CHAPTER 1: Marketing in the Twenty-First 3.

Unstated Needs
Century 4. Delight Needs
5. Secret Needs
10 TYPES OF ENTITIES ( WHAT IS MARKETED?)
MARKETPLACE: A physical like a store
1. Goods
2. Services MARKETSPACE: A digital like online shopping
3. Events
4. Experiences METAMARKET: Cluster of complementary products and
5. Persons services closely related in the minds of consumers, but
6. Places spread across a diverse set of industries e.g. automobile
7. Properties
8. Information VALUE PROPOSITION: set of benefits that satisfy the
9. Idea needs
10. Organization
BRAND: an offering from a known source
MARKETING: Identifying and meeting societal needs.
According to American Mktg. Assoc.: Marketing is the CUSTOMER VALUE TRIAD: quality, service, price
activity, set of institutions, and processes for creating,
communicating, delivering, and exchange offerings that SUPPLY CHAIN: longer channel stretching from raw
have value for customers, clients, partners, and society materials to components to finished goods carried to
at large. final buyers

MARKETING MANAGEMENT: Art and science of
choosing target markets and getting, keeping, and
growing customers through creating, delivering, and
communicating superior customer value. It is the
process of planning and executing the conception,
pricing, promotion, and distribution of ideas, goods, and
services to create exchanges that satisfy individual and
organizational goals.
MARKET SEGMENTATION: identify and profile distinct
groups of buyers who might prefer or require varying
products and marketing mixes. Market segments can be
identified by examining demographic, psychographic,
and behavioral differences among buyers.
MARKET OFFERING: The offering is positioned in the
minds of the target buyers as delivering some central
benefit(s).
INDUSTRY: Collection of sellers
MARKET: Collection of buyers
NEEDS: Basic human requirements
WANTS: Needs become wants when they are directed
towards a specific object to satisfy those needs.
COMPETITION: all the actual and potential rival
offerings and substitutes a buyer might consider.
VALUE as a ratio between what the customer gets and
what he gives.
VALUE= Benefits/ Costs = (Functional benefits +
emotional benefits) / (Costs Monetary costs + time costs
+energy costs + psychic costs)
EXCHANGE, the core of marketing, involves obtaining a
desired product from someone by offering something in
return. Exchange is a value-creating process because it
normally leaves both parties better off. Note that
exchange is a process rather than an event
TRANSACTION involves at least two things of value,
agreed-upon conditions, a time of agreement, and a
place of agreement. Note also that a transaction differs
from a transfer.
TRANSFER, A gives a gift, a subsidy, or a charitable
contribution to B but receives nothing tangible in return.
Typically, the transferer expects something in exchange
for his or her gift—for example, gratitude or seeing
changed behavior in the recipient

DEMANDS: wants for specific products backed by the RELATIONSHIP MARKETING aims to build long-term
ability to pay mutually satisfying relations with key parties—
customers, suppliers, distributors—in order to earn and
MARKETER: someone who seeks a response – retain their long-term
attention, purchase, etc. from another party called preference and business. It cuts down on transaction
PROSPECT. costs and time. The ultimate outcome of relationship
marketing is the building of a unique company
5 types of needs asset called a marketing network.

1. Stated Needs MARKETING NETWORK consists of the company and

2. Real Needs its supporting stakeholders (customers, employees,
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suppliers, distributors, university scientists, and others)
with whom it has built mutually profitable business
relationships.
Marketing Channels
1. COMMUNICATION CHANNELS deliver
messages to and receive messages from target
buyers. They include newspapers, magazines,
radio, television, mail, telephone, billboards, etc.
2. DISTRIBUTION CHANNELS to display or
deliver the physical product or service(s) to the
buyer or user. There are physical distribution
channels and service distribution channels,
which include warehouses, transportation
vehicles, and various trade channels such as
distributors, wholesalers, and retailers.
3. SELLING/ SERVICE CHANNELS to effect
transactions with potential buyers. Selling
channels include not only the distributors and
retailers but also the banks and insurance
companies that facilitate transactions.
Marketing Environment
1. TASK ENVIRONMENT includes the immediate
actors involved in producing, distributing, and
promoting the offering, including the company,
suppliers, distributors, dealers, and the target
customers.
2. BROAD ENVIRONMENT consists of six
components: demographic environment,
economic environment, natural environment,
technological environment, political-legal
environment, and social-cultural environment.
These environments contain forces that can
have a major impact on the actors in the task
environment, which is why smart marketers
track environmental trends and changes closely.
MARKETING MIX is the set of marketing tools that the
firm uses to pursue its marketing objectives in the target
market. Marketing-mix decisions must be made to
influence the trade channels as well as the final
consumers.
Four Ps Modern 4 Ps Four Cs
Product People Customer solution
Price Performance Customer cost
Place Processes Convenience
Promotion Programs Communication
PRODUCTION CONCEPT: consumers prefer
products that are widely available and inexpensive.
PRODUCT CONCEPT: consumers
favor those products that offer the most quality,
performance, or innovative features
SELLING CONCEPT: consumers and
businesses, if left alone, will ordinarily not buy enough of
the organization’s products.
The organization must, therefore, undertake an
aggressive selling and promotion
effort.
MARKETING CONCEPT: the key to achieving
organizational goals consists of the company being more
effective than its competitors in creating, delivering, and
communicating customer value to its chosen target
markets.
HOLISTIC MARKETING CONCEPT: based on the
development. Design, and implementation of marketing
programs, process, and activities. Acknowledges that
EVERYTHING matters in marketing.
4 broad components of Holistic Marketing Concept
1. Internal Marketing: Mktg, dept., senior mgt,etc.
2. Integrated Marketing: communications,
products and services, channels
3. Performance Marketing: sales revenue, brand,
equity, ethics, etc.
4. Relationship Marketing: customer, channels,
partners
Societal Marketing Concept: the organization’s
task is to determine the needs, wants, and interests of
target markets and to deliver the desired satisfactions
more effectively and efficiently than competitors in a way
that preserves or enhances the consumer’s and the
society’s well-being.
 “Selling focuses on the needs of the seller;
marketing on the needs of the buyer. Selling is
preoccupied with the seller’s need to convert his
product into cash; marketing with the idea of
satisfying the needs of the customer by means
of the product and the whole cluster of things
associated with creating, delivering and finally
consuming it” by: Theodore Levitt of Harvard
 Customer retention is thus more important than
customer attraction.
 The ultimate purpose of the marketing concept
is to help organizations achieve their objectives.
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CHAPTER 2& 3: Winning Markets through
Strategic Planning, Implementation, and Control
STRATEGIC PLAN: guide the whole enterprise and
deciding about resource allocations as well as starting
and eliminating particular businesses. It shape the
company’s businesses and products so that they yield
target profits and growth and
keep the company healthy despite any unexpected
threats that may arise.
Three key areas
1. managing a company’s businesses as
Investment Portfolio
2. assessing each business’s strength
considering the market’s growth rate and
company’s position and fit in that market
3. development of strategy, a game plan
achieving long-term objectives
MARKET-ORIENTED STRATEGIC PLANNING is the
managerial process of developing and maintaining a
viable fit among the organization’s objectives, skills, and
resources and its changing market opportunities.
VALUE CHAIN: Tool for identifying ways to create value
MISSION STATEMENT: provides employees with a
shared sense of purpose, direction, and opportunity.
Good mission statements focus on a limited number of
goals, stress the company’s major policies and values,
and define the company’s major competitive scopes
Competitive Scopes
1. Industry scope
2. Products and applications scope:
3. Competence scope
4. Market-segment scope:
5. Vertical scope
6. Geographical scope
Three Dimensions Of Business
1. Customer groups,
2. Customer needs,
3. Technology
 The purpose of identifying the company’s
strategic business units is to develop separate
strategies and assign appropriate funding to the
entire business portfolio
Boston Consulting Group Approach: developed and
popularized the growth-share matrix
 Circles represent the current sizes and positions
of eight business units in a hypothetical
company.
 Circle’s Area is proportional to the dollar-volume
size of each business
 Location of each business unit indicates its
market growth rate and relative market share.
 Market Growth Rate on the vertical axis
indicates the annual growth rate of the market in
which the business operates.
 Relative market share, which is measured on
the horizontal axis, refers to the SBU’s market
share relative to that of its largest competitor in
the segment.
The growth-share matrix is divided into four cells,
each indicating a different type of business
an
1. QUESTION MARKS (Q1) are businesses that
operate in high-growth markets but have low relative
by market shares. A question mark requires a lot of cash
the because the company is spending money on
plant, equipment, and personnel.
for
2. STARS (Q2) are market leaders in a high-growth
market. A star was once a question mark, but it does
not necessarily produce positive cash flow; the
company must still spend to keep up with the high
market growth and fight off competition.
3. CASH COWS (Q3) are former stars with the largest
relative market share in a slow-growth market. A cash
cow produces a lot of cash for the company (due to
economies of scale and higher profit margins), paying
the company’s bills and supporting its other
businesses.
4. DOGS (Q4) are businesses with weak market shares
in low-growth markets; typically, these generate low
profits or even losses.
The next task is to determine what objective, strategy,
and budget to assign to each SBU. Four strategies can
be pursued:
1. BUILD: To increase market share, even forgoing
short-term earnings to achieve this objective if
necessary. Building is appropriate for question marks
whose market shares must grow if they are to
become stars.
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 2. HOLD: To preserve market share, an appropriate
strategy for strong cash cows if they are to continue
yielding a large positive cash flow.
3. HARVEST: To increase short-term cash flow
regardless of long-term effect. Harvesting involves a
decision to withdraw from a business by implementing
a program of continuous cost retrenchment. The hope
is to reduce costs faster than any potential drop in
sales, thus boosting cash flow. This strategy is
appropriate for weak cash cows whose future is dim
and from which more cash flow is needed. Harvesting
can also be used with question marks and dogs.
4. DIVEST: To sell or liquidate the business because the
resources can be better used elsewhere. This is
appropriate for dogs and question marks that are
dragging down company profits.
 Successful SBUs move through a life cycle,
starting as question marks and becoming stars,
then cash cows, and finally dogs
The General Electric Model: each business is rated in
terms of two major dimensions— market attractiveness
and business strength
GE matrix is divided into NINE CELLS
 The three cells in the upper-left corner indicate
strong SBUs suitable for investment or growth.
 The diagonal cells stretching from the lower left
to the upper right indicate SBUs of medium
attractiveness these should be pursued
selectively and managed for earnings
 The three cells in the lower-right corner indicate
SBUs low in overall attractiveness, which the
company may want to harvest or divest.
 INTENSIVE GROWTH OPPORTUNITIES:
identify opportunities to achieve further growth
within the company’s current businesses (market-
penetration strategy, market-development strategy,
product-development strategy, diversification
strategy)
 INTEGRATIVE GROWTH OPPORTUNITIES:
identify opportunities to build or acquire
businesses that are related to the company’s
current businesses (backward integration (acquiring
a supplier), forward integration (acquiring a
distributor), or horizontal integration (acquiring a
competitor).
 DIVERSIFICATION GROWTH
OPPORTUNITIES: identify opportunities to add
attractive businesses that are unrelated to the
company’s current businesses (concentric
diversification strategy, horizontal diversification
strategy, conglomerate diversification strategy)
SWOT ANALYSIS: overall evaluation of a
business’s strengths, weaknesses,
opportunities, and threats
MACROENVIRONMENT FORCES: demographic,
economic, technological, political-legal, and social-
cultural
MICROENVIRONMENT ACTORS: customers,
competitors, distributors, and suppliers
MARKETING OPPORTUNITY: an area of buyer need in
which a company can perform profitably. Opportunities
can be classified according to their attractiveness and
their success probability
ENVIRONMENTAL THREAT: a challenge posed by an
unfavorable external trend or development. Threats
should be classified according to seriousness and
probability of occurrence
GOAL FORMULATION: specific goals for the planning
period
STRATEGY: game plan for achieving those goals.
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Three Generic Types of marketing strategies by: 5. Marketing strategy
Michael Porter 6. Action programs:
7. Projected profit-and-loss statement
1. OVERALL COST LEADERSHIP: achieve the lowest
production and distribution costs so that it can price
8. Controls
lower than competitors and win more market
Organization of the Marketing Department
2. DIFFERENTIATION: achieving superior performance
in an important customer benefit area, such as being 1. Functional Organization: The most common
the leader in service, quality, style, or technology—but
form of marketing organization consists of
not leading in all of these things
functional specialists (such as the sales
3. FOCUS: focuses on one or more narrow market manager and marketing research manager)
segments, getting to know these segments intimately
and pursuing either cost leadership or differentiation 2. Geographic Organization: A company selling
within the target segment. in a national market often organizes its sales
force (and sometimes other functions, including
marketing) along geographic lines
VALUE-DELIVERY PROCESS: task of any business is
to deliver value to the market at a profit 3. Product- or Brand-Management
Organization: Companies that produce a
2 views variety of products and brands
 The traditional view is that the firm makes
something and then sells it; assumes that the
4. Market-Management Organization: companies
sell their products to a diverse set of markets
company knows what to make and that the
market will buy enough units to produce profits
for the company. 5. Product-Management/Market-Management
Organization: Companies that produce many
The Value-Delivery Sequence products that flow into many markets tend to
adopt a matrix organization
1. First Phase, choosing the value, represents the
strategic “homework” 6. Corporate-Divisional Organization: As
multiproduct-multimarket companies grow, they
2. Second Phase, providing the value
often convert their larger product or market
3. Third Phase, communicating the value groups into separate divisions with their own
departments and services
Steps in the Marketing Process
7. Global Organization: Companies that market
1. ANALYZING MARKET OPPORTUNITIES: assess internationally
buyer wants and needs, etc.
2. DEVELOPING MARKETING STRATEGIES:
 Organization is one factor contributing to
prepares a positioning strategy
effective marketing implementation
3. PLANNING MARKETING PROGRAMS: marketing
managers must make basic decisions on marketing
expenditures, marketing mix, and marketing  Strategy addresses the what and why of
allocation, 4 Ps, etc. ( Identify expenditure, Divide, marketing activities, Implementation addresses
and Allocate) the who, where, when, and how.
4. MANAGING THE MARKETING EFFORT: organize
the firm’s marketing resources to implement and
control the marketing plan

MARKETING PLAN: created for each product line or

brand is one of the most important outputs of planning
for the marketing process

Contents of a Marketing Plan

1. Executive summary and table of contents

2. Current marketing situation
3. Opportunity and issue analysis
4. Objectives
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 Chapter 3: Collecting information and
Forecasting Demand

MARKETING INFORMATION SYSTEM (MIS):

consists of people, equipment, and procedures
to gather ,sort, analyze, and evaluate, and
distribute needed, timely, and accurate
information to marketing decision makers

Internal records and Database System:

INTERNAL RECORDS: supplies results data

 ORDER-TO-PAYMENT- CYCLE: the

heart of internal record system
 SALES INFORMATION SYSTEM :
 DATABASES, DATA WAREHOUSING,
and DATA MINING

MARKETING INTELLIGENCE SYSTEM: set of

procedures and sources that managers use to
obtain everyday information about developments
in the marketing environment. Supplies
happenings data

MARKETING INSIGHTS: provides diagnostic

information about how and why we observe
certain effects in the marketplace, and what that
means to marketers

MARKETING RESEARCH: Systematic design,

collection, analysis and reporting of data and
findings relevant to a specific marketing situation
facing the company

Marketing Research Process

1. Define the Problem, decision

alternatives, and objectives
2. Develop research plan (data sources,
research approaches, instruments, sampling
plans, and contact methods)
3. Collect the Information
4. Analyze the Information
5. Present the findings
6. Make the Decision

POTENTIAL MARKET: set of consumers with enough

level of interest in a market offer

AVAILABLE MARKET: set of consumers who have

interest, income, and access to a particular offer

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TARGET MARKET: part of the qualified available
market the company decides to pursue
PENETRATED MARKET: set of consumers who are
buying the products
MARKET DEMAND: total volume that would be
bought by a defined customer group in a defined
geographical area in a period of time
CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
process of carefully managing detailed information about
the individual customers and all customer touch points to
maximize loyalty.
TOUCH POINTS: any occasion on which customer
encounters the brand and product from actual
experience to marketing communications to casual
observation

MARKET FORECAST: shows expected demand not the CHAPTER 5: Analyzing Consumer Markets
maximum demand
CONSUMER BEHAVIOR: study of how consumers
MARKET POTENTIAL: limit approached by market select, buy, use, and dispose goods, etc to satisfy needs
demand as industry marketing expenditures approach and wants
infinity for a given marketing environment
SOCIAL CLASSES: relatively homogeneous and
FORECASTING: the art of anticipating what buyers are enduring divisions in a society, etc
likely to do under a given set of conditions
Major Factors Of Consumer Behaviors
6 Major Forces in a Broad Environment
1. CULTURAL
1. Demographic: population size, growth rate, 2. SOCIAL
diversity, etc 3. PERSONAL
2. Economic: available purchasing power 4. PSYCHOLOGICAL
depends on current income, prices, savings,
debt, credit availability MOTIVE: a need becomes a motive when it is aroused
3. Natural: environmental issues to a sufficient level of intensity to drive us to act.
4. Technological: technologies, innovation, R&D,
etc. 1. PERCEPTION: process by which we select,
5. Political- Legal: laws, government agencies, organize, and interpret information inputs to
and pressure groups create meaningful picture
2. LEARNING
3. EMOTIONS
Chapter 4: Creating Long-Term Loyalty 4. MEMORY
Relationships
The Buying Decision Process: 5 Stage Model
CUSTOMER-PERCEIVED VALUE (CPV): The
difference between prospective customers’ evaluation of 1. Problem recognition
all the benefits and costs of an offering and the 2. Information search
perceived alternatives 3. Evaluation of Alternatives
4. Purchase decision
TOTAL CUSTOMER BENEFIT: perceived monetary 5. Post-purchase behavior
value

TOTAL CUSTOMER COST: perceived bundle of

costs customer’s expect to incur

QUALITY: totality of features and characteristics of a

product or service that bear on its ability to satisfy stated
or implied needs.

PROFITABLE CUSTOMER: overtime yields a revenue

stream exceeding by an acceptable amount the
company’s cost stream for attracting ,selling, and serving
the customer

CUSTOMER LIFETIME VALUE (CLV) net present value

of the stream of future profits expected over the
customer lifetime purchases