Marketing Notes Essay, Research Paper
Chapter 1 – Marketing In a Changing World
What is marketing?
- Creating customer value and stratification are at the very heart of modern
marketing thinking and practice.
Market Defined
- Markets always focus at satisfying customers needs
- Marketing: A social and managerial process by which individuals and groups
obtain what they need and want through creating exchanging products and value
with others.
- Needs: States of felt deprivation
- Wants: Are the form taken by human needs as they are shaped by culture and
individual personality. Wants are described in terms of objects that will
satisfy needs.
- Demands: Human wants that are backed by buying power
- Products: Anything that can be offered to a market for attention,
acquisition, use, or consumption that might satisfy a want or need it. It
includes physical objects, services, persons, places, organizations, and ideas.
- ?Marketing myopia? Sellers may suffer from ?Marketing myopia? they
are so taken with their products that they focus only on existing wants and lose
sight f underlying customer needs. They forget that a physical product is only a
tool to solve a consumer problem.
Value, Satisfaction, and quantity
- Customer Value: The difference between the values the customer gains from
owning and using a product and the cost of obtaing the product.
- Customer Satisfaction: The extent to which a product?s perceived
performance matches a buyer?s expectations.
- If the product?s performance falls short of the customer?s
expectations, the buyer is dissatisfied. If the performance matches expectation,
the buyer is satisfied. If performance excesses expeditions, the buyer is
delighted. Outstanding marketing companies go out of their way to keep their
customers satisfied.
- Total quantity management (TQM): Programs designed to constantly improve
the quantity of products, services and marketing processes.
Exchange, Transactions, and Relationship
- Exchange: The act of obtaining a desired object from someone by offering
something in return.
- Transaction: A trade between two parties that involves at least two things
of value, agreed-upon conditions, a time of agreement, and a place of agreement.
- Relationship Marketing: The process by creating, maintaining, and enhancing
strong, value, -laden relationships with customers and other stakeholders.
- A market network consists of the company and all of its surrounding
stakeholder: customers, employees, suppliers, distributions, retailers,
advertising, agencies, and others with whom it has built mutually profitable
business relationships.
Market
- Market: The set of all actual and potential buyers of a product or service.
- Figure 1-2 (13)
Marketing
- Marketing means managing markets to bring about exchanges for the purpose
of satisfying human needs and wants.
Marketing Management
- Marketing Management: The analysis, planning, implementation, and control
of programs designed to create, build, and maintain beneficial exchanges with
target buyers for the purpose of achieving organizational objectives.
- De-marketing: Marketing to reduce demand temporarily or permantely-the aim
is not to destroy demand, but only to reduce or shift it.
Building profitable customer relationship
- A company demand comes from two groups: 1. New customers and 2. Repeat
customers.
- It costs five times as much to attract new customers as it does to keep an
existing customers satisfied.
Marketing Management Philosophies
- There are five alternatives concepts under which organizations conduct
their marketing activities: the product, selling, marketing, and societal
marketing concept.
- Production Concept: The philosophy that consumers will favour products that
are available and highly affordable and that management should therefore focus
on improving production and distribution efficiency.
- Product Concept: The philosophy that consumers will favour producers that
offer the most quality, performance, and innovative features.
- Selling Concepts: The idea that consumers will not buy enough of the
organization?s products unless the organization undertakes a large-scale
selling and promotion effort.
- Marketing Concept: The marketing management philosophy that holds the
achieving organizational goals depends on determining the needs and wants of
target markets and delivering the desired satisfactions more effectively and
efficiently than competitors do.
The Internet
- Internet: A vast and burgeoning global web of computer networks with no
central management or ownership.
Chapter 2- Strategic Planning the Marketing Process
Strategic Planning
- The annual plan is a short-run marketing plan that describes the current
marketing situation, the company objectives, and the marketing strategy for the
year, the action program, budgets, and controls.
- The long-run plan describes the major factors and forces affecting the
organization during the next several years, it includes the long-term
objectives, the major marketing strategies that will be used to attain them, and
the resources required.
- Strategic Planning: The process of developing and maintaining a strategic
fit between the organization?s goals and capabilities and its changing
marketing opportunities.
- At the corporate level, the company first defines its overall purpose and
mission. This mission then is turned into detailed supporting objectivities that
guide the whole company. Next, headquarters decides what portfolio of business
and products is best for the company and how much support to give each one. In
turn, each business and product unit must develop detailed marketing and other
departmental plans that support the company wide plan.
Defining the company mission
- Mission Statement: A statement of the organizations purpose-what it wants
to accomplish in the larger environment.
- Mission should be realistic, specific, fit the market environment,
motivating
Designing the Business Portfolio
- Business Portfolio: The collection of business and products that comprise
the company.
- The best business portfolio is the one that best fits the company?s
strengths and weakness to opportunities in the environment. The company must (1)
analyse the current business portfolio and decide which business should receive
more, less, or no investment, and (2) develop growth strategies for adding new
products or business to the portfolio.
Analysing the current business portfolio
- Portfolio Analysis: A tool by which management identifies and evaluates the
various businesses that makes up the company.
- Strategic business Unit (SBU): A unit of the company that has a separate
mission and objectives and that can be planned independently from other company
business. An SBU can be a company division, a product line within a division, or
sometimes a single product or brand.
- Management?s first step is to identify the key businesses making up the
company. The next step in business portfolio analysis calls for management to
assess the attractiveness of its various SBU?s and decide how much support
each deserves.
The Boston Consulting Approach
- Growth-share matrix: A portfolio-planning method that evaluates a company?s
strategic business units (SBU) in terms of their market growth rate and relative
market share. SBUs are classified as stars, cash cows, question marks, or dogs.
- Four types of SBUs can be distinguished:
1. Star: High-growth, high share business or products that often require
heavy investment to finance their rapid growth.
2. Cash Cow: Low-growth, high share business or products; established and
successful units that generate cash that the company uses to pay its bills and
support other business units that need investment.
3. Question Mark: Low-share business units in high-growth markets that
require a lot of cash in order to hold their share or become stars.
4. Dogs: Low-growth, low share business and products that generate enough
cash to maintain themselves but do not promise to be large sources of cash.
- Figure 2-2 (45) Growth Share matrix
The General Electric Approach
- It uses a matrix with two dimensions-one representing industry
attractiveness (the vertical axis) and one representing company strength in the
industry (the horizontal axis). The best businesses are those located in highly
attractive industries where the company has high business strength.
Problems with Matrix Approaches
- They can be difficult, time consuming, and costly to implement. Management
may find it difficult to define to define SBUs and measure market share and
growth.
- These approaches focus on classifying current businesses but provide little
advise for future planning.
Developing Growth Strategies
- Product/market expansion grid: A portfolio-planning tool for identify
company growth opportunities through market penetration, market development, or
diversification.
- Market Penetration: A strategy for company growth by increasing sales of
current products to current market segments without changing the product in
anyway.
- Market development: A strategy for company growth by identifying and
developing new market segments for current company products.
- Product development: A strategy for company growth by offering modified or
new products to current market segments.
- Diversification: A strategy for company growth by starting up or acquiring
businesses outside the company?s current products and markets.
Marketing Role in Strategic Planning
- Marketing looks at consumer needs and the company?s ability to satisfy
them; these same factors guide the company mission and objectives.
- Marketing plays a key role in the company?s strategic planning; Marketing
provides a guiding philosophy-the marketing concept-which suggests company
strategy should revolve around serving the needs of important consumer groups.
Marketing provides input to strategic planners by helping to identify attractive
market opportunities and by assessing the firm?s potential to take advantage
of them. Within individual business units, marketing designs strategies
- For reaching the unit?s objective.
Conflict between Departments
- Operations focuses on suppliers and production; finance is concerned with
stockholders and sound investments; marketing emphasizes consumers and products,
pricing, promotion, and distribution.
The Marketing process
- Marketing Process: The process of (1) analysing marketing opportunities;
(2) selecting targets market (3) developing the marketing mix and (4) managing
the marketing effort.
- Market Segmentation: Dividing the market into distinct groups of buyers
with different needs, characteristics, or behaviour who might require separate
products or making mixes.
- Market Segment: A group of consumers who respond in a similar way to given
set of marketing stimuli.
Market Targeting
- Market targeting: The process of evaluating each market segment?s
attractiveness and selecting one or more segments to enter.
Marketing Position
- Arranging for a product to occupy a clear, distinctive, and desirable place
relative to competing products in the minds of target consumers.
Marketing Strategies for Competitive Advantage
- The company must formally or informally monitor the completive environment
to answer these and other important questions: Who are our competitors? What are
their objectives and strategies? What are their strengths and weakness? And how
will they react to different completive strategies we might use?
Developing the Marketing Mix
- Marketing Mix: The set of controllable tactical marketing tools-product,
price, place and promotion-that the firm blends to produce the response it wants
in the target market.
- Product means the ?goods and services?
- Price is the amount of money customers have to pay to obtain the product.
- Place includes company activities that make the product available to target
consumers.
- Promotion means activities that communicate the merits of the products and
persuade target customers.
Managing the Marketing Effort
- Four management functions-analysis, planning, implementation and control.
- Marketing Analysis ? The Company must analyse its markets and making
environment to identify attractive opportunities and avoid environmental
threats. It must analyses company strengths and weaknesses, as well as current
and possible marketing actions, to determine which opportunities it can best
pursue. Marketing analysis needs information and other input to each of the
other marketing management functions.
- Marketing Planning ? It involves deciding on marketing strategies that
will help the company attain its overall strategic objectives. A detailed
marketing plan is needed for each business, product or brand.
- Product or brand plan (Contents of Marketing Plan) p.58
- Product or brand plan includes: Executive summary that quickly overviews
major assessment goals, and recommendation. The main section of the plan
presents a detailed analysis of the current marketing situation, and of
potential threats and opportunities. It next states major objectives for the
brand and outlines the specific of a marketing strategy for achieving them.
- Marketing Strategy: The marketing logic by which the business unit hopes to
achieve its marketing objectives. It consists of specific strategies for target
markets, positioning, the marketing mix, and marketing expenditure levels.
- In the marketing strategy level the planner explains how each strategy
responds to threats, opportunities, and critical issues outlines earlier in the
plan.
- Additional Sections of the marketing plan lay out action program for
implementing the marketing strategy, along with the details of a supporting
marketing budget.
- The last section ? the controls that will be used to monitor progress and
take corrective action.
Marketing Implementation
- Marketing Implementation: The process that turns marketing strategies and
plans into marketing actions to accomplish strategic marketing objectives.
- Implementation involves day-to-day, month-to-month activities that
effectively put the marketing plan to work.
Marketing Department Organization
- Marketing manager is responsible for developing long range and annual plans
for the sales and profits in their market. This system?s main advantage is
that the company is organized around the needs of specific customer segments,
Marketing Control
- Marketing Control: The process of measuring and evaluating the results of
market strategies and plans, and taking corrective action to ensure that
marketing objectifies are attained.
- Marketing first sets specific marketing goals. It then measures its
performance in the market place and evaluates the causes of any difference
between expected and actual performance. Finally management takes corrective
action to close the gaps between its goals and its performance, this may require
changing the action programs or even changing the goals.
- Operating Controls ? Involves checking ongoing performance against the
annual plan and taking corrective action when necessary. Its purpose is to
ensure that the company achieves the sales, profits, and other goals set out in
its annual plan. It also involves determining the profitability of different
products, territories, market and channels.
- Strategic Control? Involves considering whether the company?s basic
strategies are well matched to its opportunities.
- The Marketing Audit: Is a comprehensive, systematic, independent, and
periodic examination of a company?s environment, objectives, strategies, and
activities to determine problem areas and opportunities and to recommend a plan
of action to improve the company?s marketing performance.
- The Marketing Audit Questions (64)
The Marketing Environment
- The company must carefully analyse its environment so that t can avoid the
threats and take advantage of its opportunities.
Chapter 3 ? The Global Marketing Environment
- Marketing Environment: The factors and forces outside marketing?s direct
control that affect marketing management?s ability to develop and maintain
successful transactions with target customers.
- Marketers have two special aptitudes. They have discipline methods ?marketing