1|Page

Marketing Management

Chapter 1 “INTRODUCTION”

What is marketing?

The marketing is a science and art of exploring, creating and delivering value to satisfy the needs and
wants of target market at a profit.

Marketing involves

 Understanding customers’ needs and preferences

 Developing product and services that meet those needs
 Creating strong brand image and reputation
 Promoting the offering threw various channels
 Building and maintain strong relationships with customers and other stakeholders

The ultimate goal of marketing is to generate revenue by attracting and retain customers

What is Marketing Management?

Marketing management is the analysis planning implementation and control of programs design to create
built and maintain beneficial exchanges with target buyers for the purpose of achieving organizational
objectives and maximize satisfaction and long term loyalty.

Comprehensive process involves range of activities

 Marketing research
 Product development
 Advertising and promotion
 Sales management
 Customer service

Marketing management is essential for company want to succeed in today’s competitive business
environment.

DEFINING MARKETING FOR 21ST CENTURY

 In the 21st century, marketing has evolved to become more personalized and interactive. With the rise
of social media and other digital platforms, companies can engage with customers in real-time, gather
data on their preferences and behaviour, and deliver customized experiences. The use of artificial
intelligence and machine learning has also enabled companies to optimize marketing efforts and
engage more customer.
 Marketing has undergone a significant evolution over time. Initially, marketing was focused on
promoting products and services to customers through mass advertising and sales techniques.
However, with the rise of digital technologies and the internet, marketing has become more customer-
centric and data-driven.
 Almost anything can be marketed, as long as it has value to someone who is willing to pay for it.

What can be marketed?

1. Places: Cities, countries, tourist destinations, hotels, resorts, attractions, and other locations.
2. Properties: Real estate, commercial buildings, residential homes, and apartments.
3. Organizations: Businesses, non-profits, government agencies, schools, and other types of
organizations.
4. Information: Books, articles, videos, podcasts, webinars, and other forms of information
products.
2|Page

5. Ideas: Political campaigns, social causes, and other initiatives that aim to change people's
attitudes or behaviours.
6. Goods: Physical products that people can buy, such as clothes, food, electronics, and other
consumer products.
7. Services: Intangible products that people can purchase, such as healthcare, transportation,
consulting, and entertainment.
8. Events: Conferences, concerts, festivals, sporting events, and other types of events that people
attend.
9. Experiences: Unique experiences that people can purchase, such as adventure tours, luxury travel,
and other customized experiences.
10. Persons: Celebrities, athletes, influencers, and other individuals who are marketed by companies
or themselves to increase their popularity and sales.

Selling is only the tip of the iceberg (peter Drucker)

“There will always be need for some selling. But the aim of marketing is to make selling superfluous. The
aim of marketing is to know and understand the customer so well that the product or service fits him and
sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed is
to make the product or service available.”

The goal of marketing is not just to sell products but to create value for customers by offering solution of
their problems and fulfilling solution to their problems or fulfilling their desire by doing so companies can
build long term relationship with customers leading to repeat business and positive word of mouth
advertising.

When a company is successfully marketed a product or service it should be easy to sell because customers
already see the value in it the role of marketing is to create awareness interest and demand for product or
service making available and convenient for customers to purchase.

Who Markets?

Marketing can be done by individual’s company’s organizations or even governments any entity that has a
product or service or idea to sell can engage in marketing activities to promote and sell that offering to
potential customer.

Demand states

Are the different levels of desire or willingness to purchase a product or service, which can vary based on
the consumer's current situation or circumstances.

 Negative demand: Consumers actively dislike the product and may even pay to avoid it. Examples
include vaccines, dental work, and certain types of insurance.
 Non-existent demand: Consumers are not aware of the product or have no interest in it. For example,
a new type of smartphone that has not been marketed yet, or a type of food that is not common in a
certain area.
 Latent demand: Consumers have an unfulfilled need or desire for a product or service, but are not
actively seeking it out. For example, people who have a desire to learn a new language, but have not
yet enrolled in a language course.
 Declining demand: Consumers are buying the product less frequently over time. Examples include
film cameras, CD players, and flip phones.
 Irregular demand: Consumers' purchasing patterns vary based on external factors such as seasonality
or time of day. Examples include ski resorts during the winter, Halloween costumes in October, and
beach gear in the summer.
 Unwholesome demand: Consumers are attracted to products that have negative social consequences.
Examples include cigarettes, alcohol, and drugs.
3|Page

 Full demand: Consumers are buying all products at the level of supply. Examples include everyday
items such as bread and milk.
 Overfull demand: There is more demand for a product than can be satisfied by the available supply.
Examples include popular concert tickets, limited edition products, and exclusive services.

Markets

• Traditionally, a “market” was a physical place where buyers and sellers gathered to buy and sell
goods.
• Economists describe a market as a collection of buyers and sellers who transact over a particular
product or product class (such as the housing market or the grain market).
• Modern exchange economy, markets can refer to both physical and virtual spaces where buyers and
sellers come together to exchange goods, services, or assets.
• Manufacturers go to Resource markets (raw material markets, labor markets, money markets), buy
resources and turn them into goods and services, and sell finished products to Intermediaries, who
sell them to consumers.
• Consumers sell their labor and receive money with which they pay for goods and services.
• Government collects tax revenues to buy goods from resource manufacturer, and intermediary
markets and uses these goods and services to provide public services.

Structure of Flows in a Modern Exchange Economy

Key Customer Markets

Refers to a specific group of customers that a company targets with its products or services. These key
customer markets are determined based on various factors, such as demographics, psychographics,
behaviour, and needs.

1. Consumer Markets: These are markets that target individual consumers who purchase products or
services for personal use. Consumer markets can be further segmented based on factors such as age,
gender, income, and lifestyle.
2. Business-to-Business (B2B) Markets: These are markets that target other businesses and
organizations as customers. B2B markets can be further segmented based on factors such as industry,
size, and location.
3. Government Markets: These are markets that target various levels of government entities as
customers, such as federal, state, and local governments.
4. Non-Profit Markets: These are markets that target non-profit organizations as customers, such as
charities, foundations, and social enterprises.
5. International Markets: These are markets that target customers in other countries or regions, and
involve various factors such as culture, language, and legal considerations

Core Marketing Concepts

• A need is a state of felt deprivation that arises when a person's physiological or psychological well-
being is not met. For example, a need for food, water, shelter, clothing, or safety.
4|Page

• A want, on the other hand, is a desire for a particular product or service that can satisfy a need. Wants
are shaped by culture and individual preferences, and can vary from person to person. For example,
someone might want a Big Mac from McDonald's to satisfy their hunger.
• Finally, a demand refers to a want that is backed by the ability and willingness to pay for it. In other
words, demand is a want that is supported by buying power. For example, if a person not only wants a
Big Mac but also has the financial resources to purchase it, then they create demand for the product.

Type of Needs

1. Stated needs: These are needs that customers express or articulate directly. For example, a customer
may state that they want an inexpensive car.
2. Real needs: These are needs that underlie the stated needs and may not be expressed directly. Real
needs are often related to the underlying motivations, desires, or problems that customers have. For
example, a customer may actually want a car with low operating costs, rather than just an inexpensive
car.
3. Unstated needs: These are needs that customers have but do not express or are not aware of. Unstated
needs may include expectations or assumptions about the product or service. For example, a customer
may expect good service from the car dealer but may not explicitly state it.
4. Delight needs: These are needs that go beyond customer expectations and provide additional value or
satisfaction. Delight needs may include features or benefits that customers did not expect or even
know they wanted. For example, a customer may be delighted if the car dealer includes an onboard
GPS system in the car.
5. Secret needs: These are needs that customers have but do not share with others or may not even be
aware of themselves. Secret needs may be related to social status, self-esteem, or other personal
factors. For example, a customer may want to be perceived as a savvy consumer by their friends, but
may not express this desire directly.

Target Markets, Positioning, and Segmentation

• Segmentation: This is the process of dividing a larger market into smaller groups of consumers who
have similar needs or characteristics. Marketers use various criteria to segment the market, including
demographics (age, gender, income, etc.), psychographics (lifestyle, values, attitudes, etc.), and
behavior (usage, loyalty, etc.). By identifying these segments, marketers can better understand the
needs and preferences of different groups of consumers and tailor their marketing efforts accordingly.
• Target market: This is the specific group of consumers that a company chooses to focus on and
serve. After identifying different segments, marketers evaluate each segment's attractiveness and select
one or more segments to target based on factors such as size, growth potential, and compatibility with
the company's strengths and objectives.
• Positioning: This is the process of creating a unique image and identity for a product or service in the
minds of consumers. Marketers use various positioning strategies to differentiate their offerings from
those of competitors and communicate the key benefits that their products or services offer to the
target market. For example, Volvo positions its cars as the safest on the market, while Porsche
positions its cars as offering pleasure, excitement, and status.

Offering and Brands

o Offering: An offering is a combination of products, services, information, and experiences that a

company provides to its customers. It represents the tangible and intangible aspects of what the
company offers to its customers, and it is designed to meet the needs and wants of a specific target
market.
o Brand: A brand is a name, term, design, symbol, or other feature that identifies and distinguishes a
company's products or services from those of its competitors. .
o Brand Image: The brand image is the set of perceptions, beliefs, and attitudes that customers have
about a brand.

Marketing Channels
5|Page

Marketer uses three kinds of marketing channels

Communication channels.

o These are used to deliver and receive messages from target buyers and include newspapers,
magazines, radio, television, mail, telephone, smart phone, billboards, posters, and Internet.

Distribution channels

o These are used to help display, sell, or deliver the physical product or service(s) to the buyer
or user. These channels may be direct via the Internet, mail, or mobile phone or telephone or
indirect with distributors, wholesalers, retailers, and agents as intermediaries.

Service channels

o These channels are used to carry out transactions with potential buyers that include
warehouses, transportation companies, banks, and insurance companies.
o Marketers clearly face a design challenge in choosing the best mix of communication,
distribution, and service channels for their offerings.

Paid, Owned, and Earned Media

o The rise of digital media gives marketers a host of new ways to interact with consumers and
customers.
o Three major communication categories includes:
o Paid media i-e TV, magazine and display ads, paid search, and sponsorships, all of which allow
marketers to show their ad or brand for a fee.
o Owned media are communication channels marketers actually own, like a company or brand brochure,
Web site, blog, Facebook page, or Twitter account.
o Earned media are streams in which consumers, the press, or other outsiders voluntarily communicate
something about the brand via word of mouth, buzz, or viral marketing methods.
o The emergence of earned media has allowed some companies, such as Chipotle, to reduce paid media
o Expenditures

Impressions and Engagement

Marketers now think of three “screens” or means to reach consumers: TV, Internet, and mobile.

Nielsen study found, three of five consumers use two screens at once

• Impressions, which occur when consumers view a communication, are a useful metric for tracking
the scope or breadth of a communication’s reach that can also be compared across all
communication types.
• Engagement is the extent of a customer’s attention and active involvement with a communication.
• It reflects a much more active response than a mere impression and is more likely to create value
for the firm.
• Some online measures of engagements are Facebook “likes,” Twitter tweets, comments on a blog
or Web site, and sharing of video or other content.

Value and Satisfaction

Perceived Value

• The customer’s evaluation of the difference between benefits and costs.

• Customers often do not judge values and costs accurately or objectively.

Customer Satisfaction

• Product’s perceived performance relative to customer’s expectations.

6|Page

Supply Chain

The supply chain is a channel stretching from raw materials to components to finished products carried to
final buyers

Problems with a supply chain can be damaging or even fatal for a business.

Competition

o Competition includes all the actual and potential rival offerings and substitutes a buyer might consider.
o An automobile manufacturer can buy steel from U.S. Steel in the United States, from a foreign firm in
Japan or Korea, or from a mini-mill at a cost savings, or it can buy aluminum parts from Alcoa to
reduce the car’s weight or engineered plastics from Saudi Basic Industries instead of steel.
o Clearly, U.S. Steel is more likely to be hurt by substitute products than by other integrated steel
companies and would be defining its competition too narrowly if it didn’t recognize this.

Marketing Environment

o Marketing environment consists of the task environment and the broad environment.
o Task environment includes the actors engaged in producing, distributing, and promoting the offering.
o These are the company, suppliers, distributors, dealers, and target customers.
o Supplier group includes material suppliers and service suppliers, such as marketing research agencies,
advertising agencies, banking and insurance companies, transportation companies, and teleco
companies.
o Distributors and dealers include agents, brokers, manufacturer representatives, and others who
facilitate finding and selling to customers.

Marketing Environment

o Broad environment consists of six components: demographic environment, economic environment,

social-cultural environment, natural environment, technological environment, and political-legal
environment.
o Marketers must pay close attention to the trends and developments in these and adjust their marketing
o strategies as needed.
o New opportunities are constantly emerging that await the right marketing savvy and ingenuity.

The New Marketing Realities

Major Societal Forces : The marketplace isn’t what it used to be…..

• Technology
• Globalization
• Social Responsibility

A Dramatically Changed Marketplace New Consumer Capabilities

• Can use the Internet as a powerful information and purchasing aid

• Can search, communicate, and purchase on the move
• Can tap into social media to share opinions and express loyalty
• Can actively interact with companies
• Can reject marketing they find inappropriate
• Can use the Internet as a powerful information and sales channel, including for individually
differentiated goods
• Can collect fuller and richer information about markets, customers, prospects, and competitors
• Can reach customers quickly and efficiently via social media and mobile marketing, sending
• targeted ads, coupons, and information
• Can improve purchasing, recruiting, training, and internal and external communications
7|Page

• Can improve cost efficiency

Changing Channels.

• Retail transformation Store-based retailers face competition from catalog houses; direct mail firms;
newspaper, magazine, and TV direct-to-customer ads; home shopping TV
• Disintermediation (DARAZ, Amazon.com, Yahoo!, eBay, and others created disintermediation in
the delivery of products and services by intervening in the traditional flow of goods through
distribution channels)

Heightened Competition.

• Private labels. Brand manufacturers are further buffeted by powerful retailers that market their own
store brands, increasingly indistinguishable from any other type of brand.
• Mega-brands. Many strong brands have become mega-brands and extended into related product
categories, including new opportunities at the intersection of two or more industries.
• Computing, telecommunications, and consumer electronics are converging, with Apple and Samsung
releasing a stream of state-of-the-art devices from MP3 players to LCD TVs to fully loaded smart
phones.
• Deregulation. Many countries have deregulated industries to create greater competition and growth
opportunities.
• In the US, laws restricting financial services, telecos, and electric utilities have all been loosened in the
spirit of greater competition.
• Privatization. Many countries have converted public companies to private ownership and
management to increase their efficiency.
• The telecommunications industry has seen much privatization in countries such as Australia, France,
Germany, Italy, Turkey, and Japan.

Marketing in Practice

Marketing Balance

• Companies must always move forward, innovating products and services, staying in touch with
customer needs, and seeking new advantages rather than relying on past strengths
• Moving forward especially means incorporating the internet and digital efforts into marketing plan
• Marketers must balance increased spending on search
• Advertising, social media, e-mails, and text messages with appropriate spending on traditional
marketing communication

Marketing Accountability

• Marketers are increasingly asked to justify their investments in financial and profitability terms, as
well as in terms of building the brand and growing the customer base
• Marketers apply metrics like brand equity, customer lifetime value, return on marketing
investment (ROMI)—to understand and measure their marketing and business performance to
assess the direct and indirect value their marketing efforts create.

Marketing In the Organization

• Marketing is not done only by the marketing department; every employee has an impact on the
customer.
• Marketers now must properly manage all possible touch points like store layouts, package designs,
product functions, employee training, and shipping and logistics. to create a strong marketing
organization.
• Marketers must think like executives in other departments, Interdepartmental teamwork that
includes marketers is needed to manage key processes like production innovation, new-business
development, customer acquisition and retention, and order fulfillment.
8|Page

Company Orientation toward the Marketplace

• The Production Concept

o Consumers will prefer products that are widely available & inexpensive e.g. Lenovo,
Haier etc.
• The Product Concept
o Consumer favor products that offer the most quality, performance, or innovative features
e.g. Rolex etc.
• The Selling Concept
o Consumers & businesses, if left alone, won’t buy enough of the organization’s products
e.g. Insurance, Encyclopedias etc.
• The Marketing Concept
o Emerged in mid 1950s Customer-Centered “Sense & Respond” e.g. Dell Computer etc.

The Holistic Marketing Concept

o Based on the development, design and implementation of marketing programs, processes and
activities that recognizes their breadth and interdependencies.

o Recognizes that “everything matters”.

o Relationship Marketing

o Relationship marketing is a strategy designed to foster customer loyalty, interaction and long-
term engagement.

o Integrated Marketing Communication

o Integrated marketing communication (imc) is a process for planning, executing and

monitoring the brand messages that create customer relationship.

o Internal Marketing

o Internal marketing is the task of hiring, training, and motivating able employees who want to
serve customers well.

Holistic Marketing Dimensions

Performance Marketing

o It requires understanding of financial and nonfinancial returns to business and society from marketing
activities and programs
o Marketing executives are also considering the legal, ethical, social, and environmental effects of
marketing activities and programs.
o Many firms have failed to live up to their legal and ethical responsibilities, and consumers are
demanding more responsible behavior.
9|Page

Four Ps to better reflect the current marketing

1. Product: While product is still an important element of marketing, some marketers suggest that it
should be expanded to include the concept of customer solutions. This means focusing on creating
products and services that solve the customer's problems or meet their needs, rather than just selling
products.
2. Price: Price remains an important element of marketing, but some suggest that it should be expanded
to include value. This means considering not only the cost of the product or service, but also the
perceived value that it offers to the customer.
3. Place: The traditional concept of place refers to the physical location where the product is sold.
However, in today's digital age, the concept of place has expanded to include online and mobile
channels. Some marketers suggest updating the concept of place to include the concept of
omnichannel, which focuses on creating a seamless customer experience across all channels.
4. Promotion: While promotion remains a key element of marketing, some suggest that it should be
expanded to include the concept of engagement. This means focusing on building relationships with
customers through social media, content marketing, and other forms of two-way communication

The Four Cs consist of:

1. Customer: This refers to understanding the needs and wants of the target customer segment.
Marketers need to analyze the customer's demographics, psychographics, and behaviors to identify
their needs and preferences.
2. Cost: This refers to the total cost of ownership of the product or service from the customer's
perspective. Marketers need to consider not only the price of the product, but also the additional
costs associated with using, maintaining, and disposing of the product.
3. Convenience: This refers to the ease and convenience of obtaining and using the product or service.
Marketers need to consider factors such as accessibility, availability, and ease of use to ensure that
the product or service is convenient for the customer to purchase and use.
4. Communication: This refers to the methods used to communicate the value proposition of the
product or service to the customer. Marketers need to use effective communication channels and
messaging to effectively reach and persuade the target customer segment.

Marketing Management Tasks

o Developing Marketing Strategies and Plans

o Identify long run potential opportunities
o Capturing Marketing Insights
o Collecting information about marketing environment
o Connecting with Customers
o How to best create value for chosen tgt mkt & develop strong, profitable, long term
relationship with customers
o Building strong Brands
o Anticipating competitors’ moves & know how to react quickly & decisively.
o Creating and Delivering Value
o Deliver the value embodied in the products and services.
o Communicating Value
o Strong marketing communication to tell customers the value in the offering.
o conducting Marketing responsibly for long-term success
o Must build a marketing organization capable of responsibly implementing the marketing plan.

Chapter 2 “Developing Marketing Strategies and Plans”

Marketing and Customer Value

The value delivery process

10 | P a g e

The value delivery process is a strategic approach that businesses use to create, deliver, and communicate
the value of their products or services to customers.
The value delivery process has evolved over time, and the traditional view of business processes is no
longer as effective in today's economy where customers have abundant choices. To succeed in such a
competitive market, businesses must focus on designing and delivering offerings for well-defined target
markets. This is where marketing comes into play and why it is now placed at the beginning of the
planning process.
By starting with a deep understanding of the target market and their needs, businesses can develop unique
value propositions that set them apart from competitors. This approach allows businesses to create
products or services that are tailored to the needs of specific customer segments, making them more
attractive to those customers and giving the business a competitive advantage.
In summary, the new view of business processes places marketing at the forefront of planning and
emphasizes the importance of designing and delivering offerings for well-defined target markets. This
approach helps businesses to create value and succeed in today's competitive marketplaces.
This process involves three key components: choosing the value, providing the value, and communicating
the value.
Choosing the Value:

 Identify the target market and understand their needs, wants, and preferences.
 Use the STP process (Segmentation, Targeting, and Positioning) to develop a unique value
proposition.
 Position the business to differentiate it from competitors.

Providing the Value:

 Develop products or services that meet the needs of the target market.
 Set prices that are competitive and profitable.
 Deliver products or services through efficient and effective channels.

Communicating the Value:

 Develop a marketing mix that includes advertising, personal selling, sales promotion, public
relations, and direct marketing.
 Communicate the value of the products or services to the target market.
 Use various tactics to engage with customers and build brand awareness

Value Chain

The value chain is a strategic tool that businesses use to analyze their internal processes and identify ways
to create more customer value. The tool was introduced by Michael Porter for identifying ways to create
more customer value. The value chain is based on the idea that every firm is a combination of activities
performed to design, produce, and market, deliver, and support its product.
11 | P a g e

The value chain model identifies nine strategically relevant activities that create value and cost in a
specific business. These nine activities consist of five primary activities and four support activities.

Primary Activities:

1. Inbound logistics: This includes receiving, storing, and distributing inputs (e.g., raw materials,
components) needed to create a product or service.
2. Operations: This includes transforming inputs into finished products or services.
3. Outbound logistics: This includes storing and distributing finished products or services to
customers.
4. Marketing and sales: This includes promoting and selling products or services to customers.
5. Service: This includes providing after-sales service and support to customers.

Support Activities:

1. Procurement: This includes purchasing inputs (e.g., raw materials, components) needed for
production.
2. Technology development: This includes research and development activities to improve products
or processes.
3. Human resource management: This includes recruiting, training, and retaining employees.
4. Infrastructure: This includes general management activities such as finance, accounting, legal,
and other administrative functions.

By analyzing these activities, businesses can identify areas where they can improve efficiency, reduce
costs, and create more value for customers. The goal is to optimize the value chain and create a sustainable
competitive advantage by differentiating the business from competitors and delivering more value to
customers.

In addition to the primary and support activities, there are Core business processes that are essential to
creating customer value.

1. The market sensing process:

 Involves gathering and analyzing information about the market
 Includes understanding customer needs and competitor offerings
 Helps develop better products and services and make informed business decisions
2. The new offering realization process:
 Involves researching, developing, and launching new offerings
 Helps firms stay competitive by introducing products that meet changing customer needs
 Critical for firms that want to innovate and grow their market share
3. The customer acquisition process:
 Involves identifying target markets and prospecting for new customers
 Helps firms grow their customer base and increase sales
 Critical for firms that want to expand their market reach and compete effectively
4. The customer relationship management process:
 Involves building deeper understanding, relationships, and offerings for individual customers
 Helps firms build customer loyalty and increase customer lifetime value
 Critical for firms that want to maintain a strong customer base and sustain long-term success
5. The fulfillment management process:
 Involves receiving and approving orders, shipping products on time, and collecting payment
 Helps firms provide high-quality customer service and ensure customer satisfaction
 Critical for firms that want to maintain a positive reputation and repeat business from customers

Core competencies:

Are unique capabilities or resources that provide a firm with a sustainable competitive advantage.
12 | P a g e

Characteristics of core competencies:

 Source of competitive advantage that contributes to perceived customer benefits

 Applicable in a wide variety of markets
 Difficult for competitors to imitate

Examples:

 Apple's design and innovation capabilities

 Toyota's lean manufacturing system

Realignment is a process of refocusing a company's strategy and operations around its core competencies.

 (Re)defining the business concept or "big idea" to align with core competencies
 (Re)shaping the business scope, sometimes geographically, to maximize core competencies
 (Re)positioning the company's brand identity to emphasize core competencies and differentiate
from competitors

Companies that have undergone realignment and restructuring to maximize their core competencies:

Apple Inc. - Apple underwent a major restructuring in the late 1990s under the leadership of Steve Jobs.
They focused on their core competencies in design, innovation, and marketing and streamlined their
product line to focus on a few key products such as the iMac, iPod, and iPhone.

A holistic marketing orientation is a comprehensive approach to marketing that considers all aspects of
the business and how they can contribute to creating value for customers. This approach emphasizes the
importance of understanding the needs and wants of customers and creating products and services that
meet those needs in a way that is sustainable and ethical.

One of the key principles of a holistic marketing orientation is the focus on creating customer value. This
means that all aspects of the business, from product development to customer service, are designed with
the goal of delivering value to customers. This value can take many forms, including quality, convenience,
affordability, sustainability, and social responsibility.

The Central Role of Strategic Planning

Developing marketing strategies and plans involves the process of defining an organization's marketing
objectives and then formulating and implementing marketing programs to achieve those objectives.

A marketing strategy is a plan or roadmap that outlines how an organization will use its resources to gain a
competitive advantage and achieve its marketing objectives.

A good marketing strategy is one that is aligned with the organization's overall business strategy and
provides a clear direction for the marketing programs and tactics to follow.

Strategic management is the process of specifying an organizations objectives, developing policies and
plans to achieve these objectives (setting the overall direction), and allocating resources so as to implement
the plans

Three key areas that marketers must prioritize in strategic planning:

 Managing the business as an investment portfolio involves identifying the strategic business units
(SBUs) within the organization and allocating resources to them based on their potential for growth
and profitability.
 Assessing the market's growth rate and the company's position in that market involves analyzing
market trends, customer needs and preferences, and competitive forces to determine the company's
strengths and weaknesses in relation to the market.
 Establishing a strategy involves developing a plan to achieve the long-term objectives of each SBU,
which may involve market penetration, market development, product development, or diversification.
13 | P a g e

The strategy should also consider the company's unique value proposition and how it can differentiate
itself from competitors.

Most large companies have four organizational levels, and strategic planning takes place at each level:

1. Corporate level: Corporate headquarters is responsible for designing a corporate strategic plan to
guide the entire enterprise. The plan includes decisions on the amount of resources to allocate to each
division and which businesses to start or eliminate.
2. Division level: Each division establishes a plan covering the allocation of funds to each business unit
within the division.
3. Business unit level: Each business unit develops a strategic plan to carry the unit into a profitable
future.
4. Product level: Finally, each product level (product line, brand) develops a marketing plan for
achieving its objectives.

A marketing plan is a comprehensive guide that outlines a company's overall marketing strategy and
goals. It covers both strategic and tactical levels of planning, with the strategic plan defining the target
markets and value proposition based on market analysis, and the tactical plan detailing specific marketing
tactics such as product features, pricing, promotion, sales channels, and service. The marketing plan serves
as a central instrument for directing and coordinating the marketing effort towards achieving business
objectives.

Corporate and Division Strategic Planning

Defining the corporate mission is the process of identifying the overall purpose and goals of an
organization. The mission statement embodies the company's reason for existence and provides direction
and focus for its activities. To create a mission statement, companies need to address critical questions,
such as the nature of their business, their target customers, and what they offer that is valuable to those
customers. Companies should also consider what they want their business to be and what it should be in
the future. Answering these questions is an ongoing process that successful companies regularly undertake.

Business definition is the process of defining what business a company is in, which involves identifying
the customer needs that the company satisfies and the customer groups that it serves.

While companies often define themselves in terms of products, a market definition of a business describes
it as a customer satisfying process. Products are seen as transient, while customer needs and groups endure.
For example, transportation is a need, and the various modes of transportation such as the horse and
carriage, automobile, railroad, airline, ship, and truck are products that meet that need.

A target market definition focuses on selling a product or service to a current market, while a strategic
market definition considers the potential market. For instance, Pepsi could define its target market as
everyone who drinks carbonated soft drinks, and its competitors would be other carbonated soft drink
companies. However, if Pepsi considered everyone who might drink something to quench their thirst, then
its competition would include noncarbonated soft drinks, bottled water, fruit juices, tea, and coffee.

Shifted from a product-based business to a market-based one:

14 | P a g e

 Apple: Initially, Apple was a computer hardware company that produced Macintosh computers.
However, it shifted its focus to creating consumer electronic devices, such as the iPod, iPhone, and
iPad, to serve a larger market of technology users.
 Netflix: Netflix started as a DVD rental service but later transformed into an online streaming platform
to reach a larger audience and expand its business.

Crafting a mission statement involves developing a concise and clear statement that communicates an
organization's purpose, values, and goals. A mission statement provides a shared sense of purpose and
direction for employees, as well as other stakeholders, such as customers, investors, and partners.

 A well-crafted mission statement should be specific and measurable, providing a clear direction for the
organization's activities and enabling progress to be tracked and evaluated. It should also be
inspirational, differentiating, realistic, relevant, and timeless.
 Overall, a mission statement serves as a powerful tool for guiding geographically dispersed employees
to work independently and collectively towards achieving the organization's goals.

Characteristics of good mission statements

Focus on a limited number of goals:

 A mission statement should be focused on a few, key goals that the organization wishes to achieve.
 This helps ensure that the mission statement is clear, concise, and easily understood.

Stress the company's major policies and values:

 A mission statement should communicate the major policies and values that the company holds dear.
 This helps guide decision-making and ensure that the organization is acting in accordance with its
values.

Define the major competitive spheres within which the company will operate:

 A mission statement should clearly define the major competitive spheres within which the
organization will operate.
 This helps provide focus and direction for the organization's activities and ensure that it is competing
effectively in the marketplace.

Take a long-term view:

 A mission statement should take a long-term view, looking beyond short-term goals and focusing on
the organization's purpose and vision for the future.
 This helps ensure that the organization is working towards a clear and meaningful long-term goal.

Be as short, memorable, and meaningful as possible:

A mission statement should be short, memorable, and meaningful.

This helps ensure that the mission statement is easily understood and remembered by employees,
customers, and other stakeholders, and that it effectively communicates the organization's purpose and
goals.

Examples of good mission statements

 Google: "To organize the world's information and make it universally accessible and useful."
 Nike: "To bring inspiration and innovation to every athlete* in the world. (*If you have a body, you
are an athlete.)"
 Tesla: "To accelerate the world's transition to sustainable energy."
 IKEA: "To create a better everyday life for the many people."
15 | P a g e

 Coca-Cola: "To refresh the world in mind, body and spirit, and inspire moments of optimism; to
create value and make a difference."

Establishing Strategic Business Units (SBU’s)

The purpose of identifying the company's strategic business units (SBUs) is to develop separate strategies
and assign appropriate funding to each SBU based on its unique characteristics and needs.

By breaking down a larger organization into smaller SBUs, management can better understand the
strengths and weaknesses of each unit, as well as the specific challenges and opportunities facing each unit.
This allows for more targeted and effective strategic planning and resource allocation.

Characteristics of SBU’s

 Separate business entity or collection of related businesses within a larger company: An SBU is a
standalone business unit or group of related businesses within a larger organization.
 Own competitors: Each SBU has its own set of competitors in the market.
 Dedicated manager responsible for strategic planning and profitability: An SBU is managed by a
dedicated manager responsible for developing and implementing its strategic plan and ensuring
profitability.
 Differentiated from the rest of the company: Each SBU is distinct and differentiated from other SBUs
or the larger company in terms of its products, services, customers, or markets.
 Separate profit and loss account: Each SBU has its own profit and loss account, allowing for more
accurate measurement of its financial performance and greater autonomy for decision-making
 Once a company has identified its strategic business units, it can allocate resources to each unit based
on its strategic importance and growth potential. Senior managers use analytical tools to evaluate the
performance and potential of each SBU and classify them accordingly. Two of the most widely used
models for evaluating a company's business portfolio are the Boston Consulting Group (BCG) model
and the General Electric (GE) model. These models help managers make informed decisions about
allocating resources to each SBU based on their relative market share, growth rate, and profitability.

Assessing Growth Opportunities:

Is the process of evaluating and selecting the most viable strategies to grow a company's business portfolio.
This process involves analyzing the company's current position and identifying potential areas for growth.

1. Intensive growth is a growth strategy that focuses on expanding the company's current product
offerings or market presence. This strategy is often used by companies that believe they have not fully
capitalized on their existing strengths or markets. There are four types of intensive growth strategies:
 Market-penetration strategy: This strategy involves increasing the company's market share with its
existing products in its current markets. The goal is to generate more sales and profits from
existing customers.
 Market-development strategy: This strategy involves finding or developing new markets for the
company's existing products. The goal is to expand the customer base and increase sales and
profits.
 Product-development strategy: This strategy involves developing new products that are related to
the company's current products. The goal is to provide customers with additional options and
generate more sales and profits.
 Diversification strategy: This strategy involves developing new products for new markets. The
goal is to expand the company's business portfolio and reduce its reliance on existing products and
markets

Product Market Expansion Grid:

16 | P a g e

2. An integrative growth strategy involves merging or acquiring other businesses to create synergies
and increase market share, as well as to reduce competition and gain access to new technologies or
distribution channels.

This strategy aims to improve the overall efficiency and effectiveness of the company's operations,
often by integrating the acquired businesses into the company's existing structure and management.

3. Diversification growth expands a company's operations by entering new markets or developing new
products.
 There are three ways to diversify: concentric, horizontal, and conglomerate.
 Concentric diversification involves finding new products that have technological or marketing
synergies with existing product lines.
 Horizontal diversification involves producing products that require a different manufacturing
process, but still serve the same customer base.
 Conglomerate diversification involves entering new businesses that have no relationship to the
company's current technology, products, or markets.
 Diversification growth makes sense when good opportunities exist outside the present businesses and
the industry is highly attractive.
 This strategy can be more risky and expensive than other growth strategies and requires careful
analysis and planning.
4. Downsizing and divesting older businesses is a strategy that involves getting rid of businesses that
are no longer profitable or do not align with the company's overall goals. This can be done by selling
the business to another company or simply closing it down.

By doing this, the company can focus on its core competencies and invest resources in more promising
areas. This strategy can also help reduce costs and streamline operations.

ORGANIZATION AND ORGANIZATIONAL CULTURE

A company's corporate culture plays a significant role in shaping the behaviors, attitudes, and values of
its employees, which in turn impacts how they interact with customers and clients. A customer-centric
culture, where employees prioritize customer satisfaction and engagement, can lead to increased customer
loyalty, repeat business, and positive word-of-mouth referrals. On the other hand, a dysfunctional culture
that doesn't prioritize customer satisfaction can lead to poor customer experiences, negative reviews, and
ultimately, lost business. Therefore, it's essential for companies to cultivate a positive corporate culture that
prioritizes customer needs and values.

Innovation in marketing is crucial to stay competitive and meet the changing needs and preferences of
customers. To encourage fresh ideas, management can look to employees with diverse perspectives, those
who are far removed from company headquarters, and new employees to the industry. These groups can
bring different viewpoints and experiences that can challenge the company's conventional thinking and
spark new ideas.
17 | P a g e

By involving employees from different backgrounds and experiences in the marketing innovation process,
companies can tap into a wider range of knowledge, skills, and ideas. This can lead to the development of
more creative and effective marketing strategies that can help the company stand out in a crowded
marketplace. However, it's not just about generating new ideas but also developing a clear strategy based
on the company's view of the future.

The Business Unit Strategic-Planning Process

SWOT analysis that assesses both the internal strengths and weaknesses and external threats and
opportunities of a firm.

Internal Analysis:

Strengths:

 Strong brand reputation and recognition in the market.

 High-quality products or services that meet customer demands.
 Efficient and effective business processes and operations.
 Skilled and experienced workforce.
 Strong financial position with good cash flow and low debt levels.

Weaknesses:

 Limited product or service offerings that may not meet all customer needs.
 Lack of innovation in product development or marketing strategies.
 Weaknesses in supply chain management that lead to high costs or delays.
 Inefficient organizational structure or communication.
 Limited geographic reach or market presence.

External Analysis:

Opportunities:

 Growing demand for the firm's products or services in new or existing markets.
 Emerging technologies or trends that the firm can leverage to improve offerings.
 Acquiring or partnering with complementary firms to expand product offerings.
 Entering new markets through partnerships or joint ventures.
 Developing new distribution channels to reach new customers.

Threats:

 Intense competition from other firms in the market.

 Economic downturns or recessions that reduce demand for the firm's products or services.
 Regulatory changes or legal challenges that increase operating costs.
 Disruptive technologies or new entrants in the market.
 Changing consumer preferences or trends that make the firm's products or services less attractive.
18 | P a g e

Strategic formulation is a process that involves the development and implementation of a comprehensive
plan to achieve the goals and objectives of an organization. Goals serve as a guidepost for the organization,
indicating the desired outcome of its actions. Strategy, on the other hand, is the game plan that outlines the
actions and decisions necessary to achieve those goals.

Porter's Generic Strategies is a framework developed by Michael Porter that outlines three different
strategies that companies can pursue to gain a competitive advantage in their respective industries. These
strategies are:

 Cost leadership: A company that adopts a cost leadership strategy focuses on becoming the low-cost
producer in its industry while maintaining an acceptable level of quality. This is achieved through
economies of scale, efficient production processes, and careful cost control. By keeping costs low, the
company can offer its products or services at lower prices than its competitors, thereby gaining a
competitive advantage in the market.
 Differentiation: A company that pursues a differentiation strategy seeks to offer a product or service
that is perceived as unique or superior by its customers. This can be achieved through product design,
quality, features, or branding. By offering something that is different from its competitors, the
company can create a loyal customer base and charge a premium price for its products or services.
 Focus: A company that adopts a focus strategy concentrates on a specific segment or niche of the
market and tailors its products or services to meet the needs of that particular segment. This can be
achieved through geographic focus, customer group focus, or product or service specialization. By
focusing on a narrow segment of the market, the company can become the dominant player in that
segment and enjoy higher profit margins.

Strategic alliances are partnerships between two or more companies that collaborate to achieve a common
goal, typically to increase competitiveness, market share, or profitability. There are several types of
19 | P a g e

strategic alliances, including product or service alliances, promotional alliances, logistics alliances, and
pricing collaborations.

 In a product or service alliance, one company licenses another to produce its product, or two
companies jointly market their complementary products or a new product. This allows both companies
to leverage their respective capabilities and resources to increase market share and profitability.
 In a promotional alliance, one company agrees to carry a promotion for another company's product
or service. This helps both companies to reach a wider audience and increase brand awareness and
sales.
 In a logistics alliance, one company offers logistical services for another company's product. This can
include transportation, warehousing, and distribution, and helps both companies to streamline their
supply chain and reduce costs.
 In a pricing collaboration, one or more companies join in a special pricing collaboration. This can
involve mutual price discounts or other pricing strategies, and can help both companies to increase
sales and market share.

To manage strategic alliances effectively, many companies have developed organizational structures and
processes to support them, including partner relationship management (PRM). This involves building
strong relationships with alliance partners, defining clear goals and objectives, and establishing effective
communication and governance structures to ensure that the partnership is successful over the long term.

Program formulation and implementation:

"Effective program formulation and implementation are essential for a successful marketing strategy, as
even the best strategy can be sabotaged by poor implementation. It is important for marketers to estimate
the costs of their programs and ensure they align with the company's budget. A company that prioritizes
creating a high level of employee satisfaction can benefit from higher effort, leading to higher-quality
products and services, which in turn creates higher customer satisfaction, more repeat business, and
ultimately higher growth and profits. This can lead to greater satisfaction among shareholders and
investors, and potentially more investment in the company."

According to McKinsey & Company, successful business practice involves focusing on seven elements,
all of which start with the letter S. The first three elements, strategy, structure, and systems, are considered
the "hardware" of success because they provide the foundational framework for achieving the desired
outcomes.

The next four elements, style, skills, staff, and shared values, are considered the "software" of success
because they are more intangible and relate to the people and culture of the organization.

Mckinsey’s Elements Of Success

1. Strategy: a clear and well-defined plan that outlines how the organization will achieve its goals and
objectives.
2. Structure: the organization's design and the way it is organized to support the strategy.
3. Systems: the processes and procedures that enable the organization to execute its strategy effectively
and efficiently.
4. Style: the shared way of thinking and behaving among company employees, including leadership style
and organizational culture.
5. Skills: the knowledge, abilities, and competencies of employees that enable them to perform their jobs
effectively.
6. Staff: the people who make up the organization and their roles and responsibilities.
7. Shared values: the guiding principles, beliefs, and norms that shape the company culture and
influence decision-making.

Feedback and control are important elements of successful strategy implementation. Feedback allows a
company to monitor and evaluate its progress towards its goals and make adjustments as necessary.
20 | P a g e

Control mechanisms such as budgets, performance metrics, and regular performance reviews can help
ensure that the company stays on track.

 Peter Drucker's philosophy emphasizes the importance of effectiveness over efficiency. In other
words, it's better to focus on doing the right things rather than just doing things right. However, the
most successful companies are able to do both.
 Large organizations can be complex, and changing one part of the organization can have a ripple effect
on other parts. Effective leadership is necessary to manage organizational change and ensure that all
parts of the organization are aligned towards the same goals.
 To stay healthy and successful, organizations must be willing to adapt to changes in the environment
and adopt new goals and behaviors. This requires a culture of openness and continuous learning.

THE NATURE AND CONTENTS OF A MARKETING PLAN

 Marketing plan is a written document that summarizes what the marketer has learned about the
marketplace and indicates how the firm plans to reach its marketing objectives.
 It contains tactical guidelines for the marketing programs and financial allocations over the planning
period
 A marketing plan is one of the most important outputs of the marketing process
 It provides direction and focus for a brand, product, or company
 Nonprofit organizations use marketing plans to guide their fund-raising and outreach efforts, and
government agencies use them to build public awareness of nutrition and stimulate tourism
 More limited in scope than a business plan, the marketing plan documents how the organization will
achieve its strategic objectives through specific marketing strategies and tactics, with the customer as
the starting point
 Most marketing plans cover one year in anywhere from 5 to 50 pages.
 Smaller businesses may create shorter or less formal marketing plans; corporations generally require
highly structured documents.
 Every part of the plan must be described in considerable detail

Marketing Plan Contents

 Executive summary and Table of contents: A brief summary of the entire marketing plan and a table
of contents to help the reader navigate the document.
 Situation analysis: A comprehensive analysis of the company, its competition, and the market
environment. This section includes a SWOT analysis (Strengths, Weaknesses, Opportunities, and
Threats) and a review of market trends, customer demographics, and other relevant factors.
 Marketing strategy: A detailed outline of the company's marketing goals, objectives, and overall
approach. This section often includes a mission statement and an overview of the company's target
market.
 Marketing tactics: A breakdown of the specific marketing activities that will be used to achieve the
company's goals. This section typically includes sections on product/service offerings, pricing,
distribution channels, and promotion/communication.
 Financial projections: A forecast of the costs associated with the marketing plan and an estimate of
the expected return on investment (ROI).
 Implementation controls: A plan for monitoring and measuring the success of the marketing plan,
including specific metrics and milestones that will be used to track progress. This section may also
include contingency plans in case certain aspects of the plan do not work as intended.

The role of research

 Marketers need up-to-date information about the environment, the competition, and the selected
market segments.
 As the plan is put into effect, marketers use research to measure progress toward objectives and
identify areas for improvement.
21 | P a g e

 Marketing research helps marketers learn more about their customers’ requirements, expectations,
perceptions, satisfaction, and loyalty.

The Role of Relationships

 Marketing plan influences how marketing staff work with each other and with other departments to
deliver value and satisfy customers.
 Secondly, it affects how the company works with suppliers, distributors, and partners to achieve the
plan’s objectives.
 Thirdly, it influences the company’s dealings with other stakeholders, including government
regulators, the media, and the community at large

From Marketing Plan to Marketing Action

 Marketers start planning well in advance of the implementation date to allow time for marketing
research, analysis, management review, and coordination between departments.
 The marketing plan typically outlines budgets, schedules, and marketing metrics for monitoring and
evaluating results.
 Marketing metrics track actual outcomes of marketing programs to see whether the company is
moving forward toward its objectives or not.

Chapter 3 Collecting Information and Forecasting Demand

Components of a Modern Marketing Information System (MIS)

 Internal company records

 Marketing intelligence activities
 Marketing research

Internal records

 Internal reports of orders

 Sales
 Prices
 Costs
 Inventory levels
 Receivables
 Payables

Marketing intelligence

Marketing intelligence system: a set of procedures and sources that managers use to obtain everyday
information about developments in the marketing environment

Improving marketing intelligence

 Motivate sales force to report new developments

 Motivate intermediaries to pass along intelligence
 Hire external experts to collect intelligence
 Network internally and externally
 Set up a customer advisory panel
 Take advantage of government-related data
 Purchase information from outside research vendors
 Collect marketing intelligence on Internet

Marketing intelligence can be gathered from various sources on the internet.

22 | P a g e

 Independent customer review forums provide insights into customer needs, preferences, and
expectations.
 Distributor or sales agent feedback sites can identify product or service quality issues and areas for
improvement.
 Combo sites that offer customer reviews and expert opinions provide a comprehensive view of a
product or service's performance and how it compares to competitors.
 Customer complaint sites can be used to address customer concerns and improve overall satisfaction.
 Public blogs can provide insights into customer preferences and trends, as well as feedback on specific
products or services.

Communicating & Acting on Marketing intelligence

 The competitive intelligence function works best when it is closely coordinated with the decision-
making process
- Given the speed of the Internet, it is important to act quickly on information gleaned
online

Analyzing the macro environment is an important aspect of strategic planning for businesses. Within the
macroenvironment, there are various needs and trends that can affect a company's operations, sales, and
overall success. Three types of trends that businesses should be aware of are fads, trends, and megatrends.

 Fad: A fad is a short-lived, popular trend that quickly gains and loses popularity. Fads are often driven
by popular culture or social media and can be difficult to predict or capitalize on. Examples of recent
fads include fidget spinners or Pokémon Go.
 Trend: A trend is a longer-term change in consumer behavior or preferences that can impact the
market for years. Trends tend to be more predictable than fads and can be monitored and capitalized
on by businesses. Examples of current trends include sustainability, plant-based diets, and the rise of e-
commerce.
 Megatrend: A megatrend is a large-scale, long-term shift in the environment, society, or economy
that can have a significant impact on businesses and industries. Megatrends tend to be slow-moving
but have a profound impact on the market. Examples of megatrends include climate change,
urbanization, and the aging population.

Identifying the Major Forces

Six major forces in the broad environment

1. Demographic
2. Natural
3. Economic
4. Technological
5. Socio-cultural
6. Political-legal

The Demographic Environment

 Worldwide population growth

 Population age mix
 Ethnic and other markets
 Educational groups
 Household patterns

The Economic Environment

23 | P a g e

 Consumer psychology is the study of how individuals make decisions about spending their money on
goods and services. It takes into account various factors, such as personal values, beliefs, emotions,
and behaviors, that influence consumer behavior.
 Income distribution refers to how the total income of a country or a region is divided among its
population. It is typically measured using statistical tools, such as the Gini coefficient, which
calculates the level of income inequality within a society.
Income, Savings, Debt, Credit:
 Income, savings, debt, and credit are interrelated concepts that play a crucial role in personal finance
and the economy as a whole.

Income distribution

 Subsistence economies
 Raw-material-exporting economies
 Industrializing economies
 Industrial economies
 Very low incomes
 Mostly low incomes
 Very low, very high incomes
 Low, medium, high incomes
 Mostly medium incomes

The sociocultural environment refers to the combination of social and cultural factors that affect an
individual's beliefs, values, and norms. These factors can include a variety of different elements, such as:

 Views of others: This includes attitudes toward different groups of people, such as race, ethnicity,
religion, gender, and sexual orientation. These views can impact consumer behavior and influence
marketing strategies.
 Views of ourselves: This includes self-concept, self-esteem, and self-image. Marketers often try to
appeal to consumers' self-concept in advertising and branding.
 Views of society: This includes cultural values, beliefs, and norms, such as attitudes toward work,
family, and leisure time. Understanding these views is essential for developing effective marketing
strategies that resonate with the target audience.
 Views of nature: This includes attitudes toward the environment and sustainability. As consumers
become more environmentally conscious, businesses must adapt their practices to meet these changing
views.
 Views of organizations: This includes attitudes toward businesses and institutions, such as trust,
loyalty, and expectations of corporate social responsibility.
 Views of the universe: This includes beliefs about spirituality, religion, and the meaning of life. While
less directly related to marketing, these views can influence consumer behavior and should be
considered when developing marketing strategies.

The sociocultural environment refers to the shared beliefs, values, customs, behaviors, and artifacts that
characterize a society and influence its members' attitudes and behaviors.

The core cultural values are the fundamental beliefs and principles that guide the behavior and attitudes
of individuals within a society, which are often passed down from parents to children and reinforced by
social institutions.

Subcultures refer to groups of people within a larger society who share distinctive beliefs, values,
preferences, and behaviors that emerge from their unique life experiences or circumstances. These
subcultures can include ethnic or racial groups, religious groups, age cohorts, or other identifiable groups
with shared characteristics.

The natural environment

24 | P a g e

Corporate environmentalism

- Opportunities await those who can reconcile prosperity with environmental protection.