Module - (Level 6) Managing and Using Marketing Defining Marketing Tell Me What is marketing? There are various views of marketing as shown in the next illustration. Marketing is.... The term ‘marketing’ is widely used and misused and often misunderstood. It has come to mean many different things to different people. Often it is more fruitful to prove how it is used in practice. Involve Me How would you define marketing? Have a go at providing a definition.Feedback If you defined it as advertising or selling or promotion you would, in the terms of most ‘marketing’ professionals, be partly, but only partly, right. You would be reflecting a typical common-sense view. But marketing as a concept and discipline – as defined by marketing professionals and academics – is a wider, more complex idea. Such people would argue that to approach marketing by seeing it as focused on selling what you have chosen to produce is wrong. Such an approach belongs to a past era. The breadth of the concept of marketing is illustrated by the following definitions: '… the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.' Philip Kotler (2012) Here is another definition from the Chartered Institute of management: Marketing is the management process for identifying, anticipating and satisfying customer requirements profitably. Chartered Institute of management (2012) Note the clear emphasis on the customer in the above statements. Marketing is about customers and satisfying customer needs and wants in exchange for something in return (usually payment). Customer relationship is at the heart of marketing and developing and managing profitable customer relationships is key to success. The discipline of marketing therefore resides at the intersection of the customer and the organisation. The organisation must craft strategies to exploit its internal strengths and capabilities in order to deliver value to the customer, so that it can capture value in return. In examining the definitions of market and products, we therefore must take a customercentric view. Show Me Marketing then looks outwards, firmly focusing on customers. A primary focus on customers is possible and, indeed, necessary in all organisations, including those that operate in the public and charity sectors of the economy. Marketing must focus on the needs and wants of the customer and this focus should be paramount. MarketsMarkets mean different things to different people. What does it mean to you? Think in the context of your own organisation and the markets it serves. How would you define markets? A market is often defined as a place where buyers and sellers meet, where goods or services are offered for sale, and where transfer of ownership takes place. A market is also defined by marketers as the total demand for a given product or service – for example, the computer tablet market or the market for contract cleaning. Kotler, P 2012) defines a market as 'the set of actual and potential buyers of a product or service'. This is the definition we shall use. Here are some examples of markets... grocery market automobile market mobile phones market tablet computing market financial services market interior decoration market software and enterprise computing market pharmaceuticals market business consulting market All of the above represent markets. Each market consists of buyers and sellers who engage in an exchange relationship. You will note a mix of markets - markets serving consumer needs and markets serving business needs. In fact, markets are distinguished in this way: Business to Consumer markets (B2C) This is when a business serves consumers it is operating in a B2C market. Consumers are individuals who purchase goods or services to meet their own needs/wants/aspirations. Business to Business Markets (B2B): This is when a business serves organisations which buy products in order to carry out their business or improve their business. Involve Me What market(s) does your organisation serve? Identify the key buyers and sellers?Feedback Your response will obviously be specific to your organisation. However, let us take the example of one market - the automobile market. The buyers of automobiles are consumers as well as businesses (who may be purchasing fleets of cars as company cars for employees). The sellers of automobiles include Nissan, Ford, Toyota, Volkswagen, Honda, Fiat, Audi, BMW, Ferrari, and Rolls Royce. Show Me More Profit is, of course, an important driver in marketing. However, even in the private sector, marketing has broader objectives than just maximising profits - such as achieving customer loyalty and repeat sales. Marketing is increasingly playing a key role in non-profit sectors too and here marketing builds awareness of issues and promotes the cause it supports taking the perspective of not just customers (recipients) but also donors. Public and Charity Sectors There is an increasing recognition of the importance of marketing in public and charity sectors (also called third sector) at the current time. This is particularly the result of the development of trends linking both marketing and public sector management. The concept of marketing has been broadened to embrace non-commercial aspects of an exchange, as well as reinforcing the relational aspect of an exchange. Whilst customer satisfaction (or, more broadly, stakeholder satisfaction) is still the primary motive, the actual categorisation of products and services will differ. Furthermore, the rapid development of tools and techniques specifically designed for marketing has enabled systems to gather and handle information, to carry out cost analyses, and to communicate and distribute much more effectively. These developments have been adopted by the public sector, albeit partially or occasionally, to support the drive towards increased marketing. Involve Me Have a look at the links below which describe the basic marketing principles in typical charity organisations. http://www.slideshare.net/CharityComms/ian-brucehttp://knowhownonprofit.org/campaigns/brand/marketing-1/marketingmix Discuss why charities have tended to be less customer-oriented than private sector companies. (For the purposes of this exercise, assume you are a marketer for a national charity managing care homes for the elderly.) Feedback Often the charity sector has a very one dimensional view of the 'product' it is ‘selling’ - it is not focused on the various stakeholders; service users and beneficiaries. Too often the charity view of customer tends to concentrate on fund raising (i.e. donor) and less on the actual users or recipients of their services. As a result they fail to please their customers, and in some cases have let down customers (as with elderly care homes). Recognising these issues, many non-profit organisations are now adopting best practices and involving all stakeholders, donors as well as recipients (or representatives of recipients), in decision making. This is at the very heart of marketing. Tell Me Marketing strategies in different sectors During the past two decades, there has been a marked shift towards public administration and its management. A number of models have been developed to describe and explain its use within the public sector. The growth of economic activities and services for citizens has been accompanied by the increased use of marketing tools from the private sector. There has also been a growing autonomy of a number of administrative units, in the form of agencies, which has allowed them to adopt a different approach from that of the traditional public administration model. In many cases, this has resulted in the formation of a hybrid model, reflecting the public nature of their organisation while simultaneously developing exchanges of a more commercial nature, often by customizing the relationship with service beneficiaries. It has become generally accepted that a transition has taken place towards a new form of public management, where service quality is no longer measured by the authority but by the beneficiary. As a result, administrative units have been encouraged to take account of the relational aspects of the exchange, and apply the corresponding tools for measuring service quality and the satisfaction of beneficiaries. For public bodies, this has led to growing uncertainty because of politically-defined requirements, as well as governments’ introduction of competition to the provision of publicservices. The result has been a significant change in the way public bodies have used marketing, which has highlighted the trend of financing by results. Traditional marketing tools, such as improved appreciation of the needs and expectations of beneficiaries, increased availability of details of the content of offers, and improved communication, have all enabled public bodies to reduce their uncertainty to some extent. A shift of focus towards the private sector has been an initial and obvious step. It has been found that by doing this a very different marketing strategy has needed to be adopted. Previously, organisations often got their government contracts as a consequence of networking; a specific sales force was not necessary. When contracts become open and available to a wider audience, a fresh marketing approach is necessary as part of a business strategy. A variety of methods are needed to secure such often lucrative contracts. A range of specialist consultants have sprung up to support the process of explaining issues involved and highlighting new developments. Investment is now necessary in marketing strategies that will take an organisation forward and create a stronger position within the existing economic climate. Using outside specialists has enabled organisations to take a much more active and disciplined approach to positioning. Websites, blogs and electronic newsletters are all used to improve marketing position, alongside the essential role played by social media. By rebranding and establishing a strong reputation for information risk management, a marketing strategy can be developed that would be effective for any organisation that has previously been reliant on public sector contracts. However, there still remains a long way to go before the public sector fully accepts the importance of the marketing function, good marketers and embraces modern marketing techniques implemented by professionals. The skills needed for public sector marketing differ greatly from those in the private sector. In business, directors are happy to follow the belief that the marketing manager will get on with it and produce results. Whilst this is ideal for experienced and talented marketing experts who readily see their creative ideas come to fruition in the race to make money, such opportunities are often not afforded to public sector marketers where the ability to sell to civil servants, who lack detailed commercial understanding, is a core skill. Marketers within the public sector need to be able to face rejection and refusal to adapt during the process of educating those unfamiliar with marketing effectiveness. Public sector organisations typically fall into two camps: those with large budgets for external research and marketing consultants, and those with no budget for marketing at all. In some public sector organisations, the marketing budget will be considerably lower than almost all others! What often happens in the public sector is that administrators are promoted internally to marketing roles or juniors are recruited who grow into the marketing managers of the future. If there is no professional marketer to manage a coherent strategy in these organisations, marketing is more of an experiment than a science. As a result, inappropriate techniques may be used, which may be ineffective and budgets get cut as a consequence. The end result in such a sequence of events is that levels of creativity fall within the marketing department and therefore is viewed as an ineffective function.Public sector managers must, therefore, understand that the correct use of marketing by the right people may transform the internal corporate culture into a more driven, dynamic and exciting culture in which to work. This helps to foster a more positive perception amongst the public about the work it does, and in turn should lead to a greater uptake in the services provided, leading to a greater budget allocation for the future. Show Me More Fund out more about marketing strategy in not-for-profit organisations by reading the material available at the following websites: http://www.ehow.com/way_5129727_marketing-strategies-nonprofit-organizations.html http://www.develop-net.com/articles/marketing-is-different-for-non-profits.html http://marketing.about.com/cs/nonprofitmrktg/a/8stepnonprofit.htm Now compare this with the approaches adopted for marketing within the public sector, which are identified at: http://www.ftpress.com/articles/article.aspx?p=1024764 A useful comparison of public and private sector banking marketing can be viewed at: http://www.scribd.com/doc/32442250/MARKETING-STRATEGY-USED-BY-PUBLICAND-PRIVATE-SECTOR Involve Me Visit the following website and view the template for marketing planning provided for notfor-profit making organisations. Consider how this might be helpful for your own organisation. http://www.probonoaustralia.com.au/news/2010/03/nfp-marketing-plan-template# Tell MeSocial marketing Social marketing is helpful in strengthening social ties which can enable public administration to assume new roles. Social links can be forged between its members given the de-structuring of social ties, and their ‘virtualization’ through social networks such as Facebook or Twitter. Public management can play an important role in this by: Promoting discussion Encouraging citizens’ participation Seeking to remain close and accessible to everybody In such situations, which may be away from any form of exchange, relational elements are very important, and there are useful lessons to be learnt here from relational marketing. Show Me More Read more about social marketing at: http://www.slideshare.net/stephendann/social-marketingimproving-policy-implementation Study the example of social marketing to be found at: http://goo.gl/Nbk86 Tell Me Political marketing Political marketing is a basic element of modern political life. Presidents and Prime Ministers, politicians, government departments and councils all use marketing in their pursuit of political goals. Components of the process of deciding on policies and service design include: Market research - used to determine what people want and need Voter profiling – used to identify new segments to target Strategy - guides creation of the political brand to develop an attractive vision Internal marketing - guides the provision of volunteer involvementAnalytics and experimental research – used to test and refine communication messages Delivery management - sets expectations and helps to convey progress once a politician is elected or a programme has begun Political marketing is a modern and dynamic field that seeks to understand, learn from, comment on and even influence people’s behaviour. It also attracts public attention and debate, and has become the focus of many media productions, such as The Iron Lady, The Ides of March and The West Wing. All these cover strategy, branding, positioning, crisis management and polling, and raise ethical issues of authenticity, often targeting ethnic minorities and gender. The marketing strategy of a political candidate or issue is very much like the marketing of a product or service. It can be considered under a series of common-place marketing headings: Advertisers - generally political organisations attempt to make voters aware of their candidate or issue's existence and provide compelling reasons why a certain market should agree with it. Branding – as with organisations and products, political candidates and issues must be branded. Effective branding attaches a recognizable set of attributes on the product or business. For example, in the USA, the Republican Party has traditionally branded itself as a political organisation that champions moral values, such as equality and loyalty. Narrative - a political organisation may choose to help explain its benefits through the use of simple narrative. For example, during his presidential campaign, Barack Obama spoke of his background as the son of a Kenyan man and an American woman, a narrative used to convey his humble beginning and his affinity for the common man. Targeting - political advertisers must carefully select the audience to whom they wish to target their message. While all advertisers will select a target demographic, few will risk alienating a large group of consumers by using rhetoric to attract another group. For this reason, it is important for advertisers to identify the precise demographic they wish to target. Laws - people may be affected by the passage of a law or the election of a political candidate. While people are relatively unaffected when others purchase specific products or services, political elections may have tangible consequences. A skilful political marketer may be capable of making the stakes of an election clear to voters in order to convince them to support or oppose a particular policy or candidate.Show Me More Read more about political marketing by viewing the material to be found at the following websites: http://www.ehow.com/info_7874075_political-marketing-strategy.html http://marketing.about.com/od/Political-Marketing/ A detailed paper on political marketing and political communication can be seen at: http://otago.ourarchive.ac.nz/bitstream/handle/10523/1463/pm-pc.pdf