MARKETING MANAGEMENT
INTRO
Marketing management is “planning, organising, controlling and
implementing of marketing programmes, policies, strategies and tactics
designed to create and satisfy the demand for the firms’ product offerings or
services as a means of generating an acceptable profit.”
VALUE CHAIN
What Is a Value Chain?
A value chain is a business model that describes the full range of activities
needed to create a product or service. For companies that produce goods, a
value chain comprises the steps that involve bringing a product from
conception to distribution, and everything in between—such as procuring raw
materials, manufacturing functions, and marketing activities.
A company conducts a value-chain analysis by evaluating the detailed
procedures involved in each step of its business. The purpose of a value-
chain analysis is to increase production efficiency so that a company can
deliver maximum value for the least possible cost.
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Value Chain
KEY TAKEAWAYS
A value chain is a step-by-step business model for transforming a
product or service from idea to reality.
Value chains help increase a business's efficiency so the business can
deliver the most value for the least possible cost.
The end goal of a value chain is to create a competitive advantage for a
company by increasing productivity while keeping costs reasonable.
The value-chain theory analyzes a firm's five primary activities and four
support activities.
The value chain
There are five primary activities in adding value and building a competitive
advantage. They are:
– Inbound Logistics: all receiving, warehousing and inventory management
of raw materials ready for the production process.
– Operations: all efforts required to convert raw materials into a finished good
or service.
– Outbound Logistics: occurs after all the operations are finalized and the
end product is ready for the consumer – included are the activities required to
deliver the product or service to the end user.
– Marketing & Sales: includes the strategies used to persuade potential
consumers to buy a product or service.
– Services: the activities that help create an improved customer experience,
such as repair and customer services.
Support activities for the value chain
Support activities that help improve a company’s competitive advantage
include:
– Procurement: the acquisition of inputs (resources) for the company.
– Human Resource Management: everything to do with recruiting, hiring,
training, developing, paying and (if needed) firing or laying off of workers.
– Technological Development: this is related to the equipment, hardware,
computer software, procedures and technical knowledge used to help the
company transform raw materials into finished products.
– Infrastructure: serves the needs of the company and links its various parts
together, including functions or departments such as planning, public affairs,
government relations, quality assurance, accounting, legal, finance and
general management.
Value chain analysis
The aim of value chain analysis is to gain an edge over one’s competitors. In
the world of business, it is both an essential and extremely valuable tool.
It is a process where companies identify their primary support activities that
add value to their finished products, and then analyze each activity carefully to
minimize costs and increase differentiation.
It represents a firm’s internal activities associated with transforming inputs into
outputs – transferring what comes in (raw materials) to what goes out
(finished products).
Value chain analysis relies on the fundamental economic principle of
advantage – commercial enterprises are best served by operating in sectors
and areas where they have a relative production advantage over their
competitors.
In other words, by examining its internal activities, the analysis shows where a
company’s competitive advantages and disadvantages are.
MACRO AND MICRO FACTORES IN NOTES
TRANSACTIONAL MARKETING
ransactional marketing is a discipline closely related to communications,
regardless of the scope to which it applies. This type of marketing is based
on satisfying consumer needs in exchange of a company’s services or
goods.
Transactional marketing seeks to capture through the product, oriented to
the sale by sale, the goal is to have more customers, “attack the majority
segment” vs. relational marketing that seeks loyalty and is based on the
relationship with the customer.
If we do transactional marketing we do not take into account that the
competitive environment can satisfy the same need of the client and we will
be competing exclusively for price, which can compromise the sustainability
of the company in the long term, we do not provide a differential value.
In this type of strategy, sales are decoupled from customer service. Unlike
relational marketing, which consists of a strategy in which the entire
company is involved, strengthening the relationship with the customer
not only in the sale but throughout its life cycle as such.
DEF
Transactional marketing is a business strategy that focuses on single,
"point of sale" transactions. The emphasis is on maximizing the efficiency
and volume of individual sales rather than developing a relationship with
the buyer.
The transactional approach is based on the four traditional elements of
marketing, sometimes referred to as the four P's:
Product -- Creating a product that meets consumer needs.
Pricing -- Establishing a product price that will be profitable while still
attractive to consumers.
Placement -- Establishing an efficient distribution chain for the
product.
Promotion -- Creating a visible profile for the product that makes it
appealing to customers.
An alternative to the transactional model, relationship marketing,
emphasizes customer retention and future interaction with the company.
There are advantages and disadvantages to both approaches. According to
customer relationship management (CRM) expert Michael Lowenstein,
because transactional marketing does not value customer retention, it can
lead to "passive, reactive and short-term customer relationships." However,
traditional elements of marketing such as those listed above will always be
crucial to success.
RELATIONSHIP MARKETING
