Identify and apply appropriate quantitative and qualitative business models to evaluate business performance
Strategic Marketing you will learn the marketing fundamentals of how to analyze markets and develop marketing strategies. The aim of the course is to provide future general managers and entrepreneurs with insight into marketing management, the kinds of issues marketing managers deal with and the analytical frameworks which can be used to make sense of and develop solutions for those issues.
Course Overview: In this course, you will be introduced to the strategic concepts of marketing management. The course takes the perspective of a marketing manager, or entrepreneur, with a focus on the decisions she or he would make and the factors influencing those decisions. Marketing managers typically begin by identifying and analyzing one or more target markets and competitive positions. This course will encourage you to see how the components of the marketing mix—Product, Promotion, Distribution, and Pricing—are primarily driven by the requirements of target markets and the offerings of competitors.
• Identify and apply appropriate quantitative and qualitative business models to evaluate business performance and solve complex organizational problems.
• Generate business plans at the corporate, business unit, and functional levels.
• Conduct business research by finding, collecting, analyzing, and evaluating business data.
• Evaluate information consisting of multiple perspectives, conflicting evidence, competing inter-ests and priorities, and risk, to determine an optimal course of action.
• Generate oral / written presentations in various business formats (e.g., memos, reports, Power-Point, spreadsheets, charts / graphs).
• Apply a system’s perspective to improve, integrate, and align business functions with organiza-tional strategy.
• Recognize and address cross-cultural contingencies for conducting business in a global envi-ronment.
• Demonstrate ethical and reasoned decision-making and action in all facets of organizational management.
• Manage and lead groups and individuals to optimize performance and productivity.
Module 1 SLP: STP, PRODUCT MANAGEMENT & SITUATION ANALYSIS
Introduction to Marketing
When you hear the word “marketing,” what is the first thing that comes to mind? Most people think “advertising,” but most people are wrong. It’s a common misperception that advertising equals marketing, but it’s just not true.
The fact of the matter is that while advertising is an important—and a very visible—marketing tactic, it’s only a small part of the marketing process.
MKT501 is a survey course in Strategic Marketing management. It is mostly devoted to specific strategies intended to advance organizational interests by choosing products and services, distribution channels and methods, promotion messages and media, and approaches to pricing that best serve the objectives of customers as well as the firms that deploy these strategies. But before tackling these strategic vectors directly, we want to provide some background fundamentals.
Introduction to the Fundamentals of Strategic Marketing
Module 1 explains the fundamentals of Strategic Marketing, that is, the basic propositions that need to be observed in making (and evaluating) those strategic marketing decisions, and hence, is the bedrock foundation on which rests the remainder of the course.
In this module you will examine the following issues:
What is Marketing? Marketing involves voluntary exchanges between a buyer and a seller. That means more than gifts or commands. While barter (exchanging goods or services for other goods or services such as happens between neighbors and family members or, frequently, in international trade) is an aspect of marketing, our usual marketing experience involves exchanging goods and services for money, as when you buy groceries at the supermarket or a company buys equipment needed to produce its products.
The terms of exchange that best meet the mutual needs of buyers and sellers are determined in the context of a “market environment.” The first order of interest is the market itself: the nature of demand (e.g., size, needs, etc.), the character and structure of competition (e.g., potential substitutes for our products and services—how many, strengths and weaknesses, etc.), and since few organizations are fully integrated, the supply situation for ingredients, support services, and other inputs. The second order of interest is what we call the macromarketing environment: social and cultural factors (e.g., demographics, values) that affect demand, public policy and regulations that define what we must and cannot do, technology that has implications for costs and competition, geography, and “non-marketing costs” (for labor and material not under the control of marketing managers).
What is a market and how does one identify who is a member of a market? It might seem like a simple question with a simple answer, yet in fact it is neither simple nor, oftentimes, easy to apply. Yet it is important to know who is in and who is not in the market for our products, and how those numbers have changed and will change over time. Two good reasons for this are that the number of potential buyers we identify as being in a market affects our potential profitability. Since other firms might be trying to reach the same potential buyers, it also determines who we are competing against.
Because capabilities and strengths are uneven among competitors and because needs and priorities vary among potential buyers, the most fundamental strategic decision is choosing our customer. Though that “possibility space” might include just about anybody who, at least figuratively, walks through our door, these variables strongly suggest recognizing that some potential buyers are better prospects than others, and, coincidentally, that our strengths (relative to competition and customer priorities) are better suited to the needs of some buyers than others. That realization implies the need to segment demand according to factors that are likely to influence buying in terms of products, prices, points of purchase, and exposure to ad media and then to focus our attention on the specific segment(s) most likely to be attracted to what we sell.
Our final fundamental relates to what we have come to term “positioning.” Where do we want our product or service to fit in the minds of the target customers we discussed above? Think of those minds as “mental maps” with coordinates defined by the various attributes of our product. If we are in the car business, for example, those coordinates might be styling, performance, economy (initial and operating cost), and service convenience. All cars have these attributes, though their specifics differ from brand to brand and model to model. “Positioning” speaks to what point on this multidimensional map a product occupies. In addition, the concept recognizes that some attributes are likely to be more important in deciding what alternatives to shop and which offering to choose. (We refer to this as “salience”: What makes a difference?) Thus, positioning implies taking account of the priority needs of target customers and the comparative strengths and weaknesses of competitors serving that demand segment in choosing which attributes to emphasize in, for example, product design and promotion.
How do potential buyers decide what to buy? As you might guess, the answer is not “They do what marketers tell them to do.” In fact there is no one simple answer to this question. However, in the Background materials for Module 1 we will explore the frameworks that motivate buying behavior, which you are encouraged to consider in your Module 1 Case. The objective is not to teach you all there is to know about buying behavior, but rather to give you a sense of how a model of buying behavior can be used to help marketing managers in developing more effective marketing strategies.
What is a marketing strategy? A marketing strategy is whom we choose to focus our marketing efforts on, and the character of those efforts—the products and services offered, the communication of their attributes, the system utilized for delivery, and the approach taken in pricing them. In this module we will examine these fundamental ideas in some detail, along with some options that organizations have used in developing their marketing strategies. We will also explore the factors likely to influence the choice of strategies:
1. The marketing environment
2. The markets we serve or might enter
3. The competition
4. Whether we have or can develop a “competitive advantage”
The Marketing Mix: Product
Having developed an understanding of how marketers analyze markets and select targets, we turn our attention to how firms can win and retain customers. In this module, we will focus on one of the four elements of the Marketing Mix, the Product (the first of the 4 Ps describing the Marketing Mix) and the closely associated concept of the brand. This raises a number of questions such as:
• What is a Product?
• What is branding and why do firms do it?
• If a new product is developed, should it be branded with an existing brand name or should a distinctive brand name be created that is unrelated to the existing brand name?
What are some of the important and current issues facing product and brand managers?
As evident from the above questions, we will be placing our emphasis on brands, branding, and brand management. Apart from understanding the fundamental concepts (such as Product, Goods, Service, Brand, and Positioning), we will explore the idea that brands can enable firms to establish a competitive advantage. In the Case we will focus on how customers view brands, and in the SLP we will apply many of the frameworks being taught to further analyze a product your chosen organization produces and the environmental factors the organization faces.
In this module, we also explore the way marketers study buyers. Ultimately, our understanding of the behavior of potential, prospective, and existing buyers (who might be companies or individuals) is what drives our marketing strategies. In terms of that understanding, we ask:
• What prompts people to buy or not to buy?
• What choices do they make and why?
• When do they buy? How often? How much?
• Where do they shop? What services do they require?
• What kind of information is important to us? Where do we look for it?
There are many questions with complex answers:
• We do not all think and act alike.
• Our behavior changes with age and other circumstances.
• The shoppers are influenced by biological, sociological, economic, psychological, and cultural factors to varying degrees, depending on what one is shopping for.
As complex as this subject is, some rudimentary understanding of consumer behavior is a necessary input to marketing decisions from the most basic product conceptualization and design to (what some view as of marginal importance) who to picture doing what in advertisements. Does it seem at all realistic to know that choices between two brands of luxury automobiles might turn on the design of a taillight?
The answers to these questions relate to issues of segmentation, targeting, and positioning. Indeed, as you get into the reading and assignments, keep those strategic fundamentals in mind.
A few prefatory comments may help your understanding of products:
1. Do not forget to bring segmentation, targeting, and positioning concepts to bear on product questions.
2. Services, though less tangible and more transitory, are “products,” too. Airlines, banks, and barbershops have to address product management questions in much the same way as manufacturers and retailers. Also, services may be a critical aspect of marketing physical products; consider things like installation, technical support, warranties, and so on.
3. The significance of addressing product management questions extends to manufacturers and retailers. Choosing an automobile brand or dealer, for example, may have as much to do with the manufacturer’s warranty or the dealer’s policy of providing loans while cars are being serviced as it does with the physical attributes of the car itself.
4. The previous point raises a question about physical attributes, which, from a marketing perspective, ought to be viewed only in terms of the benefits they deliver. We do not consume horsepower except in the acceleration or speed it delivers—and the cost of fuel required to deliver those benefits.
5. Even though distribution is covered in a future module, it is appropriate at this time to recognize the importance of the marketing channel, particularly retail outlets, in understanding “products.” While this subject will get more attention later, keep in mind that intermediaries contribute to how well or poorly the product “package”—of benefits and costs—responds to the needs and wants of the marketplace.
6. This module also considers the subject of branding. Since the origination of this concept lies in marking products with the “brand” of the maker or owner, we often find students thinking about branding only in terms of trademarks, logos, and such, (e.g., updating graphics). A more important understanding of branding lies in people’s beliefs about a brand; graphics (as well as brand names, etc.) should reflect or, possibly, influence those beliefs, but by no means do they constitute the whole of the branding idea.
7. Contemporary marketing strategies often require considerable attention to branding (think new or modified products) in large measure because branding/beliefs amount to shorthand and residual set predispositions toward products, making promotion and information requirements simpler and more efficient.
8. Branding as shorthand is also advanced when brand names and logos convey meanings that match the product itself. (Why didn’t Ford call it a “Ranger” instead of an “Edsel”?)
9. We also have to be careful about damaging or confusing brand franchises and recognizing any “baggage” attached to an existing brand. Does the promotion of Mercedes’ “C” series damage the image of its “E” and “S” lines? Should Hyundai put out its newer luxury models under a different brand, much as Toyota did with Lexus?
10. Turning to new product development, the marketing concept implies that successful new products must respond to pre-existing needs. A common practice is to survey prospective buyers regarding their needs and ask whether they would (definitely, maybe, or definitely not) buy some proposed product or service. While that approach to gauging demand is logical and may have merit, it is difficult to square that kind of thinking with the success of, for example, Macintosh products. Who would have indicated their need to download movies on a cell phone?
There is much to cover in this module, but a good grounding in these topics will give you a strong foundation for the remainder of the course.