2. Marketing Management
• Market:
– Set of actual or potential buyers
• Marketing management:
– Choosing target markets
– Building profitable relationships with them
• Demarketing:
– Reduce, not
destroy demand
– Temporarily or
permanently
Marketing management: The art and science of choosing target markets
and building profitable relationships with them. Simply put, marketing
management is customer management and demand management.
3. Marketing Management Orientations
• Production concept: The idea that consumers will
favor products that are available and highly
affordable and that the organization should
therefore focus on improving production and
distribution efficiency.
• Product concept: The idea that consumers will
favor products that offer the most quality,
performance, and features and that the
organization should therefore devote its energy to
making continuous product improvements.
• Selling concept: The idea that consumers will not
buy enough of the firm’s products unless it
undertakes a large-scale selling and promotion
effort.
• Marketing concept: A philosophy that holds that
achieving organizational goals depends on
knowing the needs and wants of target markets
and delivering the desired satisfactions better
than competitors do.
4. Marketing Management Orientations
The marketing concept takes an
outside-in view that focuses on
satisfying customer needs as a path
to profits. As Southwest Airlines’
colorful founder puts it, “We don’t
have a marketing department, we
have a customer department.”
The selling concept
takes an inside-out
view that focuses on
existing products and
heavy selling. The
aim is to sell what the
company makes
rather than making
what the customer
wants.
5. Marketing (Pemasaran)
Needs, wants and
demands
Products
Value, cost and
satisfaction
Exchange,
transactionand
relationship
Market
Sales
(salesman)
Marketing
(marketer)
6. Needs, Wants, and Demands
• Marketing:
– The managing of profitable relationships
– Satisfying customer needs
• Needs:
– Felt deprivation
• Wants:
– Form of needs shaped by
culture and personality
• Demands:
– Wants backed by buying
power
7. The Marketing
Process
Creating value for
customers, marketers
capture value from
customers in return. This
five-step process forms the
marketing framework for the
rest of the chapter and the
remainder of the text.
8. Value and Satisfaction
• Value:
– Benefits gained versus costs of obtaining product
• Satisfaction:
– Degree of meeting consumer’s expectations
• Exchange:
– Trade of value between
parties
• Transaction:
– Two things of value
– Agreed-upon conditions
– Time/place of agreement
In-N-Out Burger delights customers by focusing on friendly service and what it does well:
making really good hamburgers, really good fries, and really good shakes—that’s it.
9. Value and Satisfaction
Each party in
the system
adds value.
Walmart
cannot fulfill
its promise of
low prices
unless its
suppliers
provide low
costs. Ford
cannot deliver
a high quality
car-ownership
experience
unless its
dealers
provide
outstanding
service.
Arrows represent
relationships that
must be
developed and
managed to create
customer value and
profitable customer
relationships.
10. Customer ….
• Relationship Management: The
overall process of building and
maintaining profitable customer
relationships by delivering
superior customer value and
satisfaction.
• Perceived Value: The customer’s
evaluation of the difference
between all the benefits and all
the costs of a marketing offer
relative to those of competing
offers.
• Satisfaction: The extent to which
a product’s perceived
performance matches a buyer’s
expectations.
Building Customer Relationships
Customer lifetime value: To keep customers
coming back, Stew Leonard’s has created the
“Disneyland of Dairy Stores.” Rule #1—The
customer is always right. Rule #2—If the
customer is ever wrong, reread Rule #1.
11. Customer ….
• Loyalty and Retention: Good
customer relationship management
creates customer delight. In turn,
delighted customers remain loyal
and talk favorably to others about
the company and its products.
• Lifetime Value: The value of the
entire stream of purchases that the
customer would make over a
lifetime of patronage.
• Equity: The total combined
customer lifetime values of all of
the company’s customers.
Building Customer Relationships
Managing customer equity: To increase
customer lifetime value and customer equity,
Cadillac needs to come up with more stylish
models and marketing that can attract
younger buyers.
12. Marketing Strategy and the
Marketing Mix
Marketing strategy: The marketing logic by which the company hopes to
create customer value and achieve profitable customer relationships.
At its cAt its core,
marketing is all about
creating customer value
and profitable customer
relationships.ore,
marketing is all about
creating customer value
and profitable customer
relationships.
Marketing strategy involves
two key questions: Which
customers will we serve
(segmentation and
targeting)? and How will we
create value for them
(differentiation and
positioning)? Then, the
company designs a
marketing program—the
four Ps—that delivers the
intended value to targeted
consumers.
13. Customer-Driven Marketing
Strategy
• Market segmentation: Dividing a market into distinct groups of buyers
who have different needs, characteristics, or behaviors, and who might
require separate products or marketing programs.
• Market segment: A group of consumers who respond in a similar way to a
given set of marketing efforts.
14. Segmenting Consumer Markets
• Geographic segmentation.
Dividing a market into different
geographical units, such as
nations, states, regions, counties,
cities, or even neig
• Demographic segmentation.
Dividing the market into segments
based on variables such as age,
gender, family size, family life
cycle, income, occupation,
education, religion, race,
generation, and nationality.
• Age and life-cycle segmentation.
Dividing a market into different
age and life-cycle groups.
Geographic segmentation: Walmart has developed
special formats tailored to specific types of
geographic locations, from Hispanic-focused
Supermercado de Walmart stores to smaller
Marketside and Neighborhood Market
supermarkets.
15. • Gender segmentation. Dividing a market into
different segments based on gender.
• Income segmentation. Dividing a market into
different income s
• Psychographic segmentation. Dividing a
market into different segments based on
social class, lifestyle, or personality
characteristics. egments.
• Behavioral segmentation. Dividing a market
into segments based on consumer knowledge,
attitudes, uses, or responses to a product.
• Occasion segmentation. Dividing the market
into segments according to occasions when
buyers get the idea to buy, actually make their
purchase, or use the purchased item.
• Benefit segmentation. Dividing the market
into segments according to the different
benefits that consumers seek from the
product.
Geographic segmentation: Car-sharing service
Zipcar focuses only on densely populated areas,
positioning itself as a lowcost alternative to urban
car ownership. As it has grown, Zipcar has
expanded its targeting to include a different type
of urban dweller: businesses and other
organizations.
16. To be useful, market segments must be:
• Measurable: The size, purchasing power, and
profiles of the segments can be measured.
• Accessible: The market segments can be
effectively reached and served. Suppose a
fragrance company finds that heavy users of its
brand are single men and women who stay out
late and socialize a lot.
• Substantial: The market segments are large or
profitable enough to serve. A segment should be
the largest possible homogeneous group worth
pursuing with a tailored marketing program.
• Differentiable: The segments are conceptually
distinguishable and respond differently to
different marketing mix elements and programs.
• Actionable: Effective programs can be designed
for attracting and serving the segments. Although
one small airline identified seven market
segments, its staff was too small to develop
separate marketing programs for each segment.
The “leftie” segment can be hard to
identify and measure. As a result, few
companies tailor their offers to left-
handers. However, some nichers such as
Anything Left-Handed in the United
Kingdom target this segment.
17. Market Targetting
Market targeting: The process of evaluating each market segment’s
attractiveness and selecting one or more segments to enter.
So, target market is a set of buyers sharing common needs or characteristics
that the company decides to serve.
• Undifferentiated (mass) marketing. A market-coverage strategy in
which a firm decides to ignore market segment differences and go
after the whole market with one offer.
18. • Differentiated (segmented) marketing. A market-
coverage strategy in which a firm decides to target
several market segments and designs separate
offers for each.
• Concentrated (niche) marketing. A market-
coverage strategy in which a firm goes after a large
share of one or a few segments or niches.
• Micromarketing. Tailoring products and marketing
programs to the needs and wants of specific
individuals and local customer segments; It
includes local marketing and individual marketing.
o Local marketing. Tailoring brands and
promotions to the needs and wants of local
customer segments—cities, neighborhoods,
and even specific stores.
o Individual marketing. Tailoring products and
marketing programs to the needs and
preferences of individual customers—also
called one-toone marketing, customized
marketing, and markets-of-one marketing.
Differentiated marketing: VF Corporation
offers a closet full of over 30 premium
lifestyle brands, each of which “taps into
consumer aspirations to fashion, status,
and well-being” in a well-defined segment.
19. Differentiation and Positioning
• Differentiation: Actually differentiating the market offering to create
superior customer value.
• Positioning: Arranging for a
product to occupy a clear,
distinctive, and desirable place
relative to competing products
in the minds of target
consumers.
• Product position: The way the
product is defined by
consumers on important
attributes—the place the
product occupies in
consumers’ minds relative to
competing products.
Positioning: Burger King builds its entire
worldwide marketing campaign around its
“Have it your way” positioning.
20. Differentiation and Positioning
The location of each
circle shows where
consumers position a
brand on two
dimensions: price
and luxury-
performance
orientation. The size
of each circle
indicates the brand’s
relative market share
in the segment. Thus,
Toyota's Land Cruiser
is a niche brand that
is perceived to be
relatively affordable
and more
performance
oriented.
The company can offer greater customer value by either charging
lower prices than competitors or offering more benefits to justify
higher prices. If the company promises greater value, it must then
deliver that greater value.
Effective positioning begins with differentiation—actually
differentiating the company’s market offering so that it gives
consumers more value.
21. The Integrated of the Marketing Mix
Marketing mix: The set of tactical marketing tools—product, price, place,
and promotion—that the firm blends to produce the response it wants in
the target market.
The marketing mix—or the
four Ps—consists of tactical
marketing tools blended into
an integrated marketing
program that actually delivers
the intended value to target
customers.
22. The Four P’s Versus the Four C’s
Product
Price
Place
Promotion
Customer solution
Customer cost
Convenience
Communication
The four P’s concept
takes the seller’s view of
the market.
The four C’s is the
buyer’s viewpoint—in
this age of customer
value and relationships.
23. Managing the Marketing Effort
• Four marketing management functions:
– Analysis
– Planning
– Implementation
– Control
We’ll close the chapter by looking at how
marketers manage those strategies and
plans—how they implement marketing
strategies and programs and evaluate the
results.
The first part of
the chapter dealt
with this—
developing
company-wide
and marketing
strategies and
plans.
24. Marketing Analysis
Managing the marketing function begins with a complete analysis of the
company’s situation. The marketer should conduct a SWOT analysis, by
which it evaluates the company’s overall strengths, weaknesses,
opportunities, and threats.
The goal of SWOT
analysis is to
match the
company’s
strengths to
attractive
opportunities in
the environment,
while eliminating
or overcoming
the weaknesses
and minimizing
the threats.
Hang on to this figure! SWOT analysis is widely used
tool for conducting a situation analysis. You’ll find
yourself using it a lot in the future, especially when
analyzing business cases.
25. Societal Marketing Concept
• Societal marketing concept:
– Determine needs/wants of target markets
– Deliver desired satisfactions
– More efficiently and
effectively
– Maintain or improve
consumer’s and society’s
well-being
Societal marketing concept. The idea that a company’s marketing decisions
should consider consumers’ wants, the company’s requirements,
consumers’ long-run interests, and society’s long-run interests.
Three Considerations Underlying the Societal
Marketing Concept
UPS knows that doing what’s right
benefits both consumers and the
company. Social responsibility “isn’t
just good for the planet,” says the
company. “It’s good for business.”
26. Customer Satisfaction and Loyalty
Studies show big differences in the loyalty of customers who are less satisfied, somewhat satisfied, and completely
satisfied. Even a slight drop from complete satisfaction can create an enormous drop in loyalty. Thus, the aim of
customer relationship management is to create not only customer satisfaction but also customer delight.
One recent study found that, even in an improved economy, 55 percent of consumers say they would rather get the
best price than the best brand. Nearly two-thirds say they will now shop at a different store with lower prices even
if it’s less convenient. It’s five times cheaper to keep an old customer than acquire a new one. Thus, companies
today must shape their value propositions even more carefully and treat their profitable customers well.
27. The Changing Marketing Landscape
• The Uncertain Economic Environment: The stock market plunged, and trillions
of dollars of market value simply vaporated. The financial crisis left shell-
shocked consumers short of both money and confidence as they faced losses in
income, a severe credit crunch, declining home values, and rising
unemployment.
• The Digital Age: The explosive
growth in computer,
communications, information,
and other digital technologies
has had a major impact on the
ways companies bring value to
their customers.
• Rapid Globalization: In an
increasingly smaller world,
companies are now connected
globally with their customers and
marketing partners.
In tough economic times, companies must
emphasize the value in their value propositions.
Target is now focusing squarely on the “pay less” side
of its “Expect More. Pay Less.” positioning.
28. Today’s Marketing Connections
• One to one marketing
• Selective relationship
management
• Increase share of
customer
• Partner relationship
management
• Supply chain
management
• Strategic alliances
• The Internet: A vast public web of computer networks
that connects users of all types all around the world to
each other and to an amazingly large information
repository.