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Sunday, July 27, 2014
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Marketing in the modern organization
Marketing in the modern organization
Marketing drives successful organizations but it is often misinterpreted and sometimes
gets bad press. Critics use phrases like marketing ‘gimmicks’, ‘ploys’ and ‘tricks’ to
undermine the valuable effect that marketing can deliver. This is unfortunate because the
essence of marketing is value creation not trickery. Successful companies rely on customers
returning to repurchase, and the goal of marketing is long-term satisfaction, not short-term
deception. This theme is reinforced by the writings of top management consultant, the late
Peter Drucker, who stated:1
Because the purpose of business is to create and keep customers, it has only two central
functions—marketing and innovation. The basic function of marketing is to attract and
retain customers at a profi t.
What can we learn from this statement? First, it places marketing in a central role for
business success and focuses managers’ attention on attracting and keeping customers.
Second, it implies that the purpose of marketing is not to chase any customer at any price.
Drucker used profi t as a criterion. Please note that profi t may be used by many commercial
organizations, whereas in the non-profi t sector other measures of success might be used,
such as reduction of social deprivation or hunger. Consequently, the concepts, principles and
techniques described in this book are as applicable to Oxfam as to Apple.
Third, it is much more expensive to attract new customers than to retain existing ones.
Indeed, the costs of attracting a new customer have been found to be up to six times higher
than the costs of retaining old ones.2
Companies which apply the principles of marketing
recognize the importance of building relationships with customers by providing satisfaction
and attracting new customers by creating added value. Grönroos stresse
Marketing drives successful organizations but it is often misinterpreted and sometimes
gets bad press. Critics use phrases like marketing ‘gimmicks’, ‘ploys’ and ‘tricks’ to
undermine the valuable effect that marketing can deliver. This is unfortunate because the
essence of marketing is value creation not trickery. Successful companies rely on customers
returning to repurchase, and the goal of marketing is long-term satisfaction, not short-term
deception. This theme is reinforced by the writings of top management consultant, the late
Peter Drucker, who stated:1
Because the purpose of business is to create and keep customers, it has only two central
functions—marketing and innovation. The basic function of marketing is to attract and
retain customers at a profi t.
What can we learn from this statement? First, it places marketing in a central role for
business success and focuses managers’ attention on attracting and keeping customers.
Second, it implies that the purpose of marketing is not to chase any customer at any price.
Drucker used profi t as a criterion. Please note that profi t may be used by many commercial
organizations, whereas in the non-profi t sector other measures of success might be used,
such as reduction of social deprivation or hunger. Consequently, the concepts, principles and
techniques described in this book are as applicable to Oxfam as to Apple.
Third, it is much more expensive to attract new customers than to retain existing ones.
Indeed, the costs of attracting a new customer have been found to be up to six times higher
than the costs of retaining old ones.2
Companies which apply the principles of marketing
recognize the importance of building relationships with customers by providing satisfaction
and attracting new customers by creating added value. Grönroos stresse
Pricing strategies
A business can use a variety of pricing strategies when selling a product or service. The Price can be set to maximize profitability for each unit sold or from the market overall. It can be used to defend an existing market from new entrants, to increase market share within a market or to enter a new market. Businesses may benefit from lowering or raising prices, depending on the needs and behaviors of customers and clients in the particular market. Finding the right pricing strategy is an important element in running a successful business.
Market Objectives
Build market share
•
Build traffic
•
Emphasize low price image
•
Desensitize customers to price
•
Create atten
•
Build traffic
•
Emphasize low price image
•
Desensitize customers to price
•
Create atten
Financial Objectives
- Maximize short-run profits
- •Maximize long-run sales
- •Stabilize income
- •Move high-margin items
- •Move slow turnover items
- •Sustain a certain gross pr
Competitive Objectives
Meet the competition
•Be the price leader
Offer the lowest price
• Increase sales volumes
Prevent competition
•Neutralize price through non-price
mea
•Be the price leader
Offer the lowest price
• Increase sales volumes
Prevent competition
•Neutralize price through non-price
mea
Pricing Considerations
Pricing Considerations
•Nature of the target market
(aforementioned)
•Nature of the competition
•Cost of merchandise (IE, successful
buying practices by the pharmacy
•Nature of the target market
(aforementioned)
•Nature of the competition
•Cost of merchandise (IE, successful
buying practices by the pharmacy
- Familiarity of the customer with price ranges
Product Mix
Product Mix
The assortment of goods and services
that must be maintained in order to
meet patient needs
The assortment of goods and services
that must be maintained in order to
meet patient needs
Differences Between Services and Products
Services are often
intangible -acts, deeds and
cannot be physically
processed. Value lies in
experience and no transfer of title
•Usually perishable, unused
portions cannot be stored
•Quality cannot be
separated from the service
provider
•Vary in quality over time
and are difficult to
standardize over time
•Products are often tangible
objects or things. Value lies
in ownership and use and
transfer of title takes place
•Can be stored, and unused
portions can be used later
•Quality can be differentiated
from the channel member’s
quality
•Products can be
standardized and mass
production and quality
control are possible
intangible -acts, deeds and
cannot be physically
processed. Value lies in
experience and no transfer of title
•Usually perishable, unused
portions cannot be stored
•Quality cannot be
separated from the service
provider
•Vary in quality over time
and are difficult to
standardize over time
•Products are often tangible
objects or things. Value lies
in ownership and use and
transfer of title takes place
•Can be stored, and unused
portions can be used later
•Quality can be differentiated
from the channel member’s
quality
•Products can be
standardized and mass
production and quality
control are possible
Target Market Variables
AGE
EDUCATION
GENDER
NATIONAL ORIGIN
LIFE STYLE
INCOME
RACE
RELIGION
PLACE OF RESIDENCE
EDUCATION
GENDER
NATIONAL ORIGIN
LIFE STYLE
INCOME
RACE
RELIGION
PLACE OF RESIDENCE
advertising
Advertising is the tool or vehicle used to promote a product, service or idea and usually comes
with a price (that is you pay to deliver your message into the marketplace via a specific
communication channel or media). Advertising includes yellow pages, direct mail, print ads in
newspaper and trade publications, billboard, radio, tv, internet advertising and media placement.
with a price (that is you pay to deliver your message into the marketplace via a specific
communication channel or media). Advertising includes yellow pages, direct mail, print ads in
newspaper and trade publications, billboard, radio, tv, internet advertising and media placement.
marketing defnition
Definition of marketing :
Marketing is the process of interesting potential customers and clients in your products and/or services.
The key word in this marketing definition is "process"; marketing involves researching, promoting, selling, and distributing your products or services
Marketing is the process of interesting potential customers and clients in your products and/or services.
The key word in this marketing definition is "process"; marketing involves researching, promoting, selling, and distributing your products or services
It's a huge topic, which is why there are tomes written on marketing, and why you can take a four-year marketing degree. But essentially marketing involves everything you do to get your potential customers and your product or service together.
When you're putting together a marketing program for your business, concentrate on the basics, the four key components of any marketing plan:
- products and services
- promotion
- distribution
- pricing.
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