapter 171, Atlas has to set up mass, communication programs consisting of advertising, sales promotion, events, and public relations [see Chapter IB). It also has to sol up more personal communications in the form ofdirecl anil interactive tnticket ing and must also hire, train, and motivate salespeople (see Chapter 19).

CREATING LONG-TERM GROWTH Alias must also take a long-term view of its producís and brands and how its profits should be grown. Based tin its product positioning, ii must Initiate new-product development* testing, and launching (see Chapter 20). i he strategy also will have to take into account changing global opportunities and challenges (see Chapter 21).

Finally. Atlas musi organize iis marketing resources and implement and control the marketing plan. The company must ¡uñid a marketing organization that is capable of irnpíeme m ing the marketing plan (see Chapter Z'¿'\. I i eta use of surprises and disappointments that can Occur as marketing plans are implemented, Atlas will need feedback and control,iT Marketing evaluation and emu rot processes are necessary to understand the efficiency and effectiveiless of marketing activities and how hoih could be improved.

□ EUNING MARKETING FOR 21ST CENTURV CHAPTER t 31

]. EToni a managerial point of view, marketing is the process of p I [in (ling a rt(.L exec ulitlg th g con cepl ¡o n, prici n g. promo ■ tion. and distribution of Ideas, gouds, and services to create exchanges dial satisfy individua) 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.

Z Marketers are skilled at managing demandr They seek to influence the level, timing, and composition of Demand-Marketers are involved in marketing many types of en lilies: goods, services, events, experiences, persons, places, properties, organizations, information, and ideas. They also operate in four different marketplaces: Consumer, business, global, ami nonprofit.

3. Businesses today face a number of chg&cnges and opportunities, including glohali/ai ion, the effects of advances in technology, and deregulation. They have responded by changing the way they conduct marketing in very fundamental ways,

4. There are five competing concepls under which organizations can choose to conduct their business: the produc tion concept, the product concept, the selling concept, the marketing concept, and the holistic marketing concept, The first three are of limited use today.

5. The holistic marketing concept is based on die development, design, and implementation of marketing programs, processes, and activities that rccognl/.e their breadth and interde pendencies. Holistic marketing recognizes that "everything mailers'" with marketing and that a broad, integrated perspective is often necessary. Four components of holistic marketing are relationship markei-ing, integrated marketing, internal marketing, and socially responsible marketing.

fi, Marketing management has experienced a number of shifts in recent years as companies seek marketing excellence.

7, The set of tasks neccssary for successful marketing management includes developing marketing strategies and plans, connecting with customers, building strong brands, shaping the market offerings, delivering and communicating value, capturing marketing insights and per form [nice, ami creating Successful long-term growth.

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