Marketing Management Lecture Notes PDF 2024

SMU Classification: Restricted MARKETING MANAGEMENT 2605501 LECTURE ONE : Introduction to Marketing Concepts and Frameworks What is Marketing Instructor: Geoffrey da Sil...

SMU Classification: Restricted MARKETING MANAGEMENT 2605501 LECTURE ONE : Introduction to Marketing Concepts and Frameworks What is Marketing Instructor: Geoffrey da Silva 1st Semester / Academic Year 2024 all about? 1  SMU Classification: Restricted LEARNING OBJECTIVES FOR LECTURE ONE 1. To introduce the study of Marketing as a core business discipline 2. To understand some key concepts in the study of marketing including customer needs, creating customer value and customer relationships 3. To introduce the key topics of marketing including consumer behaviour, customer segmentation and targeting and overview of the marketing mix 4. To understand the different assessment components of this course 1-2  SMU Classification: Restricted SOME HOUSE RULES Come on time for every class. Late-comers will have penalty marks deducted from the overall course grade Punctuality is a critical business discipline. Get it right before you go out to the world of work No use of mobile phones in my class. But please use tablet or notebook to follow the lectures and take notes No private conversations while the lecture is taking place but feel free to discuss when we have a class discussion topic Absence must be supported with a medical certificate (send scanned copy to me) or official leave of absence letter (university activities) My lectures are NOT recorded unless we have a scheduled zoom class (you will be advised) 1-3  SMU Classification: Restricted WHAT MARKETING COULD MEAN TO DIFFERENT PEOPLE 1-4  SMU Classification: Restricted BUT YOU ALREADY KNOW A LOT OF ABOUT MARKETING WHY? Discussion Give some reasons why this is so: 1-5  SMU Classification: Restricted MARKETING IS ONE OF THE MANY DIFFERENT BUSINESS FUNCTIONS IN AN ORGANIZATION Marketing is one of the many business functions. How do each of the business functions provide value to the firm? The organization Human Operations Marketing Finance Resources Management 1. Find Customers 1. Track and 1. Recruitment 1. Efficiently Manage 2. Increase Sales Control Costs and Selection and Control Revenues 2. Manage Cash 2. Develop Talent Business 3. Develop Strong Flow 3. Reward for Operations Brands 3. Look for Funds Performance 2. Get Products to Markets 1-6  SMU Classification: Restricted WHY MUST ALL BUSINESS SCHOOLS HAVE A FOUNDATION COURSE ON PRINCIPLES OF MARKETING? Give some possible reasons below: 1.. 2.. 3.. 4.. 5.. 1-7  SMU Classification: Restricted MARKETING AND ME … I will be taking a Major in I have some interests in marketing. This marketing things outside of this uni. course is going to … This marketing course is going to … I will be a business major in I will be going for a job some other area other than interview. This marketing marketing. This marketing course is going to … course is going to … I am NOT a business I am thinking of ways for student. This marketing self improvement/personal course is going to … development. This marketing course is going to … 1-8  SMU Classification: Restricted SOME QUOTES ABOUT MARKETING AND BRANDS (DISCUSS THE IMPLIC ATIONS) “Some people say, "Give the customers what they want." But that's not my approach. Our job is to figure out what they're going to want before they do. People don't know what they want until you show it to them.That's why I never rely on market research. Our task is to read things that are “Marketing takes a semester to learn not yet on the page.” but a lifetime to master” - Philip Kotler Which quotation is seen to be more relevant to you and why? 1-9  SMU Classification: Restricted DEFINITION OF MARKETING (PROFESSOR KOTLER) Marketing is a process by Key terms to note: which companies create value for customers and build strong Process (systematic approach) customer relationships in order (who are they?) to capture value from customers Customers in return. (Kotler and Armstrong) (what does value Create Value really mean? How to measure?) Build Strong (why are relationships Relationships important in Capture Value (how is this possible?) Marketing?) (from customers? 1-10  SMU Classification: Restricted MARKETING IS A PROCESS THAT STARTS WITH PLANNING Marketing is following a systematic process that includes the key stages 1) Starts with understanding markets: information about markets, competitors and customers is VITAL to successful marketing 2) Get the products and services to the customer(“right time, right place, right products, best prices) 3) Get the sales but also win the customer!! Keep the customer loyal to the company and its brands 1-11  SMU Classification: Restricted THE STUDY OF MARKETING SHOULD COMPRISE OF THREE LEARNING SKILL SETS Theory: marketing is a study that requires the study and understanding of key concepts and models that will be covered during various lectures on the marketing topics Evidence: Marketing is witnessed every day in the news; stories about brands and campaigns. A marketing student must follow stories and breaking news on brands, campaigns and new innovations Practice: Marketing has applications in different situations, each requiring different approaches. Practice means putting “marketing-into-action” and justifying the actions with the right logic 1-12  SMU Classification: Restricted THE REQUIRED TEXT FOR THIS COURSE Principles of Marketing (19th edition) by Philip Kotler, Gary Armstrong and Sridhar Balasubramaniam (Pearson; 2023) 1. Excellent and concise marketing text for introductory level marketing 2. The chapter references are indicated in the Lecture Schedule found in the Course Syllabus 3. Try to read the chapters before or after each lecture 1-13  SMU Classification: Restricted THE STUDY OF MARKETING IS BEYOND JUST WHAT WE FIND IN A TEXTBOOK You cannot learn (and truly appreciate) marketing by just reading a textbook! The text and the notes are the foundation only In addition, I would like you to study this course with an eye on the external marketing environment and pay What’s going on attention to recent examples of marketing campaigns in the world of Campaigns could include the introduction of new marketing products and brands, entry of a company into a new TODAY? market, responding to public criticism of marketing practices and of course in today’s world – the impact of digital (especially now with AI) on the different aspects of marketing practices 1-14  SMU Classification: Restricted MARKETING C ANNOT BE STUDIED FROM JUST THE TEXT! THE IMPORTANCE OF “EXAMPLES” Markets and Marketing are Dynamic! Changes each day. Must keep up to date with EXAMPLES. You can refer to any sources for examples of marketing that capture your interest and imagination I would recommend: Short marketing examples and Marketing Interactive: https://www.marketing- updated regularly interactive.com/ Start collecting some interesting marketing You can use relevant marketing examples from any examples or stories and bookmark or print other business sites as well them for your collection. Get ready at least 10 examples for use in the final exam! No examples NO A grade 1-15  SMU Classification: Restricted SOME KEY CONCEPTS TO START IN THE STUDY OF MARKETING Needs,Wants Market Value and Relationships Market and Demand Offerings Satisfaction Learn these key concepts early in this course 1-16  SMU Classification: Restricted 1. THE STARTING POINT IN MARKETING : TO UNDERSTAND NEEDS,WANTS AND DEMANDS Needs are not the same as wants We need to have clothes, but we want to have Tommy Hilfiger We need to eat but we would want to have a good burger at Burger King We need to commute from point A to B but we might want to drive a Audi car For the consumer to meet his needs and wants, he needs to have purchasing power Wants + $$$ = DEMAND 1-17  SMU Classification: Restricted 2. WHAT DO YOU SELL? MARKET OFFERINGS The firm can offer products, services, information, or experiences Offered to satisfy a need or want Realize that the term ‘Product’ is very wide In this course we will learn about many kinds of products including consumer and business products A service is an intangible product Sometimes the market offering is an idea or change in behaviors Organizations that offer products and services can be both profit and non-profit 1-18  SMU Classification: Restricted NOT UNDERSTANDING CUSTOMER NEEDS = MARKETING MYOPIA Marketing myopia—paying more attention to the specific products than to the benefits and experiences produced Many companies fail due to marketing myopia They focus on the product or service or BUT FAIL to There are many products UNDERSTAND or MEET customer expectations that failed because of marketing myopia “myopia” is short-sightedness Can you give some In marketing, it means the “company can see the product but examples? cannot see the customer needs” Why does this happen? 1-19  SMU Classification: Restricted STUDY EACH OF THESE GRAPHICS. DISCUSS WHAT EACH MEANS Discussion 1-20  SMU Classification: Restricted CUSTOMERS BUY PRODUCTS AND SERVICES … OR DO THEY WANT MORE – THE EXPERIENCES? OR The store and the products The “Experiences” If you go for a vacation.. What is more The “Experiences” important? The room and hotel? OR 1-21  SMU Classification: Restricted MARKETING MEANS UNDERSTANDING WHAT YOUR CUSTOMERS ARE “REALLY BUYING” Discussion The Product/Brand The product/service But what is the customer really features buying? The core benefit? Thai Airways Business Class Bigger seats, better food and beverages Porsche Sports Car/SUV Powerful engine, German engineering, sporty design Cosmetics from Sephora Wide range of cosmetics brands Go Pro Camera Hero Action camera/ durable Luxury Spa and Hotel (Phuket) Luxurious villa, modern amenities Business post-graduate degree Study of Business from CBS Management Industry and International Recognition 1-22  SMU Classification: Restricted 3. WHAT DO CUSTOMERS GET? VALUE AND SATISFACTION Value is the perceived benefit that customer get from buying and consumption of products and services Customers form expectations about the value and satisfaction of market offerings. Satisfaction = Performance minus (-) Expectations Satisfied customers buy again Dissatisfied customers switch to competitors And BOTH satisfied and dissatisfied customers use SOCIAL MEDIA Some key learning points: 3. Do market research to find out if 1. Understand customer needs customers are satisfied 2. Deliver the right value to customers 4. Develop continuing relationships with customers 1-23  SMU Classification: Restricted 4. EXCHANGES AND RELATIONSHIPS IN MARKETING “marketing continues long after the first transaction” Relationship does not mean customer services alone Why are relationships important in marketing? 1. Customers are part of building a long-term brand relationship 2. Customers increase in value over time (customer equity; just like you may have heard of brand equity) 3. Customers tell other customers (peer-to-peer especially in social media) 4. Customers are part of “community of brand users” 5. It is expensive to find new customers and costly to lose them! 1-24  SMU Classification: Restricted 5. MARKETS A market is the set of actual and potential buyers. Markets are places where customers search for products interact with companies to obtain information make purchases Markets must be studied for different trends Markets can be physical places or virtual And markets can be consumer or business Market comprise different types of customers that need to be segmented and targeted 1-25  SMU Classification: Restricted WE MUST STUDY LATER IN THIS COURSE ABOUT TWO KIND OF MARKETS – B2B AND B2C 2 B 2 C B B “selling solutions to organizations” “personal or end-user consumption” 1-26  SMU Classification: Restricted CUSTOMERS ARE NOT THE SAME Customers are divided into SEGMENTS Each segment may have And they purchase different different needs Products and Brands 1-27  SMU Classification: Restricted THE RIGHT THINKING ABOUT MARKETING : NOT ALL COMPANIES GET IT! KOTLER TALKS ABOUT FIVE DIFFERENT CONCEPTS (CONCEPTS = A PERSPECTIVE ON DOING BUSINESS AND MARKETING) 1. The production concept holds that consumers will favor products that are available and highly affordable. 2. The product concept holds that consumers will favor products that offer the most quality, performance, and features. 3. The selling concept refers to the idea that consumers will not buy enough of the firm’s products unless the firm undertakes more selling and promotion effort – push for sales. 4. The marketing concept is a philosophy in which achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. 5. The final alternative is the societal marketing concept which holds the idea that a company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests. 1-28  SMU Classification: Restricted THE FIRST THREE CONCEPTS ALL MISS THE POINT ABOUT MARKETING Production Concept = make Product Concept = make it Selling Concept = push and it cheap and affordable fancy and full of features (“bells push (customers are passive) and whistles”) All these three approaches never started with the Customer!!! 1-29  SMU Classification: Restricted THE MARKETING CONCEPT Starts with the customer as the focus of all marketing What does the customer really want? What are the customer problems or frustrations? How can we design products and services that solve customer problems? The task is not to find the right customers for your product but to find the right products for your customers. And how can we do it better than our competitors? Avoid Emphasises the following in Marketing: Listening | Observing |Asking |Empathy Customer focus BEFORE the sale and continues AFTER the sale 1-30  SMU Classification: Restricted SELLING VERSUS MARKETING “only make what we can sell” “sell what we can make” 1-31  SMU Classification: Restricted THE SOCIETAL MARKETING CONCEPT A final yet important dimension of marketing is that of ethics and social responsibility Marketers not only sell products and services but must do so with respect and responsibility to customers and the environment This is called ‘societal marketing’ and it covers many aspects such as safety, economic value, impact on environment, culture and others. Areas of application in include Ethics in Marketing and Sustainability (more covered in Lecture 11) 1-32  SMU Classification: Restricted DISCUSSION ON WHAT CUSTOMERS WANT READ THIS SHORT ARTICLE Questions for Discussion: 1. Do you think Ferrari is meeting the needs of its customers in the modern age? 2. Why is it caught in this situation of giving what customers want and what is good for the environment? 3. Do you understand how sometimes the marketing concept can conflict with the societal marketing concept? https://www.bbc.com/news/65539880 1-33 MKTG618 Marketing Management Geoffrey da Silva  SMU Classification: Restricted MARKETING SIMPLIFIED IN ONE FIGURE Study the business Study your target Plan your Marketing Track the result of environment (trends customers and their Strategy using the your marketing and threats) and then buying preferences tools called the actions. Decide on study the market for and behaviours. “marketing mix” what actions to take the product (that you Customer research going forward are researching) Lecture 2 Lectures 3 and 4 Lectures 5 to 10 Lecture 12 1-34  SMU Classification: Restricted 1. STUDY THE BUSINESS AND MARKETING ENVIRONMENT Marketing does not happen in a vacuum; rather it is affected by many different external forces Many of these forces or factors are uncontrollable and sometimes unpredictable The outcomes of marketing actions (strategies and campaigns) are affected by these forces Later in Lecture 2 we discuss: Lesson here: you need Macro factors such as political, legal, economic, social and technological to be good in current affairs in business and Micro factors such as competition, customers, collaborators (distributors) marketing Marketing managers must have a keen eye to monitor the external environment 1-35  SMU Classification: Restricted 2. STUDY YOUR TARGET CUSTOMERS The key term is ‘target’ – marketer need to focus on key market segments Different groups of customers have different needs and benefits; marketers need to customise products and solutions to satisfy different customer needs Marketing uses tools of marketing research – today we often refer to these as ‘marketing analytics’ – statistical techniques to track and study consumer buying behaviours Customers are very complex to understand; their needs are ‘heterogeneous’ and are ‘dynamic’ Customer needs can change over time (think of the impact of the COVID-19) Topics on Segmentation and Customer Behaviours are covered in Lectures Three and Four respectively 1-36  SMU Classification: Restricted 3. PLANNING MARKETING STRATEGY The core of this course is about marketing strategies These are exemplified through the ‘tools of marketing’ The best framework we will use in this course is the Marketing Mix framework The lectures 5-10 will cover in detail the elements of the marketing mix Marketing strategies deployed through the planning of the marketing mix seeks to help the company achieve its marketing objectives and achieve competitive advantages The marketing mix usually is depicted though the 4 Ps Product – Price – Promotions – Place 1-37  SMU Classification: Restricted 4. THE RESULTS OR OUTCOMES OF MARKETING All marketing actions should lead to outcomes or results These include sales, market share, profits, shelf space (distribution), social media presence, brand awareness, brand loyalty and others We often call these ‘marketing metrics’ Some results are purely financial but increasingly the results today are also measured in ‘behavioural terms’ – example Do customers have an ‘affinity’ or loyalty to the brand? Does marketing create strong customer relationships and brand communities? Can brands have a global presence outside their home markets (particularly for Asian brands)? 1-38  SMU Classification: Restricted THE MARKETING MIX The central part of our Marketing Management course  SMU Classification: Restricted THE MARKETING MIX = TOOLS OR METHODS WE USE IN MARKETING © Geoffrey da Silva 2024 Product Promotions Marketing Mix are the Tools for Marketing Price Place 1-40  SMU Classification: Restricted WHEN WE SAY TOOLS OF MARKETING, WHAT DO WE MEAN? All aspects of the marketing mix will be used in any situation for marketing They must used in the right manner. What does this mean? Right kind of product / the right level of pricing / the right location / and others Different marketing mixes would suit different kinds of products The word mix is meant to be about: Changing and combining (ingredients) Right set of marketing mix (we often call these “variables”) You study Statistics? We refer to the Marketing Mix as independent variables. They are used to affect Sales Y = f(X) Y is sales and X is one or more of the marketing mix variables Example price affects sales / level of advertising affects sales. 1-41  SMU Classification: Restricted THINK OF THE MIX AS “INGREDIENTS” © Geoffrey da Silva 2024 In cooking we say: different ingredients are used to cook different dishes and yet the same dish could be cooked using different ingredients How does this apply to Marketing? Different products and services would use different marketing mixes (but we use all the Ps) And yet the same product could use different types of marketing mixes (think of marketing a Toyota versus marketing a Bentley car) 1-42  SMU Classification: Restricted IF YOU ARE THESE BRANDS, WHICH MARKETING MIX ‘P WOULD BE THE “MOST IMPORTANT” FOR THAT BRAND? (PUT A STAR) © Geoffrey da Silva 2024 1-43  SMU Classification: Restricted THE MARKETING MIX HAS DIFFERENT POSSIBLE PERMUTATIONS (SOME ILLUSTRATIONS) © Geoffrey da Silva 2024 The MM The possible options: aspect: Option#1 Option#2 Option#3 Option#4 Product Single product Ten product Single brand Multiple brands line lines Prices Higher Lower Matching Subsidised Place Single retail Twenty retail Selling Online store stores Promotions Use more Use more Use more Sale Use more Sales Advertising Social Media Promoters People Hire few or Hire better Hire cheap Self Service more trained ($$$) labour 1-44  SMU Classification: Restricted EACH ASPECT OF THE MARKETING MIX PROVIDES SPECIFIC VALUE TO CUSTOMERS © Geoffrey da Silva 2024 1-45  SMU Classification: Restricted THE PRODUCT The starting point of marketing is the offer “what is the firm really selling” The product represents the essence of the offer Remember this: customers don’t buy products, they buy solutions What does it comprise? The physical product itself, the packaging, design, branding and after sales services Product : Creating The key in product marketing is differentiation Customer Value Some products are intangibles – they are referred to as ‘services’ Products have limited life spans due to rapid market and technological changes Product innovation is important to sustain company growth 1-46  SMU Classification: Restricted ANOTHER VERY IMPORTANT SET OF TERMS NOT BE CONFUSED WITH – PRODUCTS AND BRANDS © Geoffrey da Silva 2021 In the discussion of marketing strategy , Product terms are often used loosely and incorrectly Category It is important in marketing to be clear what you are referring to Product Sub- A product is not the brand! Category A product represents a category And the category could have sub-categories Each category could have different brands and sub-brands Brand: Use the correct terms in your marketing analysis Models or sub-brands: BMW X3 or BMW 520 1-47  SMU Classification: Restricted SOME WELL-KNOWN BRANDS IN ASIA PACIFIC Start your marketing journey by exploring a few brands that you like to focus on and understand why they are successful (using the principles of marketing we are going https://www.campaignasia.com/article/southeasts-asias- to learn in this course) top-50-brands-2024/495968 1-48  SMU Classification: Restricted THE PROMOTIONS Great brands need to get customers attention The role of promotions (marketing communications) is to target specific customer groups and get attention, create desire and eventually to trigger buying Today’s markets are increasingly dense with so many brands and there is clutter and information overload (‘too many brands; too many ads) The marketer uses a range of tools to communicate – advertising, online, public relations and sales promotion What is the most significant impact is that of social media Customer don’t want one way communication; they expect dialogue with the firm and among other customers (peer-to-peer) Promotions : Communicating Customer Value 1-49  SMU Classification: Restricted THE PLACE Place is not just about location but also about availability Getting the right products at the right time at the right place and at the most competitive price Place in marketing involves the distribution channels, retailers and supply chain But also, in today’ digital world, place means the processes and systems that network the manufacturers, the retailers, logistics companies and the final customer Place is about the ‘networks’ which are all DIGITAL today An important aspect of place strategy especially for consumer goods and services is the important role of the retailer (physical store or digital). Customers buy in both situations Place : Delivering Customer Value 1-50  SMU Classification: Restricted THE PRICE All the tasks in marketing add to costs and costs affect prices The ability of the firm to charge it wants depends on its ability to differentiate Otherwise, it will be a price-follower Pricing in marketing means value (from the customer point of view) For many FMCG brands, customers are sensitive to price and there are price wars between retailers But for many luxury brand, price is secondary. Customers are willing to pay for premium For services marketing, pricing is more complex since services are ‘intangible’ – difficult for customers to assess quality Price : Capturing Customer Value 1-51  SMU Classification: Restricted THERE ARE MORE P’s – there could be 7Ps Later in our lectures, we will cover the topic of ‘services marketing’ There we see that services often involve additional marketing mix elements PEOPLE / PHYSICAL EVIDENCE / PROCESS Marketing is enhanced by the role of Staff, the Service Environment and Systems In services, customer don’t buy products. They buy “Experiences” 1-52  SMU Classification: Restricted MY PERSPECTIVE IN MY MARKETING COURSE Good to have a global outlook BUT we must try to focus on Asian Perspective We study, live and work in Asia Shouldn’t we be concerned about how to take Asian brands and companies onto the global stage? An Asian Perspective instead! Start collecting 10 short marketing examples (read and then make your own short notes before the end of this course in good time before our final exam) about local and other Asian brands and companies; what are they doing NOW? Give examples about their marketing activities and strategies Learn to become more current affairs smart. Studying the lecture slides and the text is the start not the end! Remember: no examples in your essays - NO A grade 1-53  SMU Classification: Restricted THE “BIG PICTURE” OF MARKETING (FROM THE KOTLER TEXT) 1. Use this figure as your blueprint or roadmap for studying Marketing 2. Go from left to right 3. For each stage go downwards and read the marketing tasks 4. Understand the outcome of marketing – to create and capture customer value 1-54  SMU Classification: Restricted BREAKING DOWN THE KOTLER MARKETING BLUEPRINT (1) All marketing starts – and ends – with the customer Study carefully the markets, competitors and customers. Look for important trends The focus on target segments and know how to communicate and present the differentiated value proposition to the target customer ( “what are we really selling?”) Positioning is one of the key words in the study of Marketing! 1-55  SMU Classification: Restricted BREAKING DOWN THE KOTLER MARKETING BLUEPRINT (2) The Core Content of this course: The Marketing Mix The Right Mix (fit) + Integrated Marketing (holistic) 1-56  SMU Classification: Restricted BREAKING DOWN THE KOTLER MARKETING BLUEPRINT (3) Developing and sustaining strong relationships with customers. Customer Loyalty. Customer Communities. Customer Analytics for CRM (customer relationship management) Marketing needs more than just customers; it needs partners or collaborators such as Distributors and Retailers. Logistics and Supply Chain 1-57  SMU Classification: Restricted BREAKING DOWN THE KOTLER MARKETING BLUEPRINT (4) Marketing is about creating and capturing value Creating value is not just through products but also through information and processes (think of the value created by digital and AI) Capturing value from customers means that satisfied customers help create future value to the firm (how?) 1-58  SMU Classification: Restricted BREAKING DOWN THE KOTLER MARKETING BLUEPRINT (5) The Three Themes for Marketing: 1. Marketing is increasing becoming Digital 2. Marketing is increasingly Global 3. Marketing is taking on more Social Responsibility + + 1-59  SMU Classification: Restricted DISCUSSION QUESTIONS FOR LECTURE ONE 1. In this lecture, what are the key concepts and ideas that you have learnt about marketing as a foundation for this whole course? What concepts appear most interesting or important to you? Note it down. 2. How is marketing different from selling? 3. Do all companies know how to apply Marketing? Why or why not? 4. Discuss how the marketing mix can be applied to any brand of your choice. 5. Identify any two Asian brands that have become successful over the last 5 years. What are the reasons for the success of these brands? 1-60