MARKETING MANAGEMENT 12th edition Defining Marketing for the 21st Century Kotler Keller

Chapter Questions Why is marketing important? What is the scope of marketing? What are some of the fundamental marketing concepts? How has marketing management changed? What are the tasks necessary for successful marketing management?

What is Marketing? 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 that benefit the organization and its stakeholders.

What is Marketing Management? 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.

For an exchange to occur….. There are at least two parties. Each party has something that might be of value to the other party. Each party is capable of communication and delivery. Each party is free to reject the exchange offer. Each party believes it is appropriate or desirable to deal with the other party.

What is Marketed? Goods Services Events Experiences Persons Places Properties Organizations Information Ideas

Demand States Negative Nonexistent Latent Declining Irregular Unwholesome Full Overfull

Key Customer Markets Consumer markets Business markets Global markets Nonprofit/Government markets

The marketplace isn’t what it used to be…. Changing technology Globalization Deregulation Privatization Empowerment Customization Convergence Disintermediation

Company Orientations Production Product Selling Marketing

Marketing Mix and the Customer Four Ps Product Price Place Promotion Four Cs Customer solution Customer cost Convenience Communication

Core Concepts Needs, wants, and demands Target markets, positioning, segmentation Offerings and brands Value and satisfaction Marketing channels Supply chain Competition Marketing environment Marketing planning

I want it, I need it….. 5 Types of Needs Stated needs Real needs Unstated needs Delight needs Secret needs

Marketing Management Tasks Developing marketing strategies Capturing marketing insights Connecting with customers Building strong brands Shaping market offerings Delivering value Communicating value Creating long-term growth

MARKETING MANAGEMENT 12th edition Developing Marketing Strategies and Plans Kotler Keller

Chapter Questions How does marketing affect customer value? How is strategic planning carried out at different levels of the organization? What does a marketing plan include?

Improving Value Delivery the Japanese Way 0 customer feedback time 0 product improvement time 0 purchasing time 0 setup time 0 defects

3 V’s Approach to Marketing Define the value segment Define the value proposition Define the value network

Benchmarks Organizational costs and performance measures Competitor

Core Business Processes Market sensing Customer relationship management New offering realization Fulfillment management Customer acquisition

Characteristics of Core Competencies A source of competitive advantage Applications in a wide variety of markets Difficult to imitate

Challenges Facing CMO’s Doing more with less Driving new business development Becoming a full business partner

Levels of a Marketing Plan Strategic Target marketing decisions Value proposition Analysis of marketing opportunities Tactical Product features Promotion Merchandising Pricing Sales channels Service

Corporate Headquarters’ Planning Activities Define the corporate mission Establish SBUs Assign resources to each SBU Assess growth opportunities

Good Mission Statements Focus on limited number of goals Stress major policies and values Define major competitive spheres

Major Competitive Spheres Industry Products Competence Market segment Vertical channels Geographical

Rubbermaid Commercial Products, Inc. “Our vision is to be the Global Market Share Leader in each of the markets we serve. We will earn this leadership position by providing to our distributor and end-user customers innovative, high-quality, cost- effective and environmentally responsible products. We will add value to these products by providing legendary customer service through our uncompromising Commitment to Customer Satisfaction.”

“The purpose of Motorola is to honorably serve the needs of the community by providing products and services of superior quality at a fair price to our customers; to do this so as to earn an adequate profit which is required for the total enterprise to grow; and by doing so, provide the opportunity for our employees and shareholders to achieve their personal objectives.”

eBay “We help people trade anything on earth. We will continue to enhance the online trading experiences of all – collectors, dealers, small businesses, unique item seekers, bargain hunters, opportunity sellers, and browsers.”

Dimensions That Define A Business Customer groups Customer needs Technology

Characteristics of SBUs It is a single business or collection of related businesses It has its own set of competitors It has a leader responsible for: Strategic planning Profitability Efficiency

Organizations Culture Policies Structure

Market Opportunity Analysis (MOA) Can the benefits involved in the opportunity be articulated convincingly to a defined target market? Can the target market be located and reached with cost-effective media and trade channels? Does the company possess or have access to the critical capabilities and resources needed to deliver the customer benefits?

Market Opportunity Analysis (MOA)_2 Can the company deliver the benefits better than any actual or potential competitors? Will the financial rate of return meet or exceed the company’s required threshold for investment?

Goal Formulation and MBO Requirements for using MBO Unit’s objectives must be hierarchical Objectives should be quantitative Goals should be realistic Objectives must be consistent

Porter’s Generic Strategies Overall cost leadership Differentiation Focus

Categories of Marketing Alliances Product or Service Alliances Promotional Alliances Logistics Alliances Pricing collaborations

Marketing Plan Contents Executive summary Table of contents Situation analysis Marketing strategy Financial projections Implementation controls

Evaluating a Marketing Plan Is the plan simple? Is the plan specific? Is the plan realistic? Is the plan complete?

MARKETING MANAGEMENT 12th edition 11 Dealing with Competition Kotler Keller

Chapter Questions How do marketers identify primary competitors? How should we analyze competitors’ strategies, objectives, strengths, and weaknesses? How can market leaders expand the total market and defend market share? How should market challengers attack market leaders? How can market followers or nichers compete effectively?

Figure 1.1 Five Forces Determining Segment Structural Attractiveness Potential entrants Suppliers Buyers Industry competitors Substitutes

Industry Concept of Competition Number of sellers and degree of differentiation Entry, mobility, and exit barriers Cost structure Degree of vertical integration Degree of globalization

Industry Concept of Competition Pure monopoly Oligopoly Monopolistic competition Pure competition

Analyzing Competitors Share of market Share of mind Share of heart

Expanding the Total Market New customers More usage

Figure 11.6 Six Types of Defense Strategies Defender Flank Preemptive Counteroffensive Mobile Contraction

Factors Relevant to Pursuing Increased Market Share Possibility of provoking antitrust action Economic cost Pursuing the wrong marketing-mix strategy The effect of increased market share on actual and perceived quality

Other Competitive Strategies Market challengers Market followers Market nichers

Market Challenger Strategies Define the strategic objective and opponents Choose a general attack strategy Choose a specific attack strategy

General Attack Strategies Frontal attack Flank attack Encirclement attack Bypass attack Guerrilla warfare

Specific Attack Strategies Price discounts Lower-priced goods Value-priced goods Prestige goods Product proliferation Product innovation Improved services Distribution innovation Manufacturing-cost reduction Intensive advertising promotion

Market Follower Strategies Counterfeiter Cloner Imitator Adaptor

Balancing Orientations Competitor-centered Customer-centered

MARKETING MANAGEMENT 12th edition 3 Gathering Information and Scanning the Environment Kotler Keller

Chapter Questions_1 What are the components of a modern marketing information system? What are useful internal records? What is involved in a marketing intelligence system?

Chapter Questions_2 What are the key methods for tracking and identifying opportunities in the macroenvironment? What are some important macroenvironment developments?

MIS Probes for Information What decisions do you regularly make? What information do you need to make these decisions? What information do you regularly get? What special studies do you periodically request? What information would you want that you are not getting now? What are the four most helpful improvements that could be made in the present marketing information system?

Internal Records Order-to-Payment Cycle Sales Information System Databases, Warehousing, Data mining Marketing Intelligence System

Steps to Improve Marketing Intelligence Train and motivate sales force Motivate channel members to share intelligence Network externally Utilize customer advisory panel Utilize government data resources Purchase information Collect customer feedback online

Needs and Trends Fad Trend Megatrend

10 Megatrends Shaping the Consumer Landscape Aging boomers Delayed retirement Changing nature of work Greater educational attainment Labor shortages Increased immigration Rising Hispanic influence Shifting birth trends Widening geographic differences Changing age structure

Environmental Forces Demographic Economic Socio-Cultural Natural Technological Political-Legal

Population and Demographics Size Growth rate Age distribution Ethnic mix Educational levels Household patterns Regional characteristics Movement

Economic Environment Income Distribution Savings Rate Debt Purchasing Power Income Distribution Savings Rate Debt Credit Availability

Types of Industrial Structures Industrial economies Industrializing economies Raw-material exporting economies Subsistence economies

Social-Cultural Environment Views of themselves Views of others Views of organizations Views of society Views of nature Views of the universe

Natural Environment Shortage of raw materials Increased energy costs Anti-pollution pressures Governmental protections

Technological Environment Pace of change Opportunities for innovation Varying R&D budgets Increased regulation of change