Dr.

Karim Kobeissi
Islamic University of
Lebanon - 2014

Chapter 1: Defining
Marketing Management in a
Changing World

W h a t is M a rke t ing?
One of the good definitions of marketing is: The
process

by

which

companies

create

value

for

customers and build strong customer relationships in

order to capture value from customers in return
Kotler.

Another definition: Marketing is an organizational

function and a set of processes for creating,
communicating, and delivering value to customers
and for managing customer relationships in ways

What is Marketing?
Process: a series of actions or steps taken in order to
achieve a particular end.
Stakeholders: A party that has an interest in an enterprise
or project. The primary stakeholders in a typical
corporation are its investors, employees, customers and
suppliers.

What is Marketing?
Value: The worth that a product has in the mind of the consumer.
The consumer's perceived value of a good or service affects the price that
he or she is willing to pay for it. For the most part, consumers are
unaware of the true cost of production for the products they buy. Instead,
they simply have an internal feeling for how much certain products are
worth to them. Thus, in order to obtain a higher price for their products,
producers may pursue marketing strategies to create a higher perceived
value for their products. Value, a central marketing concept, is primarily a
combination of quality, service, and price (qsp), called the customer
value triad. Value perceptions increase with quality and service but
decrease with price.

What is Marketing Management?

Simply put, marketing management

is customer management and demand
Management, Kotler.

What Is Marketed?

ETC..

Who Markets?

A marketer is someone who seeks a

responseattention, a purchase, a
vote,

donationfrom

party, called the prospect.

another

Marketers & Demand States

Marketers are skilled at stimulating demand for their products, but
thats a limited view of what they do. Marketers are
responsible

for

demand

management.

They

seek

to

influence the level, timing, and composition of demand to meet

the organizations objectives. Eight demand states are possible:
1. Negative demandConsumers dislike the product and may
even pay to avoid it.
2. Nonexistent demandConsumers may be unaware of or
uninterested in the product.
3. Latent demandConsumers may share a strong need that
cannot be satisfied by an existing product.
4. Declining demandConsumers begin to buy the product less
frequently or not at all.

Marketers & Demand States(con)

5. Irregular demandConsumer purchases vary on a
seasonal, monthly, weekly, daily, or even hourly basis.
6. Full demandConsumers are adequately buying all
quantities of the product put into the marketplace.
7. Overfull demandMore consumers would like to buy the
product than can be satisfied.
8. Unwholesome demandConsumers may be attracted to
products that have undesirable social consequences.
In each case, marketers must identify the underlying cause(s)
of the demand state and determine a plan of action to shift
demand to a more desired state.

What is a Market?
The

set

of

actual

and

potential buyers of a product.

These people share a need or

want that can be satisfied

through
relationships.

exchange

Core Concept - Need

Needs - basic human

requirements

Types of Needs
Physical:
Food, clothing, shelter, safety

Social:
Belonging, affection

Individual:
Learning, knowledge, self-expression

Core Concept - Want

Wants - needs become wants when
they

are

objects

directed

that

might

to

specific

satisfy

the

need. Wants are shaped by the

society.

A U.S. consumer needs food but may

want a Philly cheesesteak and an
iced tea. A person in Afghanistan
needs food but may want rice,

Core Concept - Demand

Demands are wants for
specific

products

backed by an ability
to pay.
Many people want a
Ferrari ; only a few
are able to buy one.

Core Concept Market Segmenting

Market Segmentation is the subdividing

of

customers

into

homogenous

sub-set

of

customers where any sub-set

may conceivably selected as
market target to be reached
with distinct Marketing Mix.

Core Concept Market Targeting

Market

Targeting

Evaluating

each

segments
attractiveness

and

selecting one or more

segments to enter.
Target Market A set
of

buyers

common

sharing

needs

or

Core Concept Market

Offering
For each target market, the
firm develops a tangible
market

offering

combination of products,
information,
experiences -

and
that it

positions in the minds of

the target buyers.

Core Concept Differentiation

Differentiation is
the

act

of

designing a set
of

meaningful

differences

to

distinguish

the

company's
offering
competitor's
offerings.

from

Core Concept - P o s i t i o n i n g

Positioning

is

the

act

of

arranging for a product to

occupy a clear, distinctive,
and desirable place relative
to competing products in the
minds of target consumers.

Core Concept Value Proposition

The end result of positioning is the creation of a market-focused

value proposition - The set of benefits a company
promises to deliver to customers to satisfy their needs to answer the customers question:

Why should I buy your

offer rather than a competitors offer? it is a simple clear

statement of why the target market should buy the product.
Such value propositions differentiate one brand from
another and the products position can be viewed as the
main result of its differentiation.

Core Concept Brand

A brand is a name, term, sign, symbol, design, or
a

combination

of

these,

that

identifies

the

products or services of one seller or group of

sellers and differentiates them from those of
competitors.
A brand name such as McDonalds carries many
associations in peoples minds that make up its image:
hamburgers,

cleanliness,

convenience,

courteous

service, and golden arches. All companies strive to build

a brand image with as many strong, favorable, and
unique brand associations as possible.

Core Concept - Marketing

Environment

- The Marketing Environment refers to the actors and forces

outside

of

the

marketing

department

marketing management ability to build

that

affect

and maintain

successful relationships with target customers.

- The Marketing Environment is made up of:
1. The microenvironment consists of the actors close to the
company that affect its ability to serve its customers.
These forces are partially controllable by the company.
2. The macroenvironment consists of the larger societal
forces that affect the microenvironment. These forces are
uncontrollable by the company.

Core Concept - Competition

Competition includes all the actual and potential rival

offerings and substitutes a buyer might consider. An

automobile manufacturer can buy steel from U.S. Steel in
the United States, from a foreign firm in Japan or Korea, or it
can buy aluminium for certain parts from Alcoa to reduce
the cars weight, or engineered plastics from Saudi Basic
Industries Corporation (SABIC) instead of steel.

Core Concept Customer Satisfaction

Customer satisfaction
depends

on

the

products

perceived

performance relative
to

expectations.

buyers

Satisfaction
Expectatio
n
8

Performance
10

Expectatio
n
10

Performance
8

If performance is higher than expectations, satisfaction is

high.
If performance is lower than expectations, satisfaction is
low.

Core Concept - The Marketing Mix

The marketing mix is the set of tactical marketing tools

that the firm blends to produce the response it wants in the
target market. The marketing mix consists of everything
the firm can do to influence the demand for its product.
The many possibilities can be collected into four groups of
variablesthe four Ps.
An effective marketing program blends each marketing mix
element into an integrated marketing program designed to
achieve the companys marketing objectives by delivering
value to consumers. The marketing mix constitutes the
companys

tactical

tool

kit

positioning in target markets.

for

establishing

strong

The Marketing Mix of a

Good

Product
Product means the goodsand services combination
the company offers to the
target market. Thus, a Ford
Escape consists of nuts and
bolts, spark plugs, pistons,
headlights, and thousands of
other parts. Ford offers
several Escape models and
dozens of optional features.
The car comes fully serviced
and with a comprehensive
warranty that is as much a
part of the product as the
tailpipe.

Price is the amount of money

customers must pay to obtain
the product. Ford calculates
suggested retail prices that its
dealers might charge for each
Escape. But Ford dealers rarely
charge the full sticker price.
Instead, they negotiate the price
with each customer, offering
discounts, trade-in allowances, and
credit terms. These actions adjust
prices for the current competitive
and economic situations and bring
them into line with the buyers
perception of the cars value.

Place
includes
company
activities
that
make
the
product available to target
consumers.
Ford partners with a large body of
independently owned dealerships
that sell the companys many
different models. Ford selects its
dealers carefully and strongly
supports them. The dealers keep
an inventory of Ford automobiles,
demonstrate them to potential
buyers, negotiate prices, close
sales, and service the cars after
the sale.

Promotion refers to the entire set

of activities that communicate
the intrinsic worth of the
product and persuade target
customers to buy it.
Ford spends more than $1.5 billion
each year on U.S. Advertising to tell
consumers about the company and
its
many
products.
Dealership
salespeople assist potential buyers
and persuade them that Ford is the
best car for them.
Ford and its dealers offer special
promotionssales, cash rebates,
and low financing ratesas added
purchase incentives.

MARKETING MIX of a
Service

PEOPLE

An essential ingredient to any service provision

is the use of appropriate staff and people.
Recruiting the right staff and training them
appropriately in the delivery of their service is
essential if the organization wants to obtain a
form of competitive advantage. Staff should
have

the

appropriate

interpersonal

skills,

attitude, and service knowledge to provide the

service that consumers are paying for.

PROCESS

The buying experience is becoming more and more

important as the public learns to expect better service.
A poor process will lead to a poor user experience, and
some very negative exposure. Letting people know
that you have strong secure customer orientated

Service Blueprinting1 (Bank Lending Operation)2

Loan application

Branch
30min--1hr.

Officer

Pay book

===
====
====

=====

$ 0 $

====

=====

Line of visibility
Decline

Initial
screening

Credit
check
1 day

Credit
bureau

Employer

Accept
2 days
Confirm

Verify
income
data

Bank
accounts

Final
payment

Issue
check

Deny

Receive
Payment

Notify
customer

Confirm

Print
payment
book 3 days

Delinquent

F
Close
account

Verify
payer
Branch
records
Accounting

Data base
records

decision

Fail point

Customer wait
W

Employee

PHYSICAL EVIDENCE

This is particularly important in services marketing as it is

the only physical items that a customer will see and so it
must reflect the image that the service is trying to project.
including some of the following:

Internet/web pages.
Brochures.
Furnishings.
Signage (such as those on aircraft and vehicles).
Uniforms.
Business cards.
The building itself (such as prestigious offices or scenic
headquarters).

Example:
If you walk into a restaurant your expectations are of a
clean, friendly, hygienic environment which will want you

PRODUCTIVITY & QUALITY

In what way is your offering a good deal for the
customer?

This

is

less

about

you

as

abusinessimproving your own productivity for

cost management, and more about how your
company

passes

this

onto

its

customers.

Remember that this always needs to be tied with

quality; you use the best materials, and supply
the best service, at a fair price.

Core Concept - Marketing

Channels
To reach a target market, the marketer uses three kinds of marketing
channels:
1) Communication channels deliver and receive messages from
target buyers and include newspapers, magazines, radio, television,
and the Internet. Beyond these, firms communicate through the look
of their retail stores and Web sites and other media.
2) The marketer uses distribution channels to display, sell, or deliver
the physical product or service(s) to the buyer or user. These
channels may be direct via the Internet, mail, or mobile phone or
telephone, or indirect with distributors, wholesalers, retailers, and
agents as intermediaries.
3) To carry out transactions with potential buyers, the marketer also
uses service channels that include warehouses, transportation
companies, banks, and insurance companies.
Marketers clearly face a design challenge in choosing the best mix of
communication, distribution, and service channels for their offerings.

Marketing Management
Tasks
Developing
marketing
strategies
Capturing
marketing insights
Connecting with
customers
Building strong
brands

Shaping market
offerings
Delivering value
Communicating
value
Creating longterm growth