Marketing Management

Definition 1:

is the study of how business firms can best adopt

resources and objectives to out side opportunities,
these opportunities provide proper starting point for
Marketing plan.

 Resources
 Objectives
 Opportunities
“Marketing is many things. It is essential to the survival of most
organization, it is fast paced and dynamic; it is highly visible; it
is rewarding to its successful practioners and frustrating to the
less fortunate and sometimes it is controversial. But one thing
you can be sure of, it is never dull!

Welcome to the place where an organization meets the public

where its ideas, planning and execution are given the ultimate
test of the market acceptance
or rejection”
(Philip Kotler)
 NEEDS
Can be viewed in a strict physiological sense (food-clothing-shelter)
WANT
Everything else is a want
NECCESSITY
Without which you will suffer for the time being. (in rain-you need
umbrella)
PRODUCT
anything offered for attention, acquisition, use or
consumption by the market is a product
Goods-service-idea-person-place
UTILITY
Capability of a product to satisfy human wants is utility
UTILITY

Dr Owais
Mufti
 TYPES OF UTILITY
 Form Utility
Physical or chemical changes that makes a product more
valuable. (furniture is made from wood; form utility is
created).
 Place Utility
Product is shifted from one place to another for easy access of
the customer.
 Time Utility
Product is made available when needed.

Dr Owais Mufti
Information Utility
by advertising that the product exist with its features, so that
customer gets curios about it. BLACK IS COMING!!!!

Image Utility
emotional or psychological association because of value of
product (image, prestige, status, brand loyalty, good will)

Possession Utility
It is created when customer buys the product and take the
ownership of it.

Dr Owais Mufti
 M= market
 A= awareness
 R= retailing
 K= knowledge
 E= education
 T= training
 I= information
 N= niche
 G= geography
Dr Owais Mufti
Sam Walton, founder of ‘Walmart’ says

“There is only one boss:

The Customer”

Dr Owais Mufti
Definition 2:

Marketing Management is the analysis, planning,

implementation and control of programs designed to
create, build and maintain, mutually beneficial exchanges
and relationship with the target Markets for the purpose of
achieving org objectives.

Marketing Management relies on the analysis of needs,

wants, perception and preference of target Market as the
basis for effective product design, pricing communication
and distribution.
Marketing Management is;

 Control of programs
 Management of programs
 Analysis, planning and implementation of plans
 Done for creating exchanges and relation hip
 To achieve org objectives
 It depends on needs, wants of the Market on which
product is delivered and designed in target Market.
Definition3 (Marketing)

Marketing consists of all those activities, which direct the

flow of ideas, goods and services from
producer to a consumer”.
Marketing job is to convert societal needs into
profitable opportunities.

Marketing consists of all activities by which a company

adapt itself to its environment creatively and profitably
(Ray Corey)
Definition 4

Marketing Management encompasses all the decisions

involve in designing and executing Marketing plans in
order to implement Marketing order.

 Decisions
 Marketing plans; (exchange, transaction profit, obj)
 Marketing order (Marketing concept)
 Demand oriented, for the needs and wants of people
Importance of Marketing Management
Marketing Management is practiced in any Market.
e.g. V.p of Human Resources deals in labor Market.
V.p of purchasing; deals in raw material Market.
These executes are not known as Marketers but they must set
objectives and develop strategies for achieving results in above
mentioned Markets.
They have to develop and manage their plans to achieve objectives.
Like advertise in newspaper than sorting and selecting etc:
Marketing people are related with customer Market.
Marketing job needs management.
to manage; resources
advertising
sales promotion
research
 Marketing Manager manage all activities.

 They manage and organize programs

 They analyze, plan and implement it.
 Marketing Management has the task of influencing the level,
timing and composition of demand in away that will help
organisation to achieve its obj.
What are ERA’s of Marketing
or Evolution of Marketing
ERA’s of Marketing

 Agriculture ERA
 Industrial
 Production
 Sales
 Marketing
 Social marketing
 Information
 Communication
 CH: 3
Winning Markets Through Market Oriented
Strategic Planning
Business firms compete in global Market place because of;
satisfaction they offer (creating and retaining satisfied customer)
continuous adaptation according to changes in the Market is the
need of the day.

For this they need an art of market-oriented strategic planning.

Definition
Marketing oriented strategic planning is the managerial process of
developing and maintaining a viable fit between the org obj’s, skills
and resources and its changing Market opportunities.

The aim of strategic planning is to shape and reshape the

companies business and products so they yield target profits and
growth. (according to the changes in the Market)

Plan to adopt to changes

Bridge the gap between Market opportunities and company obj
This concept rose because of decline of US industry 1970.
Reasons of decline
Japan (technology)
Deregulations of industries
Economy (inflation)
Energy crisis

Strategic planning takes the place of conventional planning

(conventional planning is on the spot planning done for short
term)
Strategic planning helps in three key areas

i. Investment portfolio
ii.Market growth rate
iii.Strategy
Investment Portfolio
Companies resources should be allocated according to the profitable
nature/obj of business in future.

Market Growth Rate

It is not sufficient to analyze the business by current sales or profits.
But to analyze Market growth rate and company position before doing
any investment,
e.g. ford company were having profits in 1970 in large
cars, but they analyze that Market for large cars would dry
up and they relocate their funds for compact divisions.
Strategy
There is not one strategy for all companies. But company has to make
its own game plan in the light of objectives, skills opportunities and
resources to achieve its long run goals.

e.g. Some companies are doing innovation other companies are doing
cost reduction, promotion etc
Strategic planning process is handled by Marketing
Manager which includes;

i. Mission of business
ii. Env analysis
iii. Completive analysis
iv. Business situations
v. Obj development (short term)
vi. Goals (long term)
vii. Strategy
viii.Product definition
ix. Market
x. Distribution
xi. Quality planning
xii. Implementation
xiii.Programs development (structure)
xiv. Operation plans (process definition)
To under stand Marketing Management; It is necessary to understand strategic
planning process AND For strategic planning we need to recognize that most large
companies consists of four organizational levels.
1-Corporate Level Planning (HQ)
corporate strategic planning
profit planning
business to start or shut.
2-Division Level Planning
Division planning which will allocate the fund for each business unit with in
the divisions.
3-Business Unit Level Planning
BU strategic planning
how to carry the business. (Way doing things.)
4-Product Level planning
product planning (line of product, brands).
It develops Marketing plan for achieving obj in particular line of
business in the market.
Marketing Plan Operates at Two Different Levels
Strategic Marketing plan development
Tactical Marketing plan development
Strategic Marketing plan development
Broad Marketing obj
Strategy based on current situation and opportunities.
Tactical Marketing plan development
i. Specific Marketing tactics
ii. Adv
iii. Merchandizing (goods arrangements)
iv. Pricing
v. Channels
vi. Services etc:
Planning Implementation and Control Cycle

Planning Implementation Controlling

Organizing
Results (feed back)

• Corporate planning
• Division planning Diagnosis
• Business unit planning
• Product planning
Corrective actions
Implementing

Feed back
 Steps In Marketing Management process

1. Analyzing Marketing opportunities

2. Research and selecting target Markets
3. Designing Marketing strategies
4. Planning Marketing programs
5. Organizing implementing and controlling the Marketing
plans
1- Analyzing Marketing Opportunities

 Developing and managing Marketing research and

Marketing information system (MIS)
 Analysis of Marketing environment
 Study of consumer behavior (preferences)
 Study of Middlemen buying behavior
 Analyzing industries and competitors
 Survey and research
 Publications
2- Researching and selecting target Marketing
 Forecasting Marketing demand

 Market segmentation

 Grouping (of Market) according to the demand

 Selection on the basis of resources

3- Designing Marketing Strategies

◦ Product innovation and differentiation strategy
◦ Image differentiation (image building strategies)
◦ Market Leader strategies (higher prices)
◦ Market follower strategies (low prices)
◦ Designing & managing strategies for global market place (global
strategy)
4-Planning Marketing Programs
◦ Management of product lines (brands, quality, packaging
◦ Management of quality
◦ Development & Management of pricing, distribution, and promotion
plans.
 4,5-Organizing -implementing and controlling the
marketing plans

 Org of Marketing resources (adv, sales, mkt research

 Implementation of plans in timely manner
 Controlling Marketing programs and developing flexibility
(feed back & adjustments)
Nature of High performance business
Arthur D. little proposed a model of the characteristics of
high performance business it pointed four factors.

Stakeholders,
Processes,
Resources,
Oganization
1. Stakeholders is first stop on the way of achieving high
performance business.
 Customers
 Employees
 Suppliers
 distributor
 For increasing business performance each group of stakeholders
must be happy.
 Company can delight its customers by giving gifts, give bonuses
to its employers and can give extra %age to its distributors.
 If employees are happy they will perform well and give boost to
the company. Result would be good quality products which will
satisfy the customers Investor will get good return and they will
invest more (So four of the factors are related with each other )
 2 Processes
 A company can accomplish its satisfaction goals only by managing
and linking work processes in deferent deptt
 In one company there are different deptt each tries to achieve its
own objective and not the obj of the firm
 Work will slow down if there is no co-operation b/w deptt
 Co’s are re-engineering the work flows and process flows and are
trying to building cross sectional teams b/w different deptt.
 TQM is one way to achieve good work process results.
 Xerox company has made cross-sectional teams from sales
shipping, installation, services and billing so that work flow
smoothly in to one another.
 Winning Co’s would be those who manage their core processes
in a best coordination way b/w deptt. Without a delay
3 Resources
To carry out the processes company needs resources like;
(Labor , Material, Machine, Information, Energy, Finance etc:)
These can be owned by a company or other wise can be arranged
from out side the company and can be done under the name of
out sourcing.
less critical but quality work can arranged by out sourcing like;
 Adv
 Research
 Trainings
 Appraisals

This will give quality in work and boost the sales e.g. Nike does not
manufacture shoes for Asians rather they are working on new
designs and innovation; and manufacturing task is given to locals
(licensing)
4 Organization and Organizational culture
In org there are; Policies, Structure, Corporate culture etc
Corporate culture
 The way people are dressed in office

 How they talk

 Office out look (arrangement)

“The shared experiences, stories, beliefs and norms that

characterize the organization”

Microsoft corporation corporate culture is defined in its vision

“If this company were a car, it would not have a rear view
mirror”
 Company does not look back and become happy and satisfied
on accomplishments.
 But instead their corporate culture is forward looking they
face challenges of fast growing environment and try to achieve
some thing new in future (innovation)
 That’s way their salary package is renewed after six months.
 Micro soft has got most millionaires and billionaires on its
salary list than any other company in the world
 Strategies in a company changes with innovation and corporate
culture changes also.
 But the core ideology of the company does not change.
 Like Microsoft changes everything with the changing
environment but customer satisfactions, quality improvement
etc does not change.
There are 4 level at which strategic planning takes place in
the org
◦ 1 Corporate level planning
◦ 2 Division level planning
◦ 3 Business unit level planning
◦ 4 Product level planning

Corporate and division level planning

 HQ is responsible for setting strategic planning process

 HQ sets frame work in which org works:

 Plans
 Mission Statement
 Goals
 Objectives
 Policy
There are four planning activities which HQ performs
1. Defining the corporate mission
2. Establishing strategic business units (SBU)
3. Assigning resources to each SBU
4. Planning new business
Defining the corporate mission
 Mission means target which you want to accomplish e.g. to make cars

 objectives e.g. to earn target return in fixed time each co’s mission is

shaped by five elements.

 History of aims
 Current preference of owner and Management
 Market env
 Resources
 Detective competences
1-History (of aims)
In light of past experiences mission is made. It is seen that what
was achieve and what not.
2-Current preferences of the owners and Management
Current preferences should be according to the Marketing condition.
Eg: company’s preference is to expand line of product for which they
are popular, instead If they change the line all together mission
statement is likely to be changed also i.e from cars to cosmetic
3-Market environment
While in Roam do as Romans do In the Market U will make mission
accordingly. Changes should be according to the demand or
expectations of the market.
Eg: In hilly areas during winter c’os mission will not be to provide
loan suits.
4-Resources
Resources of org is in better position to tell which mission is
possible (out of many)
That mission statement cannot be selected for which resources
cannot be arranged.
5-Distinctive competences
In light of co’s expertise and competences mission should be
decided. Mission statement, will give company employers direction
purpose and opportunity extreme care must be taken in designing
mission statement.

As employees will be working independently and away from the

company in different departments (but they are collectivity doing
effort in one direction) in achieving aim for the company.
Nature of business mission
 Declaration of an attitude
 Resolution of divergent views
 Customer orientation
 Declaration of social policy

GTZ / BEFARe
“provide & improve quality of basic education for
AGHANS to enhance the education system on the basis of
community self help.” (mission statement)
Three major characteristics of good
mission statement
1. Focus on limited number of goals
 Quality (Colgate we can be the best)
 Good speed (M-S we make world fastest computers)
 Durability (Telephone service for every one)
focus is on one or two goals out of all (because all cannot be
taken by the company, it wont be feasible)
2. Mission statement stress on major policies.
Policy define how company will deal with stakeholders
employees, customers, suppliers, distributor etc: policy will
reduce individual discretion.
3. Mission define and focuses major competitive scopes
with in which company will operate.(Those areas in which
company is professional).
 Types of competencies
A-Industry scopes
The range of industry in which company will operate .Some co’s will
operate in one field like consumer goods or industrial goods or
services.
eg: DuPont will operate only in industrial goods
3M on the other hand is ready to invest in any industry.

B-Products and Application scope

Range of products and applications that a company will supply.

C-Competence scope
Range of technological and other core competences that a company
will master and leverage
D-Market segment scope
Type of Market or customer a company will
serve. Eg; some will target upper class, other will target
middle class
E-Vertical scope
Vertical channel levels from raw malarial to final product
and distribution
company will be doing all things by its self eg: Ford has got
its own distribution network. Industrial plant, rubber plant
glass manufacturing etc: similarly Mitsubishi
F-Geographical scope
The range of regions countries in which company will
operate (like cities, states, regions)
2-Establishing SBU’s Why?

Management concept is to define business by customer

satisfaction group and not by goods producing company.

eg: BMW is a transportation and comfort provider company

and not a car maker company.
 What will be the effect if not define like this:
For example:
If your company is; lead manufacturer company then you
will be producing : pencil

1. If your company defines that they produce writing instruments;

then it might expand to produce: pen
2. If it decides to produce writing equipment it might consider;
computers
3. If it defines that it is communication company then they can
produce: exchanges, telephones, mobile etc
So it is critical for a company that how strategically they define
their SBU…… because it will give sense of direction to the SBU.
 SBU’s characteristics
1. It is a single business or collection of businesses that can be
planned separately from rest of the company.
2. It has its own set of competitors
3. It has a manager who is responsible for strategic planning
and profit performance and who controls most of the factors
walls ……………. sbu1
like Uniliver surf excel………….. Sbu2

 Separate mission
 Separate profit responsibility
 Separate executive group responsible
 Its own competitors
 Separately identified business
There are four planning activities which HQ performs
1. Defining the corporate mission
2. Establishing strategic business units (SBU)
3. Assigning resources to each SBU
4. Planning new business
3-Assigning Resources to each SBU

BCG Model
GE Model
BCG Model (Boston consulting group)
Leading Management consulting group
 They give a growth share matrix of a hypothetical company

 8 circles represents in the matrix, current sizes of investment

(in$) and positions of business unit in a company

 largest business is 5 & 6 according to size

 Location of BU indicate the Market growth rate and Market

share on the graph

 Market growth rate is shown on annual basis 0-- 20%

 Market growth rate above 10% is considered high

 Market share on X-axis shows share in the Market w.r.t the

largest competitor
For example
0.1 Market share means that the company sales volume is only
10% of the leaders sales volume e.g. relative Market share of
10 means that company SBU is leader and has 10 times the
sales of the next strongest competitor. (only more then 1 is
considered)

This relative Market share is drawn as a log scale an 1.0 is a

dividing line for high and Low Market share Growth share
matrix is divided into 4 cells each indicating different type of
business.
1. Question marks (opportunity for investment)
Low Market share
High industry growth rate
Question mark is the starting point of the business in which they
want to get good Market share so it needs cash as Market leader
is also present in the form of competitor
Company has to spend money on plant, equipment, labor to be
competitive with leader.
In matrix many question marks are given but company should
invest money in one business where there is more opportunity.
(company needs to have limited focus)
 2 Stars

In question mark if the company is successful it becomes a star

High Market share
High growth rate

20%
High low

Question
STARS Marks ???? High
Industry High

growth
rate
/annual

low Cash Cows Dogs low

0
A. Market share w.r.t largest
competitor
 3 Cash cows
High Market share
low growth the rate
 If company is a star it becomes Market leader but Market
share does not increase more, (if company is loosing sales
it will invest from profit of cash cow).
 If it needs cash for other businesses company will take
money from cash cow.
 Company will enjoy lot of cash and pay its all bills out of
cash cow.
 Cash cow will then convert into Dog’s if money is drawn
from it and it will loose Market position.
4 Dog
Low Market share
Low growth rate
 It will generate low profit but it is good if company needs

little cash
 But in low Market share it is difficult to survive

 Dog’s need more Management and need is to get rid of them

quickly.
Note
By seeing this matrix company can arrange resources and
invest in each SBU
 Too many dogs and too many question marks will give an

unbalance portfolio for business.

 Low cash- cows or stars will also effect the business (profit)
Example
 Andrew carnage
 100 years back have no assets came from Scotland went to USA
bought shares and became rich finally became owner of US steel
corporation in which he invested seeing the BCG matrix.
 Next task of a company after resources allocation is to determine
what objective strategy and budget to assign to each SBU.
 Four strategies are pursued in this regard

1. Build
 Here objective is to increase SBU Market share, long term
objectives are considered.
 Used in question marks, widely to convert it into stars
2-Hold
 Hold is a strategy in which company is trying to hold or
maintain SBU Market share
 Strategy is suited for strong cash-cows where company
try to maintain share and profit
3-Harvest
 Here objective is to increase short term cash flow regard
less of long term effect.
 In harvesting generally retrenchment of cost is done i.e
R & D expenditure is eliminated, less maintenance cost,
reduced Adv expenditure
 Strategy is good for weak cash cows
 It can also be applied to question marks and dogs
4-Divest
 Here obj is to liquidate or sell the business , because resources can be used
goodly else where.
 Strategy is appropriate for dogs and question marks in which company is
loosing Market share and profits
 Good for weak businesses'
Life cycle of growth share matrix, It starts with:
Question Marks

Become Stars

then Cash Cows

Dogs
 Company should see its previous position and should foresee that where it is
heading…….
 It is beneficial for a company to make decisions about investment in a
SBU or not (by analyzing a matrix)
GE Model
 SBU appropriate obj can't be determined only by its position in growth
share matrix but additional factors must also be considered
 That’s why known as multi factor portfolio matrix
 See diagram 3-4
seven businesses of one company are plotted
 Size of each circle represents the size of relevant Market. Shaded part of the
circle shows business Market share.
 Each business is rated in two dimensions
Market attractiveness
business strength
 If one factor is missing company con not perform well
 See3.2 table
Market attractiveness varies with Market size annual Market growth rate
profit margins only for a hydraulic pump company
Business strength varies with the company Market share growth product
quality only for a hydraulic pump company
Note
 Rating and weights are given by company preferences itself which would be
different for different cos
 There are not the sole two factors, but GE model leads strategic planers to
look into more factors.
 3.2 table shows score out of total
Market attractiveness = 3.70 5.00
business strength = 3.40
relying on number of factors given
 Clearly hydraulic pump business is attractive part of the business
 3.4 (b) shows
Nine cells
Three zones
 Strong medium weak
protect position invest to build -------
build selectively ---------- -------
Protect and refocus ----------- --------
see diagram 3.4 (b)
 Relief value business is weak and with small Market share company
should are harvest divest
 Hydraulic pump business will decline stealthy (see arrow) in Market
attractive
 Clutch business is expected to decline strongly
 Now company decision will not be to boost sales of each SBU company
obj is mater demand with the resources
or
 The task of Marketing not is to mange demand or revenue to the target
level negotiated with the corporate Management.
Critique of port folio models
 There are other models like aurthur D little, model and shell
directional policy model
 Port folio models have # of benefits.
″ Improve strategic planning
″ Quality of plans
″ Co-ordination b/w businesses (cross sectional teams)
″ Opportunities
″ Strengths
″ Resources allocations in right direction

 Draw Back
″ Other businesses are left (because of attention)
″ Concentration towards one or two businesses are some time risky
There are four planning activities which HQ performs
1. Defining the corporate mission
2. Establishing strategic business units (SBU)
3. Assigning resources to each SBU
4. Planning new business
4-Planning new businesses

 Cos targeted or desired sales is different from actual sales

 Obviously co’s want to grow quickly that’s why desired sales is
higher.
Desired position

Diversification growth
Strategic
Integrative growth planning gap

Intensive growth

Current position
 How this strategic planning gap filled

1. Intensive growth opportunity

2. Integrative growth in opportunity
3. Diversification growth opportunity

4. Intensive Growth
 If there is any opportunity to improve existing business
(Penetration Strategy)
 Next co’s find or develop new markets for current products
(Market Development Strategy)
 New products for the same Markets
(Product Development Strategy)
Market Penetration Strategy
Company is interested in boosting current products Market share
For example Music company (musicale)
If company encourage them to buy more cassettes per year by
showing benefits ie learning cassettes, Music variety.
If company try to attract competitor customers i.e. for this
competitors weakness has to be identified (competitive diss-
positioning)
If company try to convince non-users to use its products.
Market Development Strategy
New Market can be explored by
◦ Potential groups identification
◦ Increased distribution channel
◦ Selling in new location i.e. if previously northern coverage
now give southern coverage.
Product Development Strategy
 New products
 New features e.g. longer playing cassettes of 90
minutes
 CD’s etc: in the same line of business
2 Integrative Growth
 Sales will increase if company uses back word, forward or
horizontals integration with in the industry
 By acquiring suppliers (we do back word integration)
 By acquiring whole sellers-retailers (wed do forward
integration)
 Acquiring competitor plants, joint ventures, etc: (we do
horizontal integration)
3 Diversification growth
New products which is in the sane line of business which will attract
the current customers and also new Markets would be developed is
known as Concentric diversification growth strategy
eg: one CD changer, five CD changer, ten CD changer etc

2. New products unrelated technologically to its current product but

for the same Market is; Horizontal diversification strategy
e.g. musicale develop cassette holding trays.

3. New products
Totally unrelated with current :products, Markets, technologically
of current business is known as; Conglomerate diversification
growth strategy
e.g. musical consider strategy for machines food products.