MODULE 1: DEFINING MARKETING FOR THE NEW REALITIES
The Value of Marketing
• Financial success often depends on marketing ability.
• Successful marketing builds demand for products and
services, which, in turn, creates jobs.
• Marketing builds strong brands and a loyal customer
base, intangible assets that contribute heavily to the
value of a firm.
The Scope of Marketing
• Marketing is about identifying and meeting human and
social needs (satisfying customers’ needs and wants)
• American Marketing Association (AMA) 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
• The art and science of choosing target markets and
getting, keeping, and growing customers through creating,
delivering, and communicating superior customer value.
What is Marketed?
• Goods: physical products
• Services: 2/3 of US econ; airlines, hotels, doctors, etc.
• Events: time-based events
• Experiences: create, stage, and market experiences
• Persons: artists, CEOs, lawyers, financiers
• Places: real estate agents, commercial banks
• Properties: real estate, stocks, and bonds
• Organizations: museums, corporations, performing arts
• Information: books, schools, universities
• Ideas: every market offers basic ideas
Who Markets?
• A marketer is someone who seeks a response—
attention, a purchase, a vote, a donation—from another
party, called the prospect
8 Demand States
• Negative demand (dislike product)
• Nonexistent demand (unaware/uninterested)
• Latent demand (strong need cannot satisfied)
• Declining demand (buying less frequently to not at all)
• Irregular demand (inconsistent/seasonal)
• Full demand (meet needs, markets are happy/loyalty)
• Overfull demand (limited capacity/less supply)
• Unwholesome demand (undesirable/bad products)
Structure Of Flows In A Modern Exchange Economy
A Simple Marketing System
Key Customer Markets
• Consumer markets – develops a superior product,
ensuring its availability engaging with communications
and reliable performance
• Business markets – focus on sales force, price, and
seller’s reputation
• Global markets – navigate language, legal, and political
differences in marketing decisions
• Nonprofit & governmental markets – include churches,
universities, charities, gov’t agencies
Core Marketing Concepts
A. Needs, Wants, and Demands
• Needs: the basic human requirements such as for air,
food, water, clothing, and shelter
• Wants: specific objects that might satisfy the need
• Demands: wants for specific products backed by an
ability to pay
B. Target Markets, Positioning and Segmentation
• Target markets: segment(s) present the greatest
opportunities
• Positioning
• Segmentation: demographic, psychographic, and
behavioral differences
C. Offerings and Brands
• Value proposition: a set of benefits that satisfy those
needs.
• Offerings: a combination of products, services,
information, and experiences
• Brands: an offering from a known source
D. Marketing Channels
• Marketing channels
• COMMUNICATION
• DISTRIBUTION
• SERVICE
E. Paid, Owned, and Earned Media
• Paid media: TV, magazine and display ads, paid search,
and sponsorships
• Owned media: a company or brand brochure, web site,
blog, Facebook page, or twitter account
• Earned media: word of mouth, buzz, or viral marketing.
F. Impressions and Engagement
• Impressions: occur when consumers view a
communication
• Engagement: the extent of a customer’s attention and
active involvement with a communication
G. Value and Satisfaction
• Value: a combination of quality, service, and price (qsp:
the customer value triad)
• Satisfaction: a person’s judgment of a product’s
perceived performance in relationship to expectations
H. Supply Chain
• Supply chain: a channel stretching from raw materials
to components to finished products carried to final
buyers (Fig 1.3: The Supply Chain for Coffee)
Marketing in practice
– Can reach customers quickly and efficiently via
social media and mobile marketing, sending
targeted ads, coupons, and information
– Can improve purchasing, recruiting, training,
and internal and external communications
– Can improve cost efficiency
• Changing channels
– Retail transformation
– Disintermediation – delivery of products by
intervening in the traditional flow of goods
• Heightened competition
– Private brands
– Mega-brands
– Deregulation
– Privatization
• Marketing balance – companies move forward
• Marketing accountability – justify investments
• Marketing in the organization – layouts, package,
product functions, employee training, shipping

I. Competition Company Orientation toward the Marketplace

• Competition: all the actual and potential rival offerings
and substitutes a buyer might consider
J. Marketing Environment
 Task environment – producing, distributing, promoting
 Broad environment – demographic, economic, socio-
cultural, natural, technological, political-legal A. Holistic Marketing Dimensions

The New Marketing Realities

• Technology
• Globalization
• Social responsibility

A Dramatically Changed Marketplace

• New consumer capabilities
– Can use the internet as a powerful information
and purchasing aid
– Can search, communicate, and purchase on the B. Relationship marketing
move
– Can tap into social media to share opinions and
express loyalty
– Can actively interact with companies.
– Can reject marketing they find inappropriate.
• New company capabilities
– Can use the internet as a powerful information
C. Integrated marketing
and sales channel, including for individually
• Devise marketing activities and programs that create,
differentiated goods
communicate, and deliver value such that “the whole is
– Can collect fuller and richer information about
greater than the sum of its parts.”
markets, customers, prospects, and competitors
D. Internal marketing
• The task of hiring, training, and motivating able
employees who want to serve customers well
E. Performance marketing

Marketing Mix Components (4 Ps)

MODERN MARKETING MANAGEMENT

MARKETING MANAGEMENT TASKS

• Developing market strategies and plans
• Capturing marketing insights
• Connecting with customers
• Building strong brands
• Creating value
• Delivering value
• Communicating value
• Creating successful long-term growth
MODULE 2: DEVELOPING MARKETING STRATEGIES AND PLANS Figure 2.1
Strategic Planning, Implementation, and Control Processes
Marketing and customer Value
 The Value Delivery Process
 The Value Chain
 Core Competencies
 The Central Role Of Strategic Planning
The Value Delivery Process

Corporate and division strategic planning

 Defining the corporate mission
The Value Chain  Establishing strategic business units
• A tool for identifying ways to create more customer  Assigning resources to each strategic business unit
value  Assessing growth opportunities

– Every firm is a synthesis of activities performed Defining the corporate mission

to design, produce, market, deliver, and support  What is our business?
its product
 Who is the customer?
Core Business Processes  What is of value to the customer?
 What will our business be?
 Market-sensing process  What should our business be?
 New-offering realization process
 Customer acquisition process Product Orientation vs. Market Orientation
 Customer relationship management process
 Fulfillment management process Company Product Market

Core Competencies Missouri- We run a We are a people-and-

Pacific railroad goods mover
 A source of competitive advantage and makes a Railroad
significant contribution to perceived customer
benefits Xerox We make We improve office
 Applications in a wide variety of markets copying productivity
 Difficult for competitors to imitate equipment

Maximizing Core Competencies Standard Oil We sell gasoline We supply energy

 (Re)define the business concept Columbia We make We market

 (Re)shaping the business scope Pictures movies entertainment
 (Re)positioning the company’s brand identity Good Mission statements
• Focus on a limited number of goals
Central Role Of Strategic Planning
• Stress the company’s major policies and values
 Managing the businesses as an investment portfolio • Define the major competitive spheres within which the
 Assessing the market’s growth rate and the company will operate
company’s position in that market • Take a long-term view
 Establishing a strategy • Are as short, memorable, and meaningful as possible

Marketing plan Establishing Strategic Business Units

• The central instrument for directing and coordinating • A single business or collection of related businesses
the marketing effort • Has its own set of competitors
• Has a leader responsible for strategic planning and
– Strategic profitability
– Tactical
Assigning Resources to Each SBU
• Management must decide how to allocate corporate Marketing Innovation
resources to each SBU • Innovation in marketing is critical
– Portfolio-planning models • Employees can challenge company orthodoxy and
– Shareholder/market value analysis stimulate new ideas
Assessing growth opportunities • Firms develop strategy by choosing their view of the
future
• – Scenario analysis
• –
• Figure 2.4 The Business Unit Strategic-planning Process
•
•
•
Intensive Growth
• Integrative Growth
• Diversification Growth
• Downsizing and Divesting Older Businesses SWOT Analysis
Intensive growth
• Corporate management should first review
opportunities for improving existing businesses
Figure 2.3
ESPN Growth Opportunities

External environment
Market Opportunity Analysis (MOA)
Integrative Growth
• A business can increase sales and profits through
backward, forward, or horizontal integration within its
industry
Diversification growth
• Diversification growth makes sense when good
opportunities exist outside the present businesses
– The industry is highly attractive and the
company has the right mix of business strengths
to succeed
Downsizing and Divesting Older Businesses
• Companies must carefully prune, harvest, or divest tired
old businesses to release needed resources for other
uses and reduce costs
• Marketing opportunity: an area of buyer need and
interest that a company has a high probability of
profitably satisfying.
• Environmental threat: challenge posed by an
unfavorable trend or development that, in the absence
of defensive marketing action, would lead to lower sales
or profit
• Can we articulate the benefits convincingly to a defined
target market(s)?
• Can we locate the target market(s) and reach them with
cost-effective media and trade channels?
• Does our company possess or have access to the critical
capabilities and resources we need to deliver the
customer benefits?
• Can we deliver the benefits better than any actual or
potential competitors?
• Will the financial rate of return meet or exceed our
required threshold for investment?

Organization and Organizational Culture

• A company’s organization consists of its structures,
policies, and corporate culture, all of which can become
dysfunctional in a rapidly changing business
environment
• Corporate culture: “The shared experiences, stories,
beliefs, and norms that characterize an organization”
 Figure 2.5 Opportunity And Threat Matrices
Feedback and control
• Peter Drucker: it is more important to “do the right
thing”—to be effective—than “to do things right”—to
be efficient
– The most successful companies, however, excel
at both

The Nature and Contents of a Marketing Plan

Marketing Plan Contents
 Executive summary
 Table of contents
 Situation analysis
 Marketing strategy
 Marketing tactics
 Financial projections
 Implementation controls
Internal environment Evaluating a Marketing Plan
• Strengths  Is the plan simple/succinct?
• Weaknesses  Is the plan complete?
 Is the plan specific?
Goal formulation (MBO)  Is the plan realistic?
• Unit’s objectives must be arranged hierarchically Other marketing plan contents
• Objectives should be quantitative • Marketing research
• Goals should be realistic • Specifications for internal and external relationships
• Objectives must be consistent • Action plans and schedules

Strategic formulation: Porter’s Generic Strategies

Strategic formulation: Strategic alliances

• Categories of marketing alliances
– Product or service alliance
– Promotional alliance
– Logistics alliances
– Pricing collaborations
–
Program Formulation and Implementation
• McKinsey’s Elements of Success