Marketing
Management
What you will learn
 What is marketing
 Market types
 Marketing Mix
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Product
Price
Promotion
Place
What is marketing?
As defined by the American Marketing Association:
• the activity, set of institutions, and processes for
• creating, communicating, delivering, and exchanging
offerings that
• have value for customers, clients, partners, and
society at large
The activities buyers and sellers perform to facilitate
mutually satisfying exchanges.
Marketing eras throughout the years
Evolution of Marketing
• Production Era: believed in a limitless market
• Selling Era: persuading customers through advertising
• Marketing Concept Era: post WWII, consumer spending
1. Customer Orientation
2. Service Orientation
3. Profit Orientation
• Customer Relationship Era: CRM
• Emerging Mobile/On-Demand Marketing Era:
• Now, Can I? For me. Simple
Marketing today is about
helping the buyer buy.
Websites that help buyers find the best price, identify
product features, and question sellers.
Social networking that cultivate consumer relationships.
A quick note on
markets
Two Markets
Consumer market (B2C)
• All the individuals or
households that want
goods and services for
personal consumption or
use.
Business-to-business (B2B)
• All the individuals and
organizations that want
goods and services to
use in producing other
goods and services or to
sell, rent, or supply goods
to others.
The Consumer Market
• Market segmentation — Dividing the total market into
groups whose members have similar characteristics.
• Geographic segmentation: cities, counties, states, or regions
• Demographic segmentation: age, income, and education level
• Psychographic segmentation: group’s values, attitudes, and interests
• Target marketing — Marketing directed toward those
groups an organization decides it can serve profitably.
The Business-to-Business Market
• Larger than consumer market but customers in the B2B
market are relatively few
• Business customers are relatively large
• Tend to be geographically concentrated
• Rational decision making (not emotional)
• Tend to sell direct, fewer intermediaries
• B2B promotions based more on personal selling
(consumer promotions based on advertising)
Market Structure
Products
Buying Procedures
Business-to-Business Market
Consumer Market
Relatively few potential customers
Many potential customers
Larger purchases
Smaller purchases
Geographically concentrated
Geographically dispersed
Require technical, complex products
Require less technical products
Frequently require customization
Sometimes require customization
Frequently require technical advice,
delivery, and after-sale service
Sometimes require technical advice,
delivery, and after-sale service
Buyers are trained
No special training
Negotiate details of most purchases
Accept standard terms for most
purchases
Follow objective standards
Use personal judgment
Formal process involving specific
employees
Informal process involving household
members
Closer relationships between
marketers and buyers
Impersonal relationships between
marketers and consumers
Often buy from multiple sources
Rarely buy from multiple sources
The Marketing Mix
The ingredients that go into a marketing
program.
Four Ps.
Marketing
Managers
and the
Marketing
Mix
•Functionality
•Features
•Brand
•Packaging
•Service/support
•Advertising
•Sales force
•Publicity
•Messaging
•Social media
•List price/consumer cost
•Discounts
•Bundling
•Payment options/Credit terms
Product
Price
Promotion
Place
•Channel
•Inventory
•Locations
•Logistics
•Distribution
The
Marketing
Process
with the
Four Ps
Product
–
–
–
–
–
What does the customer want from this product?
How will the customer use this product?
What should it be called and how should it be branded?
What features?
Tangible and intangible characteristics?
Classes of goods and services
Consumer goods/services
Industrial goods/services
Type
Explanation
Category
Type
Convenience
Products consumers want to
purchase frequently and with little
effort
Production goods
Shopping
Products consumer buys only after
comparing value (quality, price, style)
from multiple sellers
• Raw materials
• Component parts (e.g., engines)
• Productions materials (e.g., nuts
and bolts)
Support goods
• Installations: buildings,
equipment, and capital rentals
• Accessory equipment: tools and
office equipment
• Supplies: paper clips, stationary,
and other office supplies
• Service: maintenance and repair
Specialty
Products with unique characteristics
and brand identity
Unsought
Products consumers haven’t thought
of or need to solve an unexpected
problem
• Product: any physical good, service, or idea that satisfies
a want or need plus anything that would enhance the
product in the eyes of consumers.
• Looking for value: good quality at a fair price
• Consumers calculate value: benefits – costs = value
• Benefits: Tangible + Intangible elements
• E.g., tangible – physical product features
• E.g., intangible – Brand: name, symbol, design identifies product and Brand name:
word, letter, or group of words that differentiates one seller’s products from those of
competitors
• Costs = price, shipping, inconveniences, etc.
Should conduct test marketing: process of testing products
among potential users
Brand Awareness
How quickly or easily a given brand name
comes to mind when a product category is
mentioned.
• Consumers reach a point of brand
preference when they prefer one brand over
another.
• When consumers reach brand insistence,
they will not accept substitute brands.
Total Product
Offer: everything
consumers
evaluate when
deciding whether to
buy something
aka: value package
Product Life Cycle
Theoretical model of what happens to sales and profits
for a product class over time
Life Cycle Stage
Sales
Profits
Competitors
Introduction
Low
Losses may occur
Few
Growth
Rapidly rising
Very high profits
Growing number
Maturity
Peak
Declining profits
Stable number, then
declining
Decline
Falling
Profits may fall to
become losses
Declining number
Marketing Mix and Product Life Cycle
Price
–
–
–
–
Is the customer price sensitive?
How will your price compare to competitors?
What is the value of your product to the buyer?
Are there established price points?
Pricing Objectives
1.
2.
3.
4.
5.
Achieving a target return on investment or profit
Building traffic – loss leaders
Achieving greater market share
Creating an image
Furthering social objectives
Pricing Strategies
Pricing Strategy
Explanation
Cost-based pricing
Using costs as primary basis for setting price (e.g., production costs & margin of
profit)
Demand-based pricing
Target costing: designing a product so that it satisfied customers and meets the profit
margins desired by the firm
Competitive-based pricing
Pricing based on what competitors are doing (above, at, or below)
Price leadership: one or more dominant firms set the pricing practices that all
competitors must follow
Break-even analysis
Process used to determine profitability at various levels of sales
Skimming price strategy
New product is priced high to make optimum profit while there is little competition
Penetration strategy
Product is priced low to attract many customers and discourage competition
Everyday low pricing
(EDLP)
Setting prices lower than competitors and not having any special sales
High-low pricing strategy
Setting prices higher than EDLP but running special sales that bring prices lower than
competitors
Psychological pricing
Pricing products at a price point that makes the product appear less expensive than it
is
Break Even Analysis
• The break-even point is where revenues equals cost.
• Total fixed costs — All the expenses that remain the
same no matter how many products are made or sold.
• Variable costs — Costs that change according to the
level of production.
Break-even point (BEP) 
Total fixed costs (FC)
Price of one unit (P)  Variable costs (VC) of one unit
Promotion
– Where and when will you be able to reach your target
audience?
– Timing of promotions?
– Benchmarking with competitors’ reach and awareness?
Promotion: al the
techniques sellers
use to inform people
about and motivate
them to buy their
products
Promotion Mix: The
combination of
promotional tools an
organization uses
Advertising –
paid, nonpersonal
communication
through various
media by
organizations and
individuals who
are in some way
identified in the
message
Personal Selling:
face-to-face
presentation and
promotion of
goods and
services
Slightly different
B2B and B2C
processes
Public Relations: the function that evaluates public attitudes,
changes policies and procedures in response to public’s
requests, and executes a program of action and information
to earn public understanding and acceptance.
Publicity: any information about an individual, product, or
organization that is distributed to the public through media
and that is not paid for or controlled by the seller.
Three steps to PR:
1. Listen to the public
2. Change policies and procedures
3. Inform people you’re responsive to their needs
Sales Promotions: promotional tools that stimulate consumer
purchasing and dealer activities by means of short-term
activities
B2B
• Trade shows
• Portfolios for salespeople
• Deals (price reductions)
• Catalogs
• Conventions
B2C
• Coupons
• Cents-off
promotions
• Sampling
• Premiums
• Sweepstakes
• Contests
• Bonuses (e.g.,
BOGO)
• Catalogs
• Demonstrations
• Special events
• Lotteries
• In-store displays
Place
– Where do buyers look for your product?
– What are the appropriate distribution channels for your
product and strategy?
– How can you get goods to consumers efficiently?
Intermediaries
• Marketing Intermediaries: Organizations that assist in
moving products from producers to businesses (B2B)
or businesses to consumers (B2C)
• Channel of Distribution: Whole set of marketing
intermediaries that join together to transport and store
goods in their path from producers to consumers
• Agents/brokers: bring buyers and sellers together and assist in
negotiating and exchange but don’t take title to the goods
• Wholesalers: sells to other organizations
• Retailers: sells to ultimate consumers
Intermediaries
create
efficiency
Utility from intermediaries
Utility: the want-satisfying ability, or value, that organizations add
to goods and services when the products are made more useful
or accessible to consumers than they were before.
Type
Explanation
Example
Form Utility
Changing raw materials into useful products (not intermediaries)
Turning wheat into flour
Time Utility
Making products available when they are needed
24-hour stores, on-demand
access, etc.
Place Utility
Having products where people want them
Convenience stores
Possession
Utility
Doing whatever necessary to transfer ownership from one party to
another
Providing credit, delivery,
installation, guarantees, etc.
Information
Utility
Opening two-way flows of information between marketing
participants
Adds, online reviews,
salespeople, etc.
Service
Utility
Providing fast, friendly service during and after the sale and by
teaching the customers how to best use products over time
Apple’s Genius Bar,
software updates, etc.
What you learned
 What is marketing
 Market types
 Marketing Mix




Product
Price
Promotion
Place
Key terms
 Marketing
 Product life cycle
 Marketing Eras
 Pricing strategies (9 types and target costing &
price leadership)
 B2B and B2C
 Market Segmentation (and types)
 Target Marketing
 Marketing Mix (Product, Price, Promotion, Place)
 Consumer Goods/Services (and types)
 Industrial Goods/Services (and types)
 Value
 Benefits/Costs
 Test Marketing
 Brand awareness, preference, and insistence
 Total product offer
 Promotion
 Promotion Mix
 Advertising
 Personal Selling
 Public Relations
 Publicity
 Sales Promotions
 Marketing Intermediaries
 Channel of Distribution (and types)
 Utility (and types)