Marketing Management Summary

[Pages:238]PHILIP KOTLER

MARKETING MANAGEMENT

SUMMARY

PREPARED BY

SUBHANK RAJGURU PGDM, BIMTECH

INDEX Chapter 1 Marketing in the 21st century ................................................... 3 Chapter 2 Building Customer Satisfaction Value and Retention.............. 19 Chapter 3 Winning Markets : Market Oriented Strategic Planning......... 25 Chapter4 Gathering Information and measuring market demand ........... 31 Chapter 5 Scanning the Marketing Environment...................................... 42 CHAPTER ?6 Analyzing Consumer markets & Buying Behavior ........... 55

CHAPTER 7 ANALYZING BUSINESS MARKETS AND BUSINESS BUYING BEHAVIOR ................................................................................. 63 Chapter 8 Dealing With the Competition ................................................... 69 CHAPTER 9 Identifying Market Segments and Selecting Target Markets ....................................................................................................................... 76

Chapter 10 Positioning the Market Offering Through the Product Life Cycle ............................................................................................................. 86 Chapter 11 Developing New Products ...................................................... 106 CHAPTER 13 Product & Product Mixes ................................................. 118 Chapter 14 : Designing and Managing Services...................................... 126 Chapter 15 Designing Pricing Strategies and Programs......................... 137 Chapter 16 Managing Marketing Channels............................................. 157 Chapter 17 Managing Retailing Wholesaling and Market Logistics...... 166

Chapter 18 MANAGING INTEGRATED MARKETING COMMUNICATIONS ............................................................................... 172 Chapter 19 Advertising and Sales Promotion .......................................... 189 Chapter 20 MANAGING THE SALES FORCE...................................... 198 Chapter 21 Managing Direct and Online Marketing.............................. 209 CHAPTER 22 Managing the Total Marketing Effort ............................. 221

Chapter 1 Marketing in the 21st century

Marketing tasks

Three stages through which marketing practice might pass

1) Entrepreneurial marketing: Most companies are started by individual who live by their wits. They visualize an opportunity and knock on every door to get attention Ex. A person sold beer door to door and such direct selling. Slowly he became market leader in selling his products.

2) Formulated marketing: when small companies achieve success, they move to formulated marketing i.e. already laid down advertising methods, like thru TV etc.

3) Intrepreneurial Marketing: some companies rely on formulated marketing, without much success. They need to develop some creative out of the box ideas to market their products.

Scope of Marketing

Marketing people are involved in 10 types of entities:

1) Goods like eggs, steel, cars (Maruti!!!! Wow) 2) Services like airlines, hotels, barbers 3) Experiences like Walt Disney world's magic kingdom, at planet Hollywood 4) Events like Olympics, trade shows, sports events (T20 World Cup). 5) Persons like celebrity marketing by making major film star as brand ambassador

(Amitabh Bachan, Cadbury's) etc. 6) Places like cities, states, nations to attract tourists, factories, company

headquarters, and new residents, like we use TAJ or say Nainital 7) Properties like real state owners market properties or agent markets securities

(DLF,Unitech) 8) Organizations thru' Corporate identity ads like by using tag line `Lets make

things better', or like Richard branson (virgin) or Phil knight of Nike are some identity 9) Information like thru encyclopedias, CDs and visit the Internet for information. This is information marketing 10) Ideas like the buyer of a drill are really buying a hole. Church should market itself as a place of worship or a community center. Eg. Bimtech as a place for breeding managers.

A broadened view of Marketing Tasks:

Production and logistics manage supply and marketers manage demand

Eight different states of demand:

1) Negative demand: if a major part of market dislikes the product and may even pay a price to avoid it ? vaccinations, gall bladder operations etc. Marketing task is to analyse why the market dislikes the product and whether a marketing program can change beliefs and attitudes.

2) No Demand: Target consumers may be unaware of or uninterested in the product. Eg. College students may not be interested in foreign language courses. Marketing should look for ways to benefit others with their product and of course thus sell their product

3) Latent demand: Market feels a strong needs for some products like harmless cigarettes. Marketer needs to measure size of this market and develop such goods

4) Declining demand: market for products etc declines. Then marketer need to know the causes and rectify

5) Irregular demand: Demand of many products and services are seasonal. Marketer needs to devise ways called synchromarketing like flexible pricing, promotions and other incentives

6) Full demand: sometimes full demand is there. Marketing task is to maintain current level of demand in face of changing consumer preferences and increasing competition.

7) Overfull demand: sometimes demand is higher than what organization can handle. Then marketing task, called demarketing is required. Like thru raising prices and reducing promotion and service. Selective marketing is reducing demand from some parts, say not so profitable, of the market

8) Unwholesome demand: Unwholesome products will attract organized efforts to discourage consumption. Like unselling campaigns against cigarettes, alcohol, and handguns. Marketing can use fear messages like raising prices, reduced availability.

The decisions marketers make

Marketing managers face a host of decisions, from major ones such as what product to make, what features, how many salesperson to hire etc. These questions vary according to marketplaces.

Consider following four markets

1) Consumer market: mass consumer goods and services such as soft drinks, toothpaste, air travel etc.

2) Business Markets: Companies selling business goods and services face well trained and well informed professional buyers. They buy goods for their utility or to make or resell a product to others.

3) Global markets: goods and services for global marketplace. They have to decide which country to enter, how to enter, has to have a fit the cultural practices etc.

4) Nonprofit and Governmental Markets: goods to nonprofit organizations like churches, universities, governmental agencies need to be priced carefully. They have to follow long government procedures to get this market.(Eg. Goods sold to the great Indian Government)

Marketing Concepts and Tools:

Defining Marketing:

Social Definition:

Marketing is a 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.

(One marketer said that marketing's role is to deliver a high standard of living)

Managerial Definition:

Often described as the art of selling. Marketing is not just selling. Selling is only the tip of the iceberg!

Peter Drucker: 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.

American Management Association: Marketing (management) is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organisational goals.

Kotler: We see marketing management as the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer value.

Core Marketing Concepts:

Target Markets and Segmentation:

? Marketers can rarely satisfy everyone in the market. So they start with ` market segmentation'.

? Identify and profile different groups of buyers. ? Target segments that present the greatest opportunity ? those whose needs the

firm can meet in a superior fashion.

? For each chosen target market, the firm develops a market offering, which is positioned as offering some central benefit.

? Marketers view the sellers as constituting the industry and the buyers as constituting the market.

Markets: ? Need markets (the diet seeking market) Eg. VLCC ? Product markets (the shoe market) Eg. Reebok, Adidas ? Demographic markets (the youth market) ? Geographic market (the French market) Eg. Atta Market ? Other markets like voter markets, donor markets and labour markets. Marketplace v/s market space ? physical v/s digital

Mohan Sawhney has proposed the concept of metamarket to describe a cluster of complementary products and services that are closely related in the minds of consumers but are spread across a diverse set of industries. Metamediaries Advantages of e-commerce: Convenience Cost savings for companies Selection Personalization Information

Services Gooda and services Services, money Money Resources Taxes, goods Taxes

Resource markets

Manufacturer markets

Government markets

Consumer markets

Intermediary markets

Marketers and prospects:

Marketer is someone seeking response in the form of attention, purchase, vote and donation. The response is sought from prospect.

Needs, Wants and Demand:

Needs describe basic human requirements. Example need for food, air, water, education, entertainment etc. Needs become wants when they are directed to specific objects that might satisfy the need. Need for food ---> Want for a Hamburger (KFC ZINGER) Demands are wants for specific products backed by willingness and ability to pay. Marketers do not create needs. Needs preexist marketers. Marketers along with other social influencers influence wants.

Product or offering:

A product is any offering that can satisfy a need or want. Major typed of basic offerings: Goods, services, experiences, events, persons, places, properties, organizations, information and ideas. A brand is an offering from a known source.

Value and satisfaction:

Value is what customer gets and what he gives. Customer gets benefits and assumes

costs. Benefits include functional and emotional benefits. Costs include monetary costs,

time costs, energy costs and psychic cost.

Benefits

(functional and emotional benefits)

Value = ----------- = ---------------------------------------------

Costs (include monetary costs, time costs, energy costs and psychic cost)

Value of customer offering can be increased by:

Raise benefits

Reduce costs

Raise benefits AND reduce costs

Raise benefits by MORE THAN the raise in costs

Lower benefits by LESS THAN the decrease in costs

Exchange and transactions:

Exchange is one of the four ways in which a person can obtain a product. Exchange is core concept of marketing.

Exchange involves obtaining a desired product from someone by offering something in return. For exchange potential to exist five conditions must be satisfied:

At least two parties Each party has something that might be of some value to the other party. Each party is capable of communication and delivery Each party is free to accept or reject offer Each party believes that it is appropriate or desirable to deal with the other party.

Exchange is value-creating process as it leaves both the parties NORMALLY better off. Exchange is a process rather than an event.

A transaction is a trade of values between two or more parties. Monetary transaction: Paying money in exchange of goods Barter transaction: Goods or services for other goods or services. Dimensions of a transaction: At least two things of value Agreed upon conditions A time of agreement Place of agreement

Transaction differs from transfer. In a transfer A gives goods to B but does not receive anything tangible in return. Example: Gifts, charities, subsidies etc.

Relationships and networks:

Transaction marketing is a part of larger idea called relationship marketing. Relationship marketing has the aim of building long term mutually satisfying relations with key parties ? customers, suppliers, and distributors ? in order to earn and maintain their long-term preference and business. Relationship marketing builds string economic, social and technical ties among the parties.

A marketing network consists of companies and its supporting stakeholders (customers, employees, suppliers, distributors, retailers, ad agencies, university scientists and others).

Marketing Channels:

To reach a target market marketer uses three different kinds of marketing channels. Communication channel: The marketer uses communication channels to deliver and receive messages from target buyers. These consist of dialogue channels (e mail, toll free numbers).

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