Marketing Management

Chapter 1 : Defining Marketing

Simi Grosman
WHAT DO YOU WANT FROM THIS CLASS?
OBJECTIVES

In this lecture we will address the following questions:

1. Why marketing is important?

2. What is the scope of marketing
3. How does marketing fit within an organization
4. What are some fundamental marketing concepts?
5. How has marketing management changed
6. What are the tasks necessary for successful
marketing management?
 DEFINITIONS : MARKETING

Marketing is the process of planning and executing the conception,

pricing, promotion, and distribution of ideas, goods, and services to

create exchanges that satisfy individual and organizational goals.

Marketing Management is the art and science of choosing target markets

and getting, keeping, and growing customers through creating,

delivering, and communicating superior customer value.

Marketing Management Tasks

Develop market strategies and plans

Capture marketing insights

Connect with customers

Build strong brands

Shape market offerings

Deliver value

Communicate value

Create long-term growth

Copyright  2009 Pearson Education Canada

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DEFINITIONS

Marketing according to Sergio Zyman

“ Marketing is about systematically and thoughtfully

coming up with plans and taking actions that get more
people to buy more of your product more often so that
the company makes more money”

“ Forget the flair, forget the hype,,,,it’s a business”

What Can Be Marketed? Page 5 - 8

Goods
 Physical goods constitute the bulk of production and marketing
efforts.
Services
 A growing portion of business activities are focused on the production
of services. The U.S. economy today consists of a 70–30 services to
goods mix
Events
 Marketers promote time-based events such as trade shows, artistic
performances, and the Olympics
Experiences
 By orchestrating several services and goods, a firm can create and
market experiences such as Walt Disney World’s Magic Kingdom.
 What Can Be Marketed? Page 5 - 8

 Places
 Cities, states, regions, and whole nations compete actively to attract
tourists, factories, and new residents
Properties
 Are intangible rights of ownership of either real property (real estate) or
financial property (stocks and bonds
Organizations
 Actively work to build a strong, favourable, and unique image in the minds
of their target publics.
Information
 Can be produced and marketed as a product. Schools, universities, and
others produce information and then market it.
Persons
 Celebrity marketing is big business
Marketplaces, Marketspaces & Metamarkets – Page 10

The marketplace is physical; the marketspace is digital

Mohan Sawhney ( Professor at Kellogg School of

Management) has proposed the concept of metamarkets
to describe a cluster of complementary products and
services that are closely related in the minds of
consumers but are spread across a diverse set of
industries. An example is the automobile industry that
consists of physical locations (car dealers) and
marketspace locations (Internet locations) that
consumers use in deciding what car to purchase.
 Key Customer Markets – Page 10
A) Consumer Markets
Consumer goods and services such as soft drinks and cosmetics spend a
great deal of time trying to establish a superior brand image.
B) Business Markets
Companies selling business goods and services often face well-trained
and well-informed professional buyers who are skilled in evaluating
competitive offerings.
C) Global Markets ( P.10 - Bombardier)
Companies face challenges and decisions regarding which countries to
enter, how to enter the country, how to adapt their products/services
to the country, and how to price their products.
D) Nonprofit and Governmental Markets
Companies selling to these markets have to price carefully because
these organizations have limited purchasing power.
 The New Marketing Realities – Page 15-16

A) Changing technology.
B) Globalization.
C) Deregulation.
D) Privatization.
E) Customer empowerment.
F) Customization.
G) Heightened competition.
H) Industry convergence.
I) Retail transformation.
J) Disintermediation.
 New Consumer Capabilities – Page 17

A substantial increase in buying power

A greater variety of available goods and services

A great amount of information about practically anything

Greater ease in interacting and placing and receiving

orders
An ability to compare notes on products and services

An amplified voice to influence public opinion

Copyright  2009 Pearson Education Canada

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 New Company Capabilities – Page 17 -18

Internet

Market Research

Internal communications

Target marketing

Mobile marketing

Improved marketing mix

Production of differentiated goods & services

Internal & external training

Copyright  2009 Pearson Education Canada

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 Core Marketing Concepts – Page 19 - 20

Production Concept
The production concept holds that consumers will prefer products that
are widely available and inexpensive.

Product Concept
The product concept holds that consumers will favour those products
that offer the most quality, performance, or innovative features.

Selling Concept
The selling concept holds that consumers and businesses will ordinarily
not buy enough of the organization’s products, therefore, the
organization must undertake an aggressive selling and promotion
effort.
 Core Marketing Concepts – Page 19 - 20
Marketing Concept
Marketing Concept
The marketing concept holds that the key to achieving organizational goals consists
of the company being more effective than competitors in creating, delivering, and
communicating superior customer value to its chosen target markets.
1) Reactive market orientation—understanding and meeting consumers’
expressed needs.
2) Proactive marketing orientation—researching or imagining latent
consumers’ needs through a “probe-and-learn” process.
a. Companies that practice both reactive and proactive marketing
orientation are implementing a total market orientation.

Holistic Marketing Concept

Holistic marketing can be seen as the development, design, and implementation of
marketing programs, processes, and activities that recognizes the breath and
interdependencies of their efforts. Holistic marketing recognizes that “everything
matters” with marketing—the consumer, employees, other companies, competition,
as well as society as a whole.
 Relationship Marketing– Page 20-21
Relationship marketing has the aim of building mutually satisfying long-term
relationships with key parties—customers, suppliers, distributors, and other
marketing partners.
Relationship marketing builds strong economic, technical, and social ties among the
parties.

Marketing must not only do customer relationship management (CRM) but also
partnership relationship management (PRM).
Four key constituents for marketing are:
a. Customers.
b. Employees.
c. Marketing partners (channel partners).
d. Members of the financial community.
The ultimate outcome of relationship marketing is the building of a unique company
asset called a marketing network.
A marketing network consists of the company and its supporting stakeholders
(customers, suppliers, distributors, retailers, ad agencies, university scientists,
and others) with whom it has built mutually profitable business relationships.
 The Ten Deadly Sins of Marketing– Page 21

Get To Know These or They Will Get You… Every Time !!!
 Marketing Mix & Customer Mix
The marketer’s task is to devise marketing activities and assemble fully
integrated marketing programs to create, communicate, and deliver
value for consumers

Robert Lauterborn suggests that the sellers 4Ps correspond to the

customers’ 4Cs:
The Four Ps The Four Cs

Product Customer solution

Price Customer cost
Place Convenience
Promotion Communication
Internal Marketing

Internal marketing is the task of hiring, training, and

motivating able employees who want to serve customers
well.
Internal marketing is also about selling the management
team on your ideas & approach.

Page 25 – Assessing which company departments are

customer minded.

Copyright  2009 Pearson Education Canada

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Marketing Management Tasks

Developing marketing Shaping market

strategies offerings
Capturing marketing Delivering value
insights Communicating value
Connecting with
Creating long-term
customers growth
Building strong brands

Copyright  2009 Pearson Education Canada

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 Functions of CMOs

Strengthening the brands

Measuring marketing effectiveness

Driving new product development based on customer

needs

Gathering meaningful customer insights

Utilizing new marketing technology

Copyright  2009 Pearson Education Canada

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Improving CMO Success

Make the mission and responsibilities clear

Fit the role to the marketing culture and
structure
Ensure the CMO is compatible with the CEO
Remember that “showpeople” don’t succeed
Match the personality with the CMO type
Make line managers marketing heroes
Infiltrate the line organization
Require right-brain and left-brain skills

Source: Gail McGovern and John A. Quelch, “The Fall and Rise of the CMO,”
Strategy+Business, Winter 2004. Reprinted by permission.

Copyright  2009 Pearson Education Canada

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HOW THIS FITS INTO MARKETING?
HOW THIS FITS INTO MARKETING?
MARKETING CONCEPT
Transaction and
hopefully a relationship

Competitor
Learn
• Database
management
Organizational
Goals

Needs and
Business Wants
Ask
Processes • Marketing
Research
• Business Target Market
Intelligence
Competitor Competitor

Deliver desired
satisfactions:
SOLUTIONS
MARKETERS’ FAQ’s
1. How can we spot and choose the right market segment(s)?
MARKETERS’ FAQ’s
1. How can we spot and choose the right market segment(s)?

 Market Research
 Study market and find gaps / opportunities
Specialization
 Target consumers
 Focus Groups
 Survey target audience
Competitive Analysis
 Analyze socio-economic trends
 Buy competitive info from third parties
MARKETERS’ FAQ’s
2. How can we differentiate our offerings?
MARKETERS’ FAQ’s
2. How can we differentiate our offerings?
MARKETERS’ FAQ’s
3. How should we respond to customers who buy on price?
MARKETERS’ FAQ’s
3. How should we respond to customers who buy on price?
 Drop prices
 Sales
Modify product
 Emphasize quality
 Raise prices
 Loyalty programs
Amplify notion of value
 Low prices are a bad thing
 People pay premium for value
MARKETERS’ FAQ’s
4. How can we compete against lower-cost, lower-price
competitors?
 MARKETERS’ FAQ’s
4. How can we compete against lower-cost, lower-price
competitors?

 Create perceived value

 Add features & functions
 Branding
MARKETERS’ FAQ’s
5. How far can we go in customizing our offering for each
customer?
MARKETERS’ FAQ’s
6. How can we grow our business?
MARKETERS’ FAQ’s
6. How can we grow our business?

 Find new markets

 Introduce new incentives
 Expand product line
 New services
 Loyalty programs

MARKETERS’ FAQ’s
7. How can we build stronger brands?
MARKETERS’ FAQ’s
8. How can we reduce the cost of customer acquisition?
MARKETERS’ FAQ’s
9. How can we keep our customers loyal for longer?
MARKETERS’ FAQ’s
10. How can we tell which customers are more important?
MARKETERS’ FAQ’s
11. How can we measure the payback from advertising, sales
promotion, and public relations?
MARKETERS’ FAQ’s
12. How can we improve sales force productivity?
MARKETERS’ FAQ’s
13. How can we establish multiple channels and yet manage
channel conflict?
MARKETERS’ FAQ’s
14. How can we get the other company departments to be more
customer-oriented?
Zeus Inc – Atlas Camera Division P.28-30

Read Case Study on Page 28 and be

prepared to discuss various tasks to
be considered
THE COMPLETE FRAMEWORK

Marketing Technological
Demographic
Channels Natural
Economic
Environment Environment

l ysis
a

Pl
An

an
ni
ng
Price Product
Target
Suppliers Consumer Publics

n
tio
Promotion Place

ta
C
on

en
em
tr

Social-Cultural
ol

Political-Legal pl
Im
Environment Environment

Competitors
MARKETING VALUE CHAIN

Competitors
Competitors

HR
Upstream Downstream

IT
Manufac- Interme-
Suppliers Marketing Customers
turing diaries

The Value Chain Sales

Finance

Your objective must be to Publics

integrate a value chain that
delivers the best value
proposition to the market
Competitors
 THE MARKETING PROCESS
Create value SWOT
for customers Analysis
and build
customer
relationships
Marketing
Situation Differentiate Metrics
Mix
Analysis Positioning
Map

Segmentation,
Targeting and
Positioning Offer
Build

Divide
Choose Capture
value from
Nurture customers
in return
Feedback
THE THREE PRINCIPLES OF MARKETING

Customer Value
and the Value Equation

Perceived Benefits
Value =
Price

Principles
Of
Marketing

Competitive or Focus
Differential
Advantage
Class Discussion

Does Marketing Create or Satisfy Needs?

Take a position:
Marketing shapes consumer needs and
wants.
versus
Marketing merely reflects the needs
and wants of consumers.
Class Discussion
Does Marketing Create or Satisfy Needs?
Pro: With the vast amount of information available to marketers today and the
emphasis on relational marketing, marketers are in more of a position to
suggest needs and wants to the public. Certainly, not all consumers have
all the needs and wants suggested by society today. However, with the
vast amount of exposure to these societal needs and wants via the media,
a substantial amount of consumers will, through mere exposure, decide
that they “have” the same needs and wants of others. Marketers by their
efforts increase peer pressure, and group thinking, by showing examples of
what others may have that they do not. An individual’s freedom to choose
is substantially weakened by constant and consistent exposure to a range
of needs and wants of others. Marketers should understand that when it
comes to resisting the pressure to conform, that individuals are and can be
weak in their resolve. Marketers must take an ethical position to only
market to those consumers able to purchase their products.
Class Discussion

Does Marketing Create or Satisfy Needs?

Con: Marketing merely reflects societal needs and wants. The perception
that marketers influence consumers’ purchasing decisions discounts an
individual’s freedom of choice and their individual responsibility. With
the advent of the Internet, consumers have greater freedom of choice
and more evaluative criteria than every before. Consumers can and do
make more informed decisions than previous generations. Marketers can
be rightly accused of influencing wants, along with societal factors such
as power, influence, peer pressure, and social status. These societal
factors pre-exist marketing and would continue to exist if there was no
marketing efforts expended.
 For Next Class…
1. Read Chapters 1&2

2. We’ll have a discussion and an in-class exercise about the “22

Immutable Laws of Marketing”.

Al Ries & Jack Trout

Harper Collins Publishers

Research information on the topic: go to the library, research over

the Internet, etc, and get a general idea of what’s this about.
Come prepared to have a discussion in class about the topic.
Students will be asked to elaborate on one of the 22 Immutable
Laws.