Introduction to
Marketing Management
WHAT IS MARKETING?
Marketing is the process used to
determine what products or services
may be of interest to customers and
the strategy to use in sales,
communications and business
development.
WHAT IS MARKETING
MANAGEMENT?
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.
THE SCOPE OF MARKETING
WHAT IS MARKETED?
• Goods (tangible)
• Services (intangible)
• Events (time based—
trade shows) and
Experiences (Walt Disney
World’s Magic kingdom)
• Persons (Artists,
Musicians, CEO,
Physicians)
• Places (Cities, States, Regions,
Nations) and Properties (Intangible
rights of ownership of real estate
or financial properties)
• Organizations (Universities,
Museums, Performing Arts
Organization)
• Information (Books, Schools,
Magazines)
• Ideas (Revlon sells hope)
KEY CUSTOMER MARKETS
• Consumer markets (personal consumption)
• Business markets (resale or used to produce other
products or services)
• Global markets (international)
• Nonprofit/Government markets (Churches,
Universities, Charitable Organizations, Government
Agencies)
Marketplace
Marketspace
Physical
Digital
Store
Internet
Metamarket
Cluster of
complementary
products
Spread across a
diverse set of
industries
bugi nai
Automobile
CORE CONCEPTS
• Needs, wants, and
demands
• Marketing channels
• Segmentation, target
markets, positioning
• Competition
• Offerings (intangible
benefit made physical)
and brands (offering
from a known source)
• Value and satisfaction
• Supply chain
MARKETING DEBATE
Does Marketing
Create or Satisfy Needs?
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5 Types of Needs
• Stated needs (inexpensive)
• Real needs (low operating
cost)
• Unstated needs (good
service)
• Delight needs (extras)
• Secret needs (savvy
consumer)
DEMAND STATES
• Negative (dislike product and
may even pay a price to avoid it)
• Irregular (purchases vary on a
seasonal, monthly, weekly, daily, or
even hourly basis)
• Nonexistent (unaware of or
uninterested in the product)
• Unwholesome (product that have
• Latent (need that cannot be
satisfied by existing product)
• Full (adequately buying all products
• Declining (buy the product less
frequently or not at all)
• Overfull (more consumers would
undesirable social consequences)
put into the marketplace)
like to buy the product that can be
satisfied)
PRODUCTION-ORIENTED AND MARKETING-ORIENTED
MANAGERS HAVE DIFFERENT VIEWS OF THE MARKET
EVOLUTION OF COMPANY
ORIENTATIONS
• Production (consumers will prefer products that are
widely available and inexpensive)
• Product (consumers favor products that offer the
most quality performance, or innovative features)
• Selling (consumer and businesses, if left alone, won’t
buy enough of the organization’s products)
• Marketing (find the right product for the consumers)-
-i.e., satisfy the wants and needs of the consumers
CHANNEL DECISIONS
• One of a marketer's most important marketing decisions
involves the way it makes its products and services
available for purchase.
• A firm can have an excellent product at a great price, but it will
be of little value unless it is available where the
customer wants it, when the customer wants it, and
with the proper support and service.
• Marketing channels are "sets of interdependent
organizations involved in the process of making a
product or service available for use or consumption."
CHANNEL DECISIONS
• Channel decisions involve selecting, managing, and
motivating intermediaries such as wholesalers,
distributors, brokers, and retailers that help a firm
make a product or service available to customers.
• These intermediaries, sometimes called resellers, are
critical to the success of a company's marketing program.
• Two types of channels:
• Direct channel
• Indirect channel
CHANNEL DECISIONS
Direct Channel:
• A company can choose not to use any channel
intermediaries but, rather, to sell to its customers through
direct channels.
• Direct channels are also frequently used by manufacturers
of industrial products and services, which are often selling
expensive and complex products that require
extensive negotiations and sales efforts, as well as
service and follow-up calls after the sale.
…CHANNEL DECISIONS
Copyright © 2009 Pearson Education,
Inc. Publishing as Prentice Hall
CHANNEL DECISIONS
Indirect Channel:
• Most consumer-product companies distribute through
indirect channels, usually using a network of wholesalers
(institutions that sell to other resellers) and/or retailers
(which sell primarily to the final consumer).
ADVERTISING DECISIONS
• Advertising is the use of paid media by
a seller to inform, persuade, and remind about its products
or organization.
• It is a strong promotion tool.
• Advertising decision-making is a five-step process consisting
of decisions about the objectives, the budget, the message, the
media, and, finally, the evaluation of results.
FIVE MS OF ADVERTISING
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ADVERTISING DECISIONS
• Marketing management must take five important decisions when developing
an advertising program:
a. Setting advertising objectives.
b. Setting advertising budgets.
c. Developing advertising strategy.
A. Message decisions.
B. Media decisions.
d. Evaluating advertising campaigns.
SETTING ADVERTISING
OBJECTIVES
Advertising objectives can be classified by primary purpose as:
• Informative advertising, which is used to inform consumers about a new
product or feature or to build primary demand.
• Persuasive advertising, which is used to build selective demand for a brand
by persuading consumers that it offers the best quality for their money.
• Comparison advertising, which is advertising that compares one brand
directly or indirectly to one or more other brands.
• Reminder advertising, which is used to keep consumers thinking about a
product.This form of advertising is more important for mature products.
Copyright © 2009 Pearson Education,
Inc. Publishing as Prentice Hall
SETTING ADVERTISING BUDGETS
Some specific factors that should be considered when setting the advertising
budget are:
1) Stage in the product life cycle. New products typically need large
advertising budgets.
2) Market share. High-market share brands usually need more advertising.
3) Competition. More advertising is usually required in a market with many
more competitors.
4) Product differentiation. When a brand closely resembles other brands in
its product class, more advertising (and therefore budget) is needed.
DEVELOPING ADVERTISING
STRATEGY.
Advertising strategy consists of two major elements:
a) Creating advertising messages:
• No matter how big the budget, advertising can succeed only if commercials
gain attention and communicate well.
• Good advertising messages are especially important in today's costly and
cluttered advertising environment.
b) Selecting advertising media:
Media planners are now working more closely than ever with creativity to allow
media selection to help shape the creative process.
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EVALUATING ADVERTISING
CAMPAIGNS
It is the last step in major decision of advertising. In this stage
evaluate the message of advertising. How much people get
attention on the message of advertising. Its market covering
capacity, style, tone, words and format etc are evaluated in this
stage.
Identifying
Market Segments
and Targets
EFFECTIVE TARGETING
REQUIRES…
• Identify and profile distinct groups of buyers who differ in
their needs and preferences
• Select one or more market segments to enter
• Establish and communicate the distinctive benefits of the
market offering
WHAT IS A MARKET SEGMENT?
A market segment consists of a group of customers who share
a similar set of needs and wants.
SEGMENTING CONSUMER MARKETS
Geographic
Demographic
Psychographic
Behavioral
DEMOGRAPHIC SEGMENTATION
Age and Life Cycle
Life Stage
Gender
Income
Generation
BEHAVIORAL SEGMENTATION
Decision Roles
• Initiator
• Influencer
• Decider
• Buyer
• User
LOYALTY STATUS
Hard-core
Split loyals
Shifting loyals
Switchers
PATTERNS OF
TARGET MARKET SELECTION
PATTERNS OF
TARGET MARKET SELECTION
PATTERNS OF
TARGET MARKET SELECTION
CUSTOMIZATION VS.
CUSTOMERIZATION
Marketing Strategies
ROLES A FIRM PLAY IN A TARGET
MARKET
LEADER
40%MarketLeader
CHALLENGER
FOLLOWER
NICHER
30%MarketChallenger
20%Market Follower
10%Market Nichers
COMPETITIVE STRATEGIES FOR MARKET LEADERS
1. Expanding the Total Market
New customers
More usage
Market penetration strategy
New Market segment strategy
Geographical expansion strategy
By increasing the amount
and frequency of use
(Family pack, 2 tk shampoo pack)
Amount: can be increased through packaging or product redesign.
Frequency: 1.Identifying the additional opportunities to use the
brand
2. Identifying the complete new and different ways to
use the brand.
3. Product development can also spur new uses. (Maggi
Noodles)
2. DEFENDING MARKET SHARE
By Continuous Innovation
Different types of Markets
Responsive Marketer- finds a stated needs and fills it
Anticipated Marketer- looks ahead into what need customers may
have in the future (Android)
Creative Marketer- Discovers and produces solution customers
did not ask for but to which they will enthusiastically respond
Creative Marketers are MARKET DRIVING FIRMS
NOT JUST MARKET DRIVEN
MARKET CHALLENGERS STRATEGY
Example: Toyota (was challenger) and General Motors (was leader)
WHY??
Challengers: Set high aspirations . Leveraging
their resources
Leaders: Run their business as usual.
Market Challengers Strategy
• Define the strategic objective and opponents
• Choose an attack strategy
MARKET FOLLOWER STRATEGIES
Counterfeiter
Duplicated leaders product
and packages
Sells it on the black market.
Cloner
Emulates the leader’s product
name and packaging with
slight difference
Imitator
Duplicates something from the leader.
Maintain differentiation in packaging,
advertising, pricing or location.
Adapter
Takes the leaders product and
adapts or improves them.
MARKET NICHER STRATEGIES
• An alternative to being a follower in a large market is to be a leader in a small
market
• The nicher is profitable because
- Ends up knowing the end customer better
- can charge a substantial price over costs.
- Nicher achieve high margins whereas the mass marketers
achieve high volume.
The nicher has 3 tasks:
Creating Niches
Expanding Niches
Protecting Niches