Marketing Management Reviewer

Introduction

Marketing is a form of communication between you and your customers with the goal of selling your
product or service to them.
Marketing consists of all the activities designed to generate and facilitate any exchange intended to
satisfy human needs and wants.
Marketing is an organizational function and a set of processes for creating, communicating, and
delivering value to customers and for managing customer relationships in ways that benefit the
organization and its stakeholders.

Marketing Management
•The art and science of choosing target markets and building profitable relationships with them.
� Aim is to find, attract, keep, and grow customers by creating, delivering, and communicating
superior value.
Needs Wants
� States of deprivation � Form that human needs take as they are shaped
by culture and individual personality
� Physical—food, clothing, warmth, safety
� Social—belonging and affection
� Individual—knowledge and self-expression

Four Eras in the History of Marketing

 The Production Era- “ A good product will sell itself”
 The Sales Era- “Creative advertising and selling will overcome consumers’ resistance and
persuade them to buy”
 The Marketing Era- “The consumer rules! Find a need and fill it”
 The Relationship Era- “Long-term relationships with customers and other partners lead to
success”

Marketing Myopia
- Theodore Levitt
- Is management’s failure to recognize the scope of its business
- Product-oriented rather than customer-oriented
- Lack of imagination/intellectual insight

Nontraditional Marketing
- Person Marketing
- Place Marketing
- Cause Marketing
- Event Marketing
- Organization Marketing

Universal functions of marketing

 Buying – ensuring that product offerings are available in sufficient quantities to meet customer
demands.
 Selling – using advertising, personal selling, and sales promotion to match products to customer
needs.
 Transporting – moving products from their point of production to locations convenient for
purchasers.
 Storing – warehousing products until needed for sale.
 Standardizing and Grading – ensuring that product offerings meet quality and quantity controls
of size, weight, and other variables.
 Financing – providing credit for channel members (wholesalers and retailers) and consumers.
 Risk Taking – dealing with uncertainty about future customer purchases.
 Securing Marketing Information – collecting information about consumers, competitors, and
channel members for use in making marketing decisions.

Chapter 1
Creating and Capturing Customer Value

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What Is Marketing?
Marketing is managing profitable customer relationships.
Goals:
1. Attract new customers by promising superior value.
2. Keep and grow current customer-base by delivering satisfaction.

• Marketing is the process by which companies create value for customers and build strong customer
relationships in order to capture value from customers in return.
OLD view of marketing:
Making a sale -“telling and selling”
NEW view of marketing:
Satisfying customer needs

Core Concepts
• Marketers must understand five core customer and marketplace concepts:
• Need:
State of felt deprivation including physical, social, and individual needs.
• Wants:
Form that a human need takes, as shaped by culture and individual personality.
• Wants + Buying Power = Demand

Marketing Offerings
• Needs and wants are fulfilled through a Marketing Offer:
✴Some combination of products, services, information, or experiences offered to a market to satisfy a
need or want.
• Products:
✴ Persons, places, organizations, information, and ideas.
• Services:
✴ Activity or benefit offered for sale that is essentially intangible and does not result in ownership.
• Brand experiences:
✴ Should immerse the consumer in the brand experience and may be intensely personal.

• Marketing myopia:
✴Occurs when sellers pay more attention to the specific products they offer than to the benefits and
experiences produced by the products.
✴They focus on the “wants” and lose sight of the “needs.”

Customer Value and Satisfaction

• Care must be taken when setting expectations for market offerings:
✴If performance is lower than expectations, satisfaction is low.
✴If performance is higher than expectations, satisfaction is high.

• Exchange:
✴Act of obtaining a desired object from someone by offering something in return.
• Relationships:
✴Marketing actions build and maintain relationships with target audiences involving an idea, product,
service, or other object. Value builds relationships.

What Is a Market?
• A market:
✴Is the set of actual and potential buyers of a product.
• These people share a need or want that can be satisfied through exchange relationships.

Modern Marketing Systems

✴ Suppliers
✴ Company (marketer)
✴ Competitors
✴ Marketing intermediaries
✴ Consumers

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• Major environmental forces affect each element.
Selecting Customers to Serve
• Market segmentation:
✴Dividing the market into segments of customers.
• Target marketing:
✴Selecting one or more segments to cultivate.

Choosing a Value Proposition

• The set of benefits or values a company promises to deliver to consumers to satisfy their needs.
✴Value propositions dictate how firms will differentiate and position their brands in the marketplace.

PRODUCTION CONCEPT- Consumers will favor products that are available and highly affordable.
PRODUCT CONCEPT- Consumers will favor products that are cheap and available.
SELLING CONCEPT- Consumers will not but buy enough of the firm’s products unless it
undertakes a large-scale selling and promotion effort.
MARKETING CONCEPT- Understand the consumer’s needs and deliver satisfaction better than
competitors.

The Societal Marketing Concept

Their needs + Society First = Better Business

Integrated Marketing Plan - Transform the marketing strategy into action.

Includes the marketing mix and 4Ps of marketing:
Product, Price, Place, and Promotion

Building Customer Relationships

• Customer relationship management:
✴The overall process of building and maintaining profitable customer relationships by delivering
superior customer value and satisfaction.
• Customer perceived value:
✴Customer’s evaluation of the difference between all of the benefits and all of the costs of a marketing
offer relative to those of competing offers.
• Customer satisfaction:
✴Extent to which the product’s perceived performance matches a buyer’s expectations.
Customer Relationships - Firms may choose to build
relationships at different levels.
Partner Relationship Marketing- Marketing partners help create customer value and assist in
building customer relationships.
Customer Equity - The total combined customer lifetime values of all the company’s current and
potential customers.
Customer lifetime value - The value of the entire stream of purchases that the customer would
make over a lifetime of patronage.
Share of customer - The portion of the customer’s purchasing that a company gets in their product
categories.

Chapter 2 “Company and Marketing Strategy”

Partnering To Build Customer Relationships

Strategic Planning- The process of developing and maintaining a strategic fit between the
organization’s goals and capabilities and its changing marketing opportunities.
Mission Statement- a statement of the organization’s purpose–what it wants to accomplish in the
larger environment.
Mission statements should be market oriented, not product oriented.
Setting Firm Objectives and Goals- The mission should be translated into supporting objectives for
each level of management.
Business Portfolio- is the collection of businesses and products that make up the company.
Strategic Business Unit- A unit of the company that has a separate mission and objectives and
that can be planned independently from other company businesses.
Portfolio Analysis- Process by which management evaluates the products and businesses making up
the company.

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BCG Growth Share Matrix uses market growth rate and relative market share to classify SBUs into
four groups.
Downsizing- Downsizing reduces the business portfolio by eliminating products of business units that
are not profitable or that no longer fit the company’s overall strategy.
Value Delivery Network
Components include:
*Company’s value chain
*Distributor
*Suppliers
*Customers
Positioning- Arranging for a product to occupy a clear, distinctive, and desirable place relative to
competing products in the minds of target consumers.
Differentiation- Creating superior customer value by actually differentiating the market offering.
The Marketing Mix- The set of controllable, tactical marketing tools that the firm blends to produce
the response it wants in the target market.
4Ps Seller’s View; Product, Price, Place, Promotion
4Cs Buyer’s View; Customer Solution, Costumer Cost, Convenience, Communication
Four marketing management functions:
 Marketing analysis
• SWOT analysis is key.
 Marketing planning
• Create marketing plan consistent with strategic plan.
 Marketing implementation
• Carry out the plans successfully.
 Marketing control
• Measure and evaluate results; take corrective action as needed.
SWOT Analysis
Strengths: Internal capabilities that may help a company reach its objectives.
Weaknesses: Internal limitations that may interfere with a company’s ability to achieve its objectives.
Opportunities: External factors that the company may be able to exploit to its advantage
Threats: Current and external factors that may challenge the company’s performance.

Organizing Marketing Departments

Chief Marketing Officer (CMO) positions are becoming more common
Functional organization- Each marketing activity is headed by a functional specialist.
Geographic organization- Sales and marketing people are assigned to specific countries, regions,
and/or districts.
Product management organization- One person is given responsibility for complete strategy and
marketing program for a single product.
Market or customer organization - Manager responsible for particular market or type of customer
(e.g., government buyers).

Combination organization- Uses some combination of the previous four approaches.

Marketing Control involves four steps:
*Set Goals
*Measure performance
*Evaluate performance
*Take corrective action
Operating Control- Evaluates performance against annual plan and takes corrective action
Strategic Control- Evaluates whether strategies match opportunities.

Chapter 3
Analyzing the Marketing Environment

Marketing Environment- Consists of actors and forces outside marketing that affect marketing
management’s ability to build and maintain successful relationships with target customers.
MICROENVIRONMENT- Actors close to the company that affect its ability to serve its customers.
MACROENVIRONMENT- Larger societal forces that affect the microenvironment.
Company Itself- Areas/departments inside of a company.
 Affects the marketing department’s planning strategies.

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Suppliers- Important link in the overall customer value delivery system.
Marketing Intermediaries- Help the company to promote, sell, and distribute its goods to final
buyers.
Competitors- Marketers must seek to gain strategic advantage against competitive organizations.
Publics- Any group that has an actual or potential interest in or impact on an organization’s ability to
achieve its objectives.
Customers- Companies may target any or all of the types of markets that may purchase a company’s
goods and services.
Demography- The study of human populations in terms of size, density, location, age, gender, race,
occupation, and other statistics.
Demographic Environment- The changing age structure of the U.S. population is the single most
important demographic trend.
Baby Boomers- Wealthiest generation in history.
Generation X- Most educated generation to date.
Millennials (Gen Y/Echo Boomers)- Includes tweens, teens, and young adults. Fluent with digital
technology.
Economic Environment- Consist of factors that affect consumer purchasing power and spending
patterns.
Natural Environment - Involves natural resources that are needed as inputs by marketers or that are
affected by marketing activities.
Technological Environment- Most dramatic force shaping our destiny. Changes rapidly, creating new
markets and opportunities and/or danger of products becoming obsolete.
Political Environment- Includes laws, government agencies, and pressure groups that influence or
limit various organizations and individuals in a given society.
Cultural Environment- The institutions and other forces that affect a society’s basic values,
perceptions, preference, and behaviors.
Reactive Responses- Many firms are passive and simply react to changes in the marketing
environment.
Proactive Responses- Some forms attempt to manage that marketing environment via aggressive
actions designed to affect the publics and forces in the marketing environment.

Chapter 4
Managing Marketing Information

Marketing managers do not need more information, they need better information that provides true
customer insights, which are useful for decision making.
Customers Insights- Fresh understanding of customers and the marketplace derived from marketing
information that become the basis for creating customer value and relationships.
Marketing Information System(MIS)- Consists of people and procedures for assessing information
needs, developing the needed information, and helping decision makers to use the information to
generate and validate actionable customer and market insights.
Assessing Information Needs- A good MIS balances the information users would like against what
they really need and what is feasible to offer.
Internal databases- Electronic collections of consumer and market information obtained from data
sources within the company network. EX: Web site usage by customers.
Competitive marketing intelligence- Systematic collection and analysis of publicly available
information about consumers, competitors, and developments in the marketing environment. EX:
Annual reports- Brand discussions on blogs, etc.
Marketing research- Systematic design, collection, analysis, and reporting of data relevant to a
specific marketing situation facing an organization. EX: Focus group studies.

Exploratory Research- Gathering information that will help define the problem and suggest
hypotheses.
Descriptive Research- Generating information to better describe marketing problems, situations, or
markets.
Casual Research- Testing hypotheses about cause-and-effect relationship.
Secondary Data- Information that already exists somewhere which has been collected for another
purpose.
Primary Data Collection -Secondary data rarely provides all of the necessary information, forcing
firms to collect primary data.

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Primary Data- Consists of information collected for the specific purpose at hand.
Observational Research- The gathering of primary data by observing relevant people, actions, and
situations.
Ethnographic Research- Trained observers watch and interact with consumers in their “natural
habitat.”
Survey Research- Gathers primary data by asking people questions about their knowledge, attitudes,
preferences, and buying behavior.
Experimental Research- Gathering primary data by selecting matched groups of subjects, giving
them different treatments, controlling related factors, and checking for differences in group responses.
Customer Relationship Management(CRM)- Managing detailed information about individual
customer and carefully managing customer “touch points” in order to maximize customer loyalty.