Marketing management summary notes PDF

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Marketing management summary notes CH The aim of marketing is to make selling unnecessary, its is the process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return.Marketplace and customer needs Five for...

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Marketing management summary notes CH1 The aim of marketing is to make selling unnecessary, its is the process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return.

Marketplace and customer needs Five forces: 1. needs, wants, and demands 2. market offerings 3. value and satisfaction 4. exchanges and relationships 5. markets. 1. Needs and wants are fulfilled through market offerings: combination of products and services, information offered to a market to satisfy a need or want. Not limited to physical products and include service activities. Also include entities such as persons, places, organizations, ideas and information. 2. Marketing myopia: Only focus on existing wants yet forgot they need to satisfy customer needs. 3. Important to form strong customer satisfaction because will buy again and tell others. 4. Exchange is the act of obtaining a desired object from someone by offering something in return. Marketing consists of actions taken to create, maintain, and grow desirable exchange relationships with target audiences involving a

product, service, idea, or other

object. 5. A market is the set of actual and potential buyers of a product or service. Buyers also carry out marketing when they search for products interact with companies to get more information.

Elements of marketing system:

Customer value-driven marketing strategy 

Selecting customers to serve: Dividing the market into segments of customers, and select the segment that they will go after

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Choosing a value position: How should the company serve target customers and how they can differentiate and position itself in the marketplace. A Value position is a set of benefits and values it promises to deliver to the customers to satisfy their needs.

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Marketing management orientations: Design strategies that will engage customers and build profitable relationships with them. o Production concept: Favor products that are available and highly affordable. Management should improve on production and distribution efficiency. BUT could lead to marketing myopia, adopting this orientation could result in focusing too narrowly on own operations than real life objective. o Product concept: Favor products that offer highest quality, performance and innovative features. Could also lead to myopia o Selling concept: Consumers will only buy when there’s a large-scale selling and promotions. This concept is to do with ‘unsought’ goods, the goods that buyers do not normally think of buying. Do not focus on long term relations, assume that customers will like the product. o Marketing concept: Knowing the needs and wants of the consumers, not to find right customers, but to find right products for consumers. o Societal marketing concept: Marketing strategy should deliver value to customers in a way that maintains or improves both customers and society’s well being. “Sustainable marketing”. Recognize what society

needs not what economy needs. Integrated marketing plan and program.

Marketing mix: set of marketing tools the firm use to implement its marketing strategy. The tools are classified in to 4 groups (four P’s) of product, price, place, and promotion.

Customers and managing customer relationships: 

Customer relationship management is the overall process of building and maintaining profitable customer relationship by superior customer value and satisfaction. o Customer values: Customer buys from a firm that has the highest customer-perceived values. They do not judge the values and the costs accurately or objectively, the perceive the values. o Customer satisfaction: depends on the products’ perceived performance relatively to a buyer’s expectation. Higher satisfaction lead to higher customer loyalty. o A customer centered firm seeks to deliver high customer satisfaction relative to competitors, but they do not attempt to maximize customer satisfaction. The can always increase customer satisfaction by lowering the price, but this will result in lower profits. Thus they have to generate customer value profitably.

Customer relationship levels and tools: 

Customers with low margins only want to develop a basic relationship (engagement is created through advertising, web sites and social media)

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Customers with high margins want to create a partnership.

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Other than customer value and satisfaction, marketers can use specific marketing tools to develop stronger bonds with customers. o Frequency marketing programs: reward customers who buy frequently or in large amounts. Eg airlines and hotels.

The new marketing is customer- engagement marketing—fostering direct and continuous customer involvement in shap- ing brand conversations, brand experiences, and brand community. Customer-engagement marketing goes beyond just selling a brand to consumers. Its goal is to make the brand a meaningful part of consumers’ conversations and lives. Customer generated marketing 

Customers exchange experiences in blogs and social media.

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Creating consumer generated content can be time consuming and costly. Companies find it difficult to generate profit from it. Customers have control over social media content, inviting them could backfire.

Partner relationship management 

Working closely with others inside and outside the company to jointly engage and bring more value to customers. Partnering with supply chain and channels.

Capturing value from customers 

Creating customer loyalty and retention: Aim of relationship management is not just customer satisfaction, but also customer delight. o 5 times cheaper to keep an old customer than acquire a new one. o Customer lifetime value: How much the customer will spend on the store in their lifetime.

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Growing share of customer: increase share of customers, firm can do so by offer higher variety (more choices).

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Building customer equity: total combined customer lifetime values of all of the company’s current and potential customers. The measure of the future value of a company’s customer base.

Building the right relationship with the right customers: 1. Classify customers according to profitability and projected loyalty.

Chapter 2: Company and marketing strategy 2. Strategic planning: the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities. 3. Company usually prepare: annual plans, long term plans and strategic plans. o Annual and long term plans deal with current business and problems. o Strategic plans deal with how the firm can adapt to the continuous change of the environment. 4. Strategic planning at corporate level:

Strategic planning: 1. Defining the company mission o A mission statement of the organization’s purpose and what it wishes to accomplish o Mission statement should not be myopically, but mission statement should be market orientated and answer in terms of customer needs. 2. Setting company objective and goals o Board mission needs to be turned into supporting objectives, each manager should have an objective and is responsible for reaching them. 3. Designing the business portfolio o The collection of business and products that make up the company o Two steps in developing a business portfolio o Analyze its current business portfolio and determine which businesses should receive more or less 

Identify strategic business units (SBU’s), the business that make up the company.

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Develop future portfolio by developing strategies for future growth

The Boston consulting group approach (BCG matrix) 1. Stars: Need heavy investments and to maintain growth and eventually will slow down and become cash cows. 2. They generate a lot of cash to support the SBU’s and use it to finance the investment. Problems with the BCG matrix: Difficult and time consuming, managers find it difficult to define their SBU’s and measure share and growth. Developing strategies for growing and downsizing 

Product/market expansion grid: Use to identify growth opportunities o Market penetration: making more sales on the same product line and markets. o Market development: Identify new markets and develop markets for current products o Product development: offer new products for current markets o Diversification: buying businesses outside of its current products or

markets

SWOT analysis

Chapter 3: Analyzing marketing environment 

Marketing environment consist of micro and macro movements o Types of markets

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Consumer markets

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Business markets

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Reseller markets

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Government markets: buy for public purposes

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International markets

The microenvironment consists of the actors close to the company that affect its ability to engage and serve its customers—the company, suppliers, marketing intermediaries, customer markets, competitors, and publics. The macroenvironment consists of the larger societal forces that affect the microenvironment—demographic, economic, natural, tech- nological, political, and cultural forces. We look first at the company’s microenvironment. o Marketing intermediators: help to promote and distribute products to the final buyers.

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Marketing environment consist of several ‘publics’:

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sa n ygr oupt ha tha sa na c t ua lorpo t e nt i a li nt e r e s ti nori mp a c t Apubl i ci o na nor g a ni z a t i o n ’ sa b i l i t yt oa c hi e v ei t sob j e c t i v e s . o Financial publics: Banks o Media publics: News papers o Government publics: Lawyers o Citizen-action publics: Consumer organizations o Local publics: Neighborhood residence and community organizations o General publics: Public image of a company

o Internal publics: When employees feel good, the positive attitude spill over external factors. 

Macro movement:

Generation groups: 

Baby boomers o Wealthiest generation in US history, %35 of US population.

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Generation X o They seek success, but less materialistic than other groups, they prize experience, not acquisition. o Tend to research products heavily before purchases, prefer quality over quantity

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The millennials: o Born between 1977 and 2000. Most financially strapped generation, highest unemployment and saddled with more debt. o Technology is their way of life, first generation to grow up with the world filled with technologies.

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Generation Z: o People born after 2000. Highly connected with one another due to the rise of social media. Love to socialize and prefer shopping online.

Managing marketing information to gain consumer insights Concept of Big Data: The concept that there’s a huge overload and complex information generated by today’s generation. Big Data presents both big opportunities and challenges faced by today’s marketers. Thus, they do not need more information, but rather better information. Marketing information system: A marketing information system (MIS) consists of people and procedures dedicated to assessing information needs, developing the needed information, and helping decision makers use the information to generate and validate actionable customer and market insights.

Marketing information needs A good marketing information system balances the information users would like to have against what they need and what is feasible to offer. Developing marketing information 

Internal data: Information obtained from company’s network.

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Competitive marketing intelligence: o Competitive marketing intelligence is the systematic monitoring, collection, and analysis of publicly available information about consumers, competitors, and developments in the marketplace. The goal of competitive marketing intelligence is to improve strategic decision making by understanding the consumer environment, assessing and tracking competitors’ actions, and providing early warnings of opportunities and threats.

o Examples: Online research, media buzz 

Marketing research is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization. Eg, Consumer motivation and purchase behavior

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Marketing research process:

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Research objectives: o The objective of exploratory research is to gather preliminary information that will help define the problem and suggest hypotheses. The objective of descriptive research is to describe things, such as the market potential for a product or the demographics and attitudes of consumers who buy the product. The objective of causal research is to test hypotheses about cause-and-effect relationships.

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Observational research: o Gathering primary data by observing relevant people, actions, and situations

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Ethnographic research: o A type of observational research, when a hired person observes and interacts with consumers in their natural environments.

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Survey research: o Gathering data by surveys

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Experimental research o Selecting primary data by matched groups of subjective and control related factors. Give them different treatments and check differences in group responses

How do companies analyze and use marketing information? 

CRM (Consumer relationship management): Consist of sophistic software and analysis tools from companies such as Salesforce.com, oracle, Microsoft, and SAS that integrate customers and market place information form all sources, analyze and apply results to strengthen consumer relationships

Understanding consumer and business buyer behavior Model of buyer behavior 1. Environment a. Marketing stimuli i. Product, price, place, and promotion b. Other stimuli i. Economic, technological, social, and cultural 2. Buyer’s black box a. Buyer’s characteristics b. Buyer’s decision process 3. Buyer’s responses a. Buying attitudes and preferences, purchase behavior, what buyer buys when where and how mBuyuch. Characteristics affecting consumer behavior 

Culture is most basic cause of a person’s wans and behavior since human behavior is largely learned. o Each culture consist of subcultures, nationalities, religions, racial groups.

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Social  Personal  Psychological  Buyer

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Social factors: groups, word-of-mouth influence, opinion leader, online social networks, family, roles and status.

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Total market strategy: the practice of integrating ethnic themes and cross cultural perspectives within their mainstream marketing

Buyer’s decision process 

Need recognition  Information search  Evaluation of alternatives  Purchase decision  Post purchase behavior

Consumer decision rules: compensatory method and non-compensatory method 

Compensatory model additive linear: each attribute value is multiplied by the importance weigh and then summed to arrive at the perceived value

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Non-compensatory models: Conjunctive model: For each attribute a minimum acceptable level is defined. Only brands hat meet all these acceptable levels are considered further. o Disjunctive model: For each attribute a minimum acceptable level is defined. Only brands that meet at least one of these desired levels are considered further. o Lexicographic model: Most important attribute is determined. Highest value on that attribute is chosen.

Types of samples 

Probability samples o Simple random sample o Stratified random sample o Cluster sample

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Non-Probability samples o Convenience sample o Judgement sample o Quota sample

Chapter 6: Market segmentation

Purpose of Market segmentation: Companies derive large, divers markets into smaller segments that can be reached more efficiently and effectively with products that match their needs. Types of segmentations 

Geographic segmentation; divide into geographical units.

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Demographic: age, gender, income, life-cycle stage o Life-Cycle segmentation: offering different products or using different marketing approaches for different age and life-cycle groups. o Income segmentation: Target consumer that like luxury goods and convenience services.

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Psychological segmentation o Divides buyers into different segments based on social class, lifestyle, or personality characters. o Referred as Brand tribes o Use of AIO’s 

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Activities, interests, opinions

Behavioral Segmentation o Divides buyers into segments based on their knowledge, attitudes, uses, or response concerning a product. o Occasions: grouped when they get the idea to buy, actually make their purchases. Occasion segmentation can help firms build up product usage. o Benefits sought: Grouping buyers to the different benefits that they seek from a product. Requires finding the major benefits people look for in a product class. o User status: Nonusers, ex-users, first timers

o Usage rates: light, medium, heavy product users o Loyalty status: Divided into consumers’ degree of loyalty Multiple segmentation basis: Use multiple segmentation analysis, not limited to one or a few variables. Segmenting international markets 

Thus, just as they do within their domestic markets, international firms need to group their world markets into segments with distinct buying needs and behaviors.

Requirements for effective segmentation 

Measurable o The size, purchasing power, a profiles of the segments

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Accessible o Effectively reached and served

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Substantial o Large or profitable enough to serve

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Differentiable o Conceptually and respond differently to different marketing mix elements and programs

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Actionable o Programs can be designed to attract and serve the segments.

Market targeting 

Evaluating different marketing segments: must look at segment size, growth, segment structural attractiveness.

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Selecting target market segments o A target market consist of buyers who share common needs and characteristics.

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Undifferentiated marketing: first ignore market segments differences and target the whole market with one offer.

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Differentiated marketing o Firm decides to target several market segments and designs separate offers for each.

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Concentrated marketing o Firm goes after a large share of one or a few smaller segments or niches. o Niching lets smaller companies focus their limited resources on serving niches that may b3 o 51e unimportant or overlooked by larger competitors

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Micromarketing o Tailoring products and marketing programs to suit the tastes of specific individuals and locations o Local marketing: tailoring brands to the needs or local customers

Positioning strategies 

Product benefits

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Usage situations

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Users

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Personalities

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Origin

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Activities

Chapter 7 product services and brands Levels of product and services 1. Core customer valu...