UNDERSTANDING

MARKETING MANAGEMENT

Copyright
 MANAGEMENT IS SCIENCE & ARTS

• Management is a science when it uses logic, data, and systematic

analysis.

• It is an art when it involves creativity, vision, and people skills.

• Effective managers blend both.

MARKETING
• Formal Definition: Marketing is the
activity, set of institutions, and processes
for creating, communicating, delivering,
and exchanging offerings that have value
for customers, clients, partners, and
society at large.

• Marketing Management is the art and

science of choosing target markets and
getting, keeping, and growing customers
through creating, delivering, and
communicating superior customer value.
 MARKETING ENVIRONMENT
• Competition includes all the actual and potential rival offerings and substitutes a
buyer might consider.

Marketing environment
• Task environment includes the actors engaged in producing, distributing, and
promoting the offering, such as, company, suppliers, distributors, dealers, and target
customers.
• Broad environment consists of Demographic environment, Economic environment,
Social-cultural environment, Natural environment, Technological environment, and
Political-legal environment (DENTSP).
MARKETING MIX
4 As OF MARKETING
SWOT ANALYSIS
5C ANALYSIS
HOLISTIC MARKETING CONCEPT
MARKETING PHILOSOPHIES
CONSUMER BEHAVIOUR
 CONSUMER BEHAVIOUR
• Consumer behavior is the study of how individuals, groups,
and organizations select, buy, use, and dispose of goods,
services, ideas, or experiences to satisfy their needs and
wants.

• Marketers must fully understand both the theory and the

reality of consumer behavior.
 PSYCHOLOGICAL FACTORS
Selective attention Selective distortion Selective retention
Focusing of conscious Tendency to interpret People recall info that
awareness on a information in a way that pertains to their needs
particular stimulus. fits our preconceptions and dispositions.
B2B MARKET
 B2B MARKET
1. Fewer, larger buyers – E.g. aircraft engines and defense weapons.
2. Close supplier–customer relationships –
• Smaller customer base +
• Importance and power of the larger customers +
• Suppliers customize offerings as per individual business customer needs.
3. Professional purchasing –
• Purchased by trained purchasing agents following their organizations’
purchasing policies, constraints, and requirements.
• E.g.: Requests for quotations, proposals, and purchase contracts—are not
typically found in consumer buying.
 B2B MARKET
4. Derived demand –
• Demand for business goods is ultimately derived from the demand for
consumer goods.
• Thus, business marketer closely monitor buying patterns of end users.
5. Fluctuating demand –
• Demand for B2B goods and services > volatile than demand for consumer
goods and services.
• Acceleration effect - Rise of only 10% in consumer demand can cause as
much as a 200% rise in business demand for products in the next period.
• 10% fall in consumer demand may cause a complete collapse in business
demand.
 BUYING SITUATIONS

1. Straight rebuy - Reorders items like office supplies and bulk chemicals
on a routine basis and chooses from suppliers on an approved list.

2. Modified rebuy -The buyer in a modified rebuy wants to change

product specifications, prices, delivery requirements, or other terms.
This usually requires additional participants on both sides.

3. New task - A new-task purchaser buys a product or service for the first
time (an office building, a new security system).
 Customer Relationship Management

• CRM is building and maintaining mutually beneficial long-term relationship

with strategically significant customers and potential customers.

• CRM helps to focus on organization’s relationships with individual people —

including customers, service users, colleagues, or suppliers — throughout
lifecycle with them, including finding new customers, winning their business,
and providing support and additional services throughout the relationship.
SEGMENTATION

TARGETING

POSITIONING
 WHAT IS SEGMENTATION?
• Aggregating prospective buyers into groups or segments with common needs
and who respond similarly to a marketing action.

• It involves looking at your entire pool of potential customers and grouping (or
segmenting) them based on similarities.

• These similarities can be pretty much anything you can think of, from age or
geographical location to buying habits, interests, and life values.
STEP 1: REQUIREMENTS FOR EFFECTIVE SEGMENTATION
STEP 1: LEVELS OF MARKET SEGMENTATION
BASES FOR MARKET SEGMENTATION
DEMOGRAPHIC SEGMENTATION
GEOGRAPHIC SEGMENTATION
PSYCHOGRAPHIC SEGMENTATION
BEHAVIORAL SEGMENTATION
BEHAVIORAL SEGMENTATION
STP
LOYALTY STATUS SEGMENTATION
TARGETING SEGMENTS – AN OVERVIEW
POSITIONING
 POSITIONING
• Positioning is the act of designing a company’s offering
and image to occupy a distinctive place in the minds of
the target customers.

• Positioning focuses on the key benefits that will provide

consumers with a reason to choose the company’s
offering.
 A PRODUCT CAN CREATE…
Depending on the consumers’ needs, an offering can create value
across three domains:

1. Functional Value

2. Psychological Value

3. Monetary Value
 FRAME OF REFERENCE
• Consumers determine an OFFERING’S VALUE relative to a FRAME OF
REFERENCE used to asses its benefits and costs.

• An offering can be viewed as ATTRACTIVE in comparison to an INFERIOR

OFFERING.

• The same offering can be perceived as UNATTRACTIVE when compared to a

SUPERIOR OFFERING.
 POINTS OF DIFFERENCE
• Points of Difference (POD) are the attributes or benefits that
are unique to the company’s offerings.

POINTS OF PARITY
• Points of Parity (POP) are the attributes or benefits that the
company’s offerings has in common with the competition.
PRODUCT MANAGEMENT

1. Core: Basic benefits + Customer want

2. Basic: Actual product + Tangible Qualities
3. Expected: Basic + Other expected attributes
4. Augmented: Differentiation
5. Potential: Possible augmentations +
transformations in future.
 PRODUCT CLASSIFICATIONS
I. Durability and Tangibility Products

1. Nondurable goods are tangible goods normally consumed in one or a few uses, such as
beer and shampoo → Purchased frequently, the appropriate strategy is to make them
available in many locations, charge only a small markup, and advertise heavily to induce
trial and build preference.

2. Durable goods are tangible goods that normally survive many uses: refrigerators,
machine tools, and clothing → Require more personal selling and service, command a
higher margin, and require more seller guarantees.

3. Services are intangible, inseparable, variable, and perishable products → Require more
quality control, supplier credibility, and adaptability. E.g. haircuts, legal advice, and
appliance repairs.
 II. Consumer-Goods

1. Convenience Goods - Buy frequently, immediately, and with minimal effort. E.g.: Soft
drinks, soaps, and newspapers.
a. Impulse goods are purchased without any planning or search effort, like candy bars and
magazines.
b. Emergency goods are purchased when a need is urgent—umbrellas during a rainstorm,
boots and shovels during the first winter snow.

2. Shopping Goods - Consumer characteristically compares on bases such as suitability,

quality, price, and style.
E.g.: Furniture, clothing, and major appliances.
a. Homogeneous shopping goods are similar in quality but different enough in price to
justify shopping comparisons.
b. Heterogeneous shopping goods differ in product features and services that may be
more important than price.
 II. Consumer-Goods

3. Specialty Goods - Have unique characteristics or brand identification for which enough
buyers are willing to make a special purchasing effort.
E.g: Cars, audio-video components, and men’s suits.
• A Mercedes is a specialty good because interested buyers will travel far to buy one.
• Specialty goods don’t require comparisons;
• Buyers invest time only to reach dealers carrying the wanted products.
• Dealers don’t need convenient locations, though they must let prospective buyers know
where to find them.

4. Unsought Goods - Consumer does not know about or normally think of buying.
E.g.: Smoke detectors, Life insurance, Cemetery plots, and Monuments.
• Unsought goods require advertising and personal-selling support.
 III. Industrial-Goods

1. Materials and Parts - Goods that enter the manufacturer’s product completely – 2
Types - Raw materials & Manufactured materials and parts.
A. Raw materials –
• 1. Farm products
• 2. Natural products

B. Manufactured materials and parts –

1. Component materials (iron, yarn, cement, wires) and component parts (small
motors, tires, castings). Component materials are usually fabricated further—pig iron
is made into steel, and yarn is woven into cloth.
2. Component parts enter the finished product with no further change in form, as when
small motors are put into vacuum cleaners and tires are put on automobiles.
 III. Industrial-Goods

2. Capital Items - Long-lasting goods that facilitate developing or managing the finished
product.
A. Installations consist of buildings (factories, offices) and heavy equipment (generators,
drill presses, mainframe computers, elevators).
B. Equipment includes portable factory equipment and tools (hand tools, lift trucks) and
office equipment (desktop computers, desks).

3. Supplies and Business Services - Short-term goods and services that facilitate developing
or managing the finished product.
A. Maintenance and repair items (paint, nails, brooms)
B. Operating supplies (lubricants, coal, writing paper, pencils).
 PRODUCT DIFFERENTIATION
1. Form - Size, shape, or physical structure of product.
2. Features that supplement product’s basic function.
3. Performance Quality - Level at which product’s primary characteristics operate.
4. Conformance Quality - Degree to which all produced units are identical and meet
promised specifications.
5. Durability - Measure of the product’s expected operating life under natural or stressful
conditions.
6. Reliability - Measure of the probability that a product will not malfunction or fail within a
specified time period.
7. Repairability - Ease of fixing a product when it malfunctions or fails.
8. Style - Product’s look and feel to the buyer and creates distinctiveness that is hard to copy.
9. Customization - Differentiating by finding out exactly what a customer wants—and doesn’t
want—and delivering on that.
 SERVICE DIFFERENTIATION
1. Ordering Ease
2. Delivery
3. Installation
4. Customer Training
5. Customer Consulting
6. Maintenance and Repair
7. Returns