Marketing Management (Philip Kotler)

Preface

The current marketing environment

The nature of this book—major features

Marketing management

Changes in the seventh edition

Improved pedagogical aids

Acknowledgements

Classification of exhibits

Marketing strategies

Marketing strategies 1-1: The secret of L.L. Bean’s Profitability—Customer Satisfaction

Marketing strategies 1-2: How Jan Carlzon “Marketized” SAS

Marketing strategies: Which company should produce an electric car?

Marketing strategies 4-1: A new answer to information needs — information centers

Marketing strategies 4-2: The 1990s marketing manager uses information power

Marketing strategies 7-1: Just-in-time production changes the face of organizational buying

Marketing strategies 7-2: Adapting marketing strategy to the type of industrial buyer segment—The case of microprocessors

Marketing strategies: Customized marketing — It’s coming back

Marketing strategies 11-1: Turbomarketing — using quick response time as a competitive tool

Marketing strategies 11-2: “Positioning” According to Ries and Trout

Marketing strategies: Not “Whether to test” by “how to test” — the case of new coke

Marketing strategies 13-1: The market pioneer “Advantage”

Marketing strategies 13-2: Breaking through the “mature-product syndrome”

Marketing strategies 14-1: Defensive strategies according to the defender model

Marketing strategies 14-2: Some attack strategies available to challengers

Marketing strategies 14-3: Specialist roles open to market nichers

Marketing strategies 14-4: Strategies for entering markets held by incumbent firms

Marketing strategies 15-1: Global marketing blunders

Marketing strategies 15-2: Megamarketing — breaking into blocked markets

Marketing strategies 15-3: Should multinationals restrict their trade to the Triad Markets?

Marketing strategies 15-4: Global standardization or adaptation?

Marketing strategies: Licensing brands names for royalties

Marketing strategies: Motivating employees to care for the customer — the case of hospitals

Marketing strategies 18-1: Five geographical pricing strategies

Marketing strategies 18-2: Analyzing the marketing mix alternatives facing a firm in an economic recession

Marketing strategies 19-1: Turning industrial distributors in business partners

Marketing strategies 19-2: Smart companies change their marketing channels over the product life cycle

Marketing strategies 19-3: The case of multichannel marketing

Marketing strategies 20-1: Does an “everyday-low price” strategy make more sense than a “promotional-pricing” strategy?

Marketing strategies 20-2: Strategies of high-performance wholesaler-distributor

Marketing strategies 21-1: Do fear appeals work?

Marketing strategies 21-2: The promotional mix of business-to-business marketers

Marketing strategies 21-3: Role of corporate advertising in industrial advertising

Marketing strategies: Celebrity endorsements as a strategy

Marketing strategies 24-1: National account management—What it is and how it works

Marketing strategies 24-2: Some classic bargaining tactics

Marketing strategies 24-3: When—and how—to use relationship management

Marketing concepts and tools

Marketing concepts and tools: Demand states and marketing tasks

Negative demand

No demand

Latent demand

Falling demand

Irregular demand

Full demand

Overfull demand

Unwholesome demand

Marketing concepts and tools 2-1: Assessing interdepartmental strengths and weaknesses

2-2: Strategic groups in the truck-manufacturing industry

Marketing concepts and tools 4-1: A “questionable” questionaire

Marketing concepts and tools 4-2: The marketer’s dream — measuring consumer response to ads

Marketing concepts and tools: How lifestyles are identified

Marketing concepts and tools: A new tool for resellers—Direct product profitability (DPP)

Marketing concept and tools 8-1: Five industry structure types

Marketing concepts and tools 8-2: Du Pont Profitability Chart

Marketing concepts and tools 8-3: Intelligence gathering — snooping on competitors

Marketing concepts and tools 8-4: Customer value analysis — The key to competitive advantage

Marketing concepts and tools 9-1: Geodemographic analysis — a new tool for identifying market targets

Marketing concepts and tools 9-2: Methods of environmental forecasting

Marketing concepts and tools: Positioning theme parks

Marketing concepts and tools 12-1: Key findings on new-product-management activity

Marketing concepts and tools 12-2: Measuring consumer preferences

Marketing concepts and tools 12-3: Estimating first-time purchases of new products

Marketing concepts and tools 12-4: Methods for measuring consumer preferences

Marketing concepts and tools 12-5: Decision facing management in setting up test markets

Marketing concepts and tools: Forecasting the shape and duration of the product life cycle

Marketing concepts and tools: The impact of different marketing mix variables on market share

Marketing concepts and tools: Assessing country risk

Marketing concepts and tools: Product classifications and their marketing-strategy implications

Marketing concepts and tools: Market-performance analysis

Marketing concepts and tools 18-1: Finding the profit-maximizing price

Marketing concepts and tools 18-2: Methods of estimating perceived value — an illustration

Marketing concepts and tools 18-3: Methods for establishing a price around a perceived value

Marketing concepts and tools 18-4: How a large chemical company used decision theory to assess probable competitors’ reactions to a contemplated price cut

Marketing concepts and tools 19-1: Five bases of power for managing channel relationships

Marketing concepts and tools 19-2: Modifying existing distribution systems toward the ideal

Marketing concepts and tools 21-1: Determining the target audience and sought response

Marketing concepts and tools 21-2: The advisor project probes into how industrial marketers set their marketing expenditures budgets

Marketing concepts and tools: Some Advertising Research Techniques

Marketing concepts and tools 23-1: Major tools of direct marketing

Marketing concepts and tools 23-2: The “maximarketing” model for integrated marketing

Marketing concepts and tools 23-3: Major common promotional tools

Marketing concepts and tools 23-4: Major trade-promotion tools

Marketing concepts and tools 23-5: Major business-promotion tools

Marketing concepts and tools 23-6: Major tools in marketing PR

Marketing concepts and tools 24-1: Sales plans and components

Marketing concepts and tools 24-2: The variety of selling styles and buying styles

Marketing concepts and tools 24-3: The principled-negotiation approach to bargaining

Marketing concepts and tools: Defining and measuring market-share

Marketing environment and trends

Marketing environment and trends 5-1: Impact of consumerism on marketing practices

Marketing environment and trends 5-2: Age group growth trends and their marketing implications

Marketing environment and trends 5-3: Impact of environmentalism on marketing decision making

Marketing environment and trends 5-4: Ten “megatrends” of great import to marketers

Marketing environment and trends 6-1: Three market segments — Hispanic, black, and older consumers

Marketing environment and trends 6-2: Women become a more important market for car buying

Market environment and trends 15-1: How does the U.S. perform in world trade?

Market environment and trends 15-2: How nations have been moving back to barter

Market environment and trends 15-3: The international product life cycle

Marketing environment and trends 20-1: Major retailer types

Marketing environment and trends 20-2: Major wholesaler types

Marketing environment and trends 20-3: Five major transportation modes

Marketing environment and trends: The ceaseless search for new media

Marketing environment and trends 24-1: How efficiently do companies manage their saleforces?

Marketing environment and trends 24-2: Salespeople use computers as a productivity tool

Marketing environment and trends 25-1: Regionalization — a passing fad or the new marketing era?

Marketing environment and trends 25-2: What’s the future of brand management?

Companies and industries

Companies and Industries: Five stages in the slow learning of bank marketing

Companies and industries: The industrial market

Companies and industries: 3M’s approach to innovation

Companies and industries: How Procter & Gamble and Caterpillar maintain their market leadership

Companies and industries: The world’s champion marketers — the Japanese?

Companies and industries: Walt Disney Enterprises — a highly responsive organization

Companies and industries: Building a distributor team for Epson Products

Companies and industries: Dentist use word of mouth to draw mouths to their practice

Companies and industries: How does and advertising agency work?

Companies and industries: Building a salesforce from scratch—the case of Wilkinson

Understanding marketing management

Understanding the critical role of marketing in organizations and society

Introduction

Opportunities of the 1990s

Soviet Bloc developments

Asian economies

Several promising new technologies

High definition TV

New wonder drugs

Superconductivity

Genetic engineering

Other miracles of science

Problems

Hunger

Disease

Illiteracy

Environmental quality

National problems

Internal strife

Corrupt leadership

Enormous internal and external debt

Gap between rich and poor countries

Fierce fighting for market share in the triad markets

Humbling business lessons

Ideas on what makes a businesses great

Books

Factors

Great strategy

Good information systems

Dedicated workers

Excellent implementation

Emphasize the … customers in a well understood target market

Sensing

Serving

Satisfying

Major company planning challenges

Developing, improving, and implementing competitive marketing strategies

Controlling costs

Improving human resources

Marketing — “the creation and delivery of a standard of living”

The core concepts of marketing

Needs, wants, and demand

Needs - a state of felt deprivation of some basic satisfaction

Wants - desires for specific satisfiers of these deeper need

Demands - are wants for specific products that are backed up by an ability and willingness to buy them

Products

Broadly - anything that can be offered to someone to satisfy an need or want

Physical product

Service product

Other vechicles

Vehicles that deliver services to us

Persons

Places

Activities

Organizations

Ideas

Other terms for product

Offers

Satisfiers

Resources

Value, cost, and satisfaction

How do consumers choose among the many products that might satisfy a given need?

The alternatives = product choice set

The different needs = Need set

Guiding concept is value

Product’s overall capacity to satisfy his or her needs

Ideal product

Value of the each actual product would depend on how close it came to this ideal product

Each product involves a cost

Customer considers the product’s value and price before making a choice

Choose the product that will produce the most value per dollar

See chapter 6 — modern theories of consumer-choice behavior

The whole marketing plan rests on assumptions about how customers make choices

Concepts of value, cost, and satisfaction are crucial to the discipline of marketing

Exchange, transactions, and relationships

Marketing emerges when people decide to satisfy needs and wants through exchange

Four ways people can obtain products they want

Self-production

Coercion

Begging

Exchange

Exchange is the act of obtaining a desired product from someone by offering something in return

The defining concept underlying marketing

Five conditions for an exchange

(see page # 7)

Exchange a process rather than an event

Transactions are the basic unit of exchange

In the most generic sense, the marketer is seeking to elicit some behavioral response

Simple exchange can be mapped

Buyer’s want list

Task is to discover the importance of these different wants of the buyer

Process of trying to arrive at mutually agreeable terms is called negotiation

This is transaction marketing

Relationship marketing

Smart marketers

Try to build up long-term, trusting, “win-win” relationships with customers, distributors, dealers, and suppliers

Accomplished by …

Promising and delivering high quality, good service, and fair prices to the other party over time

Strengthening the economic, technical, and social ties between the two members

Marketing network the outcome

Markets

Defined -- All the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want

Market size

Number of persons

Have resources

Willing to offer those resources

Different usages of the term

Original term — where buyers and sellers gathered

Economist usage — a collection of buyers and sellers who transact over a particular product or product class

Marketers — see the sellers as the industry & the buyers as the market

Colloquially

Need markets

Product markets

Demographic markets

Geographic markets

Noncustomer groupings

Voter market

Labor market

Donor market

Modern economies

Operate on the principle of division of labor

Each person …

specializes in the production of something

receives payment

buys needed things with this money

Kinds of markets & the flows connecting them

Resource markets

Raw-material markets

Labor markets

Money markets

Government

Middlemen

Marketing and marketers

Marketing means …

human activity taking place in relation to markets

working with markets to actualize potential exchanges for the purpose of satisfying human needs and wants

A marketer is someone seeking a resource from someone else and willing to offer something of value in exchange

Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others

Marketing management

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 objectives

Definition recognizes that marketing management

Is a process involving analysis, planning, implementation, and control

Covers ideas, goods, and services

Rests on the notion of exchange

The goal is to product satisfaction for the parties involved

Marketing work

in the customer market is formally carried out by

Sales managers

Salespeople

Advertising and promotion managers

Marketing researchers

Customer service managers

Product managers

Market managers

The marketing vice-president

each job carries well-defined tasks and responsibilities

Many of the jobs involve managing marketing resources

Advertising

Salespeople

Marketing research

Other jobs involve managing programs

Product manager

Market manager

Marketing vice-president

Marketing management is essentially demand management

The task of influencing the level, timing, and composition of demand in a way that will help the organization achieve its objectives

An idea of a desired level of transactions with a target market

Marketing concepts and tools: Demand states and marketing tasks

Negative demand

No demand

Latent demand

Falling demand

Irregular demand

Full demand

Overfull demand

Unwholesome demand

Marketing managers cope with these tasks by carrying out marketing …

Research

Planning

Make decisions on …

Target markets

Market positioning

Product development

Pricing

Channels of distribution

Physical distribution

Communication

Promotion

Implementation

Control

Company orientation toward the marketplace

The production concept

Widely available

Low cost

The product concept

Making good products

Improving them over time

“Marketing myopia”

The selling concept

Hard-selling of

Unsought goods

Sought goods

Nonprofit area

Don’t do it. (see page # 16)

The marketing concept

Pillars of the marketing concept

Market focus

Clearly defined target market

A tailored marketing program for each target market

Customer orientation

Define customer needs from the customer point of view

Customer retention is more critical than customer attraction

A satisfied customer

Buys again

Talk favorably to others about the company

Pays less attention to competing brands and advertising

Buys other products from the same company

Our aim is to delight customers

Unsatisfied customers don’t complain

Maximize the customer’s opportunity to complain & then respond constructively

Marketing strategies 1-1: The secret of L.L. Bean’s Profitability—Customer Satisfaction

Coordinated marketing

Everybody in the company pulling together for the customer

Profitability

Marketing strategies 1-2: How Jan Carlzon “Marketized” SAS

A marketing department does not assure a market-oriented company

Developments that often prod a company to see the need for marketing

Sales decline

Slow growth

Changing buying patterns

Increasing competition

Increasing marketing expenditure

Organized resistance

The marketer’s argument for the business concept

(see page # 24)

Marketing is still resisted in many quarters

Slow learning

Companies and Industries: Five stages in the slow learning of bank marketing

Fast forgetting

… in the wake of a marketing success

Know your target market and know how to satisfy it

The societal marketing concept

Problems with the marketing concept

Fast food — tastes good but bad for customer

Societal marketing

The organization’s task

Determine the … of target markets

Needs

Wants

Interests

Deliver the desired satisfactions

More effectively and efficiently than competitors

In a way that preserves or enhances … well being

Consumer’s

Society’s

Balance three considerations in setting their marketing policies

Company profits

Consumer want satisfactions

Public interests

The rapid adoption of marketing management — in the … sector

Business

Nonprofit

International

Laying the groundwork through strategic planning

Introduction

What makes a company excellent?

The company’s employees are committed to creating satisfied customers

Know how to adapt and respond to a continuously changing marketplace

They practice the art of market-oriented strategic planning

Definition of strategic planning

The managerial process of developing and maintaining a viable fit between the …

organization’s objectives

resources

its changing market opportunities

The aim is to shape and reshape the company’s businesses and products so that they combine to produce satisfactory profits and growth

History of strategic planning development

Three key ideas that defined the new planning process

Managing a company’s businesses as an investment portfolio

Which business entities deserve to be …

Built

Maintained

Phased down

Terminated

Assess accurately the future profit potential of each business

Naive extrapolating of past business trends not acceptable

Strategy

A game plan for achieving its long run objectives

No one strategy is optimal for all competitors in that business

What makes the most sense in the light of …

Industry position

Objectives

Opportunities

Resources

Examples

Cost reduction

Innovation

Diversification

Nichemanship

Strategic planning and modern corporate structure

Four organizational levels and associated planning actions

Corporate level

Designs a corporate strategic plan

Guides the whole enterprise into a profitable future

Makes decisions on

How much resources support to allocate to each division

Which new businesses to start

Division level

A division plan covering the allocation of funds to each business unit within the unit

Business level

Business unit strategic plan to carry that business unit into a profitable future

Product level

Each product line, brand within a business unit develops a marketing plan for achieving its objectives in its product market

Plans are then implemented at the various levels of the organization

Results are monitored and evaluated

Corrective actions are taken

See figure 2-1

Next two chapters

This chapter

Next chapter

Corporate strategic planning

Introduction

Corporate headquarters

Sets planning process in motion

Establishes the framework within which the individual business units prepare their business-level plans

Role of division

Sales and profit goals

Set by corporate headquarters

Set by division

Strategy development

Done by division

Heavy involvement of headquarters

Performance

Corporate mission

Why and when

Fundamental questions (Peter Drucker)

Shaped by five elements

History

Current preferences

Market environment

Resources

Distinctive competences

Not easy

May take a year or two

Characteristics

Focus on a limited number of goals

Define major competitive scopes

Industry scope

Market-segment scope

Vertical scope

Geographical scope

Should be motivating

Should not be “to make profits”

Something useful outside the organization

Stress major policies that the company wants to honor

How to deal with …

Narrow the range of individual discretion so employees act consistently on important issuer

Provide vision and direction for the company of the next ten to twenty years

Revision

When that mission has lost credibility

No longer defines an optimal course for the company

Strategic business unit identification

Not at all obvious

One division may contain several businesses

Sometimes two divisions may be so interrelated that they form a single business

Identify the business they are in and managing each business

“Marketing Myopia”

Market definitions superior to product definitions

Business defined as a customer-satisfying process not a goods-producing process

Basic needs and customer groups endure forever

Market based definition shouldn’t be too narrow or too broad

Three dimensions of business definition

Customer groups

Customer needs

Technology

SBU characteristics

Planned seperately from the rest of the company

Has own competitors

Which it is trying to surpass or equal

Has a responsible manager

Responsible for strategic planning and profit performance

Controls most of the factors affecting profit

Evaluating the current business portfolio

Boston Consulting Group Approach

Relative market share

Market growth rate

Categories

Question marks

Stars

Cash cows

Dogs

Actions

Build

Hold

Harvest

Divest

General electric approach

Market attractiveness and competitive position

Critique of portfolio models

Corporate new-business plan

Desired sales less projected sales = Strategic planning gap

Gap filling actions

Identify further opportunities to achieve growth within the company’s current business (intensive growth opportunities)

Market penetration

Market development

Product development

Identify opportunities to build or acquire businesses that are related to the company’s current business (integrative growth opportunities)

Backward integration

Forward integration

Horizontal integration

Identify opportunities to add attractive businesses that are unrelated to the company’s current business (diversification growth opportunities)

Concentric diversification

Horizontal diversification

Conglomerate diversification

Business strategic planning

Business mission

External environment analysis (opportunity and threat analysis)

Monitor

Macroenvironmental forces

Microenvironmental actors

Opportunities

Definition

Classified

Attractiveness

Success probability

Business strengths

Match the success requirements for operating in the target market

Exceed those of its competitors

Marketing strategies: Which company should produce an electric car?

Threats

Definition

Classified

Seriousness

Probability of occurrence

Contingency plan

Picture of the business

Ideal business

Speculative business

Mature business

Troubled business

Internal environment analysis (strengths/weaknesses analysis)

See figure 2-12

Marketing concepts and tools 2-1: Assessing interdepartmental strengths and weaknesses

Goal formulation

Specific goals and objectives

Mix of objectives

Sets these objectives. Then manages by objectives

Arrange objectives hierarchically

Company mission: Good service to customers

Company objectives

Increase return on investment

Increase return

Marketing objectives

Increase billings

Sell more equipment to increase rentals and usage

Sell more basic equipment

Sell more auxiliary equipment

Seek to increase usage only

Increase rates (risk decreases in usage)

Reduce cost

Increase location service life

Reduce investment base

Ultimately translated into specific objectives for all employees

Objectives should be stated quantitatively

Use the term goal to describe objectives that are specific with respect to magnitude and time

Realistic target levels for its objectives

Objectives need to be consistent

Trade-offs

High profits vs. high market share

Deep penetration of existing markets vs. developing new markets

Profit goals vs. nonprofit goals

High growth vs. high stability

Strategy formulation

Goals indicate where a business wants to go

Strategy answers how to get there

Strategy must be refined into specific programs

That are implemented efficiently

Corrected if they are failing to achieve the objectives

Three generic types

Overall cost leadership

Differentiation

Focus

Strategic groups

2-2: Strategic groups in the truck-manufacturing industry

Program formulation

Decided to attain technological leadership

Run programs to

Strengthen its R&D department

Gather intelligence on the newest technologies that might affect the business

Develop leading-edge products

Train the salesforce to understand the products and educate the customers

Develop an advertising program to communicate its position as the technological leader

See other parts of the book

Implementation

McKinsey’s 7-S framework

Hardware success

Strategy

Structure

Systems

Software

Style

Common style of behaving and thinking

Skills

Mastered the skills needed to carry out the company’s strategy

Staff

Hired able people

Trained them well

Assigned the right jobs to exercise their talents

Shared values

Employees share the same guiding values and missions

Feedback and control

Need to track results and monitor new developments in the environment

Make appropriate adjustments if it is to achieve its objectives

Magnitude

Speed

A company’s strategic fit with the environment will inevitably erode

The market environment will almost always change faster than the company’s 7-S’s

A new opportunity is a strategic window

Managing the marketing process and marketing planning

Introduction

The Marketing concept and strategic planning

form the principal basis for managing the modern company in highly competitive markets.

Corporate headquarters

Evaluate its strategic business units continuously

Assign appropriate objectives

Assign appropriate funds

Strategic business units

Carefully monitor its external and internal environments

Develop a strategic business unit plan

Prepare marketing plans for each product destine to each of a number of market segments

Marketing plans

Differ from strategic business unit plans

Focusing more narrowly on product/market

Developing more detailed marketing strategies and programs

The central instrument for directing and coordinating the marketing effort

Must learn how to create and implement sound marketing plans

Questions to answer

Major steps in the marketing process

Major contents of a marketing plan

Main theoretical tools for describing how various types of marketing efforts affect the company’s sales and profits?

The marketing process

Introduction

Relationship between marketing and strategic planning

Steps

Marketing supplies information and strategic recommendations to

Strategic planners for analysis and evaluation

The strategic planners then negotiate goals and resources

Marketing then formulates marketing plans based on these goals

Marketing carries them out

The results are evaluated by the strategic planners and the process recycles

Target market and product-positioning strategy are defined

Sales goals and needed resources are established for achieving these goals

Roles of … is to make sure the proposed marketing plan can be supported with enough money, materials, machines, and personnel

Finance

Purchasing

Manufacturing

Physical distribution

Personnel departments

To carry out their responsibilities, marketing managers go through a marketing process

Definition

Analyzing marketing opportunities

Researching and selecting target markets

Designing marketing strategies

Planning marketing programs

Organizing, implementing, and controlling the marketing effort

The marketing process

Analyzing market opportunities

Need a dimension of the total market to focus on

Need to identify major directional options within each dimension

Need a reliable marketing information system (Chapter 4)

to identify and evaluate its opportunities

Needs to gather significant and continuous information about its relevant marketing environment (Chapter 5)

microenvironment

macroenvironment

Needs to understand the markets it is in

Consumer (Chapter 6)

Business (Chapter 7)

Needs to pay close attention to identifying and monitoring it competitors (Chapter 8)

Researching and selecting target markets and positioning the offer

Know how to measure and forecast the attractiveness of any given market (Chapter 9)

Segment the market (Chapter 10)

Product market grid

Subsegmentation

Clear idea of its target market

Designing marketing strategies

Develop a differentiating and positioning strategy (Chapter 11)

Study competition

What are their positions

Product positioning map

Position oneself to exploit an opportunity

Avoid competition

Choose your competitors carefully

Begin new-product development, testing, launching (Chapter 12)

The new product will have to be modified at different stages in the product life cycle (Chapter 13)

Strategy choice will depend on the role the firm plays (Chapter 14)

Strategy will have to take into account changing global marketing opportunities and challenges (Chapter 15)

Planning marketing programs

Broad business strategies to help the company achieve its objectives

Plan marketing strategies and tactics for specific products

Marketing strategy defined

The broad principles by which marketing management expects to achieve its business and marketing objectives in a target market. Consists of basic decisions on

marketing expenditures

marketing mix

marketing allocation

Level of marketing expenditures to achieve its marketing objectives

Marketing budget to sales ratio

Analyze the work required to attain a given sales volume or market share

Divide the total marketing budget among the various tools in the marketing mix

Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market

Four Ps (see figure # 3-5)

Product

Price

Place

Promotion

A marketing mix is selected from a great number of possibilities

Decisions must be made for both the distribution channels and final consumers

Not all variables can be changed in the short run

Allocate of the marketing dollars to the various products, channels, promotion medial and sales areas

Sales response functions

Organizing, implementing, and controlling the marketing effort

Must build a marketing organization that is capable of implementing the marketing plan (Chapter 25)

Headed by a marketing vice president

Tasks

Coordinate the work of all the marketing personnel

Work closely with the vice-presidents of … to coordinate company efforts to satisfy customers

Finance

Manufacturing

Research and development

Purchasing

Personnel

Marketing department effectiveness

How well its personnel are …

selected

trained

directed

motivated

Need to be turned on

evaluated

Need constructive feedback

Review performance

Praise strenghts

Point out weaknesses

Suggest ways to improve

Likely to be many surprise as marketing plans are implemented by the marketing organization

Need feedback and control procedures (Chapter 26)

Three types of marketing control

Annual plan control

Well-defined goals

Measure its ongoing performance

Determine underling causes for serious gaps

Decide on the best corrective action to take

Profitability control

of various

products

customer groups

trade channels

order sizes

Marketing profitability analysis

Marketing efficiency studies

How various marketing activities could be carried on more efficiently

Strategic control

Critically reexamine its overall marketing game plan

Rapid obsolescence of … is a constant possibility

Objectives

Policies

Strategies

Programs

Marketing audit

See figure 3-7

The nature and content of a marketing plan

Executive summary

Current marketing situation

Data from the product fact book

Market situation

Product situation

Competitive situation

Distribution situation

Macroenvironment situation

Opportunity and issue analysis

Strengths/weaknesses analysis

Issues analysis

Objectives

Financial objectives

Marketing objectives

Marketing strategy

Basic strategy statement

Action programs

Each element of the marketing strategy must now be elaborated to answer

What will be done?

When will it be done?

Who will do it

How much will it cost

Projected profit and loss statement

Controls

Appendix: the theory of effective marketing-resource allocation

Analyzing marketing opportunities

Marketing information systems and marketing research

Concept and components of a marketing information system

Internal records system

The order - shipping - billing cycle

The system of sales reporting

Designing a user-oriented reports system

Marketing intelligence system

Marketing research system

Marketing strategies 4-1: A new answer to information needs — information centers

Suppliers of marketing research

The scope of marketing research

The marketing research process

Marketing concepts and tools 4-1: A “questionable” questionaire

Marketing concepts and tools 4-2: The marketer’s dream — measuring consumer response to ads

Characteristics of good marketing research

Management’s use of marketing research

Marketing decision support system

Marketing strategies 4-2: The 1990s marketing manager uses information power

Appendix: Marketing decision support systems

Analyzing the marketing environment

Actors in the company’s microenvironment

Company

Suppliers

Marketing intermediaries

Customers

Competitors

Publics

Forces in the company’s macroenvironment

Demographic environment

Marketing environment and trends 5-1: Impact of consumerism on marketing practices

Marketing environment and trends 5-2: Age group growth trends and their marketing implications

Economic environment

Natural environment

Marketing environment and trends 5-3: Impact of environmentalism on marketing decision making

Technological environment

Political environment

Cultural environment

Marketing environment and trends 5-4: Ten “megatrends” of great import to marketers

Appendix: Mapping a company’s marketing environment, marketing system, and marketing strategy

Analyzing consumer markets and buyer behavior

Marketing environment and trends 6-1: Three market segments — Hispanic, black, and older consumers

A model of consumer behavior

Major factors influencing consumer behavior

Cultural factors

Social factors

Marketing environment and trends 6-2: Women become a more important market for car buying

Personal factors

Marketing concepts and tools: How lifestyles are identified

Psychological factors

The buying decision process

Buying roles

Types of buying behavior

Researching the buying decision process

Stages in the buying decision process

Appendix: Some alternative decision processes used by consumers to evaluate alternative brands

Analyzing business markets and organizational buying behavior

The industrial market

Who is in the industrial market?

What buying decisions do industrial buyers make?

Who participates in the industrial buying process?

What are the major influences on industrial buyers?

Marketing strategies 7-1: Just-in-time production changes the face of organizational buying

How do industrial buyers make their buying decisions?

The reseller market

Who is the reseller market?

Marketing strategies 7-2: Adapting marketing strategy to the type of industrial buyer segment—The case of microprocessors

What buying decisions do resellers make?

Who participates in the reseller buying process?

What are the major influences on reseller buyer?

How do resellers make their buying decisions?

Marketing concepts and tools: A new tool for resellers—Direct product profitability (DPP)

The government market

Who is the government market?

What buying decisions do government buyer’s make?

Who participates in the government buying process?

Companies and industries: The industrial market

What are the major influences on government buyers?

How do government buyers make their buying decisions?

Analyzing competitors

Identifying the company’s competitors

Industry concept of competition

Marketing concept and tools 8-1: Five industry structure types

Market concept of competition

Identifying the competitors’ strategies

Determining the competitors’ objectives

Assessing the competitors’ strengths and weaknesses

Marketing concepts and tools 8-2: Du Pont Profitability Chart

Estimating the competitors’s reaction patterns

Designing the competitive intelligence system

Marketing concepts and tools 8-3: Intelligence gathering — snooping on competitors

Selecting competitors to attack and avoid

Marketing concepts and tools 8-4: Customer value analysis — The key to competitive advantage

Balancing customer and competitor orientations

Researching and selecting target markets

Measuring and forecasting market demands

Major concepts in demand measurement

A multitude of measure of market demand

Which market to measure

A vocabulary for demand measure

Estimating current demand

Total market potential

Area market potential

Marketing concepts and tools 9-1: Geodemographic analysis — a new tool for identifying market targets

Estimating industry sales and market shares

Estimating future demand

Marketing concepts and tools 9-2: Methods of environmental forecasting

Survey of buyer’s intentions

Composite of salesforce opinions

Expert opinion

Market test method

Time series analysis

Statistical-demand analysis

Appendix: Determinants of company market share

Identifying market segments and selecting target markets

Market segmentation

The general approach to segmenting a market

Markets and niches

Patterns of market segmentation

Marketing strategies: Customized marketing — It’s coming back

Market-segmentation procedure

Bases of segmenting consumer markets

Bases for segmenting industrial markets

Developing the customer-segment profile

Requirements for effective segmentation

Market Targeting

Evaluating the market segments

Selecting the market segments

Other considerations in evaluating and selecting segments

Designing marketing strategies

Marketing strategies for differentiating and positioning the marketing offer

How buyers define value and choose suppliers

Identifying potential competitive advantages through value-chain analysis

Tools for competitive differentiation

Product differentiation

Service differentiation

Marketing strategies 11-1: Turbomarketing — using quick response time as a competitive tool

Personal differentiation

Image differentiation

Developing a positioning strategy

How many differences to promote?

Marketing concepts and tools: Positioning theme parks

Which differences to promote?

Marketing strategies 11-2: “Positioning” According to Ries and Trout

Communicating the company’s positioning

Developing, testing, and launching new products and services

The new-product-development dilemma

Effective organizational arrangements

Marketing concepts and tools 12-1: Key findings on new-product-management activity

Companies and industries: 3M’s approach to innovation

Idea generation

Sources of new-product ideas

Idea-generating techniques

Idea screening

Product-idea rating devices

Concepts development and testing

Concept development

Concept testing

Marketing-strategy development

Marketing concepts and tools 12-2: Measuring consumer preferences

Business analysis

Estimating sales

Estimating cost and profits

Marketing concepts and tools 12-3: Estimating first-time purchases of new products

Product development

Marketing concepts and tools 12-4: Methods for measuring consumer preferences

Market testing

Consumer-goods market testing

Marketing concepts and tools 12-5: Decision facing management in setting up test markets

Marketing strategies: Not “Whether to test” by “how to test” — the case of new coke

Industrial-goods market testing

Commercialization

When (Timing)

Where (Geographical strategy)

To whom ( Target-market prospects)

How (Introductory market strategy)

The consumer-adoption process

Concepts in innovation, diffusion, and adoption

Stages in the adoption process

Individual differences in innovativeness

Role of personal influence

Influence of product characteristics on the rate of adoption

Influence of organization buyer’s characteristics on the rate of adoption

Managing products through their product life cycle

The product life cycle

Demand/technology life cycle

Stages in the product life cycle

Product category, product form, and brand life cycles

Other shapes of the product life cycle

Marketing concepts and tools: Forecasting the shape and duration of the product life cycle

Rational for the product life cycle

Introduction stage

Marketing strategies in the introduction stage

Marketing strategies 13-1: The market pioneer “Advantage”

Growth stage

Marketing strategies in the growth stage

Maturity stage

Marketing strategies in the mature stage

Marketing strategies 13-2: Breaking through the “mature-product syndrome”

Decline stage

Marketing strategies during the decline stage

Summary and critique of the product life-cycle concept

The concept of market evolution

Stage in market evolution

Dynamics of attribute competition

Designing marketing strategies for market leaders, challengers, and followers, and nichers

Market-leader strategies

Expanding the total market

Defending market share

Marketing strategies 14-1: Defensive strategies according to the defender model

Expanding market share

Marketing concepts and tools: The impact of different marketing mix variables on market share

Market-challenger strategies

Defining the strategic objective and opponent(s)

Companies and industries: How Procter & Gamble and Caterpillar maintain their market leadership

Choosing an attack strategy

Market-follower strategies

Marketing strategies 14-2: Some attack strategies available to challengers

Market-nicher strategies

Marketing strategies 14-3: Specialist roles open to market nichers

Marketing strategies 14-4: Strategies for entering markets held by incumbent firms

Designing strategies for the global marketplace

Market environment and trends 15-1: How does the U.S. perform in world trade?

Marketing strategies 15-1: Global marketing blunders

Appraising the global marketing environment

The international trade system

Economic environment

Political-legal environment

Market environment and trends 15-2: How nations have been moving back to barter

Marketing strategies 15-2: Megamarketing — breaking into blocked markets

Cultural environment

Business environment

Deciding whether to go abroad

Market environment and trends 15-3: The international product life cycle

Deciding which markets to enter

Marketing strategies 15-3: Should multinationals restrict their trade to the Triad Markets?

Marketing concepts and tools: Assessing country risk

Deciding how to enter the market

Indirect export

Direct export

Licensing

Joint ventures

Direct investment

The internationalization process

Deciding on the marketing program

Product

Promotion

Marketing strategies 15-4: Global standardization or adaptation?

Price

Distribution channels

Deciding on the marketing organization

Export department

International division

Global organization

Companies and industries: The world’s champion marketers — the Japanese?

Planning marketing programs

Managing product lines, brands, and packaging

What is a product?

Five levels of a product

Product hierarchy

Product classifications

Product-mix decisions

Marketing concepts and tools: Product classifications and their marketing-strategy implications

Product-line decisions

Product-line analysis

Product-line lengths

Line-modernization decision

Brand decisions

Branding decision

Brand-sponsor decision

Marketing strategies: Licensing brands names for royalties

Family-brand decision

Brand-extension decision

Multibrand decision

Brand-repositioning decision

Packaging and labeling decisions

Managing service businesses and ancillary services

Nature and classification of services

Characteristics of services and their marketing implications

Intangibility

Inseparability

Variability

Perishability

Marketing strategies for service firms

Marketing strategies: Motivating employees to care for the customer — the case of hospitals

Managing differentiation

Managing service quality

Marketing concepts and tools: Market-performance analysis

Companies and industries: Walt Disney Enterprises — a highly responsive organization

Managing productivity

Managing product support services

Presale service strategy

Postsale service strategy

Designing pricing strategies and programs

Setting the price

Selecting the pricing objective

Marketing concepts and tools 18-1: Finding the profit-maximizing price

Determining demand

Estimating cost

Analyzing competitor’s prices and offers

Selecting a pricing method

Marketing concepts and tools 18-2: Methods of estimating perceived value — an illustration

Marketing concepts and tools 18-3: Methods for establishing a price around a perceived value

Selecting the final price

Adapting the price

Marketing strategies 18-1: Five geographical pricing strategies

Geographical strategies

Price discounts and allowances

Promotional pricing

Discriminatory pricing

Product-mix pricing

Initiating and responding to price changes

Initiating price cuts

Marketing strategies 18-2: Analyzing the marketing mix alternatives facing a firm in an economic recession

Initiating price increases

Customers’ reactions to price changes

Competitors’ reactions to price changes

Responding to price changes

Marketing concepts and tools 18-4: How a large chemical company used decision theory to assess probable competitors’ reactions to a contemplated price cut

Selecting and managing marketing channels

The nature of marketing channels

Why are marketing intermediaries used?

Marketing - channel functions and flows

Number of channel levels

Channels in the service sector

Channel - design decisions

Analyzing service output levels desired by customers

Establishing the channel objectives and constraints

Identifying the major channel alternatives

Evaluating the major channel alternatives

Channel-management decisions

Selecting channel members

Motivating channel members

Companies and industries: Building a distributor team for Epson Products

Marketing concepts and tools 19-1: Five bases of power for managing channel relationships

Evaluating channel members

Marketing strategies 19-1: Turning industrial distributors in business partners

Modifying channel arrangements

Marketing strategies 19-2: Smart companies change their marketing channels over the product life cycle

Channel dynamics

Marketing concepts and tools 19-2: Modifying existing distribution systems toward the ideal

Growth of vertical marketing systems

Growth of horizontal marketing systems

Growth of multichannel marketing systems

Roles of individual firms in a channel

Marketing strategies 19-3: The case of multichannel marketing

Channel cooperation, conflict, and competition

Types of conflict and competition

Causes of channel conflict

Managing channel conflict

Managing retailing, wholesaling, and physical-distribution systems

Retailing

Nature and importance of retailing

Types of retailers

Marketing environment and trends 20-1: Major retailer types

Retail marketing decisions

Marketing strategies 20-1: Does an “everyday-low price” strategy make more sense than a “promotional-pricing” strategy?

Trends in retailing

Wholesaling

Nature and importance of wholesaling

Growth and types of wholesaling

Wholesaler marketing decisions

Marketing environment and trends 20-2: Major wholesaler types

Trends in wholesaling

Physical distribution

Nature of physical distribution

Marketing strategies 20-2: Strategies of high-performance wholesaler-distributor

The physical-distributor objective

Order processing

Warehousing

Inventory

Transportation

Organizational responsibility for physical distribution

Marketing environment and trends 20-3: Five major transportation modes

Designing communication and promotion-mix strategies

The communication process

Steps in developing effective communications

Identifying the target audience

Determining the communications objectives

Designing the message

Marketing concepts and tools 21-1: Determining the target audience and sought response

Marketing strategies 21-1: Do fear appeals work?

Selecting the communication channels

Companies and industries: Dentist use word of mouth to draw mouths to their practice

Establishing the total promotion budget

Deciding on the promotion mix

Marketing strategies 21-2: The promotional mix of business-to-business marketers

Marketing strategies 21-3: Role of corporate advertising in industrial advertising

Marketing concepts and tools 21-2: The advisor project probes into how industrial marketers set their marketing expenditures budgets

Measuring promotion’s results

Managing and coordinating the marketing communication process

Designing effective advertising programs

Companies and industries: How does and advertising agency work?

Setting the advertising objectives

Deciding on the advertising budget

Deciding on the message

Message generation

Message evaluation and selection

Message execution

Marketing strategies: Celebrity endorsements as a strategy

Deciding on the media

Deciding on reach, frequency, and impact

Choose among major media types

Selecting specific media vehicles

Marketing environment and trends: The ceaseless search for new media

Deciding on media timing

Evaluating advertising effectiveness

Communication-effect research

Marketing concepts and tools: Some Advertising Research Techniques

Sales-effect research

Designing direct marketing, sales-promotion, and public-relations programs

Direct marketing

Nature, growth, and advantages of direct marketing

Marketing concepts and tools 23-1: Major tools of direct marketing

The development of integrated direct marketing

Developing a marketing database system

Marketing concepts and tools 23-2: The “maximarketing” model for integrated marketing

Major decisions in direct marketing

Sales promotion

Rapid growth of sales promotion

Purpose of sales promotion

Major decisions in sales promotion

Establishing the sales-promotion objectives

Selecting the sales-promotion tools

Marketing concepts and tools 23-3: Major common promotional tools

Marketing concepts and tools 23-4: Major trade-promotion tools

Marketing concepts and tools 23-5: Major business-promotion tools

Developing the sales promotion program

Public relations

Major decisions in marketing PR

Marketing concepts and tools 23-6: Major tools in marketing PR

Managing the salesforce

Designing the salesforce

Salesforce objectives

Salesforce strategies

Salesforce structure

Companies and industries: Building a salesforce from scratch—the case of Wilkinson

Marketing strategies 24-1: National account management—What it is and how it works

Salesforce size

Salesforce compensation

Managing the salesforce

Recruiting and selecting sales representatives

Marketing concepts and tools 24-1: Sales plans and components

Training sales representatives

Directing sales representatives

Marketing environment and trends 24-1: How efficiently do companies manage their saleforces?

Motivating sales representatives

Marketing environment and trends 24-2: Salespeople use computers as a productivity tool

Evaluating sales representatives

Principles of personal selling

Selling

Marketing concepts and tools 24-2: The variety of selling styles and buying styles

Negotiation

Marketing concepts and tools 24-3: The principled-negotiation approach to bargaining

Marketing strategies 24-2: Some classic bargaining tactics

Relationship management

Marketing strategies 24-3: When—and how—to use relationship management

Organizing, implementing, and controlling marketing effort

Organizing and implementing marketing programs

Company organization

Marketing organization

The evolution of the marketing department

Ways of organizing the marketing department

Marketing environment and trends 25-1: Regionalization — a passing fad or the new marketing era?

Marketing management organization

Marketing environment and trends 25-2: What’s the future of brand management?

Marketing’s relations with other departments

Strategies for building a companywide marketing orientation

Marketing implementation

Diagnostic skills

Company levels

Marketing implementation skills

Implementation-evaluation skills

Evaluating and controlling marketing performance

Annual-plan control

Sales analysis

Market-share analysis

Marketing concepts and tools: Defining and measuring market-share

Marketing expense-to-sales analysis

Financial analysis

Customer-satisfaction tracking

Corrective action

Profitability control

Methodology of marketing-profitability analysis

Determining the best corrective action

Direct versus full costing

Efficiency control

Salesforce efficiency

Advertising efficiency

Sales-promotion efficiency

Distribution efficiency

Strategic control

Marketing effectiveness rating review

The marketing audit

The marketing-controller concept

Indexes

Author

Company/brand

Subject