Marketing Management Fundamentals

• These notes cover the fundamentals of marketing, consumer and business market analysis, market strategy development, value design, communication, delivery, and growth management.

Definition of Marketing Management

• Identifying customer needs and fulfilling them better than competitors is key.
• Selecting target markets and acquiring, retaining, and growing customers by providing superior value is the core focus.

Customer-Centric vs. Traditional Organizations

• Customer-centric organizations place customers at the heart of all activities.
• Frontline employees directly interact with and prioritize customer needs.
• Middle and top management support frontline employees in value delivery.
• Traditional organizations operate hierarchically, with top-down decision-making.
• Top managers are at the apex, followed by middle managers, frontline employees, and customers at the base.

Marketable Items

• Goods
• Services
• Events
• Experiences
• People
• Places
• Properties
• Organizations
• Information
• Ideas

Market Forces Changing the Marketing Environment

• Technology advancements enable personalized offerings and improved customer understanding.
• Globalization impacts innovation and product development through cross-border learning.
• The physical environment, including climate change and global health, influences marketing.
• Social responsibility requires marketers to consider ethical, environmental, legal, and social implications.

New Market Environment & Changing Marketing Realities

• New consumer capabilities have emerged through online resources, mobile connectivity, and social media.
• Consumers can interact with companies, reject inappropriate marketing, and maximize the value of their possessions.
• New company capabilities include using the internet for information and sales, gathering market data, and improving cost efficiency.
• A new competitive environment is defined by deregulation, privatization, retail transformation, disintermediation, private labels, and mega-brands.

Holistic Marketing Approach

• Holistic marketing integrates internal and external business aspects.
• Four components characterize holistic marketing.
  • Relationship marketing focuses on building long-term, mutually beneficial relationships.
  • Integrated marketing coordinates all activities to deliver consistent value and messaging.
  • Internal marketing involves hiring, training, and motivating employees to serve customers well.
  • Performance marketing assesses financial and nonfinancial returns to business and society.

Philosophies of the Marketing Department

• Production concept focuses on affordable and available products.
• Product concept emphasizes quality, performance, and innovative features.
• Selling concept relies on promotion to drive sales.
• Marketing concept prioritizes understanding and meeting consumer needs better than competitors.
• Market-Value Concept focuses every area of a comapny on actively creating value for the company, its customers and its collaborators

Ways of organizing the marketing department

• Functional organization
• Geographic organization
• Product or brand organization
• Market organization
• Matrix organization

Model of Consumer Behavior

• Tactics and market context influence consumers' cultural, social, and personal factors.
• Consumer motivation, perception, emotions, and memory impact buying decisions.

Influences on Consumer Behavior

• Cultural factors (culture, subculture)
• Social factors (reference groups, family)
• Personal factors (age, life cycle stage, occupation, lifestyle, values)

Impact of Consumer Characteristics

• Consumer characteristics shape perceptions, desires, and need fulfillment.

Importance of Understanding Customer Needs

• Needs form the basis of consumer behavior.
• Purchasing decisions are based on motivation, perception, emotions, and memory.
• Understanding customer needs allows for effective product and marketing strategy development.

Levels of Needs

• Psychological needs: food, water, shelter
• Safety needs: security, money, job
• Social needs: friendship, love, family
• Esteem needs: achievement, status, respect
• Self-actualization needs: morality, creativity, acceptance

Consumer Buying Decision Process

• Involves learning, choosing, using, and disposing of a product.
• Five stages.
  • Problem recognition: Identifying a need or problem.
  • Information search: Seeking product information.
  • Evaluation of alternatives: Weighing pros and cons.
  • Purchase decision: Forming preferences and intentions.
  • Post-purchase behavior: Assessing satisfaction and addressing dissonance.

Business Customer Definition

• A business customer is an organization purchasing goods/services for commercial use

Differences Between Business Customers and Consumers

• Business customers prioritize purpose, volume, frequency, and involve multiple stakeholders.
• Consumer purchases are more personal, individual, and less complex.
• B2B marketing is informational and relationship-driven, while B2C is broader.

B2B vs. B2C Buying Processes

• B2B involves multiple stakeholders and longer decision times.
• B2C is typically faster with individual decision-making.
• B2B is driven by business needs, efficiency, and long-term benefits.

Scope of Marketing Research

• Connects the consumer, customer, and public to the marketer through information.
• Identifies and defines marketing opportunities and problems.
• Generates and evaluates marketing actions.
• Monitors marketing performance and improves understanding of marketing.

Steps in the Marketing Research Process

• Defining the problem: Clarifying the research question.
• Developing the research plan: Determining data needs and methods.
• Collecting the information: Gathering data through surveys, interviews, etc.
• Analyzing the information: Extracting key findings.
• Making the decision: Implementing insights.

Segmentation

• Dividing the market into distinct customer groups based on shared needs/characteristics.
• Market segmentation identifies groups of buyers with differing needs and wants.

Consumer Market Segmentation Types

• Demographic: age, life cycle, income, occupation, culture, etc.
• Geographic: country, city, density, language, climate, etc.
• Behavioral: user status, usage rate, readiness, loyalty, occasions, etc.
• Psychographic: lifestyle, personality, values, attitudes, concerns, etc.

Targeting Definition

• Identifies customers for whom the company will optimize its offering.
• Involves selecting which customers to prioritize and which to ignore.

Logic of Targeting

• Deliberate choice to ignore some customers to better serve others.
• Ranges from mass marketing (one offer for everyone) to mass customization (meeting individual needs).

Evaluating Segment Viability

• Compatibility: Can the company create superior value for these customers?
  • Infrastructure, resources, skills, expertise, brands, network
• Attractiveness: Can these customers create superior value for the company?
  • Monetary, strategic, social, scale, and information value

Market Targeting Strategies

• Single-segment: Focusing on one specific market segment.
• Multi-segment: Targeting multiple segments with different strategies.

Bringing Target Segments to Life

• Creating personas: Detailed profiles of hypothetical target consumers.

Customer Value Proposition

• The difference between all benefits and costs of an offering.
• It is the unique combination of benefits offered that makes the product or service valuable.

Value Proposition Statement

• Explains the unique benefits a product/service offers to target customers.
• Highlights what makes the offering different from competitors.

Developing a Positioning Strategy

• Defining a company's offering and image to occupy a distinct place in the market's mind.
• Requires defining similarities and differences between the brand and competitors.
• Frame of reference identifies target market and competition.
• Points of parity are attributes shared with competitors.
• Points of difference are unique attributes.

Perceptual Map

• Visual representation of how consumers perceive a brand vs. competitors

Evaluating Attractiveness of an Offering

• Customers evaluate offerings based on product, service, and brand.
• Decisions depend on how well the offering aligns with needs, emotions, and budget.

Product Differentiation

• Attributes of differentiation include
  • Core functionality: Delivering on basic benefits.
  • Features: Supplementing basic functions.
  • Performance quality: Level of operational characteristics.
  • Conformance quality: Meeting specifications.
  • Durability: Expected operating life.
  • Reliability: Probability of malfunction-free operation.
  • Form: Physical structure/design.
  • Style: Look and feel.
  • Customization: Tailoring to individual needs.

Packaging

• Packaging includes activities of designing and producing product containers.
• Three Layers
  • Primary: Immediate container.
  • Secondary: Groups primary packages.
  • Shipping: Outermost packaging.

Goals of Packaging and Labeling

• Capture consumer attention
• Identify or grade the product or brand
• To describe the product and promote it

Guarantees and Warranties

• Seller assurances of product performance.
• Guarantees ensure compensation if a product fails as promised.
• Warranties cover repair or replacement of the product.

Product Portfolio

• Encompasses all products offered by a company, including product lines and categories.
• Key Aspects:
  • Product portfolio length: Total number of products
  • Width: Number of product lines
  • Depth: Number of variants per product/brand
  • Length: Number of products in a single line

Product Portfolio Decisions

• BCG Matrix evaluates products based on market growth and relative market share.

Physical vs. Digital Products

• Physical products are tangible.
• Digital products are intangible and delivered electronically.

Characteristics of Services

• Intangibility: Cannot be seen, tasted, felt, heard, or smelled.
• Inseparability: Simultaneously produced and consumed.
• Variability: Quality depends on the provider/time.
• Perishability: Cannot be stored.

Tackling Insecurities Linked to Services

• Emphasize tangible aspects of service quality.
• Train providers and build confidence.
• Standardize processes and monitor satisfaction.
• Use differential pricing and complementary services.

Managing Service Quality

• Assessed at each service encounter.
• Key Determinants.
  • Reliability: Dependable and accurate performance.
  • Responsiveness: Willingness to help and provide prompt service.
  • Assurance: Knowledge, courtesy, and trustworthiness of employees.
  • Empathy: Caring and individualized attention.
  • Tangibles: Appearance of facilities, staff, and materials.

Differentiating Products Using Services

• Products and services can be differentiated based on tangibility, ownership, production, and delivery.

Achieving Service Excellence

• Requires excellence in:
  • External marketing (promotion)
  • Internal marketing (employee training)
  • Interactive marketing (employee skills)

Definition of A Brand

• A name, term, sign, symbol, design, or combination of these, identifying and differentiating goods/services.
• Creates value for consumers, companies, and collaborators beyond product/service.

The Role of Brands

• Benefits for Consumers
  • Simplifies decision-making
  • Creates an emotional connection
  • Reduces perceived risk
  • Confers status
  • Conveys identity
• Benefits for Companies
  • Supports differentiation
  • Protects competitive advantage
  • Encourages loyalty
  • Supports premium pricing
  • Simplifies product handling

Scope of Branding

• Linking a product or service to the power of a brand.
• Creating differences between products.

Value Created by a Brand

• Brand Equity is the monetary value of a brand.
  • Measured through.
    • Cost approach: Analyzes costs of developing the brand
    • Market approach: Measures revenue differences of branded vs. unbranded product
    • Financial approach: Assesses net present value of future earnings
• Brand Power reflects how consumers think, feel, and act regarding the brand.
  • Measured through:
    • Brand audit: Assesses brand health and equity sources.
    • Brand tracking: Monitors the value that's being created

Designing a Brand

• Creating the right brand associations.
  • 3 Key elements.
    • Defining the mantra: A short articulation of the brand's essence.
    • Choosing brand elements: Names, logos, symbols, slogans, etc.
    • Choosing secondary associations: Linking brands to other sources.

Brand Hierarchy

• Reflects how brands are related to products/services and to each other.
• Important for companies managing diverse brand portfolios.

Brand Positioning Bull’s-Eye

• Represents a brand's positioning and core identity.

Customer Psychology and Pricing

• Consumers actively process price information in context.
  • Reference prices, image pricing, and pricing cues.

Setting Prices

• Price setting occurs when developing new products, entering new markets/channels, or bidding for contracts.

Pricing Objectives

• Short-term profit maximization.
• Market penetration to maximize market share.
• Market skimming with high prices for early adopters.
• Quality leadership with prices supporting investments.

Importance of Determining Demand

• Each price impacts demand and company objectives.
• Demand elasticity reflects how price changes affect sales.

Influences on Price

• Demand sets the ceiling.
• Costs set the floor.
• Competitor analysis assesses their prices and offerings.

3Cs Model of Price Setting

• Costs, competitors, and customers.
• 5 Price Setting Methods
  • Markup: Add a standard markup to the product cost
  • Target Rate of Return: Set price to achieve desired ROI
  • Economic-Value-to-Customer: Considers customer image, channel factors, and softer attributes.
  • Competitive: Bases price on competitors
  • Auction: Growing in popularity, especially online

Setting the Final Price

• Developing a pricing structure reflecting variations in demand, costs, and market segments.
• A single product or service has varied costs that are assessed in.
  • Customer-segment
  • Product-form
  • Channel
  • Location
  • Time pricing

Roles of Marketing Communication

• Informs, persuades, and reminds consumers about products/brands.
• Establishes dialogue, builds relationships, and strengthens customer loyalty.
• Demonstrates product usage and links brands to experiences.

Steps to Develop Effective Marketing Communications

• Setting communication objectives.
• Identifying target audience (potential buyers).
• Crafting the communication message.
• Selecting communication channels.
• Developing creative communication (ads, content).
• Measuring communication effectiveness.

Focuses of Company Communication

• Creating awareness of the brand and what the company is/does/offers
• Building preferences when communicating offerings to serve consumers needs
• Inciting action is done to motivate customers to purchase the brands through promoting the options available

Determining the Communication Budget

• Competitive-parity method looks at what competitors are doing.
• Affordable method sets the budget at what can be afforded.
• Percentage-of-sales method: Based on set sales metrics.
• Objective-and-task method does so based on objectives of what's needed in each stage.

Setting Communication Benchmarks

• Quantitative benchmarks quantify objectives (awareness, preferences, actions).
• Temporal benchmarks define timeframes for outcomes.

Customer Roles in Selecting the Targeting Audience

• Consider potential buyers, users, deciders, and influencers.

Marketing Communications Mix

• Different types for each customer
  • Advertising is done by print, broadcast, and display.
  • Online and social media has increased engagement.
  • Mobile communication places messages on devices.
  • Direct marketing: communication through mail, in-person etc
  • Events and experiences: to generate brand related interactions
  • Word of mouth: personal communications and stories
  • Publicity and public relations: Promote or protect a company
  • Personal selling: to convince a buyer for service and products
  • Packaging: effective form of decision for the user

Developing a Media Plan

• Determine cost-effective communication options.
  • Reach: The number of different persons who have been reached.
  • Frequency: number of exposures people have towards the brand
  • Impact: value that's associated

Message Appeal

• Informational appeals communicate attributes or benefits.
• Transformational appeals communicate non-product benefits or image.

Selecting the Message Source

• Expertise, trustworthiness, and likability.

Measuring Communication Effectiveness

• Assessing outcomes and revenues resulting from communication investments.

Integrated Marketing Communications (IMC)

• Coordinating diverse communication tools to achieve strategic goals.
• Ensures consistency and cost-efficiency.

Levels of IMC

• Horizontal intergration is the connection of communication campaigns with marketing and sales activity.
• Vertical integration relates the objectives with the marketing startegy.
• Internal integration happens through sharing the right information between parts in the buisnesss
• External integration relates the communications to external collaborators activities.

Marketing Distribution Channel Definition

• Intermediaries moving goods from producers to final users.

Intermediary Types

• Merchants: Buy and resell merchandise
• Agents: Search for customers without taking ownership
• Facilitators: Assist distribution without ownership/negotiatons

Intermediaries

• Used to increase revenue for organization.
  • Can gather information, promote brand, negotiation, financing
  • Risk taking, physical possession, payment.

Channel Levels

• Zero-level (direct): Manufacturer sells directly to the final customer.
• Single-level: Contains one intermediary (e.g., retailer).
• Dual-level: Contains two intermediaries (e.g., wholesaler and retailer).

Multi-Channel vs. Omni-Channel Marketing System

• Multi-channel involves independent channels with varying experiences
• Omni-channel integrates all channels for a seamless customer experience

Channel Objectives

• Stated per customers that businesses aim to reach and need costs to be provided

Channel Members

• Determine what characteristics are most important in distributors and intermediaries

Distribution Based on Members

• Exclusive Distribution includes manufacturers giving the task resellers
• Selective distribution has a certain retailer
• Intensive distribtion have as many outles as possible

Four Types of Marketing Channel System

• Conventional all the parties work interpedently
• Horizontal is when resource and opportunity is used together
• Vertical uses unified systems
• Integrated makes it tactics of all activities reflect the same way as is in other channels

Franchising Model

• Grantig a business model to somebody else to operate under

Channel Power to Motivate Members

• Implementing training and developing the workers
  • Coercive power has the power to stop resources
  • Reward power incentives workers to perform
  • Legal power is the power that comes in the work terms
  • Expert power is workers having knowledge and improving skills constantly
  • Referent power is workers respecting each other

Channel Conflicts

• Strategic justification have products with specific things for certain channels
• Dual compensation pays members already made
• Superordinate happens when members come in an agreement
• Employee exchange happens through personal reducing the conflict
• Joint memberhsips does promotion of trade assosiation
• Co-optation supports and involves council decisions
• Diplomacy means resolving conflicts legally

New Marketing Realities

• Changes include consumers, tech, trending.

Retailers (Store v Non-Store)

• Store Retailers include services such as; self service, self selection, limited, full
• Non-Store Retailers involves direct to customer experiences

Store Retailers Types

• Specialty store has a nattow product line.
• Department stores have multiple product line
• Supermarket offers food product for needs
• Convienece store is open 24/7
• Drug store is for health needs
• Discount store has low prices
• The value discount store are mix stores
• Off-Price have random items that can be sold for less

Market Members

• Leader has the greatest
• Challenger looks to have biggest impact
• Follower sticks to its place
• Nichers is when a distinct group of consumers are the target

Share of Mind and Heart

• Measured by market, mind and heart.
  • Market is compared depending to another unit in area
  • Mind is the percent that is kept in consumers mind
  • Heart is when they know people would prefer this product

Defnding and Gaining Market

• Gain it through current and new customers
• Defend market with the use of launch and defensive actions

Market Strategies for Challengers

• Challengers can do a frontal attack
• Flank attack
• Encirclement attack
• Bypass attack
• More short bursts like Guerilla attacks

Market Strategies for Followers

• Adapter uses other products and improves
• Cloner copies it
• Imitator steals but adds to a few things

Small and Nichey Markets

• An alternative to being a follower in a large market, smaller market or a small market

Product Life Cycles

• Sales slow when introducing new products and it grows after that
• Profits depend on markets
• Must market through multiple different stages

Phases Linked to Product Life

• The phases involve sales, costs, profits, customers and competitors through each product
• The strategies depend if sales have dropped or are peaking

5 A: CUSTOMER ACQUISITION

• Steps to follow for acquriing members
  • Awareness
  • Appeal
  • Ask
  • Act
  • Advocate These are the gateway to interactions.

Conversion Rate Definition

• Percentage of customers at each A

Consumer and Customer Satisfaction

• Feelings consumers have when comparing the expected preformance vs what happens
• If the products expectations are not made, they will not be satisfied
• If happy, they will be happy again

Customer Loyalty Definition

• Customer being consistent towards a brand or product which can influence new buyers.

Messurement for Customer Satisifaction

• By tracking it in regular forms and it could mean getting high customers or getting customers to stick around.

Loyalty through Relationship

• Interact with the loyalty and keep the company going
• Loyalty programs should be used for a long term

CRM

• It is the the process of detailing infomrations to increase loyalty.

Point of Touch and Brands

• Every brand has a touch point depending on the experience from one and another.

To Build Cusotmer Relationship

• Increase word of mouth and create custmization for others