Strategic Marketing Management - Summary PDF

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Strategic Marketing Management - Summary...

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Chapter 1: Defining Marketing for the New Realities Marketing • Identifying and meeting human and social needs • Activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large • Societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others Aim • Make selling superfluous • Know and understand the customer so well that the product or service fits him and sells itself Marketing Management • Art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value Marketing Entities (10) • Goods • Services • Events • Experiences • Persons • Places • Properties • Organizations • Information • Ideas Marketer • Someone who seeks a response—attention, a purchase, a vote, a donation—from another party • If two parties are selling to each other they are both called marketers Prospect • Another party Demand States (8) • Negative o Consumers dislike the product and may even pay to avoid it • Nonexistent o Consumers may be unaware of or uninterested in the product. • Latent o Consumers may share a strong need that cannot be satisfied by an existing product • Declining o Consumers begin to buy the product less frequently or not at all • Irregular o Consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis

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Full o Consumers are adequately buying all products put into the marketplace Overfull o More consumers would like to buy the product than can be satisfied Unwholesome o Consumers may be attracted to products that have undesirable social consequences

Market • Collection of buyers and sellers who transact over a particular product or product class • Also used to describe customer groups • Types (5) o Resource o Consumer o Government o Manufacturer o Intermediary Industry • Collection of sellers Market • Collection of buyers Key Customer Markets • Consumer o Companies selling mass consumer goods and services such as juices, cosmetics, athletic shoes, and air travel establish a strong brand image by developing a superior product or service, ensuring its availability, and backing it with engaging communications and reliable performance • Business o Companies selling business goods and services often face well-informed professional buyers skilled at evaluating competitive offerings. Advertising and Web sites can play a role, but the sales force, the price, and the seller’s reputation may play a greater one • Global o Companies in the global marketplace navigate cultural, language, legal, and political differences while deciding which countries to enter, how to enter each (as exporter, licenser, joint venture partner, contract manufacturer, or solo manufacturer), how to adapt product and service features to each country, how to set prices, and how to communicate in different cultures • Nonprofit and governmental o Companies selling to nonprofit organizations with limited purchasing power such as churches, universities, charitable organizations, and government agencies need to price carefully. Much government purchasing requires bids; buyers often focus on practical solutions and favor the lowest bid, other things equal Needs • Basic human requirements such as for air, food, water, clothing, and shelter • Types (5) o Stated

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Real Unstated Delight Secret

Demands • Wants for specific products backed by an ability to pay Value Propositions • set of benefits that satisfy those customer needs Brand • Offering from a known source Marketing Channels • To reach a target market o Types (3) ▪ Communication • Deliver and receive messages from target buyers ▪ Distribution • Help display, sell, or deliver the physical product or service(s) to the buyer or user ▪ Service • To carry out transactions with potential buyers, the marketer Paid Media • Include TV, magazine and display ads, paid search, and sponsorships, all of which allow marketers to show their ad or brand for a fee Owned Media • Communication channels marketers actually own, like a company or brand brochure, Web site, blog, Facebook page, or Twitter account Earned Media • Streams in which consumers, the press, or other outsiders voluntarily communicate something about the brand via word of mouth, buzz, or viral marketing methods • Allows some companies to reduce paid media expenditures Impressions • 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 • Negative o Impressions don’t provide any insight into the results of viewing the communication Engagement • 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 Value • Sum of the tangible and intangible benefits and costs • Central marketing concept, is primarily a combination of quality, service, and price (qsp) o Customer value triad • Perceptions increase with quality and service but decrease with price

Satisfaction • Reflects a person’s judgment of a product’s perceived performance in relationship to expectations Supply Chain • Channel stretching from raw materials to components to finished products carried to final buyers Competition • Includes all the actual and potential rival offerings and substitutes a buyer might consider Marketing Environment • Consists of the task environment and the broad environment • Task environment o Includes the actors engaged in producing, distributing, and promoting the offering • Broad environment o Consists of six components (6) ▪ Demographic environment ▪ Economic environment ▪ Social-cultural environment ▪ Natural environment ▪ Technological environment ▪ Political-legal environment Transformative Forces (3) • Technology • Globalization o Has made countries increasingly multicultural o Changes innovation and product development as companies take ideas and lessons from one country and apply them to another • Social responsibility New Consumer Capabilities (5) • Consumers can use the Internet as a powerful information and purchasing aid • Consumers can search, communicate, and purchase on the move • Consumers can tap into social media to share opinions and express loyalty • Consumers can actively interact with companies • Consumers can reject marketing they find inappropriate New Company Capabilities (5) • Companies can use the Internet as a powerful information and sales channel, including for individually differentiated goods • Companies can collect fuller and richer information about markets, customers, prospects, and competitors • Companies can reach consumers quickly and efficiently via social media and mobile marketing, sending targeted ads, coupons, and information • Companies can improve purchasing, recruiting, training, and internal and external communications • Companies can improve their cost efficiency Retail Transformation • Store-based retailers face competition from catalog houses; direct-mail firms; newspaper, magazine, and TV direct-to-customer ads; home shopping TV; and e-commerce

Disintermediation • Early dot-coms such as Amazon.com, E*TRADE, and others successfully created disintermediation in the delivery of products and services by intervening in the traditional flow of goods Private Label • 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 Deregulation • Many countries have deregulated industries to create greater competition and growth opportunities Privatization • Many countries have converted public companies to private ownership and management to increase their efficiency Moving Forward • Means incorporating the Internet and digital efforts into marketing plans Measures for Marketing and Business Performance (3) • Brand equity • Customer lifetime value • Return on marketing investment (ROMI) Production Concept • One of the oldest concepts in business • Holds that consumers prefer products that are widely available and inexpensive Production Oriented Managers • Concentrate on achieving high production efficiency, low costs, and mass distribution Product Concept • Proposes that consumers favor products offering the most quality, performance, or innovative features Selling Concept • Holds that consumers and businesses, if left alone, won’t buy enough of the organization’s products • Practiced most aggressively with unsought goods Marketing Concept • Emerged in the mid-1950s as a customer-centered, sense-and-respond philosophy Holistic Marketing Concept • Based on the development, design, and implementation of marketing programs, processes, and activities that recognize their breadth and interdependencies • Acknowledges that everything matters in marketing and that a broad, integrated perspective is often necessary • Recognizes and reconciles the scope and complexities of marketing activities Relationship Marketing • Aims to build mutually satisfying long-term relationships with key constituents in order to earn and retain their business • Key constituents (4)

o Customers o Employees o Marketing partners o Members of the financial community Marketing Network • Ultimate outcome of relationship marketing • Consisting of the company and its supporting stakeholders—customers, employees, suppliers, distributors, retailers, and others—with whom it has built mutually profitable business relationships • Operating Principle o Build an effective network of relationships with key stakeholders, and profits will follow Integrated Marketing • Occurs when the marketer devises marketing activities and assembles marketing programs to create, communicate, and deliver value for consumers such that “the whole is greater than the sum of its parts • Themes (2) o Many different marketing activities can create, communicate, and deliver value o Marketers should design and implement any one marketing activity with all other activities in mind Internal Marketing • Element of holistic marketing • Task of hiring, training, and motivating able employees who want to serve customers well Performance Marketing • Requires understanding the financial and nonfinancial returns to business and society from marketing activities and programs Four P’s of Marketing (4) • Product • Price • Place • Promotion Modern Marketing Management Four P’s (4) • People o Reflects, in part, internal marketing and the fact that employees are critical to marketing success • Processes o Reflects all the creativity, discipline, and structure brought to marketing management • Programs o Reflects all the firm’s consumer-directed activities o Encompasses the old four Ps as well as a range of other marketing activities that might not fit as neatly into the old view of marketing • Performance o To capture the range of possible outcome measures that have financial and nonfinancial implications

Key Market Outcomes (2) • New consumer capabilities • New company capabilities Fundamental Pillars of Holistic Marketing (4) • Relationship marketing • Integrated marketing • Internal marketing • Performance marketing

Chapter 2: Developing Marketing Strategies and Plans Value Creation and Delivery Sequence Phases (3) • Choosing the value • Providing the value • Communicating the value Value Chain • Michael Porter • Tool for identifying ways to create more customer value Primary Activities that Create Value and Cost in a Specific Business (5) • Inbound logistics or bringing materials into the business • Operations, or converting materials into final products • Outbound logistics, or shipping out final products • Marketing, which includes sales • Service Support Activities that Create Value and Cost in a Specific Business (4) • Procurement • Technology development • Human resource management • Firm infrastructure Core Business Processes (5) • Market sensing process • New offering realization process • Customer acquisition process • Customer relationship management process • Fulfillment management process Core Competency Characteristics (3) • It is a source of competitive advantage and makes a significant contribution to perceived customer benefits • Has applications in a wide variety of markets • Difficult for competitors to imitate Realignment Steps • Redefining the business concept or “big idea” • Reshaping the business scope, sometimes geographically • Repositioning the company’s brand identity Priority Strategic Planning Areas (3) • Managing the businesses as an investment portfolio • Assessing the market’s growth rate and the company’s position in that market • Establishing a strategy Organizational Levels • Corporate • Division • Business unit • Product Marketing Plan • Central instrument for directing and coordinating the marketing effort

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Levels (2) o Strategic ▪ Lays out the target markets and the firm’s value proposition, based on an analysis of the best market opportunities o Tactical ▪ Lays out the target markets and the firm's value proposition, based on an analysis of the best market opportunities Strategic Planning (4) • Corporate planning • Division planning • Business planning • Product planning Strategic Implementation (2) • Organizing • Implementing Strategic Control Processes (3) • Measuring results • Diagnosing results • Take correction action Planning Activities (4) • Defining the corporate mission • Establishing strategic business units • Assigning resources to each strategic business unit • Assessing growth opportunities Target Market Definition • Tends to focus on selling a product or service to a current market Strategic Market Definition • Focuses on the potential market Market Definition • Describe the business as a customer satisfying process Mission Statement Characteristics (5) • They focus on a limited number of goals • They stress the company’s major policies and values • They define the major competitive spheres within which the company will operate • They take a long-term view • They are as short, memorable, and meaningful as possible Strategic Business Units (SBU) Characteristics (3) • It is a single business, or a collection of related businesses, that can be planned separately from the rest of the company • It has its own set of competitors • It has a manager responsible for strategic planning and profit performance, who controls most of the factors affecting profit Market Development Strategy • Considers whether it can find or develop new markets for its current products Market Penetration Strategy

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Considers whether it could gain more market share with its current products in their current markets Product Development Strategy • Considers whether it can develop new products for its current markets Diversification Strategy • Firm will also review opportunities to develop new products for new markets Company Organization • Consists of its structures, policies, and corporate culture, all of which can become dysfunctional in a rapidly changing business environment Corporate Culture • Shared experiences, stories, beliefs, and norms that characterize an organization Scenario Analysis • Develops plausible representations of a firm’s possible future using assumptions about forces driving the market and different uncertainties Business Unit Strategic Planning • Steps (7) o Business mission o SWOT analysis ▪ Overall evaluation of a company’s strengths, weaknesses, opportunities, and threats o Goal formation o Strategy formulation o Program formulation o Implementation o Feedback and control • Objectives (4) o They must be arranged hierarchically, from most to least important o Objectives should be quantitative whenever possible o Goals should be realistic o Objectives must be consistent Marketing Opportunity • Area of buyer need and interest that a company has a high probability of profitably satisfying • Sources (3) o Offer something that is in short supply o Supply an existing product or service in a new or superior way o Totally new product or service Problem detection method • Asks consumers for their suggestions Ideal method • Has them imagine an ideal version of the product or service Consumption chain method • Asks them to chart their steps in acquiring, using, and disposing of a product Environmental Threat • Challenge posed by an unfavorable trend or development that, in the absence of defensive marketing action, would lead to lower sales or profit

Goal Formulation • Developing specific goals for the planning period • Objectives that are specific with respect to magnitude and time Strategy • Game plan for getting there • Must consist of a marketing strategy and a compatible technology strategy and sourcing strategy Porter’s Generic Strategies (3) • Overall cost leadership • Differentiation • Focus Strategic Group • Competing firms directing the same strategy to the same target market Strategic Partnership Categories • Product or service alliances • Promotional alliances • Logistics alliances • Pricing collaborations Partner Relationship Management (PRM) • Corporations have begun to develop organizational structures to support them, and many have come to view the ability to form and manage partnerships as core skills Soft Element Styles (4) • Company employees share a common way of thinking and behaving • Skills, means employees have the skills needed to carry out the company’s strategy • Staffing means the company has hired able people, trained them well, and assigned them to the right jobs • Shared values, means employees share the same guiding values.

Chapter 3: Collecting Information and Forecasting Demand Advantages for Identifying Significant Market Changes (2) • disciplined methods for collecting information • Time spent interacting with customers and observing competitors and other outside groups Marketing Information System • Consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers • Relies on internal company records, marketing intelligence activities, and marketing research Ways to Spot Opportunities and Potential Problems (7) • Internal reports of orders • Sales • Prices • Costs • Inventory levels • Receivables • Payables Marketing Intelligence System • Set of procedures and sources that managers use to obtain everyday information about developments in the marketing environment • Internal records system supplies results data, but the marketing intelligence system supplies happenings data • Ways to improve (7) o Train and motivate the sales force to spot and report new developments o Motivate distributors, retailers, and other intermediaries to pass along important intelligence o Hire external experts to collect intelligence o Network internally and externally o Set up a customer advisory panel o Take advantage of government-related data resources o Purchase information from outside research firms and vendors Places to Find Competitors Strengths and Weaknesses Online (5) • Independent customer goods and service review forums • Distributor or sales agent feedback sites • Combo sites offering customer reviews and expert opinions • Customer complaint sites • Public blogs Fad • Unpredictable, short-lived, and without social, economic, and political significance Trend • More predictable and durable than a fad • Reveal the shape of the future and can provide strategic direction Megatrend

Large social, economic, political, and technological change [that] is slow to form, and once in place, influences us for some time between seven and ten years, or longer Major Forces in the Broad Environment (6) • Demographic • Economic • Social-cultural • Natural • Technological • Political-legal Cohorts • Groups of individuals born during the same time period...