Basic Marketing Management (Chapter 1-9)

Marketing Process
1. Determine Needs and Wants
2. Design customer-driven marketing strategy (involving marketing management, selecting customers, and choosing a value proposition)
3. construct marketing program that delivers superior value
4. build relationships and delight the customer
5. Capture Value from customer to achieve profits
Marketing Management Orientations
1. Production concept- consumers will favor products that are available and affordable
2. Product concept- consumers will favor products that offer the most quality, performance and innovative features
3. Selling concept- consumers will not buy enough without a large scale selling and promotion effort
4. Marketing concept- focus on satisfying the needs and wants of target markets (3 POINTS: needs/wants satisfied, research to uncover them, making a profit)
5. Societal Concept: how does it help society
Marketing Definition
the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return
Marketing Mix
Product (What is being marketed), Place(Where is the consumer going to find it), Promotion(How is the Consumer going to find it), Price(How much will it cost)
The Changing Marketing Landscape
1. new consumer frugality and focus on supplying value to the customers
2. people are connected to each other and information worldwide in the digital age
3. Marketers have new tools to communicate with customers
strategic planning
what is the organization’s purpose and what does it want to accomplish, using: 1)marketing opportunities and 2)the organization’s capabilities
Strategic Planning Steps
1. Define the mission
2. Set objectives
3. Design a business portfolio
4. Plan marketing strategies
BCG Matrix
BCG Matrix
Product-Market Growth Matrix
Product-Market Growth Matrix
Value Chain
a set of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market
Market Segmentation
Segmenting the market
Market Targeting
choosing which segment of the market you want to sell to
Market Positioning
creating an image for the product based on its intended audience
SWOT Analysis
SWOT Analysis
functional organization
each function is headed by a specialist
geographic organization
for companies that are located all over, each area is responsible for something different
product management organization
developing plans for one product segment of a brand
customer management organization
having different branches to focus on individual customers segments
Return on Marketing Investment
the net return from a marketing investment divided by costs of the marketing investment. Marketing ROI provides a measurement of the profits generated by investments in marketing activities
The Marketing Environment
includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain relationships with customers.
Microenvironment
consists of actors close to the company that effect its ability to serve its customers, the company, suppliers, marketing intermediaries, customers markets, competitors, and publics
uncontrollable marketing environment
reacting and adapting to forces in the environment
proactive marketing environment*
agressive actions to affect forces in the environment. *Most desired*
reactive marketing environment
watching and reacting to forces in the environment
The company’s microenvironment
top management, finance, R&D, purchasing, operations, accounting
Types of Marketing Intermediaries
resellers, physical distribution firms, marketing services agencies, financial intermediaries
Macroenvironment
technological environment, economic environment, demographic environment, natural environment, political/legal environment, cultural environment
demography
the study of human populations
baby boomers
born between 1946 and 1964. The most affluent Americans
Generation X
born between 1965 and 1976. High parental divorce rates, cautious economic outlooks, less materialistic, family comes first
Generation Y
born between 1977 and 2000. Comfortable with technology
cause-related marketing
A type of marketing involving the cooperative efforts of a for-profit business and a non-profit organization for mutual benefit
Core beliefs and values
persistent and are passed on from parents to children and are reinforced by schools, churches, businesses and government
Secondary beliefs and values
more open to change and include people’s views of themselves, others, organization, society, nature and the universe
Marketing Information System (MIS)
consists of people and procedures for: assessing the information needs, developing needed information, helping decision makers use the information for customers.
Marketing Research Process
1. Define the problem/objectives
2. Develop a research plan
3. Implement: collect/analyze data
4. Interpret and report findings
Primary Research
observational, ethnographic, Survey, Experimental; Collected for new research plan, tailored to new problem, costly, takes time
Secondary Research
Collected for different purposes; On-Hand; Easy, Cheap; Risk of Being Old, Outdated Irrelevant
Implementing Research Project
1. Collect Information
2. Process Information
3. Analyze Information
4. Interpret Findings
5. Draw Conclusion
6. Report to Management
Consumer Buyer Behavior
the buying behavior of final consumers, individuals, and households, who buy goods and services for personal consumption
Consumer Market
All of the personal consumption of final consumers
Buyers’ Black Box
the interaction of stimuli, consumer characteristics, decision process and consumer responses
Factors Influencing Consumer Behavior
Cultural(culture, subculture, social class), social(reference groups, family, roles and status), personal (age and life cycle stage, economic, situation, lifestyle, personality and self-concept), psychological(motivation, perception, learning, beliefs and attitudes)
Maslow's Hierarchy of Needs
Maslow’s Hierarchy of Needs
Types of Buying Decision Behavior
Types of Buying Decision Behavior
Buyer Decision Process
1. Need Recognition
2. Search
3. Evaluation/Choice
4. Purchase
5. Post-purchase Behavior
Buyer Decision Process of NEW PRODUCTS
The adoption process is the mental process an individual goes through from first learning about an innovation final regular use
Adoption Process for NEW PRODUCTS
1. Awareness
2. Interest
3. Evaluation
4. Trial
5. Adoption

There are:
– innovators
– early adopters
– early mainstream
– late mainstream
– lagging adopters

Influence of Product Characteristics for NEW PRODUCTS
– relative advantage
– comparability
– complexity
– divisibility
– communicability
inelastic demand
A situation in which an increase or a decrease in price will not significantly affect demand for the product
fluctuating demand
small changes in consumer demand create large changes in business demand.
EX: a small shift in consumer demand for flights creates a large change in production of planes
business buyers
fewer but larger purchases, geographically concentrated, more decision participants
Buying Situations
straight rebuy: routine purchase of same products
modified rebuy: shopping around for suppliers with better offers. Or new needs for products already being bought
new-task buy: new task and new purchases needed. No previous experience to base decisions.
Business buyer behavior
influenced by environmental, organizational, interpersonal, and individual factors
major Influences on Business Buyers
Price, Service, Emotion
Buying Centers
all of the individuals and units participating in the business decision-making process including: users (person on consuming end), influencers (have expertise), buyers (execute the purchase), deciders (make the ultimate decision), and gatekeepers (control flow of decision-making)
Buying Process
1. Problem Recognition
2. General Need Description
3. Product Specification
4. Supplier Research
5. Solicit Proposal
6. Select Supplier
7. Order-routine specification
8. Perfromance Routine
Segmenting Consumers
Geographic, Demographic, Psychographic, Behavioral
Evaluating Segments
-Segment size and growth
-Segment structure attractiveness
-Company objectives and resources

An attractive segment would not have a lot of aggressive competition, a lot of control over prices, not too many substitutes

To be Useful Market Segments Must Be…
measurable, accessible, substantial, differentiable, and actionable
individual marketing
AKA: one-to-one marketing, mass customization, markets-of-one marketing, micromarketing
involves tailoring products and marketing programs to the needs and preferences of individual customers
Competitive Advantage
the extent that a company can position itself above others using greater value, lower prices, better quality and more benefits
Choosing a positioning strategy
1. Identify competitive advantages
2. Choose the right competitive advantage
3. Select the positioning Strategy
Differentiation and Positioning
the way a product is defined by consumers on important attributes- the place the product occupies in consumers’ minds relative to competing products. Based on: perceptions, impressions, feelings
Value Proposition
Value Proposition
Layers of a Product
Core product which is all the benefits the product will provide.
Actual Product which is the good plus features of the product that are appealing to the consumer
Augmented Product which is the product plus features such as warranty, repair, and other add-ons that add value for the consumer
Product Line/Mix
a group of products that are closely related because they function in a similar manner. Product line length is the number of products in a product line. Product line filling involves adding more products within the present range. Product line stretching is lengthening the product line beyond its current range
Product Mix
Product Mix
depth: how many versions of each product
consistency: how similar are they all
Types of Consumer Products
-convenience: frequent and immediate
-shopping: less frequent and lots of comparing
-specialty: less frequent and very specific
-unsought: life insurance, blood donations
Types of Industrial Products
materials/parts, capital items, supplies and services
Person Marketing
consists of activities undertaken to create, maintain, or change attitudes and behaviors of target consumers toward particular people
Place Marketing
consists of activities undertaken to create, maintain, or change attitudes and behaviors of target consumers toward particular places

EX: campaign: “Tour Ireland”

Organization Marketing
consists of activities undertaken to create, maintain, or change attitudes and behaviors of target consumers toward an organization, both profit and non-profit entities
Social Marketing
consists of activities undertaken to create, maintain, or change attitudes and behaviors of target consumers for a cause that benefits the wellbeing of society

EX: LiveStrong

Service Characteristics
intangibility, inseparability, variability, perishability
Services Marketing
business services, private not-for-profit organizations, government
Marketing Tasks
differentiation, service quality, service productivity
Internal Marketing
marketing within a company to treat employees well to motivate them to interact well with customers
Interactive Marketing
pertains to the service and employee-customer relations
Service-profit Chain
1. internal Service Quality: superior employees/work environment
2. Productive Employees
3. Greater Service Value
4. Satisfied Loyal Customers
5. Growth and Profit
Product/Service Attributes
quality, features, style/design
Brand Strategy
Attributes, Benefits, Beliefs. The must be built on in order to build a strong brand and position is firmly
Brand Equity
The differential effect that knowing the brand name has on customer response to the product or its marketing
A good brand name should…
-suggets benefits
-be easy to read, say and spell
-be distinctive
-be extendable
-work worldwide
-be able to be legally protected
Brand Sponsorship
– Manufacturer’s Brand: brand name
– Private Brand: generic
– Licensed Brand: Coca-Cola Sweater
– Co-Brand: Reese’s Peanutbutter Bryer’s Ice-Cream
Brand Development
Brand Development
Stages of New Product Development
1. Idea generation- systematic research for new ideas
2. Idea screening- spotting and dropping ideas efficiently
3. Concept development and testing- find out what customers think of different ideas
4. Marketing strategy development- designing an initial strategy for introduction to market
5. Business analysis- review of the costs and projections to see if they satisfy objectives
6. Product development- creation and testing of physical versions through R&D
7. Test marketing- testing products to see viability in market (standard, controlled and simulated)
8. Commercialization- introducing the product into the market
When firms will test the market
when it is a new product with a large investment and there is uncertainty about a product of marketing segment
When firms will not test the market
when it is a simple line extension, a copy of a competitor’s product, costs are low, and there is a lot of management confidence
Team-Based New Product Development
an approach where departments work closely together in cross-functional teams
Systematic New Product Development
an approach that collects reviews and evaluates and manages new product ideas, creates an innovation-oriented culture and yields a large number of ideas
Customer-Centered New Product Development
finding ways to solve customers’ problems and create more customer-satisfying experiences
Product Life Cycle
Product Life Cycle
introduction: first chance to purchase good
growth: sales increase while profits increase and peak
maturity: longest phase. Sales peak and then level off while profit margins narrow
decline: decrease in product category sales
Product Life Cycle Strategies
Style: basic and distinctive mode of expression
Fashion: currently accepted or popular style
Fad: temporary periods of unusually high sales driven by customer enthusiasm of a brand or produt
PLC for Style VS. Fashion VS. Fad
PLC for Style VS. Fashion VS. Fad