Course Name: Marketing Management

Topic: Summaries

Submitted By: Batool Abbas

Submitted To: Ms. Syeda Sabahat

Chapter 1: Defining Marketing for the 21st Century
 Marketing is creating value and strong relations with customers which benefits the
stakeholders and marketing management is making sure that the utilization of resources is
done properly and all the tasks are done properly.
 All marketers need to be aware of the effect of the advancing technology. Rather than try to
satisfy everyone, marketers start with market segmentation and develop a market offering
that is positioned in the minds of the target market.
 To satisfy the target market’s needs, wants, and demands, marketers create a product, one of
the 10 types of entities (goods, services, experiences, events, persons, places, properties,
organizations, information, and ideas) and keep in mind that only those goods will be sold
which have created value for the customer.
 Every marketing exchange requires at least two parties, the buyer (market) and the seller
(industry)- goods and services are reached to the market and the industry receives income
for that. In the modern exchange economy, there are other parties involved like government
for tax purposes and regulations and intermediaries for providing services to both the buyer
and seller.
 Marketers have to focus on the demand existing in the market before providing the good
like preference, awareness of the good, how frequent it’s purchased how many customers to
target, which goods are bought in bulk and the like.
 They target particular markets like consumer, business, NGOs and global ones and try to
strengthen brands, drive new products, gather their preferences and utilize marketing
technology.
 Marketers face a lot of competition and for that they need to have core marketing concepts-
they need to provide customers with brands, offerings, and proper distribution channels
which benefit and satisfy the customer.
 The offerings made have to be as per the need and want of the customer; whether they are
aware of the good, what they exactly need and what they expect from the good.
 Companies can adopt one of five orientations toward the marketplace. The production
concept assumes that consumers want widely available, affordable products; the product
concept assumes that consumers want products with the most quality, performance, or
innovative features; the selling concept assumes that customers will not buy enough
products without an aggressive selling and promotion effort; the marketing concept assumes
the firm must be better than competitors in creating, delivering, and communicating
customer value to its chosen target markets. Keeping this concept in mind companies add
features.
 The marketers apply the four Ps—the set of marketing tools used to pursue marketing
objectives in the target market. The four Ps: product, price, place, and promotion.
 Marketers develop strategies, get information, build strong relations with customers, stake
holders, keeps those employees who want to serve and deliver value to the customers.
Chapter 2- Developing Marketing Strategies and Plans

 Marketers create value (benefits). The value chain is to identifying ways to create more
customer value as every firm combines all its activities to support, design, and produce and
market its product.
 For doing so, the firm will construct the core business processes where activities like
gathering marketing intelligence, disseminating, researching, developing, launching new
products, defining markets for new customers, building relations with them, receiving and
shipping them are carried out.
 The firm defines the market plan which works on a strategic and tactical level. The strategic
marketing plan is carried by the top management like target marketing decisions, analysis of
marketing opportunities and the tactical marketing plan is done by the lower and middle
management like pricing, merchandising, promotion etc.
 The Corporate Headquarters’ planning activities are defining the short and meaningful
corporate mission, establishing SBUs and assigning resources to them.
 Companies operate in different competitive spheres; some prefer operating in one or related
industries, others prefer providing several goods, some master the technological
competencies, others serve a particular market, some participate in channels from raw
materials to final production and distribution and some operate in different countries.
 The Business Unit plans in the following manner:
 Carries SWOT analysis where the abilities, threats and opportunities are analyzed
 They formulate realistic and quantitative goals
 Strategies are formulated for each department
 Programs are formulated as per the resources at hand
 Implementation of the plans takes place
 Feedback is taken as to check if the plans were effective.
 Firms follow Ansoff’s Product Market Expansion Grid for market planning. They analyze
the existing and new products and markets and:
 Increase sales without changing the product. (Market penetrating)
 Locate new markets for existing products (Market Development)
 Provide new good in existing market. (Product Development)
 Introduce new product in new market. (Diversification)
 Firms follow the Porter’s Generic Strategies, where they:
 Lower the costs and prices to attract more customers
 Focus on the important customer benefit area and provide a large market
 Concentrate on niche market and provide unique product.
 Firms follow Marketing Alliances strategy where two firms undertake a mutually beneficial
project. They jointly market their complimentary goods, carry out promotions for each
other’s goods or services, provide logistical services for one another and join in a special
pricing collaboration like airlines and car-rental firms.
 The marketing plan consists of the executive summary, table of contents, situation analysis,
marketing strategy, financial projections and implementation controls.
Chapter 3-Setting Product Strategy

 A product is anything offered that satisfies the needs and wants of the customer. It is
basically the benefits provided to the consumer at a price.
 Basic levels of a product are:
 Core benefit: this is the benefit being provided like hotels provides rest and sleep
 Basic product: turn the core benefit into product like hotel room consist of beds,
towels, bathrooms and the like
 Expected product: the expectations of customer
 Augmented product: the exceeds of the customer benefits
 Potential product: the possible augmentations created by the manufacturer.
 There are two broad classes of products namely consumer products (those goods that are
directly bought by the customer) and business products (those goods that are bought by the
firm for production process). This helps in planning the marketing mix and gets the thinking
of both the classes before they buy the product.
 Sometimes the seller focuses on providing physical goods (like cans, steel pipe), services
(like internet, hairstyles) or both (like cafes provide with internet services)
 Differences between goods and services:
 Goods are tangible while services are not
 Goods produced are not essentially consumed but services are
 Goods are stored and transported but this is not the case with services
 Goods are consumed so it has to be provided as per the demand
 A good producer will contact the customer as a good and service provider
 We classify goods according to their durability and tangibility; the ones which are
consumed for a few days, which survive many uses like tools and machines and through
services which are intangible, inseparable, perishable and variable goods.
 We classify the consumer good through the following:
 Convenience products: which are purchased often and require less buying efforts
like staples, emergency goods and impulse good like chips
 Shopping products: these goods require comparison as per their style and quality
like specialty goods (cars), homogenous goods and heterogeneous goods
 Unsought products: these are those goods of which the buyer has no awareness
 We classify the industrial goods through the following:
 Raw materials: those that become part of the physical good
 Components parts and materials: they become part of the finished good
 Accessories: they are short-lived capital good like tools and equipment.
 Installations important capital products
 Professional services aiding a firm’s operations
 MRO supplies: like maintenance and repairs.
 There are many was to differentiate a product. Such as the product’s, shape, size, its
functions and features, customization for all customers to for one, the way it works, it’s
conformance, its operating life, reliability, how quickly it can be repaired, and the style.
 The services can be differentiated in many ways. Like its ordering ease, delivery,
installation provided, the training given to employees for the usage, maintenance and repairs
and returns.
 Product systems consist of diverse but related goods and product mixes consist of all
product lines. The depth of the product consists of variants in one line and the length is the
 total number of lines in a mix. The width of the product mixes the different product lines in
it.
 Product Line Analysis consist of core product (basic ones which are highly marketed),
staples (lower sales volume and not promoted), specialties (lower sales volume but are
highly promoted) and convenience items (high sales but with less promotion).
 The company can expand its line through three ways:
 Down market stretch: firm will introduce a lower price product to attract mass
consumers and markets. Being in the middle market, it will go in the down market
so as to save them form competition.
 Up-market stretch: firms may wish enter high end the market to realize higher
markets or to position themselves as full line manufacturers.
 Two-way stretch: firms in the middle market want to stretch in both ways in order
to attain market dominance.
 The Product- Mix Pricing is done through the following ways:
 Product –line pricing: prices are set at various levels of the product
 Optional-feature pricing: a price paid for the optional goods and services
provided
 Captive-product pricing: low prices charged that are usually bought together like
razor and razor blades
 Two-part pricing: the customer is charged for the fixed and variable cost like
telephone fee monthly charge and per minute charge of the phone
 By-product pricing: prices are set as per the value of the by-product.
 Product-bundling pricing: prices are charged for goods provided in a bundle like
tour packages.
 Co-branding is when two brands combine products offered or market them like Lays and
Pepsi.
 Ingredient branding is a special case of co-branding. Where the ingredient of other brand is
involved in the making of another brand.
 The fifth Packaging: it involves the designing and producing a container. There are factors
that influence the packaging of a product:
 Self-service: vegetables in markets are to be packed by you.
 Consumer affluence: customers readily pay for attractive packaging
 Brand/Image: packaging should be done in such a way that the brand is
recognized
 Innovation opportunity: innovative packaging can bring large sales and profits
 The objectives of packaging are:
 Identifying the brand
 Describe the message and persuade the customers
 It easier to transport and it protects the good
 It makes storage easy
 It aids in consumption
 Chapter 4- Pricing Strategies
 Price is the value placed on the benefits of the good; a price should be set in such a way
that it captures the value provided. It produces revenue unlike other elements that show
the cost.
 The steps in setting the price are:
 Setting an objective as to why the price is set; to face rivals or to effect the
quality of the product
 Assess the demand of the product in the market
 Estimating the costs involved in making the product
 Analyzing the rival’s prices and offers
 Selecting a pricing method
 Selecting the final price
 Market Skimming Pricing is a strategy for new product. A high price is charged to get
maximum profits at fewer sales. The quality should high and buyers should want the
product and the costs should not be high and not cancel the benefits of higher profits
 Market Penetration Pricing is a plan for new product. A low price is charged so the good
can enter the market easily and attract more customers and high market share.
 Product Mix Pricing Strategies are:
 Product –line pricing: prices are set at various levels of the product
 Optional-feature pricing: a price paid for the optional goods and services
provided
 Captive-product pricing: low prices charged that are usually bought together like
razor and razor blades
 Two-part pricing: the customer is charged for the fixed and variable cost like
telephone fee monthly charge and per minute charge of the phone
 By-product pricing: prices are set as per the value of the by-product.
 Product-bundling pricing: prices are charged for goods provided in a bundle like
tour packages.
 The Price Adjustment Strategies include:
 Discount and allowance pricing: this for the customer to quickly. Discounts on
bulk buying, services, during seasons are given. Allowances are given to dealers
participating in promotion and in trade like when exchanging items
 Segmented pricing: two or more prices are set for the good. For example, prices
are set differently for the same good, for the different versions of the good, as per
different locations, and as per the time, season, month etc.
 Psychological pricing: prices are set as per the psyche of the customer. An image
of the brand is created in the mind and the decision is made as per the
expectations of the customer. If set higher, then the customer thinks the prduct is
not worthy of the price and if set lower, then he thinks that the quality is not good
 Reference Pricing: a price is set in the buyer’s mind. He compares it with the old
one and assess the situation. Price is then set as per that
 Promotional pricing: temporary prices are set which are below the costs to
increase demand. Prices are lowered of brands, during a certain event, cash
 rebates are given, low interests are provided, longer payment terms (installments)
are offered and free warranties and slow cost services are provided.
 Geographical pricing: prices are set for different regions. Here, the seller can
provide FOB, same prices for all the regions, same price for two or more zones,
charging the same freight from one city (made as a base point) and bearing the
part or whole freight by themselves.
 Dynamic pricing: prices are fluctuating as per the needs of the customer.
 International pricing: prices are set after evaluating specific factors of a country
like economical, regulations, competition, infrastructure and the marketing
objectives.
 Companies initiate price changes through price cuts, in order to boost sales, and price
increase which results from lack of supply, cost inflation and increased demand
 The buyer assumes that if the prices have increased, then the good to be excellent and if
the prices are cut, the firm is either greedy or have lower quality goods which aren’t selling.
 The seller has to consider that if the rival as cut price will it negatively affect its profits or
not; if not then he has to monitor the same price. If yes, then he should take an action by
reducing prices, communicating the value of the good, improving the quality and increasing
the price and launching low-price “fighting brand”
 Pricing within channel levels are:
 Price fixing: prices are set without telling the rival
 Predatory pricing: prices are kept below the cost so as to punish the rival, to
attain ling-term profits and protect the small sellers from large ones
 Retail or resale price maintenance: the manufacturer requires the retailer to
charge a specific price for it goods.
 Chapter 5- Promotion
 Promotion includes the marketing mix tools whose role is persuasive communication. It
communicates the value (benefits) provided to consumer through various promotion
components.
 Its objectives are to inform, persuade, and continuously reminding the consumer about
the product’s benefits.
 The role of promotion is to aid marketers to communicate, create awareness and state the
benefits of the product. A well designed promotional mix will create a strong image in
the mind of the customer. It also helps to differentiate rival’s brand from yours, and
attracts, urges and reminds the customer of the brand.
 Promotion components are, advertising, sales promotion, personal selling, public relation,
direct marketing.
 Advertising is paid, non-personal presentation of ideas and values to increase sales and
influence public opinion. It’s an informative and persuasive act which helps to
differentiate rivals product. It is not part of the product.
 Advertising provides advantages to the following:
 Manufacturers- increases sales and profits, states the prices, helps the buyer in
new markets and helps to maintain the existing market share
 Salesman- he doesn’t have to make efforts as customers are aware of the good
 Wholesalers and Retailers- it makes sales easier which increases the inventory
turnover and helps to attract customers
 Customers-it allows easy purchasing, saves time due to awareness created, helps
to choose best quality and educates the customer about products.
 The disadvantages of advertising are:
 Its less persuasive as limited words in limited time is used
 Sometimes customers can’t understand the message being delivered
 High level of wastage if the advertising is not effective
 It does not target the audience well
 It is less interactive as responses are not taken
 It is very costly.
 Electronic and print media are used to advertise the product.
 The steps involved in creating an advertisement are as follows:
 Identify the target audience’s needs and interests
 Set the advertising objective which is to determine what is to be delivered.
 Determine the cost and budget needed
 Design the message
 Select the type of media
 Create an ad
 Measure the impact on sales
 Designing the message includes, identifying the message to be communicated. Then the
idea is connected to life so as to bring out a meaningful, believable and appealing
message to the customer. Next, a situation is created and the message is executed; tones,
color style and words are appropriately used to deliver the message.
 Sales Promotion consists of short-term tools that stimulate quicker sales of goods and
services. These are carried out by distribution channels and with customers.
 Companies can use sponsorships, coupons, exchange offers, free sampling, contests and
other techniques to attract customers and increase sales.
 Personal Selling and Direct marketing are door to door selling of goods; one can even
find such kind of promotion in supermarkets where seller offer their products through
samples or come at your doorstep to promote them.