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1. Needs, Wants, Demands The marketer must try to understand the target markets needs, wants, and demand. Needs are the basic human requirements. People need food, air, water, clothing, and shelter to survive. People also have strong needs for recreation, education, and entertainment. These needs become wants when they are directed to specific objects that might satisfy the need. An American needs foods but wants hamburger, French fries, and a soft drink. A person in Mauritius needs food but wants a mango, rice, lentils, and beans. Wants are shaped by ones society. Demands are wants for specific products backed by an ability to pay. Many people want a Merceds; only a few are able and willing to buy one. Companies must measure not only how many people want their product but also how many would actually be willing and able to buy it. These distinctions shed light on the frequent criticism that “market create needs” or “marketers get people to buy things they dont want.” Marketers do not create needs: Needs preexist marketers. Marketers, along with other societal factors, influence wants. Marketers might promote the idea that a Mercredes would satisfy a persons need for social status. They do not, however, create the need for social status. 2. Product, Offering, and Brand Companies address needs by putting forth a value proposition, a set of benefits they offer to customers to satisfy their needs. The intangible value proposition is made physical by an offering, which can be a combination of products, services, information, and experiences. A brand is an offering from a known source. A brand name such as McDonalds carries many associations in the minds of people: hamburgers, fun, children, fast food, Golden Arches. These associations make up the brand image. All companies strive to build brand strengththat is, a strong, favorable brand image. 1 3. The four P components of marketing mix 保证 品种 库存 Four Ps: product, price, place, promotion V全对方背叛四舍五入 啊咧电瓶车 食品啊骗人的吗 猜猜爱丽i团 2 Mix 四基本要素 Four Cs: customer solution, customer cost, convenience, communication 顾客成本方便沟通 3 4. Company orientations toward the marketplace We have defined marketing management as the conscious effort to achieve desired exchange outcomes with target markets, but what philosophy should guide a companys marketing efforts? What relative weights should be given to the interests of the organization, the customers, and society? Very often these interests conflict. Marketing activities should be carried out under a well-thought-out philosophy of efficiency, effectiveness, and social responsibility. However, there are six competing concepts under which organizations conduct marketing activities: the production concept, product concept, selling concept, marketing concept, consumer concept, and societal marketing concept. 1) The production concept The production concept is one of the oldest concepts in business. The production concept holds that consumers will prefer products that are widely available and inexpensive. Managers of production-oriented businesses concentrate on achieving high production efficiency, low costs, and mass-distribution. They assume that consumers are primarily interested in product availability and low prices. This orientation makes sense in developing countries, where consumers are more interested in obtaining the product than in its feature. It is also used when a company wants to expand the market. Some service organizations also operate on the production concept. Many medical and dental practices are organized on assembly-line principles, as are some government agencies (such as unemployment offices and license bureaus). Although this management orientation can handle many cases per hour, it is often to charge of impersonal and poor-quality service. 2) The product concept 4 Other businesses are guided by the product concept, which holds that consumers will favor those products that offer the most quality, performance, or innovative features. Managers in these organizations focus on marketing superior products and improving them over time. They assume that buyers admire well-made products and can evaluate quality and performance. However, these managers are sometimes caught up in a love affair with their products. Management might commit the “better-mousetrap” fallacy, believing that a better mousetrap will lead people to lead beat a path to its door. Such was the case when WebTV was launched during Christmas 1996 to disappointing results. Product-oriented companies often trust that their engineers can design exceptional products. They get little or no customer input, and very often they will not even examine competitors products. A general Motors executive said years ago: “how can the public know what kinds of car they want until they see what is available?” GMs designers and engineers would design the new car. Then manufacturing would make it. The finance department would price it. Finally, marketing and sales would try to sell it. No wonder the car required such a hard sell! Today GM asks customers what they value in a car and includes marketing people in the very beginning stages of design. The product concept can lead to what Theodore Levitt called “marketing myopia.” He pointed out that customers do not buy drill bitsthey buy ways to make holds. Railroad management thought that travelers wanted trains and overlooked the growing competition for transportation from airlines, buses, trucks, and automobiles. Coca-Cola, focused on its soft-drink business, missed seeing the market for coffee bars and fresh-fruit juice bars that eventually impinged on its soft-drink business. McDonalds is in danger of over focusing on its hamburger business while many diners are turning to sandwiches, pizza, tacos, and other fast food. These organizations are looking into a mirror when they should be looking out the window. 3) The selling concept 5 The selling concept is another common business orientation. The selling concept holds that consumers and business, if left alone, will ordinarily not buy enough of the organizations products. The organization must, therefore, undertake an aggressive selling and promotion effort. This concept assumes that consumers typically show buying inertia or resistance and must be coaxed into buying. It also assumes that the company has a whole battery of effective selling and promotion tools to stimulate more buying. The selling concept is epitomized by the thinking of Sergio Zyman, Coca-Colas former vice president of marketing: the purpose of marketing is to sell more stuff to more people more often for more money in order to make more profit. The selling concept is practiced most aggressively with unsought goods, goods that buyers normally do not think of buying, such as insurance, encyclopedias, and funeral plots. These industries have perfected various sales techniques to locate prospects and hard sell them on their products benefits. The selling concept is also practiced in the nonprofit area by fund-raisers, college admissions offices, and political parties. A political party “sells” its candidates to voters. The candidate moves through voting precincts from early morning to late evening, shaking hands, kissing babies, meeting donors, and making speeches. Countless dollars are spent on radio and television advertising, posters, and mailings. The candidates flaws are concealed from the public because the aim is to make the sales, not worry about post purchase satisfaction. After the election, the new official continues to take a sales-oriented view. These is little research into what the public wants and a lot of selling to get the public to accept policies the politician and the party want. Most firms practice the selling concept when they have overcapacity. Their aim is to sell what they make rather than make what the market wants. In modern industrial economies, productive capacity has been built up to a point where most markets are buyer markets (the buyers are dominant) and sellers have to scramble for customers. Prospects are bombarded with TV commercials, newspaper ads, direct mail, and sales 6 calls. At every turn, someone is trying to sell something. As a result, the public often identifies marketing with hard selling and advertising. However, marketing based on hard selling carries high risks. It assumes that customers who are coaxed into buying a product will like it; and that if they do not, they will not bad-mouth it or complain to consumer organizations and will forget their disappointment and buy it again. These are indefensible assumptions. One study showed that dissatisfied customers may bad-mouth the product to 10 or more acquaintances; today bad news travels even faster and further with Internet. 4) The marketing concept The marketing concept emerged in the mid-1950s and challenged the preceding concepts. Instead of a product-centered, “make-and-sell” philosophy, we shift to a customer-centered, “sense-and respond” philosophy. Instead of “hunting,” marketing is “gardening.” The job is not to find the right customers for your product, but the right products for your customers. As stated by the famed direct marketer Lester Wunderman, “the chant of the Industrial Revolution was that of the manufacturer who said, this is what I make, wont you please buy it. The call of the Information Age is the consumer asking, this is what I want, wont you please make it. ” The marketing concept holds that the key to achieving its organizational goals consists of the company being more effective than competitors in creating, delivering, and communicating superior customer value to its chosen target markets. It crystallized in the mid-1950s and has been expressing in many colorful ways: “Meeting needs profitably.” “Find wants and fill them.” “Love the customer, not the product.” “Having it your way.” (Burger King) “You re the boss.” (United Airlines) “Putting people first.” (British Airways) 7 “Partners for profit.” (Milliken & Company) (a) The selling concept Starting point Focus Means Ends (b) The marketing concept Theodore Levitt of Harvard drew a perceptive contrast between the selling and marketing concept: Selling focuses on the needs of the seller; marketing on the needs of the buyer. Selling is preoccupied with the sellers need to convert his product into crash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering and finally consuming it. The marketing concept rests on the four pillars: target market, customer needs, integrated marketing, and profitability. They are illustrated in the figure, where they are contrasted with a selling orientation. The selling concept takes an inside-out perspective. It starts with the factory, focus on existing products, and calls for heavy 8 selling and promoting to produce profitable sales. The marketing concept takes an outside-in perspective. It stars with a well-defined market, focuses on customer needs, coordinates all the activities that will affect customers, and produces profits by satisfying customers. 5. Mass marketing versus one-to-one marketing Mass marketing One-to-one marketing Average customer Individual customer Customer anonymity Customer profile Standard product Customized market offering Mass distribution Customized production Mass advertising Individualized message Mass promotion Individualized incentives One-way message Two-way messages Economies of scale Economics of scope Share of market Share of customers All customers Profitable customers Customer attraction Customer retention 6. Stakeholders (差别 举例说明) As its first stop on the road to high performance, the business must define its stakeholders and their needs. Traditionally, most businesses focused on their stakeholders. Todays businesses are increasingly recognizing that unless they nurture other stakeholders-customers, employees, suppliers, distributorsthe business may never earn sufficient profits for the stockholders. 9 A company can aim to deliver satisfaction levels above the minimum for different stakeholders. For example, it might aim to delight its customers, perform well for its employees, and deliver a threshold level of satisfaction to its suppliers. In setting these levels, a company must be careful they are getting. There is dynamic relationship connecting the stakeholder groups. A smart company creates a high level of employee and satisfaction, which leads to higher effort, which leads to higher-quality products and services, which creates higher customer satisfaction, which leads to more repeat business, which leads to higher growth and profits, which leads to high stockholder satisfaction, which leads to more investment, and so on. This I the virtuous circle that spells profits and growth. 7. The Boston consulting group s growth-share matrix (注:圈的大小的含义) The Boston Consulting Group (BCG), a leading management consulting firm, developed and popularized the growth-share matrix shown in the Figure(上面的图,下面同). The eight circles represent the current sizes and positions of eight business units in a hypothetical company. The size of the circle depends on the dollar volume 10 of each business. Thus, the two largest businesses are 5 and 6. The location of each business unit indicates its market growth rate and relative market share. The Growth-Share Matrix The market growth rate on the vertical axis indicates the annual growth rate of the market in which the business operates. In Figure, it ranges from 0 percent to 20 percent. A market growth rate above 10 percent is considered high. Relative market share, which is measured on the horizontal axis, refers to the SBUs market share relative to that of its largest competitor in the segment. It serves as a measure of the companys strength in that market segment. A relative market share of 0.1 means that the companys sales volume is only 10 percent of the leaders; a relative share of 10 means that companys SBU is the leader and has 10 times the sales of the next-strongest competitor in that market. Relative market share is divided into high and low share, using 1.0 as the dividing line. Relative market share is drawn in log scale, so that equal distances represent the same percentage increase. The growth-share matrix is divided into four cells, each indicating s different type of the business: 1) Question market: businesses that operate in high-growth markets but have low relative market shares. A question market requires a lot of cash because the company has to spend money on plant, equipment, and personnel to keep up with the fast-growing market, and because it wants to overtake the market leader. The company in the figure operates three questions-market businesses, and this may be too many. 2) Stars: the market leader in a high-growth market. A star does necessarily produce a positive cash flow for the company. The company must spend substantial funds to keep up with the high market growth, and to fight off competitors attacks. In figure, the company has two stars. 3) Cash cow: Stars with a falling growth rate that still have the largest relative market share and produce a lot of cash for the company. The company does not have to finance expansion because the markets growth rate has slowed. Because 11 the business is the market leader, it enjoys economics of scale and higher profits margins. The company uses its cash cows to pay bills and support other businesses. The company in the figure has only one cash cow and is therefore highly vulnerable. If this cash cow starts losing relative market share, the company will have to pump money back into it to maintain leadership. 4) Dogs: businesses that have weak market shares in low-growth markets. The company in the figure holds two dogs, and this may two too many. The company should consider whether it is holding on to these businesses for good reasons (such as an expected turnaround in the market growth rate or a new chance at market leadership). After plotting its various businesses in the growth-share matrix, a company must determine whether its portfolio is healthy. An unbalanced portfolio would have too many dogs or question marks and too few stars and cash cows. 8. The business strategic-planning process (自己理解整理说明P102) 1) Business mission Each business unit needs to define its specific mission within the broader company mission. Thus, a television studio-lighting-equipment company might define its mission as, “the company aims to target major television studios and become their vender of choice for lighting technologies that represent the most advanced and reliable studio lighting arrangements.” Notice that this mission does not attempt to 12 win business from smaller television studios, win business by being lowest in price, or venture into non-lighting products. 2) SWOT analysis 3) Goal formulation 4) Strategy formulation 5) Program formulation 6) Implementation 7) Feedback and control 9. The business market versus the consumer market (对比B-B 与B-C有什么去辨 别) The business market consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others. The major industries making up the
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