Marketing management is defined by the American Marketing Association as a social process involving individuals and groups in the creation, supply and exchange of valuable products and services.
At the heart of this definition is the concept of exchange.
The social relationship is central to the modern understanding of marketing.
The aim is to create mutual benefit through long-term relationships between the parties involved.
- 1 Successful Marketing Management
- 2 Marketing Management Strategies
Successful Marketing Management
Successful marketing management starts from the needs of consumers and aims to realise a better offer than that of the competition. Here are 5 key steps for realising a competitive offer:
- The identification of unmet needs
- The design of products and services to satisfy these needs
- The definition of an optimal price and offers
- Communication to consumers
- The distribution
All this has to be done with the financial objectives of the company in mind.
Marketing management activities are exercised by:
- Demand stimulation
- Competitive tool
- Cohesive role: it is a glue for the internal activity of an organisation especially in cases where companies are opening up to world markets with the consequent problem of co-ordination of different activities.
The historical periods in which businesses and consumers were considered separate entities have been overcome.
The basic factors in the evolution of marketing, have several functions, including stimulating demand, acting as a competitive tool and playing a cohesive role. These key factors include consumers, competition and the state of the world economy.
A brief overview: Consumers, Competition and the State of the World Economy
In the contemporary landscape, individual preferences are increasingly articulated and fickle and involve the identification of distinct market segments that consequently require the creation of unique products to meet the needs of numerous types of consumers. As a result, companies must continually review their marketing strategies.
Increasingly aggressive and sophisticated competitors, technological progress, and an increased strategic and managerial culture have raised the level of competition.
Moreover, legislative bodies have always been pro-competitive.
Changes in economic conditions constitute both constraints and opportunities for companies and must therefore be monitored and anticipated as best they can.
Marketing Management Strategies
We can therefore identify three guiding principles in marketing management.
Satisfying consumer needs
What does it mean to satisfy consumer needs? First, a consumer analysis must be carried out. The objective?
To find out which attributes are considered a priority to design a product that meets their needs, and then focus on the stages of the purchasing decision.
What are the physical product attributes that are identifiable as subjective information? Physical attributes generate perceptions that are subjective judgements, thoughts and emotions that are characteristic of the individual also in contrast to the communication goals. These subjective judgements are integrated into attitudes and preferences that play a key role in influencing the purchase decision.
Providing a superior product/service to those offered by competitors
A key step is a competitive analysis. There are various approaches to deal with competitive threats such as product differentiation, which consists of creating a distinctive image of the product by positioning it against competitors.
For consumers to perceive it as unique and unrivalled, it must be based on the perception of real advantage. This increases consumer loyalty by making them less price sensitive and less vulnerable to competitor offers.
This can be achieved through various elements such as:
- The communication strategy;
- The composition of the product;
- The price,
- The distribution
- Ancillary services
However, this could be a costly process and easily imitated by competitors in the long run.
Cost leadership for marketing management
The objective of cost leadership is to keep production costs at a minimum level to stimulate demand through the leverage of a relatively low price. Higher sales volume means higher production volume and thus the possibility of economies of scale and economies of experience that generate further cost reductions.
The ultimate goal is to increase market share. Economies of scale generate higher sales and thus production volumes. With economies of experience, the average cost per product decreases as the quantity produced increases because the workforce becomes more efficient, innovations in manufacturing processes spread, and this allows experience gained to be utilised.
Economies of scope, on the other hand, are based on a concept of shared experience, i.e. the cumulative output of product units related to the focal product. The total costs of the focal product are shared between the various products. There is an implicit trade-off between differentiation and cost leadership.
Focusing on cost reduction overshadows giving a product superior characteristics. It is, therefore, a dangerous strategy in the long run because to remain competitive, it is necessary to provide the same innovation content as competitors. Price manoeuvres can easily be imitated by competitors and consumer tastes are changing. The company may therefore not get a return on its investment.
Focusing consists of concentrating on a particular segment or a small number of them. Whereas differentiation and cost leadership strategies aim at dominating the entire market.
The focus strategy concentrates on a particular segment. Once these segments have been identified, the company decides to compete by adopting either differentiation or cost leadership.
It competes by conquering market niches. All this, however, requires a higher marketing culture and capacity than the other two strategies, since segments are difficult to identify and require a specific offer and competitive strategy as well as an impactful sensitivity to competition and changing consumer tastes.
Analysis of the company’s characteristic strengths, weaknesses and environmental constraints
In conclusion, the marketing management planning model, therefore, involves the following steps:
- The definition of objectives can be both organisational objectives, such as ROI employee welfare and so on; and marketing objectives, such as the satisfaction of consumer needs.
- Focus on analysing both the consumer and the business.
- Planning the management of new products, managing existing ones, forecasting demand and choosing the target market.
- Implement plans through the decision marketing mix
- Evaluate and control the results of the objectives set.
In general, the constraints and opportunities of the external and internal environment should not be forgotten: e.g. legal, economic, physical, financial, and technological aspects and aspects related to the organisational structure of the enterprise.