Marketing Management Concepts

Marketing Management Orientations

• Production Concept: Focuses on producing and distributing products efficiently and affordably, assuming customers will favor easily accessible and cheap products.
• Product Concept: Emphasizes making high-quality products with improved features and performance, believing customers will favor the best-performing and most feature-rich options.
• Selling Concept: Prioritizes aggressive selling and promotional efforts to convince consumers to buy, assuming consumers won't purchase enough without active marketing push.
• Marketing Concept: Centers on identifying and meeting customer needs and wants better than competitors, ensuring customer satisfaction is prioritized.
• Societal Marketing Concept: Considers not only customers' needs and company profits but also long-term interests of consumers and society as a whole, suggesting companies should make ethical decisions.

Capturing Value from Customers

• Share of Customer: Represents the portion of a customer's spending on a company's product categories.
• Customer Equity: The combined lifetime value of all a company's customers.
• Building Customer Equity: Involves establishing the right type of relationships with the right customers.
• Types of Customer Relationships:
  • Butterflies: Profitable but not loyal, requiring occasional attention.
  • True Friends: Loyal and profitable, requiring nurturing and engagement.
  • Strangers: Low profitability and loyalty, requiring minimal effort.
  • Barnacles: Highly loyal but not profitable, needing re-evaluation or strategic adjustments.

Marketing: Customer Value and Engagement

• Building Customer Relationships:
  • Customer Relationship Management (CRM): A strategy for managing customer interactions to build loyalty and long-term relationships.
  • Engaging Customers : Interacting with customers and becoming an integral part of their lives.
  • Partner Relationship Management (PRM): Similar to CRM but extended to partnerships and collaborations.

Capturing Value from Customers

• Loyalty & Retention: Maintaining customers over time, reducing churn and encouraging repeat purchases.
• Growing Share of Customer: Increasing the percentage of a customer's spending on a company's products.

The Changing Marketing Landscape

• The Digital Age: Marked by the rise of online, mobile, and social media marketing, enabling engagement with customers across various digital devices and platforms.

Marketing: Understanding the Marketplace

• Customer Needs, Wants, and Demands: Understanding what customers need, want, and demand:
  • Needs: Fundamental requirements, often basic.
  • Wants: Specific desires shaped by culture and personality, often expressed as preferences.
  • Demands: Wants backed by purchasing power.

Marketing: Market Offerings

• Products, Services, and Experiences: Companies must provide a combination of these to meet customer needs and wants.

Marketing: Customer Value and Satisfaction

• Customer Value: Perceived benefits gained by customers from a product or service, often relative to competitors' offerings.
• Customer Satisfaction: A customer's evaluation of a product or service's ability to meet expectations.

Marketing: Exchanges and Relationships

• Exchanges: A process where individuals or organizations trade something of value for something else.
• Relationships: Building lasting connections with customers through ongoing interactions.

Marketing: Markets

• Market: A group of individuals or organizations with a shared need and the ability to purchase a product or service.

Designing a Customer Value-Driven Marketing Strategy

• Understanding Target Markets: Determining which customer segments the company will serve to focus efforts effectively.
• Selecting Customers to Serve: The process of identifying and defining target markets for strategic marketing.
• Market Segmentation: Dividing the overall market into groups of customers with similar needs and preferences.
• Target Marketing: Choosing the specific market segments to pursue based on their potential for profitability and alignment with company goals.
• Value Proposition: A statement outlining the benefits and value a brand promises to deliver to satisfy customers.

Strategic Planning

• Strategic Planning is the process of developing and maintaining a strategic fit between an organization's goals and capabilities, and its changing marketing opportunities.
• Strategic business units (SBUs) can be a company division, product line, single product, or brand.

Analyzing the Current Business Portfolio

• The growth-share matrix is a portfolio-planning method that evaluates a company's SBUs in terms of market growth rate and relative market share.
• The Boston Consulting Group approach categorizes SBUs into four categories: Stars, Question Marks, Cash Cows, and Dogs.

Developing Strategies for Growth and Downsizing

• The product/market expansion grid is analyzing the market growth rate for new and existing products in relation to new and existing markets.
• Downsizing is when a company must prune, harvest, or divest unprofitable businesses.

Planning Marketing: Partnering to Build Customer Relationships

• Value chain is a series of departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products.
• Value delivery network is the company, suppliers, distributors, and customers working together to improve performance of the entire system.

Marketing Strategy and the Marketing Mix

• Customer value-driven marketing strategy creates customer value and achieves profitable customer relationships.
• Market segmentation is the division of a market into groups of buyers with distinct needs, characteristics, or behaviors.
• Market targeting evaluates the attractiveness of each market segment and chooses one or more to enter.
• Market positioning is arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
• The marketing mix is the set of controllable, tactical marketing tools – product, price, place, and promotion – that the firm blends to produce the response it wants in the target market.

Managing the Marketing Effort

• SWOT analysis is a way to evaluate internal and external factors that are opportunities or threats for the company.
• Marketing plan includes the executive summary, marketing situation, objectives and issues, marketing strategy, action programs, budgets, and controls.
• Marketing implementation is turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives.
• Marketing department organization addresses functional organizational structure based on departmental tasks.
• Marketing control is evaluating results, taking corrective action, operating control, and strategic control.

Measuring and Managing Return on Marketing Investment

• Return on Marketing Investment (Marketing ROI) is the net return from a marketing investment divided by the costs of the marketing investment.