OR
UNDERSTANDING THE NOTION AND
DECISION MAKING IN MARKETING
The Customized Business Development Course for PSL and Interested Students
Explore the Notion of Marketing: To focus attention on the development of a basic understanding of what marketing is and is not.
Develop A Marketing Perspective: Demonstrate that customer satisfaction and customer service are the focus of all organizations.
To Explore the Marketing Job: To introduce the elements of marketing and the role they play in responding to the changing marketing environment.
Review Selected Marketing Issues facing PSL:
INSTRUCTIONS: Please check one answer for each question.
1. Do managers recognize the importance of designing the organization to serve the needs and wants of selected markets, clients and/or customers?
[1] Management thinks primarily in terms of offering (selling) current products or services to whoever will buy
[2] Management thinks in terms of serving a wide range of organizations with equal effectiveness
[3] Management thinks in terms of serving the needs and wants of well-defined markets
2. Has management developed different offerings (products and services) and marketing plans for different segments of the market?
[1] no
[2] somewhat
[3] yes
3. Has management created a marketing attitude so all employees know that the most important goal is to create and keep satisfied customers?
[1] no
[2] somewhat - we are working on it
[3] yes
4. Has PSL developed an organization and process that is responsible for planning and implementing marketing programs?
[1] no
[2] somewhat
[3] yes
5. Is there integration, coordination and control of the major marketing functions?
[1] no-Public relations, promotion, customer relations and other marketing functions are not integrated and coordinated among the different departments.
[2] somewhat
[3] yes-The marketing functions are integrated and coordinated among the various departments.
6. Does management have in place an organization and process for new product, new service or new program development?
[1] no
[2] in progress
[3] yes
7. When were the last research studies on customers and competitors conducted?
[1] not at all or many years ago
[2] a few years ago
[3] recently
8. How well does management know the needs and wants of different markets and potential customers?
[1] not at all
[2] somewhat
[3] very well
9. What effort is expended to assess the effectiveness of different marketing activities and expenditures?
[1] little or no effort
[2] some effort
[3] substantial effort
10. What is the extent of formal marketing planning?
[1] We do little or no formal marketing planning
[2] We develop annual marketing plans
[3] We develop annual and long range marketing plans
11. What is the quality of the current marketing strategy?
[1] Current marketing strategy is not clear
[2] Current strategy is clear and is what we have done in the past
[3] Current strategy is clear, innovative, data-based and well-conceived
12. How well do you feel the present marketing approach will achieve reimbursable business?
[1] not at all sure
[2] somewhat sure
[3] sure
13. How well is marketing thinking at the top communicated and implemented down the line?
[1] poorly
[2] fairly
[3] successfully
14. Is PSL doing an effective job with the current marketing resources?
[1] no The marketing resources are inadequate for the job to be done
[2] somewhat The marketing resources are adequate, but could be used better
[3] yes Marketing resources are adequate and deployed efficiently
15. Is management flexible and does it react quickly to market developments?
[1] no-Service and market information are not current and our reaction time is slow
[2] somewhat
[3] yes-We have installed systems yielding current information allowing fast reaction time
SCORE:
Rating marketing effectiveness (organization climate): Each question has three answers - the first answer gets one point, the second answer gets two points, and the third answer gets three points. Add the scores for all questions - the total will range from 15 to 45. The following is an indication of your marketing climate.
15-20 none
21-25 poor
26-30 fair
31-35 good
36-40 very good
41-45 superior
MARKETING ISSUES AND RELATED QUESTIONS AT PSL
1. What is our marketing attitude (score) ?
2. What are the (services or products) provided by each division and branch
at PSL?
3. How (satisfied) are our present customers with services?
4. What (information) is needed about potential customers?
5. What is the best way to (segment) the current non-customer market?
6 What services are most important to each (division) at PSL?
7. What services are most important to each (market) segment?
8. Who are the competitors and what are their (strengths) and (weaknesses) ?
9. What are the pricing implications for the services offered in the new
(research, business and marketing environment) ?
10. What services are likely to be most in (demand) ?
11. What should be done about advertising and promotional
(activities and budgets) ?
12. What is done about training employees to be better at recognizing (customer/clinet needs) as the basis for improving marketability?
13. What do (customer retention) statistics look like?
14. What should be done about developing a (marketing information) system?
15. How can we deliver (services) better?
16. Should we consider establishing a (sales) force?
17. What are the issues associated with measuring (customer/service)
revenues or contribution?
18. Beyond just being reimbursed, (what) kind of organization is PSL?
19. What should be the relationship between (marketing)
and (divisions/branches) look like in the future?
20. What is the process for taking present services and turning
them into (highly marketable) services/products?
21. What organizational structure will develop, plan and implement the (marketing) functions and activities?
22. How are we going to match (customer needs) with current services?
23. Do we provide services or solve (customer) problems?
24. What should the relationship between (services offered) and
(markets or market segments) look like in five years?
25. What are the major (marketing strategies) anticipated to achieve
reimbursable business goals in the near future?
26. What is the (strategy ) for internal marketing activities?
27. What (information) needs to be collected on/about customers?
28. What is the nature of future (competition) in our markets?
Each question highlights a marketing related issue and decision that managers must make. These questions also suggest how marketing and manager responsibilities are changing in the new environment.
Comments and questions:
A MARKETING ORIENTATION OR THE "MARKETING CONCEPT'
The marketing concept and its implementation, a market orientation, is:
1. An (organizational way of thinking and commitment)
that defines the key tasks of managers and employees at PSL as:
2. determining the (needs) and (wants/desires) of (targeted) markets
3 and (adapting) the (organizations) at PSL to
4. deliver the desired (level of customer satisfaction)
5. more (effectively) and (efficiently) than competitors
6. as the key to earning a desired level of (revenues/profits) .
IN ESSENCE MARKETING IS A PHILOSOPHY OF OPERATIONS, AN
ORGANIZATIONAL VALUE AND AN ATTITUDE THAT WHEN PRACTICED
EACH AND EVERYDAY RESULTS IN:
______________ ___________ ___________________ CUSTOMER.
Marketing is an organizational focus on:
Customer Satisfaction + Customer Service + Continuous Improvement = Revenues
(Profit)
Note: Most individuals believe that the purpose of business is to make a profit! Not so!!!! The purpose is to create high levels of customer satisfaction. In fact this should be the aim or purpose of all organizations!!!!!!!!!!!!!!!!!!!!!!!!!! Profit is the result.
IS ATTITUDE IMPORTANT? LET'S CHECK.
Read the following story and then go to the next page to answer the ten questions. After reading the story, do not refer to it again to answer the questions.
THE STORY: A manager, J. Wiggins, had just turned off the lights in the office when an
attorney appeared and demanded information on S.A. Jones. The manager opened the files. The contents of the files for S.A. Jones were removed and the attorney left hastily. The attorney bumped into the manager's secretary who them limped into the office and sat down.
STATEMENTS ABOUT THE STORY:
T = True F = False ? = Don't Know
1. An attorney appeared after the manager had turned off his
lights. T F ?
2. The man who appeared did not demand information. T F ?
3. The manager open his files. T F ?
4. While the file contained information, the story does not
state how much. T F ?
5. The secretary was hurt. T F ?
6. The attorney caused the secretary to limp by running
into her. T F ?
7. The secretary limped into the manager's office. T F ?
8. No one demanded information. T F ?
9. The manager's secretary was bumped into. T F ?
10. Some one demanded information. T F ?
WHAT IS MARKETING AND SOME COMMON MISUNDERSTANDINGS?
Highlighting the decisions that managers must make.
Marketing is the:
1. _____________________________
2. _____________________________
3 _____________________________ and
4. _____________________________ of
the marketing planning elements or what is commonly known as the "marketing mix decisions" of
___________________________, ____________________________, ____________________
and ________________________ designed to ________________________________________
as the key to achieving organizational ___________________ and ______________________.
All these decisions are generally supported and backed with current market research information.
A FEW COMMON MISCONCEPTION ABOUT MARKETING
Marketing is not (just advertising) .
Marketing is not (just sales) .
Marketing is not (just direct mail) .
Marketing is not magic.
Marketing is not public relations.
Marketing focuses on developing and keeping satisfied customers as the key to revenues, and where some other departments may be internally focused, marketing creates an attitude in all that is externally focused on customers, clients, prospects, competitors, and the broader environment. In essence, it requires the development of the MARKETER'S MANAGERIAL MIND.
ELEMENTS, FUNCTIONS OR ACTIVITIES OF MARKETING NECESSARY FOR ITS PRACTICE
I. MARKETING RESEARCH AND INFORMATION
II. TARGET MARKETING AND SEGMENTATION
III. MARKETING MIX DEVELOPMENT
a. SERVICE OR PRODUCT
b. PROMOTION
c. PLACE OR DISTRIBUTION
d. PRICING
I. MARKET RESEARCH AND INFORMATION
The purpose of marketing research is to provide ________________
that will enable managers to answer ______________, solve _____________,
make __________________ and develop marketing ____________________.
Information is of course power and marketing research is a tool.
Types of marketing research:
Projects: a specific study conducted within a particular time frame to solve a
particular problem or help make a decision.
Ongoing: continuing activities designed to collect, analyze and provide information about markets and marketing related activities.
At PSL the customer data base is_______________________________________ ____________________________________________________________________
II. TARGET MARKETING AND SEGMENTATION
Market segmentation is the subdividing of a _____________________
market into _________________ subsets.
Target Marketing is __________________ one or more of the identified
segments (groups) as target market segments to be reached with a
______________________ market mix (s).
Total Market Market Segment A Market Segment B Market Segment C
Groups Service Service Service
A B C Price Price Price
Promotion Promotion Promotion
Distribution Distribution Distribution
The identification of groups who have the same or similar service needs, interests, and practices is the essence of market segmentation.
Selecting the segments to serve or the make offers to is the essence of targeting.
Subdividing a Heterogeneous Market
Geographic & Demographic: age, sex, race, family size, and location
Socioeconomic: Income, sales, occupation, education, and social class
Service Related: use, benefits, time of use, use patterns
Application: SIC category, type of buying situation
Psychological: attitudes and life styles
How will PSL identify, segment and target customers?
III. MARKETING MIX DEVELOPMENT
A. SERVICE OR PRODUCT
add features or accessories
make it better
increase efficiency
re-bundle products or services
un-bundle products or services
create new services or products
B. PROMOTION
offer incentives
use trade shows
advertise more
use direct mail
use personnel selling
provide demonstrations
offer training seminars
C. PLACE OR DISTRIBUTION
create special outlets
D. PRICING
use specials
raise prices
lower prices
price to cover cost
offer lost leaders
A BRIEF REVIEW OF MARKETING IN NON-TRADITIONAL ORGANIZATIONS
Historically, marketing has not played a major role in many non-profit and non-traditional organizations. Why?
Products/services were designed and priced in Washington, D. C.
In many cases, the range of products and services were limited or restricted by legislation or regulation.
Competition was restricted in many product/service categories as well as in many geographic locations.
Most all products were offered to all customers/clients at all locations.
Many of the organizations were staffed with highly trained and certified professionals who determined what the markets needed, wanted and received.
Many industries came to accept and enjoy this kind of environment because most could operate and generate revenues and/or profit without much external effort. BUT, there are and will continue to be many changes.
NEW OPPORTUNITIES AND THE ROLE OF MARKETING
In order to see where marketing fits, let's review
Goals and Objectives:
These are specific statements identifying what a given organization is trying to accomplish.
Goals and objectives are: _____________________________________________________
Marketing Strategy:
A marketing strategy is a (commitment) of (resources) to a course
of (action; a selected target market + specific marketing mix) designed to accomplish the goals and objectives of the organization. At the moment our major strategy is:
____________________________________________________________________________
Marketing Plans orAction Plans:
These are detail actions taken to implement the (marketing strategy) , or part of it, which enables the organization to accomplish its goals and objectives.
In most organizations, marketing efforts fit into that area we Action Plans. In general, marketing is done on a product by product or service by service basis. Within the marketing efforts, activities and plans we may have what some call a marketing strategy, which is the way the organization arranges and supports what we have called the elements of marketing or the marketing mix - target markets, marketing mix and information.
What are some of the general marketing strategies used?
1. Cut (costs - this enables you to lower your price or add features).
2. Create, add and introduce (new) services or products to existing markets. (often called product service development)
3. Create and introduce (new) services or products to new markets. (often called diversification)
4. Re-bundle or reformulate the current (services) offered.
5. Increase (market) share. (often called market penetration)
6. Introduce current services to new (markets) . (often called market development)
7. Increase (price) of current services and products.
8. Increase (quality) of current services and offerings.
9. Segmentation, positioning and innovation.
Within the marketing planning process itself, or at the tactical level, we can describe at least four major ways that the elements of marketing practice (price, place, promotion and product/service) have been emphasized.
MASS MARKETING: Is where the organization defines the market as everyone or all potential buyers in some product or service category, and offers then one marketing mix - the same product, same price, same promotion, and same distribution for everyone.
TARGET MARKETING OR SEGMENTATION: It is where the organization recognizes that consumers in some markets differ. They may differ on the basis of demographics, use of product or service, location, perceptions, preferences or some other aspect of consumer choice. The idea is to isolate markets and then design a unique marketing mix for each segment.
DIFFERENTIATION OR PRODUCT/SERVICE DIFFERENTIATION: Differentiation is the process of attempting to make yourself different from you competition - you stress differences, usually some special service or product feature.
POSITIONING: Is the process of understanding how customers perceive a service or product, and then using that knowledge to change or create a service/product perception. In essence, it is gaining a place in the mind of the consumer.
EXAMPLES:
One of the greatest mass marketers - Mr. Henry Ford - "Sure you can have any car you want so long as it is a Model-T and the color black.
In the 1920s and 1930s it was popular to practice product differentiation. It was extensively used for most widely advertised products appealing to large markets. Such products were soap and food - "This one floats."
Beginning in the late 1930s and continuing into the early 1950s, segmentation became a dominant method of marketing. Firms isolated previously unsatisfied parts of mass markets (the market for Model-Ts) and created what was called target markets or segments. They then designed unique products for the segments. By doing so, many firms had the market to themselves.
Mr. Sloan of General Motors was perhaps the most famous business man using this notion - he designed a number of brands and models for its defined segments.
He almost put Ford out of business with this marketing strategy.
The 1960s is generally consider the era of a combination of market segmentation and product differentiation.
Cars such as Chevrolet's Camaro designed to compete with Ford's Mustang.
Competitive focus tends to be on a segment basis (the sporty segment of the auto market) with emphasis on minor feature differences such as trim, accessories, color, etc.
In the 1970s we saw the arrival of the positioning era. As before, all this was due to increased competition. One attempts to relate to the consumer the way the consumer thinks!!!!
"The Un-Cola"
"We do it all for you"
"The night time cold cure"
"Looking for a few good men"
"Its not just a job, it's an adventure."
"Be all you can be"
For PSL at NMSU it would be "___________________________"
WHAT IS THE ORGANIZATIONAL STRUCTURE USED TO IMPLEMENT MARKETING AT PSL
The committee approach?
The Division approach? Perhaps what is similar to a brand management system? A marketing plan for each service? Or one plan for a group of related services?
An organizations wide approach with brand/service managers in each Division? Individual service plans and marketing programs, but one central promotional effort?
The organizational arrangements adopted will be critical in the analysis, planning, implementation, and control of marketing efforts.
PERHAPS BEFORE TOO MANY DECISION ARE MADE AND AN ORGANIZATION IS PUT IN PLACE, PSL MIGHT CONSIDER CONDUCTING WHAT IS CALLED A MARKETING AUDIT. IT IS A SPECIAL KIND OF MARKETING RESEARCH. THIS WOULD INCLUDE ASKING SUCH QUESTIONS AS THE FOLLOWING:
MARKETING AUDIT FOR PSL
I. Purpose of Organization
A. Mission and goals
B. Division purpose and goals
C. Operational constraints
II. Current Situational Analysis
Part I - The marketing external review
A. Markets
1. Who are the organization's major markets and publics?
2. What are the major market segments in each of these markets?
3. What are the present and expected future size and characteristics of each market and market segment?
B. Customers or Clients
4. How do the customers and publics perceive the present organization? Image?
5. How do customers make purchase or adoption decisions?
6. What is the present and expected future state of customer needs and satisfaction?
C. Competitors
7. Who are PSL's major competitors?
8. What trends can be foreseen in competition?
D. Macroenvironment
9. What are the main relevant developments with respect to the economy, technology, government and public attitudes that will affect our situation?
Part II - The marketing internal system review
A. Objectives
10. What are the organization's long and short-run objectives? What are the marketing objectives?
11. Are the marketing objectives reasonable for the organization given the current situations, resources and opportunities?
12. Are objectives stated in a form that permits planning and measurement of achievement?
B. Service Program
13. What is the core strategy for achieving stated objectives, and is it likely to succeed?
14. Are enough (or too many) resources allocated to accomplish the marketing tasks?
15. Are resources allocated optimally among various markets and services?
16. Are the resources allocated optimally among the major elements of the marketing mix: service quality, personnel contact and promotion?
C. Implementation
17. Does organizations develop annual marketing plans?
18. What control procedures are in place to ensure that annual marketing plans are meeting stated objectives?
19. Does the organization conduct periodic studies to determine the contribution and effectiveness of various marketing activities?
20. Is the marketing management information system adequate to serve the needs of managers who are responsible for planning and controlling operations in various markets?
D. Organization
21. Does the organization have someone responsible to analyze, plan, and implement the marketing work for each organization or directorate?
22. Are those involved directly in marketing activities qualified? Is there a need for more training, incentives, supervision, or evaluation?
23. Do the organizational personnel understand, accept and practice the marketing concept?
Part III - Marketing Activity Review
A. Services
24. What are the main services of the organizations?
25. Should services be reformulated to appeal to various markets?
26. Should services be added to the product/service line?
27. What is the general attractiveness of each service? What is the overall service portfolio?
B. Pricing
28. To what extent are prices set at cost, demand, and/or competitive criteria?
29. What is the present pricing method? What would happen to demand if prices
were raised or lowered?
30. How do customers or potential customers interpret the current price level?
31. Can the organizations use temporary price promotions? Can services be bundled for pricing?
C. Distribution
32. Are there alternative methods of distributing the service that might result in more customer satisfaction at less cost?
D. Personnel Contacts
33. Are the number of individuals who make contact with potential customers large enough to be effective?
34. How is the contact personnel force organized? Is it organized along markets, services or territories?
35. Is the contact personnel force well trained and motivated?
36. Are procedures adequate for evaluating performance?
E. Advertising
37. Are advertising and promotional objectives adequately stated?
38. Does the organization spend the right amount on promotion?
39. Are the themes and copy effective?
40. Are the media well-chosen?
41. What forms of advertising is used? Is it effective?
F. Sales and Trade Promotion
42. What sales and trade promotions are used? Are they well received by potential customers?
Part 4 - Market Information Activities
A. Market Information System
43. Does the organization have a marketing information system that collects data necessary to analyze, plan, implement, and evaluate marketing activities?
44. Are specific marketing research studies conducted periodically in defined problem areas?
THE IMPORTANCE OF PLANNING
I am writing in response to your request for additional information. In block number three of the accident report form, I put as the cause of my accident, quote "Poor Planning", unquote. You said in your letter I should explain more fully, and I trust that the following will be sufficient.
I am a brick layer by trade. On the day of the accident, I was working alone on the roof of a new six story building in Las Cruces. When I completed my work, I discovered I had about 500 pounds of brick left over. Rather than carry the bricks down by hand, I decided to lower them in a barrel by using a pulley which was fortunately attached to the side of the building on the sixth floor.
Securing the rope to the ground level, I went up to the roof, swung the barrel out, and loaded the bricks into it. Then I went down to the ground and untied the rope, holding it tightly to insure a slow descent of the 500 pounds of brick. You will notice in block number eleven of the accident report form that I weigh only 135 pounds.
Due to my surprise at being jerked off the ground so suddenly, I lost my presence of mind and forgot to let go of the rope. Needless to say, I proceeded at a rather rapid pace up the side of the building. In the vicinity of the third floor, I met the barrel coming down. This explains the fractured skull and fractured collarbone.
Slowed only slightly, I continued my rapid ascent, not stopping until the fingers of my right hand were two knuckles deep into the pulley. Fortunately, by this time I had regained my presence of mind and was able to hold the rope tightly in spite of the pain.
At approximately the same time, however, the barrel of bricks hit the ground - and the bottom fell out of the barrel. Devoid of the weight of the bricks, the barrel now weighted 50 lbs. I refer you again to my weight of 135. As you can imagine, I now began a rapid descent down the side of the building.
In the vicinity of the third floor, I met the barrel coming up. This accounts for the two fractured ankles and the lacerations of my legs and lower body. The encounter with the barrel slowed me enough to lessen my injuries when I fell on the pile of bricks and fortunately, only three vertebra were cracked.
I am sorry to report, however, that as I lay there on the pile of bricks, in pain, unable to stand, and watching the empty barrel six stories above me, and still holding the rope, I again lost my presence of mind.....
I LET GO OF THE ROPE!!
