Understanding Marketing Management

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Topic 1
Marketing Management (MAR4803) By Kanghyun Yoon

• Understanding Marketing Management

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Issues To Be Discussed

• Lets consider the following issues to understand
  what the marketing management is.
• Issue 1 What are the marketing goals of the
  company?
• Consider why companies run their business by
  developing a new product and sell it to the
  customers.
• The important concepts for this issue are .
• Issue 2 What is marketing?
• The important concepts for this issue are .
• Issue 3 What does that mean by the marketing
  management process?
• The important concepts for this issue are .
• Issue 4 How to design a strategic marketing
  plan? What are the components of a strategic
  marketing plan?
• The important concepts for this issue are .

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Issue 1 What are the Goals of Company?
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Discussion on Marketing Goals

• Lets discuss what the marketing goals or
  objectives of the company are?
• For example, they are .
• We can consider three different perspectives
  which result in different types of strategic
  marketing plans.
• When focusing on customers .
• When focusing on product or brand .
• When focusing on market as an area or a place .
• So, ultimate marketing goals of the company are .

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Two Types of Marketing Goals

• Lets take the customer perspective to understand
  the nature of marketing or marketing management.
• The model of adoption process tells us how the
  customer change their status, when they face a
  product for the first time (i.e., evolution or
  status change patterns of customers).
• Stages of the adoption process
• Customer change their status, as follows .
• Two marketing goals
• Acquisition strategy (or leaky bucket approach)
• Retention and growing strategy
• Given this customer perspective, what is the
  ultimate goal of the company?

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Evolution of Company Orientation
Production Concept
Product Concept
Selling/Sales Concept
Marketing Concept
Holistic Marketing Concept

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Issue 2 What is Marketing?
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What is Marketing?

• Lets discuss what marketing is
• Many people think of marketing only as selling
  and advertising. Do you agree to this opinion?
• This class prefers the idea of Kotler and Keller
  (2006) .
• Marketing is managing profitable relationships
  with customers by delivering superior value and
  customer satisfaction that meets customers needs
  and/or wants.
• Core Marketing Concepts
• 1) Needs, wants, and demands
• 2) Market
• 3) Marketing offers products, services,
  information, and experiences
• 4) Value and satisfaction
• 5) Exchange, transactions, and relationships
• Ultimately speaking, marketing is Customer
  Relationship Management (CRM) which is defined as
  the process of building long-term relationships
  with the customers at a profit.

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Core Marketing Concepts
Product, Services, Information, Experiences
Needs, wants, and demands
Core Marketing Concepts
Markets
Value and satisfaction
Exchange, transactions, and relationships
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Core Marketing Concepts (I)

• Needs, Wants, and Demands
• Needs A state of felt deprivation (ex physical,
  social, individual needs).
• Wants The form taken by a human need as shaped
  by culture and individual personality.
• Demands Human wants that are backed by buying
  power.
• Issues to be considered
• What types of needs are required to be filled to
  satisfy the customers?
• When do customers recognize their needs for
  purchasing?

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Core Marketing Concepts (II)

• Markets
• A market is defined as the set of actual and
  potential buyers of a product.
• In marketing, the term market does not stand for
  the place where the buyers and the sellers
  gathered to exchange their products.
• The size of a market depends on the number of
  people, homogenous needs, resources for exchange,
  and willingness to buy (e.g., purchase
  intention).
• Issues to be considered
• How to divide a product market into different
  segments, each of which has homogeneous needs?
• How to measure the potential market size of each
  segment?

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Core Marketing Concepts (III)

• Marketing Offers Products, Services,
  Information, and Experiences
• To satisfy customers needs, companies design a
  marketing offer (e.g., a product, broadly
  speaking) that delivers superior value over
  competitors.
• A marketing offer is some combination of
  products, services, information, or experiences
  (e.g., value proposition a set of benefits).
• Issues to be considered
• What types of benefits should a product include
  to maximize its value?
• How to measure the perceived value of products,
  which are provided by your company and
  competitors?

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Core Marketing Concepts (IV)

• Value and Satisfaction
• Customers choose a product that provides the
  maximum perceived value among many marketing
  offers.
• Customer perceived value total benefits total
  costs.
• Total benefits product features, services,
  information, and experiential values.
• Total costs monetary, time, and psychological
  costs.
• Smart companies aim to delight customers by
  promising only what they can deliver and actually
  deliver more than they promise.
• Satisfied customers, who are tend to be less
  price sensitive, make repeat purchases and tell
  others about their good experiences with the
  product and company.
• Customer satisfaction f (expectation, perceived
  performance, disconfirmation).
• Issues to be considered
• How to measure the perceived value of products,
  which are provided by your company and
  competitors?
• How to measure the current level of customer
  satisfaction with the product and company?
• How do buyers form their expectations? Are the
  sources of their expectations past buying
  experiences, opinions of friends, information or
  promises provided by our company and competitors?

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Core Marketing Concepts (V)

• Exchange, Transactions, and Relationships
• Exchange The act of obtaining a desired object
  from someone by offering something in return.
• Transaction It is a unit of measurement to
  measure the exchange activity. It represents a
  trade of values between two parties.
• Instead of focusing on the role of marketing as
  channel, marketers should focus on actions taken
  to build and maintain desirable exchange
  relationships with target audiences.
• Issues to be considered
• How to describe the exchange relationships?

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Issue 3Marketing Management Process
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Basic Tasks of Marketing Management

• What kinds of tasks the marketing managers do
  toward building profitable long-term relationship
  with the customers?
• Task 1 Capturing Marketing Insights from the
  Changing Environment.
• The detailed tasks are .
• Task 2 Connecting with Customers.
• The detailed tasks are .
• Task 3 Developing an Effective Marketing Mix.
• The detailed tasks are .
• Task 4 Developing and Implementing Marketing
  Plans.
• The detailed tasks are .

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Marketing Management Process

• Stage 1 Identifying marketing opportunities or
  problems.
• Key purpose Understand major environmental
  forces or trends that link to both marketing
  opportunities and threats.
• Diagnostic tools Business portfolio analysis,
  SWOT analysis, assessing market potential or
  demand forecasting, and so on.
• Stage 2 Developing a well-defined target market.
• Key purpose Identify the most promising
  segment(s) and consider how to satisfy the
  customers that have homogeneous needs within each
  segment.
• Diagnostic tools Market structure map,
  positioning (perceptual) map, and so on.
• Stage 3 Designing a new product by understanding
  the customers.
• Key purpose Design a new product by
  understanding potential customers needs and
  purchasing patterns.
• Diagnostic tools Three levels of product,
  concept testing, model of consumer behavior.
• Stage 4 Developing a marketing mix.
• Key purpose Design a competitive marketing
  strategy by blending product, price, promotion,
  and place strategies.
• Stage 5 Managing the marketing efforts.
• Key purpose Measure and evaluate the
  performances of current marketing strategy.
• Diagnostic tools AIDA model, customer
  satisfaction analysis, and so on.

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Factors Influencing Marketing Strategy
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Issue 4Contents of Strategic Marketing Plan
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Components of Strategic Marketing Plan

• Executive Summary
• Situation Analysis
• Industry or category analysis
• Competitive situation analysis
• Customer analysis
• Environmental analysis
• Company and Marketing Objectives
• Company, marketing, and financial goals or
  objectives
• Marketing Strategy
• Definition of target market after segmentation,
  targeting, and positioning procedures
• Four Ps or marketing mix (product, price,
  promotion, and place strategies)
• Financial Projections and Action Programs
• Financial projections for budgets and sales
  forecasting
• Action programs
• Implementation Controls of the marketing efforts.

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Reference

• Blackwell, Roger D., Paul W. Miniard, and James
  F. Engel (2001), Consumer Behavior, 9th ed.,
  Harcourt College Publishers.
• Ferrell, O. C. and Michael D. Hartline (2008),
  Marketing Strategy, 4th ed., Thomson
  South-Western, Ohio.
• Kotler, Philip and Kevin Lane Keller (2007), A
  Framework for Marketing Management, 3rd ed.,
  Pearson Prentice-Hall, New Jersey.
• Kotler, Philip and Kevin Lane Keller (2007),
  Marketing Management, 12th ed., Pearson
  Prentice-Hall, New Jersey.
• Kotler, Philip and Gary Armstrong (2004),
  Principles of Marketing, 10th ed., Prentice Hall.
• Lehmann, Donald R. and Russell S. Winer (2005),
  Analysis for Marketing Planning, 6th ed.,
  McGraw-Hill, Boston.
• Winer, Russell S. (2007), Marketing Management,
  3rd ed., Pearson Prentice-Hall, New Jersey.
• Zikmund, William G. (2003), Essentials of
  Marketing Research , 2nd ed., Thomson
  South-Western. (see chapter 1)