MRKT 495: Marketing Policies and Strategies
Module 1: Understanding Marketing Management
Notes from Andrew Rein: Production directions and Notes are in red:
Navigation for Modules should contain the following tabs, in the order shown:
– Overview
– Objectives
– Commentary
– Commentary section should start with a list of topics, hotlinked to a bookmark for this section of
the commentary.
– Glossary – put tab in each module, link to same, single glossary file. Green terms link to popup
with that word only. Defs are at end of module file in glossary table.
– Self-Assessment – need a Check Answer button at end of all the questions.
Graphics to go to production for this module:
Graphics title
The Strategic Marketing
Process
Organization Goals
Details of what’s needed
Create to our standards, this
also goes in the syllabus, and
all the modules
Create to our standards
Overview
Marketing is the lifeblood of organizations, economies, and societies. Marketing defines customer target
markets and finds the best way to satisfy their wants and needs profitably. The current increasingly
competitive global marketplace challenges firms to perform more efficiently and effectively. Those that
do will excel; those that do not are destined to fail.
– Marketing strategies and policies link the organization’s mission achievement to the needs and
wants of the consumer in the form of Customer-delivered Value. (Glossary – put tab in each
module, link to same, single glossary file. Green terms link to popup with that word only. Defs
are at end of module file in glossary table.)
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The model for that process is displayed below.
Create to our standards, this also goes in the syllabus, and all the modules.
The Strategic Marketing Process
Organization Mission
External Environment
(Threats and Opportunities)
Internal Environment
(Strengths and Weaknesses)
Organization Goals
Strategy
Formulation
Strategic and
Tactical
Planning
Policy
Implementation
Control and
Adjustment
Market Mix
(4 P’s and 4
C’s)
No
Reach
Target
Market?
Yes
Customer Delivered Value
This model forms the basis of our learning quest this semester. Our task will be to explore this process
and to better understand the relationships among marketing management, consumers, decision making,
and the marketplace.
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Objectives
After completing this module, you should be able to:
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review and refresh your understanding of the core principles of marketing, emphasizing the marketing
concept, mutually beneficial exchanges, and relationship marketing
identify the basic tasks performed by marketing organizations and managers
explain the concepts related to understanding and the role and potential of marketing in the larger
business environment
describe how business and marketing practices are changing as a result of changes in the external
environment
explain what constitutes customer value and satisfaction and how they are related to organizational
mission
describe the role of the 4 Ps and 4 Cs in the strategic marketing process
explain the policy formulation process and the significance of planning, implementing, and
controlling as elements in this process
Commentary
Topics
(make hot to subheads)
Environmental Analysis – External and Internal
Strategic Marketing in a Competitive Environment
The Evolving Power of the Consumer
Customer Satisfaction and Customer Retention, and Loyalty
Customer-delivered Value
The Four Ps – the Four Cs
Strategy and Marketing are Interdependent.
Environmental Analysis – External and Internal (H3 subhead)
The fundamental process of marketing rarely changes. But the environment in which it takes place is
dramatically different today from just a few years ago. Rapid change is now the norm. Perhaps the only
constant is change. The rapid pace of market dynamics requires marketing strategies and policies to
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evolve equally as quickly. A review of the external environment helps us identify any threats or
opportunities facing an organization – profit-driven or not-for-profit.
Organizational Processes and Culture Matter – Strengths and Weaknesses. A major challenge for
high-performing organizations is to build and maintain viable processes in a rapidly changing
marketplace. Marketers and executive decision-makers must recognize the differences between core and
support elements in their organization.
Continuous improvements in strong and weak areas of performance aid survival. Marketers and
executives must nurture a viable, even delicate, fit between their stakeholders, processes, and resources
within their capabilities and culture.
High performers develop and emphasize cross-functional skills beyond unit barriers. They improve
ongoing skills and results rather than functional wrangling. Wise organizations transform core
capabilities into cooperative centers of excellence, fusing distinctive abilities and competitive
advantages. In a corporate culture of shared insights and experiences, day-to-day cultural beliefs and
norms translate directly into ongoing successes.
In our Process Module, we’ll make a sound assessment of the organizations internal environment –
strengths and weaknesses of the firm.
Strategic Marketing in a Competitive Environment (H3 subhead)
Consumers and business buyers have an abundance of suppliers seeking to satisfy their every need.
Companies and not-for-profit organizations cannot survive today simply by doing a good job. They must
perform in an exceptionally efficient and effective manner if they are to survive in an increasingly
competitive global marketplace. The key to profitable marketing performance is to know and satisfy
target customers with competitively superior offers. The Strategic Marketing Process enables both profit
and not-for-profit firms to achieve these two complementary goals of customer satisfaction and
organizational profit.
The Evolving Power of the Consumer (H3 subhead)
Today’s economy presents many new challenges and opportunities for the marketer. Consumers today have
power and they use it. They dictate the features of products and services. They alone interpret the benefits of
product and service choices according to their changing perceptions. They dictate the structure and operation
of channels. Consumers are customers in small, routine transactions. They become clients in more complex ongoing relationship-based exchanges. Citizens can be either customers or clients, depending on the complexity
of the exchange. Regardless, decisions in the marketplace matter! Enlightened marketers are neither shocked
nor troubled by consumers’ new-found powers. They must satisfy needs and wants wisely. They know that
continuously creating customer-delivered value is the only means to thrive! (Refer to the Strategic Marketing
Process).
Customer Satisfaction and Customer Retention, and Loyalty (H3 subhead)
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To create customer satisfaction, companies must manage their value chain as well as the whole value delivery
system in a customer-centered way. The company’s goal is not only to get customers but, even more
importantly, to retain customers. Customer relationship marketing (CRM) provides key insights to retaining
customers and involves providing financial and social benefits as well as structural ties to the consumer.
Companies must decide how to tailor and invest in relationship marketing for different market segments and
loyal customers and clients. Much depends on estimating customer lifetime value against the costs required to
attract and retain these customers. Loyal, repeat customers are the fruit of continuous customer satisfaction.
Astute firms’ marketers focus on profitable or key customers, because not all provide the same returns. In the
public sector, this focus applies to stakeholders. Stakeholders are those who most impact – or are most
impacted by – a public or not-for-profit program.
Customer-delivered Value (H3 subhead)
Today’s customers face a growing range of choices in the products and services they can buy. Choices are
made on the basis of perceptions of quality, access, service, and value. Marketers must understand the
determinants of customer value and satisfaction. Customer-delivered value represents the difference between
the customer’s total perceived value and total customer cost. Customers will normally choose the offer that
maximizes their delivered value.
Customers perceive customer-delivered value in both qualitative and quantitative ways. That is, their
perceptions may be objective or quite subjective. Perceptions will surely vary across customer segments
in the marketplace. We will explore these distinctions as we progress through the course.
The Four Ps – the Four Cs (H3 subhead)
The Information Age shapes marketing today. There is an incredible range of marketing-related information
available to consumers and organizations. Consumers access literally millions of products, offers, options,
prices, pitches, and claims. Few emerged until recent years. All of this information arrives with the click of a
mouse on your home computer. Marketers must be innovative or they will perish. Marketing involves change
management skills. You do it by using sound, flexible marketing strategy and policies, as we shall see.
Product, price, place, and promotion (the marketing mix, or four Ps) have been expanded toward a more
consumer-oriented approach – the four Cs - customer solutions, cost, convenience, and communication. The 4
Ps and 4 Cs help marketers focus on how to best design, deliver, display, and discern the benefits of their
products and services. They help remind us to convince our customer targets to engage in a value-based
exchange – again and again, over time.
Relationship Marketing means what it says. Relationships with customers help marketers identify profitable
(or valuable) segments of markets to serve. If relationship insights are ignored, failure is not far behind. It is
likely that the rapid growth and rate of change we have experienced in the past will continue in the future.
Clearly, the Internet and the new economy have changed marketers and marketing for the long-term future.
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Is Change the Only Constant? Marketing channels are becoming increasingly direct, international marketing
is becoming more localized. Information technologies usher in dramatic change to advertisers, competitors,
suppliers, and other stakeholders. In today’s environment only the most customer- focused organizations will
prosper.
Marketing Management Database Support Systems are also pivotal today. To develop and support
effective strategies and policies, marketers must ensure that customer data is accurate, up to date, nonintrusive, and protected for confidentiality. Despite its potential, online and direct marketing
controversies include deception and fraud, consumer annoyance, and invasion of privacy, all of which
have received significant publicity and government attention.
Strategy and Marketing are Interdependent (H3 subhead)
Marketing strategies and organization goals derive directly from the mission statement or the purpose of
the organization. Strategy is tempered by the reality of internal competencies and culture as well as
marketplace threats and challenges.
Mission statements define the organization’s purpose, and, for some, its vision. One must answer the
following questions:
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Who are we?
What do hope to achieve?
How will we achieve it?
Whom shall we serve?
What are our values? (If vision is included in the mission.)
You can see that marketing is very much involved in all of these strategic responses.
Examples are that goals such as “increase revenues” or “improve market coverage” lead to specific
objectives such as “improve product X market share” or “survey consumers about feature “Y.” Goals and
objectives bring mission statements alive.
Strategy, and marketing’s role in it, guides decisions and actions by everyone in the organization.
Organization Goals
Strategy
Formulation
Strategic and
Tactical Planning
Policy
Implementation
Control and
Adjustment
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The strategic formulation process entails the development of long-range (strategic) and short-range
(tactical) plans. These plans represent the organization’s best thinking on how to integrate organizational
goals with consumer needs and wants. To be effective, sound plans must be properly implemented. The
implementation aspect of the model “makes it happen.”
Because plans may be flawed, implementation imperfect, or the environment may change, there must be
a process of control and adjustment – that is, performance measurement and management. Organizations
must continuously improve their policies and strategies – products and services – and, performance and
search for success.
What’s Ahead (H4 subhead)
In the coming modules, we will examine related marketing techniques and processes:
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Module 2: Analyzing Marketing Opportunities
Module 3: Marketing Decision Process
Module 4: Managing and Delivering Marketing Programs
Glossary of Terms
Term
Competitive Advantage
Customer-delivered Value
Customer Relationship
Marketing
(CRM)
Definition
The advantage that an
organization has over
competitors; it can be achieved
by reducing prices or
increasing consumers’
perceived benefits.
The difference between the
total value the consumer
receives from a product or
service and the total costs
incurred in getting and using it.
A philosophy of marketing that
attempts to create and maintain
mutually beneficial and longterm relationships with
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Database Marketing
Direct Marketing
External Environment
Four Cs of Marketing
Four Ps of Marketing
customers, employees, and key
stakeholders. Its focus is on
reaching different market
segments differently
The process of collecting
information about customers
and potential customers,
storing the data in computer
files, and then analyzing the
data to find out how best to
start or support profitable longterm relationships. This is a
CRM tool.
Dealing with customers
without using other channel
partners. Not to be confused
with direct mail or
telemarketing.
Factors outside the
organization that may affect
the marketing process or
influence marketing success –
often couched in terms of
threats and opportunities.
An emerging view of the
marketing mix. Includes:
customer solutions, cost,
convenience, and
communication. Customer
solutions reflect product
features. Convenience is much
like place, especially in terms
of access. Cost is much like
price and its relationship to
perceived value or benefits.
Communications reflects
multimedia means for most
promotion. The 4 Cs are also a
useful analytical framework.
Also known as the marketing
mix. This is the blending of
product, price, place, and
promotion to satisfy customer
needs. Product includes
features of the product or
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Internal Environment
Marketing
Marketing Concept
Organization Goals
Value Chain
service. Price is the cost to the
consumer – not the provider.
Place reflects access,
responsiveness, and/or
convenience. Promotion is the
sum of communications that
attempts to influence
perceptions of customerdelivered value. The 4 Ps are
also a useful analytical
framework.
Factors outside the
organization that may affect
the marketing process or
influence marketing success –
often referred to as strengths
and weaknesses.
The function within an
organization responsible for
establishing and maintaining
mutually beneficial exchange
relationships with customers
and other stakeholders.
The idea that organizations can
satisfy their own long-term
objectives, such as
profitability, by coordinating
and focusing all of their
activities on identifying and
satisfying customer wants and
needs.
In terms of organizational
mission and strategy, goals set
the direction for implementing
strategy. Some organizations
measure goal achievement
against benchmarks to assess
and adjust their approach
toward mission or strategic
success.
Linked activities including
marketing forecasts, executive
decisions, supplier supports,
channel partners, and market
feedback to innovate, create,
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and deliver a value package
that satisfies customers. The
value chain begins and ends
with customers. By contrast,
the supply chain merely affects
operations, or production.
Self Assessment
(Bold text shows the answer.)
DTP- show score and correct answer when Check Answer button is
clicked.
Directions: Test yourself on how well you know the material. You will get the correct answers
when you click the Check Answer button at the bottom. There are no grade points for this online
review.
Multiple choice: Select the best answer for each of the following:
1.
Which of the following statements is true?
a.
b.
c.
d.
Needs exist before marketers.
Marketers create needs.
A person’s need for food or shelter is a creation of marketers.
Wants become needs when they are directed at specific objects that might satisfy
the want.
Demand strictly means desire for some object.
e.
2.
A brand name such as BMW carries many associations in the minds of people: speed,
expensive, engineering, status, the BMW logo. These associations make up BMW’s
____________.
a.
a.
b.
c.
d.
brand strength
customer value triad
brand image
effective demand
value proposition
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3. Marketers can increase the value of a customer offering by ______________.
a.
b.
c.
d.
e.
lowering benefits and raising costs
reducing benefits
raising costs
raising benefits more than cost
not considering the competitive offering
4. Which of the following is not necessary in order for exchange to exist?
a.
b.
c.
d.
at least two parties
satisfaction by both parties
each party is free to accept or reject the offer
each party believes it is appropriate or desirable to deal with the other
party
e. each party has something that might be of value to the other party
5. _______________ marketing aims to build long-term, mutually satisfying
exchanges with key parties (customers, suppliers, distributors) in order to earn
and retain their long-term exchanges.
a.
b.
c.
d.
e.
Network
Business-to-business
Transaction-oriented
Behavioral response
Relationship
6. When Anne Peterson started operating the Olde Westport Spice and Trading Co.,
she had just one product, an all-purpose seasoning mix called Olde Westport’s
Special Blend. It adds flavor to bland casseroles. She sold six-ounce bottles of her
seasoning mix for $6.95. Her only outlets were booths at craft fairs throughout the
Midwest. She relied on word-of-mouth advertising and a few feature articles in
regional newspapers to get her message out. Olde Westport clearly has a
____________.
a.
b.
c.
d.
e
method of exchange
transaction marketing
marketing tactic
marketing mix
transfer marketing
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7. The marketing concept rests on which “four pillars?”
a. customer needs, target market, integrated marketing, and
profitability
b. products, integrated marketing, sales volume, and competition
c. customer needs, competition, sales volume, and profit
d. product, price, promotion, and place
e. customer needs, integrated marketing, profitability, and market focus
8. When a company’s departments work together to serve the customers’ interests,
the result is ______________.
a.
b.
c.
d.
e.
product management
responsive marketing
anticipative marketing
integrated marketing
bad word-of-mouth communications
9. When a bricks-only retailer is put out of business by a Web site-based business
that serves the consumer needs better, this is an example of ___________.
a.
b.
c.
d.
e.
reintermediation
digitalization
disintermediation
customerization
industry convergence
10. ____________ is a term that describes a company’s efforts to inform,
communicate, promote, and sell its products and services over the Internet.
a.
b.
c.
d.
e.
E-business
E-commerce
E-purchasing
E-consuming
E-marketing
11. The difference between total customer value and total customer cost is
_______________.
a.
b.
c.
d.
e.
satisfaction
value/price ratio
customer perceived value
total added value
market cost
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12. A company’s core competency _______________.
A.
is a source of competitive disadvantage
B.
is easy to copy
C.
makes no contribution to perceived customer benefits
D.
is something the competitor can never take away
E.
is difficult for competitors to imitate
13.
The process of comparing one’s own costs and performance to competitors in
order to see how to improve one’s own performance and gross margins is called
_______________.
a.
b.
c.
d.
e.
benchmarking
value-delivery networking
a value analysis
a flanking attack
a core business evaluation
14. _______________ is the present value of the profit stream that the company
would have realized if the customer had not defected prematurely.
a.
b.
c.
d.
e.
Customer lifetime value
Customer cost trends
Customer value cost
Customer retention rate
Customer defection rate
15. _______________is an organization-wide approach to continuously improving
the quality of the organization’s processes, products, and services.
a.
b.
c.
d.
e.
Customer service
Core competency development
Total quality marketing
Total quality management
Conformance quality
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