Marketing Management

First Exam: 20%

Second Exam: 20%
Final Exam: 20%
Quizzes, Workshops, presentations and case studies: 15%
Marketing Plan: 25%

Marketing is about identifying and meeting human and social needs

4 stages in Marketing

1. Identifying needs
2. The main objective is to create value
3. Delivering values (4 P’s)
4. Sustain that value

A marketer is someone who seeks a response from another party, called the prospect.

Possible Demand States

 Negative demand: consumer dislike the product and may even pay to avoid it
 Nonexistent Demand: Consumers may be unaware of our uninterested in the
product.
 Latent Demand: consumer may share a strong need that cannot be satisfied by an
existing product.
 Declining Demand: Consumers begin to buy the product less frequently or not at
all
 Irregular Demand: Consumers purchases vary on a seasonal, monthly, weekly, or
even hourly basis
 Full Demand: Consumers mare adequately buying all products put into the
marketplace
 Overfull Demand: More consumers would like to buy the product that can be

Key Customer Markets

1. Consumer M
2. .
3. .
4. .
  Marketplaces
 Marketspaces
 Metamarkets

Core Marketing Concepts

 Needs: the basic human requirements (air, food, clothing and shelter)
 Wants: Specific objects that might satisfy the need
 Demands: Wants for specific products backed by an ability to pay

STP

Segmentation: divide the market, identify and profile distinct groups of buyers who might
prefer or require varying products and service mixes

Target markets: The marketer decides which groups present the greatest opportunities

Positioning: For each target market, the firm develops a market offering that it positions in
the minds of the target buyers as delivering some central benefits

Value proposition
 Explains how your product or service solves customer problems or improves

Marketing Channels
 Communication
 Distribution
 Service

Supple chain: is a longer channel stretching from raw materials to components to finished
products to final buyers

Marketing Environment

Task Environment + Broad Environment = Marketing Environment

PESTEL
P: political
E: economic
S: Social
T: Technology
E: Environmental
L: Legal

The new marketing realities

1. Network Information Technology

2. Globalization
3. Deregulation
4. Privatization
5. Heightened Competition
6. Industry Convergence

Developing Marketing Strategies and Plans

The value delivery process

1. Choosing the value

2. Providing the value
3. Communicating the value

The value chain: A tool for identifying ways to create more customer value

Core Competency
 A source of competitive advantage and makes a significant contribution to
perceived customer benefits
 Applications in a wide variety of markets
 Difficult for competitors to imitate

How to maximize the core competencies?

1. (Re)define the business concept
2. (Re)shaping the business scope
3. (Re)positioning the company’s brand identity

Central Role of Strategic Planning

 Managing the businesses as an investment portfolio
 Assessing the market’s growth rate and the company’s position in that market
 Establishing a strategy

4 organizational levels
 Corporate
  Division
 Business Unit
 Product

Analytical Marketing + Strategic Marketing Plan + Tactical Marketing Plan = Marketing

Plan

Strengths: Weaknesses
Internal capabilities Internal limitations
Resources Negative factors
Circumstantial factors

Opportunities Threats
Favorable factors or trends in the Unfavorable external factors or trends that
environment that the company can exploit may hinder the achievement of good
advantageously performance

Some common sources of competitive advantage

Relationship advantages
1. Customers loyal to the brands
2. High switching costs for customers
3. Long-term relationships with partners in the supply chain
4. Agreements to strategic alliances
5. Joint marketing agreements or branding
6. Close coordination and integration with partners in the supply chain
7. Great bargaining power

Advantages of products

1. Legal advantages
2. Price advantages
3. Organizational Advantages
4. Promotional Advantages
5. Human Resources Advantages
6. Distribution Advantages

Complex Changing Market

Necessity to understand the market and customers

Objective of Marketing Information

 To provide a context, vision and inspiration that contributes to decision making
Relevant elements to the market
1. Clients
2. Competitors
3. Products
4. Distributors
5. Marketing programs

Market Research

Collection of Data

Secondary Data

1. Data from government entities

2. Private Data
3. Online Data Sources

Primary Data

1. Method of Observation
2. Interpretative Research
a. Ethnographic studies
3. Survey Methods
a. Telephone interviews
b. Focus groups
c. Personal interviews
4. Experimental Methods

Marketing Information System (MIS)

Natural Environment
 Environmentalists and ecologists

Technological Environment
- Accelerating pace of change
- Unlimited opportunities for innovation

Political-Legal

How to improve the quantity and quality of the MIS?

1. Train and motivate the sales force to identify and report on new developments
2. Motivate distribution and retailers to transmit important intelligence information
 3. Hire outside experts to gather intelligence
4. Establish internal and external contacts
5. Take advantage of government related information resources
6. Acquire information from research companies and external sellers

Potential market: more than the possibility is the desire to acquire the product
Available and qualified market: You can only purchase alcohol if you’re old enough
Target Market:
Penetrated Market: is the set of consumers who are buying the product

Total Market Potential = Potential number of buyers * Average quantity each purchases *
average price

Market Penetration Index (MPI) = Real level of market demand / Potential level of demand

- If the MPI is low: the company can increase its market share considerably
- If the MPI is high: it will be very expensive to attract the few remaining customers

Why make a sales forecast

- To make decisions about a product
- For production scheduling
- For financial basic planning for the preparation of companies’ budgets
- For the planning of purchases, inventories and distribution

Market Segmentation: involves dividing large heterogeneous markets into smaller

segments that can be reached more efficiently with products and services that match their
unique needs.

Market Segmentation Principles

 All customers are different and have different wants, needs and expectations from
purchases
 Given sufficient resources they will express these differences in their purchasing
and consumption behavior

Bases for Segmentation Consumer Markets

1. Geographic segmentation
2. Demographic segmentation
3. Psychographic segmentation: phycological/personality traits, lifestyle or values
4. Behavioral segmentation: related to actual customer behavior

Market Targeting
1. Needs-based segmentation
 2. Segment identification
3. Segment attractiveness
4. Segment profitability
5. Segment positioning
6. Segment “Acid Test”
7. Marketing mix-strategy

Effective Segmentation

1. Measurable
2. Substantial
3. Accessible
4. Differential
5. Actionable

One to one marketing

1. Identify your prospects and customers

2. Differentiate customers in terms of their need and value to your company
3. Interact to improve your knowledge about customers’ needs and to build
relationships
4. Customize products, services, and messages to each customer

Socially Responsible Targeting

 Some segments, especially children, are at special risk
 Many potential abuses on the internet, including fraud internet shoppers
 Controversy occurs when the method used are questionable.

Model of consumer behavior

1. Marketing Stimuli: Products & services, price, distribution, communications

2. Other Stimuli: economic, technological, political, cultural
3. Consumer Psychology: motivation, perception, learning, memory
4. Consumer Characteristics: cultural, social, personal
5. Buying Decision Process: Problem recognition, information search, evaluation of
alternatives, Purchase decision, post purchase behavior
6. Purchase Decision: Product choice, brand choice, dealer choice, purchase amount,
purchase timing, payment method

Key Psychological Process

1. Motivation
2. Perception
 3. Learning
4. Emotions
5. Memory

Culture and Assumption

The meaning of consumption

 The cultural meaning found in the products /services and communication of the
same
 Use value vs exchange value
 The symbolic meaning of a product: knowledge, emotions and attitudes towards
brands

The cultural meaning

 World (culturally constituted)
 The good (product or service)
 The individual consumer

Premises of the culturally constituted world

 World formed from the beliefs and assumptions of individuals
 Culture is the lens through which individuals see their life – how the world sees
 Culture is a blueprint

Cultural Categories – time, space, measurement and occasion

Cultural Principles – Clothing

Instruments to transfer meanings: from the “culturally constituted world” to the “good”
1. Advertising (IMC systems)
2. Fashion system

Instruments to transfer meanings: from “good” to “consumer”

1. Exchange Rituals
2. Possesion Rituals
3. Grooming Rituals
4. Divestment Rituals

SEGUNDO CORTE

Creating Long-Term Loyalty Relationships

Building customer value, satisfaction, and loyalty

  Managers who believe the customer is the less important plan of the company are
stacked in the past

Customer-perceived value

Total customer value:

- Perceived monetary value of the bundle of economical, functional and
psychological benefits customers expect

Total customer cost

Customer Value Analysis

1. Identify the major attributes and benefits that customers value

2. Assess the quantitative importance of the different attributes and benefits
3. Assess the company’s and competitors’ performances on the different customer
values against their rated importance
4. Examine how customers in a specific segment rate the company’s performance
against a specific major competitor or and individual attribute or benefit basis
5. Monitor customer values over time

Total customer satisfaction: a person’s feelings of pleasure of disappointment that result

from comparing a product or services perceived performance to expectations

Level of satisfaction = perceived performance – expectations

How do buyers form expectations?

1. Past buying experiences
2. Advice from friends and associates
3. Information: public, marketer and competitor
4. Promises – marketer and competitor

A highly satisfied customer

- Stays loyal longer
- Buys more as the company introduces new or improved products
- Speaks favorably to others about the company and products
- Is less sensitive to price
- Offers ideas for the development of products and services

Branding

Points of Difference and Point of Parity

Points of Difference (PODs): attributes benefits that consumers strongly associate with a
brand, positively evaluate and believe they could not find the same extent with a
competitive brand

Points of Parity (POPs): attributes benefit associations that are not necessarily unique to
the brand but may in fact be shared with other brands

POP forms
- Category: attributes or benefits that consumers view as essential to a legitimate
and credible offering within a certain product or service category. Necessary but
not sufficient conditions for brand choice

Brand Mantra

Communicate: clarify what is unique about the brand

Simplify: memorable
Inspire: personally, meaningful and relevant to as many employees as possible

Communicating POPs and PODs

- Low price vs high quality
- Taste vs low calories
- Powerful vs safe
- Ubiquitous vs exclusive
- Varied vs simple

Monitoring Competition

Market Share + Share of Mind + Share of Heart

Alternative Approaches to positioning

Brand Narrative and storytelling – narrative branding

Positioning/Branding for a small business

1. Find compelling product performance advantage
2. Focus on building one or two stong based on one or two key associations
3. Encourage product trial in any way possible
4. Develop cohesive digital strategy to make the brand “bigger and better”
5. Create buzz and a loyal brand community
6. Employ a well-integrated set of brand elements
7. Leverage as many secondary associations as possible
Brand: a name, term, signal, symbol or design or a combination of these that identifies the
goods or services of one seller or group o seller and differentiates them from those of
competitors

Through brands firms can:

- Simplify management and product handling
- Organize inventory and accounting
- Create brand loyalty
- Secure competitive advantage
- Provide legal protection for unique features of the product or service

Brand Equity: Refers to the added value that a certain brand name gives a product on the
market

How added value occurs

1. Experience of use
2. Users associations
3. Belief in efficacy
4. Brand appearance
5. Manufacture name and reputation

Brand Strategic Decisions

1. Brand positioning
2. Choice of brand name
3. Brand sponsorship
4. Brand development

Dimensions of Brand Personality

Brand personality plays a very important role in brand management as it is an integral part
of its positioning and image

Building brand personality can help experts enrich their conception of people’s
perceptions and attitudes towards the brand contributing to a differentiated brand
identity, guiding the communication

Growth Strategies
- Building your market share
- Developing committed customers and stakeholders
- Building a powerful brand
- Innovating new products, services and experiences
- International expansion
- Acquisitions, mergers and alliances
Growing the core
1. Make the core of the brand as distinctive as possible
2. Drive distribution through both existing and new channels
3. Offer the core product in new formats or versions

Competitive strategies for market leaders

1. Market Leader: 40%

2. Market Challenger:30%
3. Market Follower: 20%
4. Market Nichers: 10%

1. Market Leaders
a. Expanding total market demand
i. New Customers
ii. More Usage (from existing customers)
b. Protecting market share
i. Proactive Marketing
ii. Proactive Firms
iii. Defensive Marketing
1. Position Defense
2. Flank Defense
3. Preemptive Defense
4. Counteroffensive Defense
5. Mobile Defense
6. Contraction Defense
c. Increasing market share
i. One share point can equal tens of millions of dollars – but not
always profitable
2. Market Challengers
a. Defining the strategic objective and opponents
i. Attack the market leader
ii. Attack firms its own size that are not doing the job and are
underrated
iii. Attack small local and regional firms
iv. Attack the status quo
b. Choosing a general attack strategy
c. Choosing a specific attack strategy
3. Market Followers
a. Counterfeiter (copy products)
b. Cloner
c. Imitator
d. Adapter
 4. Market Nicher

Common Product Life-Cycle Patterns

- Style (It’s always there)
- Fashion (Trends)
- Fad (Spinners)

Marketing Strategies:
- Growth Stage
o Improve quality and add new features
o Add new models and flanker products
o Enter new market segments
o Increase distribution coverage and enter new distribution channels
o Lower prices to attract the next layer of price-sensitive buyers
- Maturity Stage
o Market modification
o Product modification
o Marketing program modification
- Decline Stage
o Eliminating weak products
o Harvesting and divesting

BCG Matrix / Growth Share Matrix

High Low
High Star ?
Low Cash Cow Dog

Marketing in an economic downturn

- Explore upside of increasing investment
- Review budget allocations
- Get closer to customers
- Put forth compelling value proposition
- Fine-tuned brand and product offerings

TERCER CORTE

Costumer value hierarchy

-Core benefit: The service or benefit the costumer is really buying
-Basic Product: Turn the core benefit into a basic product
-Expected Product: Set of attributes buyers expect
-Augmented product: Must exceed costumer expectation
-Potential product: Encompasses all possible transformations the product might undergo
in the future

Product classification

 Durability
 Non-durable
 Durable
 Services
 Tangibility
 Use

1. Convenience goods
Regular basis, frequent, immediate, easy, everywhere
Milk, chewing gum

2. Shopping goods
Furniture, Clothing, major appliances

Homogeneus: the only thing that defers is the price

Heterogeneus: Ej: guayos

3. Specialty goods
Special effort, brand is important, exclusive, luxury, not everywhere

4. Unsought goods
You never think about buying them
Life insurance, gravestone, smoke detectors

1. Materials and parts – raw materials

2. Capital Items – buildings, installations
3. Supplies and business services

Positioning – The place you occupy in consumer minds

Product differentiation
 - Form
- Features
- Performance quality
o Low, average, high, superior
- Comformance quality
o Coca cola same taste
- Durability
- Reliability
- Repairability
- Style
- Customization

Services differentiation

- Ordering easy
- Delivery
- Installation
- Costumer training
- Costumer consulting
o Info the buyer has
- Maintenance and repair
- Returns
o Controllable, errors made by the seller
o Uncontrollable, need for costumers to see, try or experience products

Design

Luxury brands

Quality
Uniqueness
Craftsmanship ej:artesanal
Heritage
Authenticity
History

Co- branding

Same Company
Joint venture: con un fin puntual
Multiple sponsor
Retail: sumar fuerzas para la tienda

Ingredient branding-what is it made of, what does it have inside

Packaging

Colors

SERVICES

1. Pure tangible goods

2. Tangible good accompanying services
3. Hybrid
4. Major service with accompanying goods
5. Pure Service

Distinctive characteristics of services

1. Intangibility
2. Inseparability
3. Variability ej:McDonalds
4. Perishability ej: no se puede guardar para despues

Managing service quality

Managing customer expectations

Post-sale Service Strategy

 Customer service evolution
 Customer service imperative

Value Network
Marketing Channels

Push Strategy: cuando llegue a la tienda que compre mas

Pull Strategy: generar demanda

Integrated Marketing Communications

 Coherency
 Consistency

Consumer Marketing Channels

Industrial Marketing Channels

Channel design decisions

- Desired the size
- Waiting and delivery time
- Spatial convenience
- Product variety
- Service backup

Number of Intermediaries
-exclusive distribution
- Selective distribution
- intensive distribution

Horizontal channel conflict: Apple, Exito

Vertical channel conflict: Direct

Types of retailers
1. Store retailers
2. Nonstore retailing
3. Franchises

Private labels Ej: ekono

Wholesaling

Communicating Value

Inform, persuade and remember

Marketing Communications Mix

- Advertising
- Sales promotion
- Events and experiences
 - Public relations and publicity

Developing Effective Communication

1. Message Strategy
2. Creative Strategy
3. Message Source

Online Marketing
- Web sites
- Search ads
- Display ads
- E-mail

AIDA model
- Attention
- Interest
- Desire
- Action

Promotional Strategy vs Product life cycle

1. Introduction
2. Growth
3. Maturity
4. Decline

Rumor Marketing: Generar un chisme para atraer a la gente

Viral Marketing: Mensaje que la gente comparte sola

Measuring the effect of word-of-mouth

ATL & BTL

Sales Funnel
1. Awareness
2. Interest
3. Decision
4. Action

Pricing

Pricing in a digital word

Sharing economy
 - Bartering
- Renting

How companies price: Boss and product line managers

How companies should price: Understanding of consumer pricing psychology

Reference prices

Price – quality inferences

Price endings

Pricing Policy
1. Selective the pricing objective
2. Estimating demand curves
3. Price Elasticity
4. Estimating costs
5. Selecting a pricing method
a. Price floor
b. Orienting point
c. Price ceiling
6. Selecting the final price

Adopting the price

- Discount
- Quantity discount
- Functional discount
- Seasonal discount
- Allowance

Initiating and responding to price changes

- Low-quality trap
- Fragile-market share trap
- Shallow-pockets trap
- Price-war trap

Initiation Price Increases

- Delayed quotation pricing
- Escalator clauses
- Unbundling
- Reduction of discounts