Marketing Management Introduction by Prof. Dr. Manfred Kirchgeorg

welcome to my into management many companies are faced today with strong competition and to survive in such a market environment it is necessary for them to know the customer needs and to align all the business activities to these customer needs I would like to introduce you into the basic understanding of marketing and into the key issues of marketing management due to the introduction I will provide you with three topics first you should learn about the main idea and understanding of marketing second you get insights in different steps of the marketing management process and third you learn something about the decisions marketing managers have to mate if you got the first points you can get a deeper understanding of marketing management through our Master of Science MBA and Executive courses so now enjoy the session what is marketing about marketing is primarily about the market and customer orientation of the whole company so marketing focuses on satisfying customer needs in a competitive environment looking at the marketing definition in a more formal way we can take the worldwide accepted definition of the American Marketing Association Marketing is an organizational function and a set of processes for creating communicating and delivering value to the customer and managing customer relationships in ways that benefit the organization and its stakeholders so in the daily business and practice marketing management is often misunderstood people say marketing is advertising or marketing is sales but marketing management goes beyond so it is the customer oriented philosophy of the whole company why is marketing important if you pose this question to yourself you can find an answer in the history of marketing management so if markets become more and more competitive customer orientation is key for success if the customer has the choice between Company A and B he will be attracted by the company which fulfills the his needs best therefore companies have to look at customer needs in a competitive environment and they have to satisfy customers by fulfilling these knees with the offers what is the impact of the marketing if you try to answer this question you can look at a spiral or circle of different effects if a company has a low customer orientation it will not be able really to satisfy customer needs with the offers so customer satisfaction rates go down and customers will not be loyal and the company will lose customers to hold the customer base the company has to acquire additional customers and that is very costly so in the long run this company has to spend a lot of money to attract customer and to be sustainable in a mark in the market in comparison to this negative circle of effects increasing customer orientation leads to higher customer satisfaction rates higher loyalty and lower acquisition cost and at the end higher and sustainable profitability who applies marketing at first you would think about the consumer good industry but there are far more institutions which apply marketing and customary intention think about industry goods manufacturers think about theaters hospitals foundations or environmental organizations they all need customer orientation in a competitive environment so marketing is applied by profit and nonprofit institutions they need professional marketing management to sustain success in the market how should market thing be implemented marketing is all about customer orientation and satisfying customer needs therefore we look at marketing in a dual way first of all marketing should be implemented as a function within the company so all the marketing knowledge and expertise is bundled in a department in addition to that marketing is also a set of cross-functional processes that means marketing orientation and customer orientation should be included in R&D production and service so marketing managers have to take care that the customer orientation is anchored in all the departments within the company so what is marketing management about until now we have looked at marketing but what is marketing management management can be explained by this planning process we would start with the situation analysis we would look at markets customers and competitors and at our internal situation then we would derive marketing goals marketing goals will be implemented by defining marketing strategies and the marketing strategies will be achieved by designing marketing activities the so called marketing mix and then we have to establish a marketing organization and a marketing controlling process this is the whole marketing management process for implementing a professional marketing concept what is important when performing a situational analysis first of all we have to start with an analysis of our internal and external environment looking at the internal environment means we have to identify our strengths and weaknesses regarding meeting customer needs looking at the external environment we have to identify the market the relevant market with the customers the competitors and sometimes retailers are included and then we have to analyze the customer needs that is a big starting point within the external analysis we have to look at our brands and products in comparison to the competitors in addition to the market analysis we have also to take care about influencing factors of the macro environment often the analysis of the macro environment is called PESTEL analysis that means that we have to look at political economic technological social ecological and legal influencing factors the internal and the external analysis will lead to the so called SWOT analysis where we combine the internal strengths and weaknesses and the external opportunities and threats why should marketing goals be formulated we often observe false when situation analysis is directly followed by actions actions without orientations will lead to modeling through therefore marketing goals should be formulated so marketing goals should fulfill different functions first of all they should give orientation second they should coordinate activities within the marketing department and within the company and third they should motivate decision makers to achieve the goals and finally marketing goals should fulfill a control function that means activities and strategies and their achievement should be controlled by having defined goals by defining marketing goals we can differentiate between economic and psychographic goals looking at the economic goals we have revenue goals we have profitability goals we can define market share as a goal or sales volume or the contribution margin these are typical economic marketing goals before we achieve these economic goals we have to change something in the customers mind and therefore we have to address the so called psychographic goals it is awareness of our brand it is to create a special image of our brand or a preference that the customer is willing to buy our product and also satisfaction goals are important to look or to create loyal customers therefore the interplay of psychographic goals and economic goals are important for the marketing planning in formulating goals often mistakes occur therefore marketing goals have to be defined precisely marketing goals should include the following elements first the content for example increase awareness or increase revenue second the extent of the magnitude increase awareness by 10% and then the timing so increase awareness by 10% in the next 12 months and finally the segment focus that means increase awareness by 10% the next 12 months in Germany or in segment A or B or C only by defining the goals in that way you can achieve the functions we have seen before that means the orientation function the coordination function the motivation function and the control functions of marketing goals only by having defines the marketing goals in such precise way we can fulfill the goal functions that means the orientation function the coordination function the motivation function and the control function of marketing goals which marketing strategies are appropriate for the achievement of the marketing goals we have to develop marketing strategies marketing strategies are long-term plans for the achievement of the marketing goals in the literature you will find a lot of strategy topologies a lot of recommendations to develop marketing strategies there is no right and no wrong but marketing strategies can increase the probability for successful marketing concept I would like to show now strategy topologies which are often used in marketing management the first strategy typology wars developed by ego ins of two structure growth strategies you can look at existing markets and new markets and add existing products and new products and then the question is how to grow if you look at existing markets and existing products you can grow with the market penetration strategies for example by cross selling if you want to grow in new markets with your existing products you might go international so market development means that you approach with your existing products new markets and then you can develop new products for your existing customers that is called product development strategy and finally you can grow with a more risky strategy that is if you approach new markets with new products and that is called diversification the second strategy typology I want to mention here was developed by Michael Porter his focus was on how to create comparative advantage and he differentiated between two main types of strategies first is to create a competitive advantage by being the cost leader in the market that means that the company has the lowest price for a reasonable quality of a product and then the opposite is the quality leadership so to create competitive advantage by having the best quality in the market and for sure for a higher price indicates the so called quality leadership strategy and then Michael Porter indicates that both strategy can take place in the mass Mac market and in a niche market so a quality leader can be profitable in a mass market but also in a small focused niche market in addition to grow strategies and competitive strategies we can mention a lot of more strategy types like branding strategies or timing strategies all of these strategies well developed will be a basis or platform for the implementation of marketing measures or marketing actions what measures can be taken to implement the marketing strategy - under this question we have to look at the so called marketing mix the marketing mix consists of all the measures which we can implement to make our company customer oriented the classical marketing mix consists of the product the price and the place and promotion and within all these areas we have to implement measures which makes our company more customer oriented the product policy is often called the heart of the marketing mix without having a customer oriented product or service mostly you will fail to satisfy customer needs what decisions to be made in the product policy area it's about product innovation it's about product differentiation and sometimes you have to eliminate products from the market but you have to make more decisions it's about branding of the product or service it's about packaging and offering additional services all these product activities should be coordinated to satisfy customer needs price policy is about setting the right price and the right conditions to attract customers so what are the main decisions in the pricing area to be made it's about setting a price for a new product or changing the price for existing products giving price promotions or price bonus we're changing the price in a dynamic way also price differentiation is a main topic in the area of pricing so the objective of pricing policy is to meet the willingness to pay of the customer in a competitive environment decisions in the area of place or distribution policy are targeted to the question when and where our customer will get the product within the distribution policy area we have to consider two types of decisions first we have to define the right distribution channel there's a variety of options to design the distribution channel take a physical store or an internet shop or a mail-order option the second main area of decision is how to design the physical flow of the product to the customer this is all about designing the logistical channel so defining the right distribution policy will lead to the answering the question when and where our customer will get the product finally we have to decide how to communicate to our customers this is the communication policy area there are also main decisions to make first of all what is the right communication channel is it print newspaper mailing or the internet second we have to the site about what to tell to the customer so it's about the content for the communication campaign in this area mostly advertisement agency will help the company to design an advertisement or a campaign for the communication policy all the communication measures should be coordinated to address the customer groups in a ficient way finally all the communication channels and the content of the campaigns should be coordinated and targeted to the customer segments which are defined in our situation analysis how should marketing be organized to answer this question we can look at different options first of all we can define responsibility for coordinating our marketing activities on the product level so-called product management it could also be that we try to build responsibilities around our core customers it's called key account management another way is that marketing managers are responsible for regions or countries and then we can define responsibilities by looking at different marketing functions like product development pricing distribution or communication it is important that the marketing organization supports the idea that marketing is an overall philosophy of the company why should marketing be controlled looking at overall marketing planning process you will finally see that marketing controlling is also an important part to control strategies and measures which we have defined and implemented is one essential part to make our marketing management more effective and efficient so marketing controlling tries to define the main marketing metrics and the key success factors and marketing controlling gives also feedback to all the decision makers which are involved in the marketing management process so now you got first insights in the basic understanding of marketing and how the marketing management process works I'm very pleased about your interest in marketing and we can discuss further aspects of marketing management in our Master of Science MBA and executive programs I wish you all the best on your way to customer oriented marketing management you

Channel: HHL Leipzig Graduate School of Management

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Keywords: Marketing Management (Job Title), Introduction, MBA, M.Sc., MSc, Marketing, Kirchgeorg, HHL, HHL Leipzig Graduate School of Management, University, College, Student, Campus, Master Of Science (Degree), Education

Id: TL0K0AhI7kE

Length: 28min 15sec (1695 seconds)

Published: Tue Sep 03 2013