Marketing Management for Engineers

A marketing system consists of a collection of sellers (Industry) and buyers (Market). In the system, 4 things are exchanged:

1. Communication
2. Information
3. Goods/services
4. Money

Marketers need to manage both the transactions as well as the information and communications.

Marketing management is the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer value. This requires:

Choosing value

analysing market, segmenting, select target, develop offering (segmenting, targeting and positioning)

Providing value

determine product features, prices and distribution (product, price and place)

Communicating value

selling, advertising, promotion, etc. (promotion)

The value chain is a tool for identifying the ways to create value for the customer. Porter's value chain consists of 5 primary and 4 support activities:

• Primary
  • Inbound logistics
  • Operations
  • Outbound logistics
  • Marketing & sales
  • Service
• Support
  • Firm infrastructure
  • Human resource management
  • Technology
  • Procurement

These all contribute to margin.

The core business processes are:

Market sensing process

Gathering and acting upon information, environmental scanning, SWOT, market research, etc.

New offering realisation process

New product development (R&D), launching new high quality offerings on time and within budget

Customer aquisition process (STP)

Defining targets and prospecting for new customers

Customer relationship management process

Building customer relationships and loyalty

Core competencies are the sources of competitive advantages. They have application in a variety of markets and are difficult to imitate. Porter suggests that competition is possible on cost leadership or differentiation, or narrow to a more niche market. The competitive advantage separates you from your competitors.

Porter's five forces is a form of industry analysis, where 5 components vie with each other to define the industry. The forces are:

Entrants

Threat of new competition

Suppliers

Bargaining power of suppliers

Buyers

Bargaining power of buyers

Substitutes

Threat of substitute products or services

Industry competitors

Rivalry among existing firms

Hollistic marketing tries to integrate value exploration, value creation and value delivery activities with the purpose of building long term, mutually satisfying relationships and co-prosperity among key stakeholders. It asks:

• What value opportunities are available?
• How can we create new value offerings efficiently?
• How can we deliver the new offerings efficiently?

A marketing plan is the central instrument for directing and coordinating a marketing effort. It operates at the strategic and tactical level.

Marketing Information Systems (MIS) is the collation of information to make decisions. It consists of:

• Internal records

  Order to payment cycle

  Time needed to process order and collect payment, speed, accuracy and efficiency

  Sales information system

  Real time sales and inventory system, reducing holding costs and increasing delivery efficiency

  Databases, warehousing and data mining

  Customer database provides insights into customer behaviour and opinions

• Marketing intelligence systems
• Marketing research systems

Marketing intelligence can be improved by:

1. Training sales force to scan for new developments
2. Motivating channel members to share intelligence
3. Hire external experts to collect intelligence
4. Network internally and externally
5. Setup a customer advisory panel
6. Utilise government sources
7. Purchase information
8. Collect information from the internet

The marketing information system works best when coordinated closely with the decision making process.

The major forces in the environment are:

• Demographic
• Political-legal
• Economic
• Technological
• Socio-cultural
• Natural

These form the basis of a PESTLE analysis.

Market research is the systematic design, collection, analysis and reporting of data and findings relevant to a specific marketing situation facing the company. Market research can be used for:

• Identifying trends
• Market analysis
• Developing marketing plans
• SWOT analysis
• Location analysis
• Competitive analysis
• Target market analysis
• Domestic/international analysis
• Price analysis