CHAPTER 1: MARKETING

What is Marketing? - Marketing is managing profitable customer relationships. - Process whre companies build strong relationships with customers. The 2 interacting components: 1.Company 2.Market Needs - states of felt deprivation Wants - the form of human needs take as they are shaped by culture and individual personality. Demands - human wants that are backed by buying power. Market offerings - some combination of products , services , information , or experience offered to a market to satisfy a need or want. Marketing myopia - the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products. Exchange - the act of obtaining a desired objects from someone by offering something in return. Market - the set of all actual and potention buyers of a product or service. The strategic C's of Marketing: 1. Customers - the satisfaction of the needs , wants and expectations. 2. Competition - to outperform competition. 3. Company - to earn money ; to ensure corporate healt and profit. CUSTOMER COMPANY MARKET SHARE Key result areas: 1. Sales 2. Market sales

3. Profit - having an excess o sales over cost and expenses on trying to gain market share. Marketing management - the art and science of choosing target markets and building profitable reltionship with them. 4 U'S of Marketing: 1. New users 2.Extended users 3.More usage 4.New usage Standard of juding Marketing effectiveness: 1.Better than before 2.Better than others 3.Better than expected Marketing Management Orientations:

1. The Production Concept - the idea that consumers will favor products that
are highly affordable and that the organization should therefore focus on improving production and distribution efficiency.

2. The Product Concept - the idea that consumers will favor products that offer
the most quality performance , and features and that the organization should therefore devote its energy to making continous product improvements.

3. The Selling Concept - the idea that consumers will not buy enough of the
firms products unless it undertakes a large scale selling and promotion effort. ex: advertising , sales promotion , personal selling , pubic relation , and direct marketing.

4. The Marketing Concept - a philosophy that holds that achieving

organizational goals depends on knowing the needs and wants of target markets nd delivering the desired satisfactions better that competitors do. "make and sell to sense and respond"

5. The Societal Marketing Concept - the idea that a company's marketing

decisions should consider consumer's wants , the company's requirements, consumers long run interest , and society's long run interest. Marketing Process:

6. Understand the market place consumer needs and wants.

7. Design a customer - driven marketing strategy. 8. Construct and integrated marketing program. 9. Build profitable relationhip and create customer delight. 10. Capture value from customers creat profits ad customer equity.
Customer relationship management - the overall process of building and maintaning profitable customer relationships by delivering supirior customer value and satisfaction. Customer - percieved value - the customer's evaluation of the difference between all the benefits and all the costs of a marketing offer relative to these competing offers. Customer satisfaction - the extent to which products percieved performance matches a buyers expectations.

CHAPTER 2 : COMPANY AND MARKETING STRATEGY Strategic planning - the process of developing and maintaning a strategic fit between the organizations goals and capabilities and is changing marketing opportunities. - its sets the stage for the rest of planning in a firm. Step in a Strategic planning process: 1.Define a company's mission - Answers the questions : What is our business ? Who is the customer? What do consumers value? What should our business be? Mission statement - is a statement of the organizations purpose , what it wants to accomplish in the larger environment.

11. Product oriented definition 12. Market oriented definition

2. Setting company's objectives and goals - The company needs to turn its mission into detailed supporting objectives for each level of management. - Which includes business objectives and marketing objectives. 3.Designing the business portfolio

- Guided by the company's mission statement and objectives the management must now plan its : Business portfolio - the collection of businesses and products that make up the company. Business portfolio planning involeves 2 steps:

13. The company must analyze its current business portfolio ad

determinde which businesses should recieve more , less or no investment.

14. It must shape the future portfolio by developing strategies for growth
and downsizing. 4. Planning marketing and other fuctional strategies Analyzing the Current Business Portfolio: the major activity in strategic planning. Portfolio analysis - the process by which management evauates the products and businesses that make up the company. SBU's - strategic business units Boston Consulting Group Approach: Growth - share matrix - a portfolio - planning methid that evaluates a company's SBU's in terms of its market growth rate and relative market share. Four types of SBU's 1.Stars - are high growth , high share businesses or products. They often need heavy investments to finance their rapid growth , eventually their growth slows down and they will turn into cash cows. 2. Cash cows - are low growth , high share businesses or products. They need less invetment to hold their market share , thus they produce a lot of cash that the company uses to pay its bills and support othe SBU's that need investments. 3. Question marks - are low share business units in high growth markets. They require a lot of cash to hold their share. Manangement has to thik hard whether they should try to build in into stars and which could be phased out. 4. Dogs - are low growth , low share businesses and products. They must generate enough cash to maintain themeselves but do not promise to be a large source of cash.

Process: Question marks - Stars - Cash cows - Dogs Problems with the Matrix Approaches: 1.Difficult to measure SBU's market share and growth. 2.Time consuming. 3.Little advice for future planning of business. Product / market expansion grid - a protfolio - planning tool for identifying company growth opportunities through market penetration , market development , product development and diversification. 1. Market penetration - company growth by increasing sales of current products to current market segments without changing the product. - Original product ; new design 2.Market development - Company growth by identifying and developing new market segments for current company products. - New markets for current products 3. Product development - company growth by offering modified or new products to current market segments. - Modified products to current markets. 4.Diversification - company growth through starting uo or aquiring businesses outside the company's current products and markets. Marketing Strategy and the Maarketing Mix: Marketing strategy - the marketing logic by ehich the company hopes to create customer value and achieve profitable cutomer relationships. Developing an integraded marketing mix : Marketing mix - the set of tactical marketing tools , product , price , place and promotion. That the firm blends to produce the response it wants in the target market. FOUR P's : 1.Product - goods and services combination the company offers to the target market. 2. Price - amount of money the customers must pay to obtain the product.

3. Place - includes company activities that make up the product available to target consumers. 4. Promotion - activities that communicate the merits of the product and persuades target customers to buy it. Marketing implementation - turning marketing strategies ad plans into marketing actions to accomplish strategic marketing objectives. Executive summary - presents a brief summary of the main goals and recommendations of the plan for management review , helping top management find the plan's major points quickly.

Current marketing situations Threats and opportinities analysis Objectives and issues Marketing strategy Action programs Budgets Controls

CHAPTER 7 : CUSTOMER DRIVEN MARKETING STRATEGY Customer - driven marketing strategy - customer centered. Process: 1. Market segmentation - dividing a market into distict groups of buyers who have different needs , characteristics , or behaviors , and who might require separate marketing strategies or mixes.

15. Georgraphic segmentation - dividing a market into different

geographical units. Such as nations , states , regions , countries , cities , or even neighborhoods.

16. Demographic segmentation - dividing the market into segments

based on variables such as age , gender , family size , family life cycle , income , occupation , education , religion , race , generation , and nationality.

17. Age and life - cyle segmentation - dividing a market into different

age and life cyle groups.

18. Gender segmentation - dividing a market into different segments

based on gender.

19. Income segmentation - dividing a market into different income

segments

20. Psychographic segmentation - dividing market into different

segment based on social class lifestyle , or personality characteristics.

21. Behavioral segmentation - dividig a market into segments based on

consumer knowledge , attitudes , uses , or responses to a product.

22. Occasion segmentation - dividing the market into segments

according to occasions when buyers get the idea to buy , actually make their purchase.

23. Benefit segmentation - dividing the maket into segments according

to the different benefits that consumers seek from a product. Segementing International Markets: 1. Geographic location 2. Economic factors 3.Cultural factors 4.Political legal factors Requirements for Effective Segmentation: 1. Measurable - the size , purchasing power and profiles of segments can be measured. 2. Accessible - the market segments can be effectively reached and served. 3.Substantial - the market segments are large or profitable enough to serve. 4. Differentiable - the segemnts are conceptually distinguishable and respond differently to different marketing mix elements and programs. Market segment - a group of consumers who respond in a similar way to a given set of marketing efforts. 2.Market targeting - the process of evaluating each market segments attractiveness and selectingone or more segments to enter.

Target market - set of buyers sharing common needs or characteristics that the company decides to serve. 1. Undifferentiated marketing ( mass marketing) - a mrket coverage strategy in which a firm decides to ignore market segemnt differences and go ater the whole market with one offer. 2.Differentiated marketing ( segmented marketing) - a market coverage strategy in which a firm decides to target several market segments and designs separate offers for each. 3. Concentrated marketing ( niche marketing) - a market coverage strategy in which a firm goes after a large share of one or a few segments or niches. 4. Micromarketing - tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments. It includes local marketing and individual marketing. Local marketing - tailoring brands and promotions to the needs and wants of local custoer segments. Individual marketing - tailoring products and marketing programs to the needs and preferences of individual customers. 3. Market differentiation and Positioning Positioning - arranging for a product to occupy a clear , distinctive , and desirable place relative to competing products in the minds of target consumers. Product position - the way the product is defined bu consumers on important attributes , the place the product occupies in consumers minds relative to competing products. Differentiation - actually differentiating the market offering to create supirior customer value. Competitive advantage - an advantage over competitors gained by offering greater customer value, either by having lower price or providing more benefits that justify higher prices. CHAPTER 8 - PRODUCTS , SERVICES AND BRANDS Product - anything that can be offered to a market for attention , acquisition , use , or consumption that might satisfy want or a need. Service - an activity , benefit , or satisfaction , offered for sale that is

essentially intangible and does not result in the ownership of anything. Levels of products and services: 1."Core product" core consumer value - (innermost) reaso for buying the product. 2. Actual product - (middle) what attracts the sellers?(quality , features , brands , design and style) 3. Augmented - (outermost) additional benefits and services "warranty". Product service classsification: 1 Consumer products - products and services bought by final consumers for personal consumption. Convinience products - consumer products that consumers usually , frequently , immediately buy. - minimal comparison - staple , impulse and emergency Shopping products - a consumer roduct that the customer usually compares to the other products. ( quality , price , and style) - "price sensitivity" Specialty products - consumer products with unique chharacteristics or brand identification. - " no comparison ; no price sensitivity" Unsought products - products that consumer dont consider to buy. 2. Industrial products - products bought by individuals an organization for future processing or use in business. A. Materials and parts i. Raw materials - form and natural ii. Manufacture materials - component part , componenet materials B. Capital - aid in buyers production , operation and equipment i. Installation - cannot be moved easily. ii. Accessory - can be moves easily.

C. Supplies and services i. Operating supplies - pencils , paper , etc. ii. Repairs / maintenance - repairs , paint , nails. iii. Business advisory - marketing , financial , accounting iii. Repairs maintenance service - janitors , security Oraginzation marketing - consist of activities undertaken to create , maintain , or change the attitudes or behaviors of target consumers. Palce marketing - involes activities created to maintain or change attitudes or behaviors towards a particular place. Ideas - social marketing ; marketing of ideas Indivudual Product nd Services Decisions: Product attributes - Branding - Packaging - Labeling - Product support services 1. Product and Service Attributes i.Product quality - is one of the marketer's major positioning tools .The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs. Total quality manangement - is an approach in which all of the company's people are involved in constantly improving the quality of products , services . and business processes. Performance quality - the ability of product to perform its functions. Conformance quality - freedon from defects and consistency in delivering a targeted level of performance. ii. Product features - are competitive tool for differentiating the company's producr from competitors products. iii. Product style and design Style - simle describes the appearance of a product ; can be eye catching or yawn producing. It does not necessarily make the product perform better. Design - more skin deep - it goes to the very heart of a product. Good design contributes to a products usefulness as well as to its looks. 2. Branding - helps conssumers identify products tht might benefit them ; product quality and consistency.

Brand - a name , term , sign , symbol , design , or a combination of these , that identifies the products or service of one seller or group of sellers and differentiates them from those competitors. 3. Packaging - the activities of designing and producing the container or wrapper for a product. 4. Labeling - ranges from simple tags attatched to products to complex graphics tht are part of the packaging. Label identifies the product or brand , might also describe things about the product. Label might help promote the brand , support its positioning , and connect with customers. 6. Product support services - customer service is another element of product strategy. A comapany's offer usually includes some support services , which can be a minor part or a major part of the total offering. Product line Descisions : Product line - a group of products that are closely related because they function in a similar manner, are sold tp the same customer groups , are marketed through the same types of outlets , or fall within given price ranges. Product line length - is influence the company objectives and resources. A company can expand its product line in 2 ways: 1. Product line filling - involves adding more items within the present range of the line. 2. Product line stretching - occurs when a company lengthens its product line beyond its recent range. Product Mix Decisions: Product mix or product portfolio - the set of all product lines and items that a particular seller offers for sale. 4 important dimensions of a Product Mix: 1.Product mix width - refers to the number of differen product lines the company carries. 2. Product mix length - refers to the total number of items a company carries within its product lines. 3. Product mis depth - refers to the number of versions offered for each product in the line.

4. Product mix consistency - refers to ow closely related the varius proct line are in end use , production requirements , distribution channels . The Nature and Characteristics of a Service: 1. Intagibility - means that services cannot be seen , tasted , felt , heard , or smelled. 2. Inseparability - means that services cannot be separated from their providers , whether providers are people or machines. 3. Variability - means that the quality of services depends on who provides them. 4. Perishability - means that services cannot be stored for later sale or use. Internal marketing - orienting and motivating customer contact employees and supporting service people to work as a team to provide customer satisfaction. Interactive marketing - training service employees in the fine art of interacting with customers to satisfy their needs. Brand equity - the differential effect that knowing the brnd name has on consumer response to the product or its marketing. Building strong Brands : Brand positioning - Brand name selection - Brand sponsorship - Brand development 1. Brand positioning - marketers need to position their brands clearly in target customers minds. -They can position their brand at any tof the 3 levels : Product attributes , benefit , and beliefs and values. 2. Brand name selection - a good brand name can add greatly to a products success. - Should suggest something about the products benefits and qualities. - Easy to pronounce , recognize , and remember. - The brand name shoul be distinctive. - Should be extendable. - Should translate easily to foreign languages.

- Should be capable of registration and legal protection. 3. Brand sponsorship i. National brands or manufacturers brand ii.Store brand (private brand) - a brand created and owned by reseller of a product or service. iii.Co- branding - the practice of using the established brand names of two deifferent companies on the same product. 4. Brand Development i. Line extensions - occur when a company extends existing brand names to new forms , colors , sizes , ingredients , or flavors of an existing product category. ii. Brand extensions - extends a current brand name to new or modified products in a new category. ex. Dove - lotion , deo , shampoo , soap iii. Multibrands - companies often market many different brands in a given product category. iiii. New brands - may create a new brand name when it enters a new product category. \ CHAPTER 9 - NEW PRODUCT DEVELOPMENT AD PRODUCT LIFE CYCLE STRATEGIES: A firm can obtain new product in 2 ways: 1. Acquisition - by buying a whole company , a patent , or a license to produce someone else's product. 2.New product develpment - the development of original products , product improvements , product modifications , and new brands through the firms own product development efforts. The New - Product Development Process: 1. Idea Generation - the systematic search for new product ideas. i. Internal idea sources - companies find new ideas through formal R and D. ii. External idea sources - companies obtain ideas from distributors and suppliers.

iii. Crowdsourcing - inviting broad communities of people , customer , employees, independent scientist and researchers , and even the public at large - into the new product innovation process. 2. Idea screening - screening of new product ideas to spot good ideas and drop poor ones as soon as possible. 3. Concept Develpment and Testing Product idea - an idea for a possible product that the company can see itself offering to the market. Product image - the way customers percieve an actual or potential prouct. Product concept - a detailed version of the new product idea stated in meaningful consumer terms ; attractive ideas must be developed into this. Concept testing - testing ne - product concepts with a group of target consumers to find out if the concepts have strong consumer appeal. 4. Marketing Strategy Development - designing an initial marketing strategy for a new product based on the product concept. * The marketing strategy statement consists of three parts: - target market ; the planned value proposition ; and the sales , market share and profit goals for the first few years. - Outlines the products planned price , place , distribution , and marketing budget for the first year. - Describles the plannes long - run sales; profit goals and marketing mix strategy.