Em An

• •

Marketing management for engineering managers Introduction Marketing management is a business discipline which is focused on the practical application of marketing techniques and the management of a firm's marketing resources and activities. (Marketing managers are often responsible for influencing the level, timing, and composition of customer demand accepted definition of the term. In part, this is because the role of a marketing manager can vary significantly based on a business' size, corporate culture, and industry context. For example, in a large consumer products company, the marketing manager may act as the overall general manager of his or her assigned product.) Two major activities of Companies • Marketing Management process through which goods and services move from concept to the customer. It is based on thinking about the business in terms of customer needs and their satisfaction. • Innovations Process by which an idea or invention is translated into a good or service for which people will pay. (To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination, and initiative in deriving greater or different value from resources, and encompasses all processes by which new ideas are generated and converted into useful products. In business, innovation results often from the application of a scientific or technical idea in decreasing the gap between the needs or expectations of the customers and the performance of a firm's products.) •

THE FUNCTION OF MARKETING Marketing and sales are critically important to profit seeking companies because they strive to ensure satisfaction in the exchange of values between the producers and consumers of products and services. (The marketing functions are performed, in the main, by manufacturers' representatives or sales agents, wholesalers or jobbers, and such special-type middlemen as mill-supply houses ( wholesalers) and sales engineering concerns (sales agents ). Certain kinds of accessory equipment such as wrenches, electrical supplies, automobile parts, bearings and fans, are handled also by retailers.)(“Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.” The mission of marketing is satisfying customer needs. That takes place in a social context. In developed societies marketing is needed in order to satisfy the needs of society’s members. Industry is the tool of society to produce products for the satisfaction of needs.) 

In modern society production and consumption are apart from each other. Marketing connects them. From the societal point of view, marketing is a philosophy which shows how to create effective production systems and consequently prosperity.



•

Traditionally, marketing has been seen as a link between production and customer. The situation could be captured better by using the term selling. Selling is associated to the so- called “Production and Sales Eras of Marketing”. Slogans: “Make what you can make” and “Get rid of what you have made” describe the traditional view of marketing/selling.

SALES VERSUS MARKETING Marketing is everything that you do to reach and persuade prospects.  Sales process is everything that you do to close the sale and get a signed agreement or contract. (Both are necessities to the success of a business. You cannot do without either process. By strategically combining both efforts you will experience a successful amount of business growth. However, by the same token if the efforts are unbalanced it candetour your growth.)  Sales: Building Relationships 

Sales roles are about one-on-one relationships-from prospecting to closing a deal and all the phone calls in between. Wherever customers are in the sales process, salespeople convince them to take the next step. And, for salespeople, successful relationships help breed more business through referrals and networking.  Marketing: planning and tactics Marketing is a business support function that paves the way for sales with promotional materials and an understanding of target audiences. Marketing plans, which may include sales strategies, are created at the executive level to guide more junior marketers in executing tactics, including ads, web pages, print brochures and more. •

THE MARKETING PROCESS The marketing of companies are typically focused on four specific aspects    

Customer focused Competitor focused Interfunctional coordination Profit orientation

The Marketing Process Situation Analysis | V Marketing Strategy | V Marketing Mix Decisions | V Implementation & Control Situation Analysis A thorough analysis of the situation in which the firm finds itself serves as the basis for identifying opportunities to satisfy unfulfilled customer needs. In addition to identifying the customer needs, the firm must understand its own capabilities and the environment in which it is operating. The situation analysis should include past, present, and future aspects. It should include a history outlining how the situation evolved to its present state, and an analysis of trends in order to forecast where it is going. Good forecasting can reduce the chance of spending a year bringing a product to market only to find that the need no longer exists. If the situation analysis reveals gaps between what consumers want and what currently is offered to them, then there may be opportunities to introduce products to better satisfy those consumers. Hence, the situation analysis should yield a summary of problems and opportunities. From this summary, the firm can match its own capabilities with the opportunities in order to satisfy customer needs better than the competition. II. Marketing Strategy Once the best opportunity to satisfy unfulfilled customer needs is identified, a strategic plan for pursuing the opportunity can be developed. Market research will provide specific market information that will permit the firm to select the target market segment and optimally position the offering within that segment. III. Marketing Mix Decisions Detailed tactical decisions then are made for the controllable parameters of the marketing mix. The action items include:  Product development - specifying, designing, and producing the first units of the product.

 Pricing decisions  Distribution contracts  Promotional campaign development  IV. Implementation and Control At this point in the process, the marketing plan has been developed and the product has been launched. Given that few environments are static, the results of the marketing effort should be monitored closely. As the market changes, the marketing mix can be adjusted to accomodate the changes. Often, small changes in consumer wants can addressed by changing the advertising message. As the changes become more significant, a product redesign or an entirely new product may be needed. The marketing process does not end with implementation - continual monitoring and adaptation is needed to fulfill customer needs consistently over the long-term. •

KEY ELEMENTS IN MARKETING MARKETER- those who plan and implement marketing programs       

•

Market Environment Customers Product or services Promotion and Communication Pricing strategy Placement (distribution)

MARKET MIX (OR THE FOUR P’S) The original 4 P's of marketing 







Product – The products or services offered to your customer: Their physical attributes, what they do, how they differ from your competitors and what benefits they provide. Price – How you price your product or service so that your price remains competitive but allows you to make a good profit. How price plays a role in your marketing strategy with respect to differentiating your products or services from your competitors'. Place (Also referred to as Distribution) – Where your business sells its products or services and how it gets those products or services to your customers. May also be used in your marketing strategy to differentiate you from your competition. Promotion – The methods used to communicate the features and benefits of your products or services to your target customers.

•

MARKET FORECAST A market forecast is a core component of a market analysis. It projects the future numbers, characteristics, and trends in your target market. A standard analysis shows the projected number of potential customers divided into segments. Barnett (1988) emphasizes that the key to successfully forecasting market size is to understand the underlying forces behind the demand. 1. define the market 2. segment the market 3. determine the segment drivers and model its changes 4. conduct a sensitivity analysis

•

MARKET SEGMENTATION Market segmentation is a strategy that involves dividing a larger market into subsets of consumers who have common needs and applications for the goods and services offered in the market. These subgroups of consumers can be identified by a number of different demographics, depending on the purposes behind identifying the groups. Marketing campaigns are often designed and implemented based on this type of customer segmentation. Market segmentation strategies can be developed over a wide range of characteristics found among consumers. One group within the market may be identified by gender, while another group may be composed of consumers within a given age group. Location is another common component in market segmentation, as is income level and education level. Generally, there will be at least a few established customers who fall into more than one category, but marketing strategists normally allow for this phenomenon. Along with playing a role in the development of new marketing approaches to attract a certain demographic within the market base, market segmentation can also help a company understand ways to enhance customer loyalty with existing customers. As part of the process of identifying specific groups within the larger client base, the company will often ask questions that lead to practical suggestions on how to make the products more desirable to customers. This activity may lead to changes in packaging or other similar changes that do not impact the core product. However, making a few simple changes in the appearance of the product sends a clear message to consumers that the company does listen to customers. This demonstration of good will can go a long way to strengthen the ties between consumer and vendor. 

PURPOSE OF MARKET SEGMENTATION

One of the main reasons for engaging in market segmentation is to help the company understand the needs of the customer base. Often the task of segregating consumers by specific criteria will help the company identify other applications for their products that may or may not have been self evident before. Uncovering these other ideas for use of goods and services may help the company target a larger audience in that same demographic classification and thus increase market share among a specific sub market base. 

STEPS IN MARKETING SEGMENTATION

(Everyone within the Marketing world knows and speaks of segmentation yet not many truly understand its underlying mechanics, thus failure is just around the corner. What causes this? It has been documented that most marketers fail the segmentation exam and start with a narrow mind and a bunch of misconceptions such as "all teenagers are rebels", "all elderly women buy the same cosmetics brands" and so on. There are many dimensions to be considered, and uncovering them is certainly an exercise of creativity.) STEP 1: Identify and name the broad market You have to have figured out by this moment what broad market your business aims at. If your company is already on a market, this can be a starting point; more options are available for a new business but resources would normally be a little limited. STEP 2: Identify and make an inventory of potential customers' needs This step pushes the creativity challenge even farther, since it can be compared to a brainstorming session. What you have to figure out is what needs the consumers from the broad market identified earlier might have. The more possible needs you can come up with, the better. Got yourself stuck in this stage of segmentation? Try to put yourself into the shoes of your potential customers: why would they buy your product, what could possibly trigger a buying decision? Answering these questions can help you list most needs of potential customers on a given product market. STEP 3: Formulate narrower markets McCarthy and Perreault suggest forming sub-markets around what you would call your "typical customer", then aggregate similar people into this segment, on the condition to be able to satisfy their needs using the same

Marketing mix. Start building a column with dimensions of the major need you try to cover: this will make it easier for you to decide if a given person should be included in the first segment or you should form a new segment. Also create a list of people-related features, demographics included, for each narrow market you form - a further step will ask you to name them. There is no exact formula on how to form narrow markets: use your best judgment and experience. Do not avoid asking opinions even from nonMarketing professionals, as different people can have different opinions and you can usually count on at least those items most people agree on. STEP 4: Identify the determining dimensions Carefully review the list resulted form the previous step. You should have by now a list of need dimensions for each market segment: try to identify those that carry a determining power. Reviewing the needs and attitudes of those you included within each market segment can help you figure out the determining dimensions. STEP 5: Name possible segment markets You have identified the determining dimensions of your market segments, now review them one by one and give them an appropriate name. A good way of naming these markets is to rely on the most important determining dimension. STEP 6: Evaluate the behavior of market segments Once you are done naming each market segment, allow time to consider what other aspects you know about them. It is important for a marketer to understand market behavior and what triggers it. You might notice that, while most segments have similar needs, they're still different needs: understanding the difference and acting upon it is the key to achieve success using competitive offerings. STEP 7: Estimate the size of each market segment Each segment identified, named and studied during the previous stages should finally be given an estimate size, even if, for lack of data, it is only a rough estimate. Estimates of market segments will come in handy later, by offering a support for sales forecasts and help plan the Marketing mix: the more data we can gather at this moment, the easier further planning and strategy will be.

These were the steps to segment a market, briefly presented. If performed correctly and thoroughly, you should now be able to have a glimpse of how to build Marketing mixes for each market segment. This 7 steps approach to market segmentation is very simple and practical and works for most marketers. However, if you are curious about other methods and want to experiment, you should take a look at computeraided techniques, such as clustering and positioning.

As a practice, it consists in coordination of four elements called 4P's: (1) identification, selection, and development of a product, (2) determination of its price, (3) selection of a distribution channel to reach the customer's place, and (4) development and implementation of a promotional strategy. Marketing differs from selling because (in the words of Harvard Business School's emeritus professor of marketing Theodore C. Levitt) "Selling concerns itself with the tricks and techniques of getting people to exchange their cash for your product. It is not concerned with the values that the exchange is all about. And it does not, as marketing invariably does, view the entire business process as consisting of a tightly integrated effort to discover, create, arouse, and satisfy customer needs." 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 marketing basics, the four key components of any marketing plan: products and services promotion distribution

pricing. The name of the game in marketing is attracting and retaining a growing base of satisfied customers. Creating and implementing a marketing plan will keep your marketing efforts focused and increase your marketing success.