Philip Kotler and Kevin Lane Keller
Marketing Management - Issues and Themes Explained in Brief
1. Defining Marketing for the 21st Century
1. Why is marketing important?
Marketing identifies demand for unfulfilled needs. Marketing also provides input to decide what features to design into a new product or service, what prices to set, where to sell products or services and how much to spend on advertising and sales. It thus builds demand for products and services offered by the firm thus providing a top line for the firm from which profits can be made. There must be a top line for there to be a bottom line.
2. What is the scope of marketing?
Marketing is about identifying and meeting human and social needs in profitable manner.
Marketers market 10 main types of entities: goods, services, events, experiences, persons, places, properties, organizations, information, and ideas.
3. What are some core marketing concepts?
Needs, Wants and Demand
Segmentation and Target Markets
Offerings and Brands
Customer Value and Customer Satisfaction
4, How has marketing changed in recent years?
5. What are the tasks necessary for successful marketing management?
Developing Marketing Strategies and Plans.
Assessing Market Opportunities and Customer Value
Sustaining Growth and Value
Detailed articles - Marketing Concept by Kotler - 14th Edition Extra coverage
2. Developing Marketing Strategies and Plans
1, How does marketing affect customer value?
A rational customer value delivery process is doing marketing at the beginning. There is homework or initial work to be done by marketing before a product is conceptualized or designed. The marketing staff have to identify the potential market for the likely product (product idea) and must segment the market and select the appropriate target segment and then only product can be finalized for its specific attributes. Kotler emphasized that segmentation, targeting, positioning (STP) is the essence of strategic marketing.
Once the business unit accepts to offer the value proposition supported by marketing as well as operations, further marketing activities include detailed product specifications, distribution system and price decisions. At the next stage, the value proposition is to be communicated in the market so that there are enough potential customers who are aware of the product and will be inclined to buy the product for the trial. Advertising through mass communication channels, public relations, personal selling and sales promotion campaigns are launched in this stage to make actual sales.
2. How is strategic planning carried out at different levels of organization?
In most large companies strategic plans are made at four levels: corporate level, division level, business level, and product level.
Developing Marketing Strategies for a Product
The information collected from the marketing research process to support marketing strategy decisions has to be analyzed to find stable and distinct market segments. The needs and potential of each segment needs to estimated and the segment that the market can serve best and make optimal profit is to be determined. For this selected target segment, differentiation decision for the product offered is to be arrived at and positioning strategy has to finalized. While differentiation can be in multiple attributes, position strategy calls for one or two features to be emphasized in communications so that position is associated with the company's product whenever a potential user thinks of the product.
The differentiation decision gives the signal for full development of the new product. Marketing has further role to play in the new product development process. The marketing strategy related to the product gets modified based on the life cycle stages: introduction, growth, maturity, and decline. The marketing strategy is also influenced by the position the product gets in the competitive market place: leader, challenger, follower and niche player. Internationalization and globalization may become possible or may become necessary at some stage in the product life cycle and marketing strategy may need to redeveloped taking into consideration the expanded market.
3. What does a marketing plan include?
A marketing plan is a written document that summarizes what the marketer has learned about the market place and indicates how the firm plans to reach its marketing objectives.
Detailed articles - Marketing Strategy and Marketing Process
3. Scanning the Marketing Environment, Forecasting Demand, and Conducting Marketing Research
1. What are the components of a modern marketing information system?
Marketers have the major responsibility for identifying significant marketplace opportunities and trends. For this purpose, firms have to organize and distribute a continuous flow of marketing information. A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to various marketing decision makers. It has three major components: 1. internal company records 2. marketing intelligence activities 3. a marketing research system.
2. What are useful internal records for such a system?
Orders, Sales Invoices, Customer payments, Customer complaints
3. What makes up a marketing intelligence system?
Marketing intelligence system is a set of procedures and sources used by marketers to obtain every day information about pertinent developments in the marketing environment (Kotler). Marketing intelligence focuses on current happenings.
4. What are some influential macroeconomic developments?
1. Demographic Environment.
Earth's population totaled 6.8 billon in 2010 and may well exceed 9 billion in 2040.
Developing world is growing at 1 to 2% and developed world is growing at 0.3%.
India with 1.2 billion population is forecasted to become world's third largest economy by 2040.
Old people are increasing the population. In 1995 there were 371 million old people. By 2050, this number will go up to one billion. So the items consumed by old people have to be produced in greater quantities.
5. How can companies accurately measure and forecast demand?
Companies use time series analysis to forecast demand using past data and regression models to forecast a product's sales using the estimates made for economy and industry. Salespersons are asked to give their forecast of demand in their areas. Expert opinion is obtained. For new distribution channels market test results are the basis for forecasting.
6. What constitutes good marketing research?
Marketing research is the systematic design, collection, analysis and reporting of data and findings relevant to specific marketing situation facing the company.
The Marketing Research Process
1. Define the problem, the decision alternatives, and the research objectives
2. Develop the research plan
3. Collect the information
4. Analyze the information
5. Present the findings
6. Make the decision
7. What are the best metrics for measuring marketing productivity?
Marketing Metrics and Marketing-Mix Modeling
Marketing cost per unit sold
8. How can marketers assess their return on investment of marketing expenditures?
By measuring impact on Customer Metrics like percentage of target market customers who have brand awareness or recall, Percentage of customers who correctly identify the brands intended positioning and differentiation, Percentage of target market customers who made a trial purchase of the product, Percentage who say they would repurchase the product etc.
Detailed Articles - Scanning of Environment for Marketing - Market Research and Market Demand Forecasting
Creating Customer Value and Customer Relationships
1. What are customer value, satisfaction, and loyalty,and how can companies deliver them?
Customers tend to be value maximizers or perceived value maximizers, within the bounds of search costs and limited knowledge, mobility and income. Customers evaluate various offers available to satisfy a need and estimate the perceived value of each offer. Customer-perceived value (CPV) is the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering. Total customer benefit is the perceived monetary value of the bundle of economic, functional, and psychological benefits customers expect from a given market offering because of the products, accompanying services and image involved. Total customer cost is the perceived bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the given market offering, including monetary, time, energy, and psychological costs.
2. What is the lifetime value of customers, and how can marketers maximize it?
The amount of goods a customer is likely to buy from the company and thereby contribute to its profits can be estimated from the past buying behavior and anticipated trends. This gives an estimate of customer life time value.Customer acquisition cost has to be less than it and also if a customer leaves the company it is a value loss and this can be also be calculated. These calculations guide the actions company takes to retain customers.
3. How can companies attract and retain the right customers and cultivate strong customer relationships?
Customer relationship management emerged as an important marketing area once relationship marketing concept was created. One aspect of CRM is maintenance and use of detailed information about individual customers and their touch points with the company.
4. What are pros and cons of database marketing.
Benefits of Database Marketing
1. Prospects can be identified.
2. Decisions regarding which customers should receive a particular offer can be taken.
3. Customer loyalty can be increased by sending information of particular interest to a customer.
4. Customer purchases can be reactivated by sending a timely reminder.
5. Properly maintained and used database will help in preventing some marketing mistakes or errors.
Problems in Using Databases
1. There is a significant cost involved in developing and maintaining a database.
2. Employees have to trained in using databases and taking marketing decisions.
3. Some customers may not like the database marketing initiatives.
4. The assumptions behind CRM may not always hold true.
Detailed article - Building Customer Value, Satisfaction and Loyalty
Analyzing Consumer Markets
1. How do consumer characteristics influence buying behavior?
The personal factors that have an influence on consumption patterns and behavior:
Age and Stage in the Life Cycle
Occupation and Economic Circumstances
Personality and Self Concept
Lifestyle and Values
2. What major psychological processes influence consumer responses to the marketing program?
Consumer affect and cognition refer to two types of mental responses consumers exhibit toward stimuli and events in their environment. Affect refers to their feelings about stimuli and events, such as whether they like or dislike a product. Cognition refers to their thinking, such as their beliefs about a particular product. Consumer behavior refers to the physical actions of consumers that can be directly observed and measured by others. It is also called overt behavior to distinguish it from mental activities (cognition), such as thinking, that cannot be observed directly. Behavior is critical for marketing strategy because only through behavior can sales be made and profits earned.
3. How do consumers make purchasing decisions?
4. In what ways do consumers stray from a deliberative, rational decision process?
Detailed articles - Consumer behavior
Chapter 7. Analyzing Business Markets
1. What is the business market and how does it differ from the consumer market?
Organization buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.
It differs from the consumer market in some characteristics:
1. Consumer market is a huge market in millions of consumers where organizational buyers are limited in number for most of the products.
2. The purchases are in large quantities.
3. Close relationships and service are required.
4. Demand is derived from the production and sales of buyers.
5. Demand fluctuations are high as purchases from business buyers magnify fluctuation in demand for their products.
6. The organizational buyers are trained professionals in purchasing.
2. What buying situations do organizational buyers face?
Straight rebuy, Modified rebuy, New task buy, Systems buy
3. Who participates in the business-to-business buying process?
Organizational buying process is a team process and the team or the buying decision-making unit of the organization is called a buying center. The buying center consists of all persons of the organizations who are involved in the buying process playing one or the other seven roles: Initiators, Users, Influencers, Deciders, Approvers, Buyers, and Gatekeepers.
4. How do business buyers make their decisions?
5. How can companies build strong relationships with business customers?
6. How do institutional buyers and government agencies do their buying?
Detailed articles: Organizational Buying Processes and Buying Behavior
Identifying Market Segments and Targets
1. What are the different levels of market segmentation?
2. In what ways can a company divide a market into segments?
3. What are the requirements for effective segmentation?
4. How should business markets be segmented?
5. How should a company choose the most attractive target markets?
Detailed Articles - Market Segmentation and Selection of Target Markets
Part 4: Building Strong Brands
Creating Brand Equity
1.What is a brand and how does branding work?
Brand is name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.
The purpose of branding is to create demand for the product that a particular firm is offering or marketing or selling. A satisfied buyer can repurchase the same product only when it is identified uniquely and branding provides the means through firms provide unique identification to their products targeted at various segments in the product or need market.
2. What is brand equity?
Brand equity brand value is associate with the customers. If more customers recognize the brand and show preference for the brand, the brand has more value. Customer-based brand equity is the differential effect brand has on consumer response to the marketing activities of that brand. A brand has positive customer-based brand equity or value when consumers react more favorably to a product's marketing activity conducted with the brand name in comparison to marketing activity conducted without disclosing the brand name.
3. How is brand equity measured and managed?
Brand Resonance Model
Brand tracking studies
4. What are the important brand architecture decisions involved in developing a branding strategy?
Choosing Brand elements
Developing brand elements
Decisions to use either or combinations of - Corporate umbrella brand name - Separate product family brand names - Target offer brand name.
Chapter 10. Crafting the Brand Position
1. How can a firm develop and establish an effective positioning in the marketg?
2. How do marketers identify and analyze competition?
3. How are brands successfully differentiated?
4. What are the differences in positioning and branding with a small business?
Chapter 11. Competitive Dynamics
1. How can market leaders expand the total market and defend market share?
2. How should market challengers attack market leaders?
3. How can market followers or nichers compete effectively?
4. What marketing strategies are appropriate at each stage of he product life cycle?
5. How should marketers adjust their strategies and tactics for an economic downturn or recession?
Part 5: Shaping the Market
Setting Product Strategy
1. What are the characteristics of products, and how do marketers classify products?
2. How can companies differentiate products?
3. Why is product design important and what factors affect a good design?
4.How can a company build and manage its product mix and product lines?
5. How can companies combine products to create strong co-brands or ingredient brands?
6. How can companies use packaging, labeling, warranties,, and guarantees as marketing tools?
Designing and Managing Services
1. How do we define and classify services, and how do they differ from goods?
2. What are the new services realities?
3. How can we achieve excellence in services marketing?
4. How can we improve service quality?
5. How can goods marketers improve customer-support services?
Developing Pricing Strategies and Programs
1. How do consumers process and evaluate prices?
2. How should a company set prices initially for products or services?
3. How should a company adapt prices to meet varying circumstances and opportunities?
4. When should a company initiate a price change?
5. How should a company respond to a competitor's price change?
Part 6: Delivering Value
Designing and Managing Integrated Marketing Channels
1. What is a marketing channel system and value network?
2. What work do marketing channels perform?
3. How should channels be designed?
4. What decisions do companies face in managing their channels?
5. How should companies integrate channels and manage channel conflict?
6. What are the key issues with e-commerce and m-commerce?
Managing Retailing, Wholesaling, and Logistics
1. What major types of marketing intermediaries occupy this sector?
2. What marketing decisions do these marketing intermediaries make?
3. What are the major trends with marketing intermediaries?
4. What does the future hold for private label brands?
Part 7: Communicating Value
Designing and Managing Integrated Marketing Communications
1. What is the role of marketing communications?
2. How do marketing communications work?
3. What are the major steps in developing effective communications?
4. What is the communications mix, and how should it be set?
5. What is an integrated marketing communication program?
Detailed Articles - Integrated Marketing Communications - Marketing Communication Channels
Chapter 18. Managing Mass Communications: Advertising, Sales Promotions, Events and Experiences, and Public Relations
1. What steps are required in developing an advertising program?
2. How should sales promotion decisions be made?
3. What are the guidelines for effective brand-building events and experiences?
4. How can companies exploit the potential of public relations and publicity?
Managing Personal Communications: Direct and Interactive Marketing, Word of Mouth, and Personal Selling
1. How can companies conduct direct marketing for competitive advantage?
2 How can companies carry out effective interactive marketing?
3. How does word of mouth affect marketing success?
4. What decisions do companies face in designing and managing a sales force?
5. How can salespeople improve their selling, negotiating, and relationship marketing skills?
Detailed Articles - Direct Marketing - Interactive Marketing - Sales Process Steps - Sales Force Management
Part 8: Creating Successful Long-Term Growth
Introducing New Marketing Offerings
1. What challenges does a company face in developing new products and services?
2. What organizational structures and processes do managers use to oversee new-product development?
3. What are the main stages in developing new products and services?
4. What is the best way to manage the new-product development process?
5. What factors affect the rate of diffusion and consumer adoption of newly launched products and services?
Detailed Article: Marketing and New Product Development
Tapping into Global Markets
1. What factors should a company review before deciding to go abroad?
2. How can companies evaluate and select specific foreign markets to enter?
3. What are the differences between marketing in a developing and a developed market?
4. What are the major ways of entering a foreign market?
5. To what extent must the company adapt its products and marketing program to each foreign country?
6. How do marketers influence country-of-origin effects?
7. How should the company manage and organize its international activities?
Managing a Holistic Marketing Organization
1. What are important trends in marketing practices?
2. What are the keys to effective internal marketing?
3. How can companies be responsible social marketers?
4. How can a company improve its marketing skills?
5. What tools are available to monitor and improve their marketing activities?