MARKETING MANAGEMENT BY KOTLER AND KELLER (12TH ED.)
LECTURE NOTES
Chapter 1. Defining marketing for the 21st century
 Importance of marketing
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Financial success often depends on marketing ability. In many companies today marketing is
represented as a C-level position at the top – CMO Chief Marketing Manager like CEO, CFO.
 The scope of marketing
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Definition
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American Marketing Association (AMA) definition (previous): Marketing is an organizational function
and a set of processes for creating, communicating, and delivering value to customers and for managing
customer relationships in ways that benefit the organization and its stakeholders.
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Marketing is 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 (October
2007).
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Exchange, transaction, transfer
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What is marketed
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Goods, services, events, experiences, persons, places, properties, organizations, information, ideas
Demand states – marketers are responsible for demand management. Marketing managers seek to
influence the level, timing and composition of demand to meet the organization’s objectives.
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Negative demand
Nonexistent demand
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Irregular demand
Full demand
Latent demand
Overfull demand Unwholesome demand
Key customer markets
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Consumer markets
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Business markets
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Global markets
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Non-profit and governmental markets
Declining demand
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Marketplace – Physical markets like a supermarket.
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Marketspace – Digital market like internet.
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 Change in business and marketing
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Changing technology
Globalization
Deregulation (changing laws)
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Privatization
Customer empowerment
Customization
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Heightened competition
Industry convergence
Retail transformation
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Disintermediation
 Company orientations toward the marketplace
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The production concept
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The product concept
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The selling concept
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The marketing concept
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The holistic marketing concept (Figure 1.3.) – It has four components:
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Relationship marketing – has the aim of building mutually satisfying long term relationships with
key parties –customers, suppliers, distributors, and others.
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Integrated marketing – devising marketing activities and assembling fully integrated marketing
programs to create, communicate and deliver value for consumers. Four Ps of marketing
(McCarthy) – Product, price, promotion, place. Four Cs (Lauterborn) – Customer solution,
customer cost, convenience, communication.

Internal marketing – ensuring that everyone in the organization embraces appropriate marketing
principles, especially senior management.
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Social responsibility marketing – understanding broader concerns and the ethical, environmental,
legal and social context of marketing acitivities and programs.
 Fundamental marketing concepts, trends and tasks
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Core concepts
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Needs, wants and demands – needs are basic human requirements, needs become wants when they
are directed to specific objects, demands are wants for specific products backed by an ability to
pay.
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Target markets, positioning and segmentation
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Marketers start by dividing-up the markets inti segments.

The marketer then decided which segments present the greatest opportunity- target markets.
For each chosen target market the firm develops a marketing offering.
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The offering is positioned in the minds of the target buyers as delivering some central benefits.
Offerings and brands
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Companies first address needs by putting forth a value proposition, which is a set of benefits
they offer to customers to satisfy their needs.
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Then, this intangible value proposition is made physical by an offering, a combination of
products, services, information and experiences.


A brand is an offering from a known source.
Value and Satisfaction – Value reflects the perceived tangible and intangible benefits and costs to
customers. Satisfaction reflects a person’s comparative judgments resulting from a product’s
perceived performance in relation to his or her expectations.
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Marketing channels – communication, distribution, service channels.
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Supply chain – channels from raw materials to final product offering.
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Competition – all the actual and potential rival offerings and substitutes that a buyer might
consider.
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Marketing environment
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The task environment (micro) – immediate actors such as the company, suppliers, distributers,
dealers and target customers.
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The broad (macro) environment- demographic, economic, physical (land, water, air etc.),
technological, political-legal, socio-cultural environment.
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Marketing planning
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Chapter 2. Developing Marketing Strategies and Plans
 Marketing and customer value (Fig. 2.1.)

Traditional physical process sequence
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Value creation and delivery process
 The central role of strategic planning – To understand marketing management, we must understand strategic
planning. Most large companies consist of four organizational levels:
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The corporate level
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The division level
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The business unit level
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The product level
 The marketing plan
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The strategic marketing plan – lays out the target markets and the value proposition that will be offered,
based on an analysis of the best market opportunities.
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The tactical marketing plan – specifies the marketing tactics, including product features, promotion,
merchandising, pricing, sales channels and service.
 Corporate and division strategic planning
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All corporate headquarters undertake four planning activities:
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Defining the corporate mission
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Establishing strategic business units (SBUs)
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Assigning resources to each SBU
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Assesing growth opportunities
Defining the corporate mission – Organizations develop mission statements to share with managers,
employees and customers. A clearful, thoughtful mission statement provides employees with a shared
sense of purpose, direction and opportunity. The statement guides geographically dispersed employees
to work independently and yet collectively toward realizing the organization’s goals.

Good mission statements has three major characteristics:
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They focus on a limited number of goals
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Mission statements stress the company’s major policies and values.
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They define the major competitive spheres within which the company will operate:
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Industry
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Products and applications
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Competence
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Market segment
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Vertical channels
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Geographical
Establishing SBUs
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Defining the business – A business must be viewed as a customer satisfying process, not a goods
producing process. Products are transient, basic needs and customer groups endure forever.


SBUs has three characteristics:
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Single business – planned separately from the rest of the company
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Has its own set of competitors
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Has a manager responsible for strategic planning etc.
Assessing growth opportunities
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Intensive growth – improving existing businesses
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Integrative growth – Backward, forward, horizontal integration
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Diversification growth – Finding opportunities outside the present businesses
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Downsizing and divesting older businesses
 Business unit strategic planning (Figure 2.7.)

The business mission
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SWOT analysis
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External environment analysis

A marketing opportunity is an area of buyer need and interest in which there is high probability
that a company can profitably satisfy that need.
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An environmental threat is a challenge posed by an unfavorable trend or development that
would lead to lower sales or profit.
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Internal environment analysis – Marketing memo
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Goal formulation – Profitability, sales growth, market share improvement, risk containment,
innovation, reputation goals.
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Criteria for objectives
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Arranged from the most to the least important
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Stated quantitatively whenever possible
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Realistic
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Consistent
Strategy formulation – Strategies are game plans for reaching goals. Three main strategies (Porter)
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Overall cost leadership
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Differentiation
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Focus on narrow market segments
Program formulation and implementation
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
Estimating costs , stakeholder and employee satisfaction
Feedback and control – Monitoring developments and changes in markets
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