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Introduction to Business Marketing

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S.C. Johnson & Son. Distinguished Professor of International Marketing ... Source: Howard Sutton, The Marketing Plan in the 1990's', The Conference Board, ... – PowerPoint PPT presentation

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Title: Introduction to Business Marketing


1
Introduction to (Business) Marketing
Rob Menko Rotterdam School of Management /
Erasmus Graduate School of Business
2
Table of content
  • Marketing Philosophy
  • Consumer and Business Marketing
  • Marketing Planning
  • Marketing Planning Problems

3
Some General Observations
  • The marketing function is only one part of the
    company responsible for excellent marketing
  • Therefore, we prefer market based management
    through a market led team
  • The main issue is creating value for the customer
    (at a profit)

4
Marketing and shareholder value
(elaboration of JM, 1998)
5
  • Marketing is not the art of finding clever ways
    to dispose of what you make.
  • Marketing is the art of creating genuine customer
    value.
  • It is the art of helping your customer become
    better off.
  • The marketers watchwords are quality, service
    and value.

Philip Kotler S.C. Johnson Son Distinguished
Professor of International Marketing Kellogg
Graduate School of Management
6
The 13 dimensions of value
Source Lapierre, 2000
7
A customer is ...
  • A customer is not dependent on us.
  • We are dependent on him.
  • He is not an interruption of our work.
  • He is the purpose of it.
  • He is not an outsider of our business.
  • He is a part of it.
  • We are not doing him a favour by serving him.
  • He is doing us a favour by giving us an
    opportunity to do so.

8
Marketing
  • Marketing is a human activity directed at
    satisfying
  • needs and wants through exchange processes.
  • Needs
  • Wants

9
Aim of marketing
  • Consumer marketing to make life more pleasant
    for consumers
  • Business marketing to make sure that your
    customers earn more money by using your
    product/offering/value proposition

10
Key concepts in Business Marketing
  • Business System/ Demand Chain
  • Customers Customer
  • Co-Development
  • Account Management
  • Total Lifetime Value
  • Account teams
  • Product and Process Innovation
  • Strategic Alliances

11
Major Challenges for Business Marketers
  • Achieve profitable growth
  • Better organize and market the marketing function
    itself
  • Get the marketing basics right (STP)
  • Refine the marketing budget process and metrics
  • Build markets through higher customer-value total
    offerings
  • Better manage changing distribution channel
    relationships
  • Deploy the power of B2B brands
  • Compete more aggressively in global markets
  • Master e-business tools

Source ISBM study, 2004
12
Essential skills and knowledge
  • Understanding Marketing metrics/ Managing
    profitability
  • Improving networking and partnering skills
  • Honing strategic skills
  • Developing a customer focus
  • Mastering fundamental marketing skills
  • Understanding customer value
  • Building global marketing skills
  • Gathering market and competitive intelligence
  • Understanding branding
  • Building new product development skills
  • Developing e-business skills
  • Managing services marketing

Source ISBM survey, 2004
13
Conclusions of ISBM survey
  • Focus on producing customer value
  • Issues in global business (e.g. dealing with
    cultural differences)
  • Learn your marketing basics
  • Awarenss of changing distribution
  • Branding
  • Relate marketing plans/projects to ABC
  • e-business
  • NPD

14
Market Focus A Strategic Necessity
  • The assets of the firm have little value without
    customers
  • A key task for the firm is therefore to create,
    attract, and retain customers
  • Customers are attracted through offers of value
    and retained through satisfaction
  • The task of the marketing function is to define
    how customers perceive value and satisfaction
  • The value and satisfaction actually received by
    customers is affected by the performance of the
    whole organisation
  • The whole organisation must therefore be market
    focused

15
Marketing Department
  • Marketing is too important to be left to the
    marketers
  • The size of the marketing department is inversely
    related to the market orientation of the
    organization
  • The role of the marketing department is to make
    itself superfluous

16
Kotler on Marketing
  • The marketing organization will have to redefine
    its role from managing customer interactions to
    integrating and managing all the companys
    customer-facing processes.

17
Selling and marketing concepts contrasted
18
The strategic triangle
Source D. Hennessey
19
Dimensions of market-driven management
Source Adapted from George Day Market Driven
Strategy, 1990
20
Business market planning A functionally
integrated perspective
Source Hutt Speh, 2000
21
Formulating Business marketing strategy Vital
cross-functional connections
Source Hutt Speh
22
Marketing planning structure
Source D. Hennessey
23
A framework for business marketing management
Source Hutt Speh
24
The marketing planning structure
Source Hutt Speh
25
Overview of analysis
26
Environmental factors (PEST)
  • olitical / legal factors
  • Monopolies legislation
  • Environmental protection laws
  • Taxation policy
  • Foreign trade regulations
  • Employment law
  • Government stability
  • ocial / cultural factors
  • Populations demographics
  • Income distribution
  • Social mobility
  • Lifestyle changes
  • Attitudes to work and leisure
  • Consumerism
  • Levels of education
  • conomic factors
  • Business cycles
  • GNP trends
  • Interest rates
  • Inflation
  • Unemployment
  • Disposable income
  • Energy availability and cost
  • echnological factors
  • Government spending on research
  • Government and industry focus on technological
    effort
  • New discoveries / developments
  • Speed of technology transfer
  • Rates of obsolescence

27
Critical questions about Marketing Strategy
  • 1. Suitability Is there a sustainable
    advantage?
  • (e.g., assess the strategy in light of the
    capabilities of the business and the likely
    responses of key competitors)
  • 2. Validity Are the assumptions realistic?
  • (e.g., assumptions concerning sales, profits,
    competition)
  • 3. Realism Do we have the skills, resources,
    and commitments?
  • (e.g., adequate sales force, advertising budget,
    commitment of key personnel including top
    management)
  • 4. Consistency Does the strategy hang together?
  • (e.g., Is it internally consistent across the
    functional areas in
  • the firm?)

Source Adapted from George S. Day. Tough
Questions for Developing Strategies Journal of
Business Strategy, 7 (Winter 1986)
28
Critical questions about Marketing Strategy(II)
  • 5. Vulnerability What are the risks and
    contingencies?
  • (e.g., If important assumptions are wrong, what
    are the risks inherent in the strategy?)
  • 6. Adaptability Can we retain our flexibility?
  • (e.g., If a major contingency occurs, could the
    strategy be
  • reversed?)
  • 7. Financial Desirability How much economic
    value is created?
  • (e.g., the attractiveness of expected performance
    relative to the probable risk)

Adapted fromGeorge S. Day. Tough Questions for
Developing Strategies Journal of Business
Strategy, 7 (Winter 1986)
29
Problems most often encountered
  • No clear linkeage to other plans (previous, BP)
  • No analysis of competitor strategy
  • Competitors seen as static
  • No content, just buzz words
  • The form is correct, but no sense of main issues,
    urgency
  • 90 analysis, 10 action
  • No projected PL
  • No action plan

30
Organizational issues
  • Plan is seen as ritual
  • Plan is static
  • No contingency plan
  • No real support for plan
  • Plan is never consulted after agreement
  • Only the financial objectives are relevant, not
    the marketing strategy

31
Planning process
  • Who starts (top down or bottom up)
  • Who is involved (staff or line)
  • How much time (do we get or take)
  • How new (zero base or adaptation)
  • How much guidance (is it or can it be)
  • How realistic (realistic or game playing)
  • Part of job (job description)

32
Marketing planning
33
Time problems
34
Co-operation problems
35
Knowledge problems
36
Content problems
37
Implementation problems
38
Marketing planning is often considered
  • a necessary evil
  • to be done in the spare hours
  • not to be consulted after it is completed
  • a yearly ritual
  • a window dressing performance
  • a justification of current position an exercise
    in futility

39
Though marketing planning should be
  • Creative
  • Intellectual
  • Challenging
  • Sharing
  • Guiding
  • Action oriented
  • Stimulating
  • and Fun

40
The ritual
41
Action minded
42
Objectives
  • explicit
  • realistic
  • acceptable
  • consistent
  • prioritised
  • dynamic
  • influential
  • measurable
  • ambitious / challenging

43
The ideal forecast
44
Unclear objectives
45
Marketing control Finish and start of marketing
management
46
The Process
47
Main shortcomings of plans (content)
Source Howard Sutton, The Marketing Plan in the
1990s, The Conference Board, Report no. 951,
1990, p. 62.
48
Most critical problems in preparing marketing
plans
Source Howard Sutton, The Marketing Plan in the
1990s, The Conference Board, Report no. 951,
1990, p. 61.
49
Marketing plan Content items objectives,
strategies and action programs (all companies
combined, N 223)
Source Howard Sutton, The Marketing Plan in the
1990s, The Conference Board, Report no. 951,
1990.
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