MARKETING MANAGEMENT

12th edition
1
Defining Marketing
for the 21st Century

Kotler Keller
Chapter Questions
 Why is marketing important?
 What is the scope of marketing?
 What are some of the fundamental
marketing concepts?
 How has marketing management changed?
 What are the tasks necessary for
successful marketing management?

1-2
What is Marketing?

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.

1-3
What is Marketing Management?

Marketing management is the

art and science
of choosing target markets
and getting, keeping, and growing
customers through
creating, delivering, and communicating
superior customer value.

1-4
For an exchange to occur…..
 There are at least two parties.
 Each party has something that might be of value
to the other party.
 Each party is capable of communication and
delivery.
 Each party is free to reject the exchange offer.
 Each party believes it is appropriate or desirable
to deal with the other party.

1-5
What is Marketed?
 Goods  Places
 Services  Properties
 Events  Organizations
 Experiences  Information
 Persons  Ideas

1-6
Demand States
 Negative  Irregular
 Nonexistent  Unwholesome
 Latent  Full
 Declining  Overfull

1-7
Key Customer Markets
 Consumer markets
 Business markets
 Global markets
 Nonprofit/Government markets

1-8
The marketplace isn’t what it used to be….

 Changing technology  Empowerment

 Globalization  Customization
 Deregulation  Convergence
 Privatization  Disintermediation

1-9
Company Orientations
 Production
 Product
 Selling
 Marketing

1-10
Marketing Mix and the Customer

Four Ps Four Cs
 Product  Customer solution
 Price  Customer cost
 Place  Convenience
 Promotion  Communication

1-11
Core Concepts
 Needs, wants, and  Marketing channels
demands  Supply chain
 Target markets,  Competition
positioning,  Marketing
segmentation environment
 Offerings and brands  Marketing planning
 Value and
satisfaction

1-12
I want it, I need it…..

5 Types of Needs
 Stated needs
 Real needs
 Unstated needs
 Delight needs
 Secret needs

1-13
Marketing Management Tasks
 Developing marketing  Shaping market
strategies offerings
 Capturing marketing  Delivering value
insights  Communicating
 Connecting with value
customers
 Creating long-term
 Building strong brands growth

1-14
 MARKETING MANAGEMENT
12th edition
3
Gathering Information
and Scanning the

Environment

Kotler Keller
Chapter Questions_1

 What are the components of a

modern marketing information
system?
 What are useful internal records?
 What is involved in a marketing
intelligence system?

1-16
Chapter Questions_2

 What are the key methods for

tracking and identifying opportunities
in the macroenvironment?
 What are some important
macroenvironment developments?

1-17
MIS Probes for Information
 What decisions do you regularly make?
 What information do you need to make these decisions?
 What information do you regularly get?
 What special studies do you periodically request?
 What information would you want that you are not getting
now?
 What are the four most helpful improvements that could
be made in the present marketing information system?

1-18
Internal Records
 Order-to-Payment Cycle
 Sales Information System
 Databases, Warehousing, Data mining
 Marketing Intelligence System

1-19
Steps to Improve Marketing Intelligence
 Train and motivate sales force
 Motivate channel members to share intelligence
 Network externally
 Utilize customer advisory panel
 Utilize government data resources
 Purchase information
 Collect customer feedback online

1-20
Needs and Trends

Fad

Trend

Megatrend

1-21
 10 Megatrends Shaping the
Consumer Landscape
 Aging boomers  Increased immigration
 Delayed retirement  Rising Hispanic
 Changing nature of influence
work  Shifting birth trends
 Greater educational  Widening geographic
attainment differences
 Labor shortages  Changing age
structure

1-22
Environmental Forces
 Demographic
 Economic
 Socio-Cultural
 Natural
 Technological
 Political-Legal

1-23
Population and Demographics
 Size  Household
 Growth rate patterns
 Age distribution  Regional

 Ethnic mix characteristics

 Movement
 Educational
levels

1-24
Economic Environment

$ Purchasing Power
$ Income Distribution
$ Savings Rate
$ Debt
$ Credit Availability

1-25
Types of Industrial Structures
 Industrial economies
 Industrializing economies
 Raw-material exporting economies
 Subsistence economies

1-26
Social-Cultural Environment
 Views of themselves
 Views of others
 Views of organizations
 Views of society
 Views of nature
 Views of the universe

1-27
Natural Environment
 Shortage of raw materials
 Increased energy costs
 Anti-pollution pressures
 Governmental protections

1-28
Technological Environment
 Pace of change
 Opportunities for innovation
 Varying R&D budgets
 Increased regulation of change

1-29
 MARKETING MANAGEMENT
12th edition
4
Conducting
Marketing Research
and Forecasting Demand

Kotler Keller
Chapter Questions
 What constitutes good marketing
research?
 What are good metrics for measuring
marketing productivity?
 How can marketers assess their return on
investment of marketing expenditures?
 How can companies more accurately
measure and forecast demand?

1-31
Marketing Research Defined

Systematic design, collection,

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

1-32
Types of Marketing Research Firms

 Syndicated
 Custom
 Specialty-line

1-33
The Marketing Research Process

 Define the problem

 Develop the research plan
 Collect information
 Analyze information
 Present findings
 Make decision

1-34
Step 1

 Define the problem

 Specify decision alternatives
 State research objectives

1-35
Step 2
 Data sources
 Research approach
 Research instruments
 Sampling plan
 Contact methods

1-36
Research Approaches
 Observation
 Focus group
 Survey
 Behavioral Data
 Experimentation

1-37
Research Instruments
 Questionnaires
 Qualitative Measures
 Mechanical Devices

1-38
 Questionnaire Do’s and Don’ts
 Ensure questions are  Avoid negatives
free of bias  Avoid hypotheticals
 Make questions simple  Avoid words that could
 Make questions specific be misheard
 Avoid jargon  Use response bands
 Avoid sophisticated  Use mutually exclusive
words categories
 Avoid ambiguous words  Allow for “other” in fixed
response questions
1-39
Question Types - Dichotomous
In arranging this trip, did you contact American
Airlines?
 Yes  No

1-40
Question Types – Multiple Choice
With whom are you traveling on this trip?
 No one
 Spouse
 Spouse and children
 Children only
 Business associates/friends/relatives
 An organized tour group
1-41
Question Types – Likert Scale
Indicate your level of agreement with the following
statement: Small airlines generally give better
service than large ones.
 Strongly disagree
 Disagree
 Neither agree nor disagree
 Agree
 Strongly agree
1-42
Question Types – Semantic Differential
American Airlines
Large ………………………………...…………….Small
Experienced………………….………….Inexperienced
Modern………………………..………….Old-fashioned

1-43
Question Types – Importance Scale
Airline food service is _____ to me.
 Extremely important
 Very important
 Somewhat important
 Not very important
 Not at all important

1-44
Question Types – Rating Scale
American Airlines’ food service is _____.
 Excellent
 Very good
 Good
 Fair
 Poor

1-45
Question Types –
Intention to Buy Scale
How likely are you to purchase tickets on American
Airlines if in-flight Internet access were available?
 Definitely buy
 Probably buy
 Not sure
 Probably not buy
 Definitely not buy

1-46
Question Types –
Completely Unstructured
What is your opinion of American Airlines?

1-47
Question Types – Word Association
What is the first word that comes to your mind
when you hear the following?
Airline ________________________
American _____________________
Travel ________________________

1-48
Question Types – Sentence Completion
When I choose an airline, the most important
consideration in my decision is:
_________________________________________
_________________________________________
_________________________________________
_________________________________________
_________________________________________
___________________________________.

1-49
Question Types – Story Completion
“I flew American a few days ago. I noticed that the
exterior and interior of the plane had very bright
colors. This aroused in me the following thoughts
and feelings.” Now complete the story.
_________________________________________
_________________________________________
_________________________________________
_________________________________________
_________________________________________
___________________________________

1-50
Question Types –
Picture (Empty Balloons)

1-51
Qualitative Measures
 Shadowing
 Behavior mapping
 Consumer journey
 Camera journals
 Extreme user interviews
 Storytelling
 Unfocused groups

1-52
Mechanical Devices
 Galvanometers
 Tachistoscope
 Eye cameras
 Audiometers
 GPS

1-53
Sampling Plan

 Sampling unit: Who is to be surveyed?

 Sample size: How many people should be
surveyed?
 Sampling procedure: How should the
respondents be chosen?

1-54
Types of Samples

Probability Nonprobability
 Simple random  Convenience
 Stratified random  Judgment
 Cluster  Quota

1-55
Contact Methods
 Mail questionnaire
 Telephone interview
 Personal interview
 Online interview

1-56
Characteristics of Good
Marketing Research

 Scientific method
 Research creativity
 Multiple methods
 Interdependence
 Value and cost of information
 Healthy skepticism
 Ethical marketing

1-57
Table 4.4 Marketing Metrics
 External  Internal
 Awareness  Awareness of goals
 Market share  Commitment to goals
 Relative price  Active support
 Number of complaints  Resource adequacy
 Customer satisfaction  Staffing levels
 Distribution  Desire to learn
 Total number of  Willingness to change
customers  Freedom to fail
 Loyalty  Autonomy

1-58
 Table 4.5 Sample Customer-
Performance Scorecard Measures
 % of new customers to average #
 % of lost customers to average #
 % of win-back customers to average #
 % of customers in various levels of satisfaction
 % of customers who would repurchase
 % of target market members with brand recall
 % of customers who say brand is most preferred

1-59
Tools to Measure Marketing Plan
Performance
 Sales analysis
 Market share analysis
 Expense-to-Sales Analysis
 Financial Analysis

1-60
Sales Analysis
 Sales-Variance Analysis
 Micro-Sales Analysis

1-61
Market Share Analysis

 Overall market share

 Served market share
 Relative market share

1-62
Marketing-Profitability Analysis

Step 1: Identifying Functional Expenses

Step 2: Assigning Functional Expenses to

Marketing Entities

Step 3: Preparing a Profit-and-Loss Statement

for each Marketing Entity

1-63
Distinguishing Types of Costs
 Direct
 Traceable common
 Nontraceable common

1-64
The Measures of Market Demand

 Potential market
 Available market
 Target market
 Penetrated market

1-65
Estimating Current Demand

 Total market potential

 Area market potential
 Market buildup method
 Multiple-factor index method
 Brand development index

1-66
Estimating Future Demand

 Survey of Buyers’ Intentions

 Composite of Sales Force Opinions
 Expert Opinion
 Past-Sales Analysis
 Market-Test Method

1-67
Purchase Probability Scale
Do you intend to buy an automobile within
the next 6 months?
0.00 No
0.20 Slight possibility
0.40 Fair possibility
0.60 Good possibility
0.80 High possibility
1.00 Certain
1-68
 MARKETING MANAGEMENT
12th edition
6
Analyzing
Consumer Markets

Kotler Keller
Chapter Questions
 How do consumer characteristics influence
buying behavior?
 What major psychological processes
influence consumer responses to the
marketing program?
 How do consumers make purchasing
decisions?
 How do marketers analyze consumer
decision making?
1-70
What Influences Consumer Behavior?

 Cultural factors
 Social factors
 Personal factors

1-71
Culture

The fundamental determinant of

a person’s wants and behaviors
acquired through socialization
processes with family
and other key institutions.

1-72
Subcultures
 Nationalities
 Religions
 Racial groups
 Geographic regions
 Special interests

1-73
Fast Facts About American Culture

 The average American

 chews 300 sticks of gum a year
 goes to the movies 9 times a year
 takes 4 trips per year
 attends a sporting event 7 times each year

1-74
Social Classes

Upper uppers
Lower uppers
Upper middles
Middle class
Working class
Upper lowers
Lower lowers

1-75
Characteristics of Social Classes

 Within a class, people tend to behave

alike.
 Social class conveys perceptions of
inferior or superior position.
 Class may be indicated by a cluster of
variables (occupation, income, wealth).
 Class designation is mobile over time.

1-76
Social Factors

Reference
Family
groups

Social
Statuses
roles

1-77
Reference Groups
 Membership
 Primary
 Secondary
 Aspirational
 Dissociative

1-78
Family
 Family of Orientation
 Religion
 Politics
 Economics
 Family of Procreation
 Everyday buying behavior

1-79
Personal Factors
 Age  Personality
 Life cycle stage  Values
 Occupation  Lifestyle
 Wealth  Self-concept

1-80
Brand Personality
 Sincerity
 Excitement
 Competence
 Sophistication
 Ruggedness

1-81
Key Psychological Processes
 Motivation
 Perception
 Learning
 Memory

1-82
Motivation
 Freud’s theory
 Maslow’s hierarchy of needs
 Herzberg’s two-factor theory

1-83
Perception
 Selective attention
 Selective retention
 Selective distortion
 Subliminal perception

1-84
Figure 6.4 Consumer Buying Process

 Problem recognition
 Information search
 Evaluation
 Purchase decision
 Postpurchase behavior

1-85
Sources of Information
 Personal
 Commercial
 Public
 Experiential

1-86
Non-compensatory Models of Choice

 Conjunctive
 Lexicographic
 Elimination-by-aspects

1-87
Perceived Risk
 Functional  Social
 Physical  Psychological
 Financial  Time

1-88
Other Theories of
Consumer Decision Making

Involvement Decision Heuristics

 Elaboration  Availability
Likelihood Model  Representativeness
 Low-involvement
 Anchoring and
marketing strategies
adjustment
 Variety-seeking
buying behavior

1-89
Mental Accounting

 Consumers tend to…

 Segregate gains
 Integrate losses
 Integrate smaller losses with larger gains
 Segregate small gains from large losses

1-90
 MARKETING MANAGEMENT
12th edition
7
Analyzing
Business Markets

Kotler Keller
Chapter Questions
 What is the business market, and how does
it differ from the consumer market?
 What buying situations do organizational
buyers face?
 Who participates in the business-to-
business buying process?

1-92
Chapter Questions
 How do business buyers make their
decisions?
 How can companies build strong
relationships with business customers?
 How do institutional buyers and
government agencies do their buying?

1-93
Organizational Buying

Decision-making process by which

formal organizations establish the
need for purchased products and
services, and identify
evaluate, and choose among
alternative brands and suppliers.

1-94
Characteristics of Business
Markets
 Fewer, larger buyers  Derived demand
 Close supplier-  Inelastic demand
customer relationships  Fluctuating demand
 Professional  Geographically
purchasing
concentrated buyers
 Many buying influences
 Direct purchasing
 Multiple sales calls

1-95
Buying Situation

 Straight rebuy
 Modified rebuy
 New task

1-96
The Buying Center
 Initiators
 Users
 Influencers
 Deciders
 Approvers
 Buyers
 Gatekeepers

1-97
Of Concern to Business Marketers

 Who are the major decision participants?

 What decisions do they influence?
 What is their level of influence?
 What evaluation criteria do they use?

1-98
Types of Business Customers
 Price-oriented  Gold-standard
 Solution-oriented  Strategic-value

1-99
Handling Price-Oriented Customers

 Limit quantity purchased

 Allow no refunds
 Make no adjustments
 Provide no services

1-100
Purchasing Orientations
 Buying
 Procurement
 Supply chain management

1-101
Product-Related Purchasing Processes

 Routine products
 Leverage products
 Strategic products
 Bottleneck products

1-102
Methods of e-Procurement
 Websites organized using vertical hubs
 Websites organized using functional hubs
 Direct extranet links to major suppliers
 Buying alliances
 Company buying sites

1-103
Forms of Electronic Marketplaces
 Catalog sites
 Vertical markets
 Pure play auction sites
 Spot markets
 Private exchanges
 Barter markets
 Buying alliances

1-104
Assessing Customer Value
 Internal engineering  Conjoint analysis
assessment  Benchmarks
 Field value-in-use  Compositional
assessment approach
 Focus-group value  Importance ratings
assessment
 Direct survey
questions

1-105
Order Routine Specification and
Inventory
 Stockless purchase plans
 Vendor-managed inventory
 Continuous replenishment

1-106
Desirable Outcomes of a B2B
transaction: OTIFNE
 On time
 In full
 No error

1-107
Establishing Corporate Credibility

 Expertise
 Trustworthiness
 Likeability

1-108
Factors Affecting
Buyer-Supplier Relationships
 Availability of alternatives
 Importance of supply
 Complexity of supply
 Supply market dynamism

1-109
Categories of Buyer-Seller
Relationships

 Basic buying and  Cooperative systems

selling  Collaborative
 Bare bones  Mutually adaptive
 Contractual  Customer is king
transaction
 Customer supply

1-110
Opportunism

Some form of cheating or

undersupply relative to an
implicit or explicit contract.

1-111