Principles of Marketing

Part One

Marketing and the Marketing Process

Ch. 1: Marketing in a Changing World:

Ch. 2: Marketing and Society; Social Responsibility and Marketing Ethics:

Ch  3: Strategic Marketing Planning:

Strategic planning is also the first stage of marketing planning and defines marketing's role in the organization.

3 stages of strategic market planning:

first, the strategic plan and its implications for marketing;

secondly, the marketing process; and
thirdly, ways of putting the plan into action.

Planning encourages systematic thinking. It forces the company to sharpen its objectives and policies, leads to better co-ordination of company efforts, and provides clearer performance standards for control.

The strategic plan involves adapting the firm to take advantage of opportunities in its constantly changing environment. It is the process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities.

Putting plans into action involves four stages: analysis, planning, implementation and control.

The strategic plan contains several components:

The mission,

The strategic objectives,

The strategic audit, SWOT analysis,

Portfolio analysis, ( BCG matrix and GE )

Objectives and ( market/product expantion gird )

Strategies.

Marketing Strategies for Competitive Advantage

To be successful, the company must do a better job than its competitors of satisfying target consumers. Chapter 11 shows how this increasingly depends upon establishing relationships with customers and other participants in the value chain by providing them with quality, value and service.

Providing excellent value and customer service is a necessary but not sufficient means of succeeding in the marketplace. Besides embracing the needs of consumers, marketing strategies must build an advantage over the competition. The company must consider its size and industry position, then decide how to position itself to gain the strongest possible competitive advantage. Chapter 12 explains how to do this.

The design of competitive marketing strategies begins with competitor analysis.

In this way it can discern areas of potential advantage and disadvantage. The company must formally or informally monitor the competitive environment to answer these and other important questions:

Who are our competitors?

What are their objectives and strategies?

What are their strengths and weaknesses?

How will they react to different competitive strategies we might use?

Which competitive marketing strategy a company adopts depends on its industry position. A firm that dominates a market can adopt one or more of several market leader strategies. Well-known leaders include Chanel (fragrances), Coca-Cola (soft drinks), McDonald's (fast food), Komatsu (large construction equipment), Kodak (photographic film), Lego (construction toys) and Boeing (civil aircraft). Market challengers are runner-up companies that aggressively attack competitors to get more market share. For example, Pepsi challenges Coke and Airbus challenges Boeing. The challenger might attack the market leader, other firms of its own sixe, or smaller local and regional competitors. Home runner-up firms will choose to follow rather than challenge the market leader. Firms using market follower strategies seek stable market shares and profit by following competitors' product offers, prices and marketing programmes.14 Smaller firms in a market, or even larger firms that lack established positions, often adopt market nicher strategies. They specialize in serving market niches that large competitors overlook or ignore. Market nichers avoid direct confrontations with the big companies by specializing along market, customer, product or marketing-mix lines. Through clever niching, low-share firms in an industry can be as profitable as their large competitors.

Developing the Marketing Mix

Winning companies are those that meet customer needs economically and conveniently and with effective communication.

The Marketing Plan

 

Executive summary

Current marketing situation
SWOT analysis
Objectives and issues
Marketing strategy
Action programmes
Budgets
Controls ( monitor progres )

Implementation:
Marketing implementation is the process that turns marketing strategies and plants into marketing actions to accomplish strategic marketing objectives.
1- Set goals
2- Measure performance
3- Evaluate performance
4- Take corrective actions
 
 
 
 
 

Part Two

The Marketing Setting

 
Ch 4: The Marketing Environment:
Ch 5: The Global Marketplace
Ch 6: Consumer Buyer Behaviour

 The central question for marketers is; how do consumers respond to various marketing stimuli that the company might use?
 Marketing stimuli consist of the four Ps: product, price, place and promotion.
Other stimuli include significant forces and events in the buyer's environment; economic, technological, political and cultural.
All these stimuli enter the buyer's black box, where they are turned into a set of observable buyer responses (shown on the right-hand side of Figure 6.1): product choice, brand choice, dealer choice, purchase timing and purchase amount.

First, the buyer's characteristics influence how he or she perceives and reacts to the stimuli.
Second, the buyer's decision process itself affects the buyer's behaviour.

Model of buyer behaviour:
Stimuli...................Characteristics /Decision Process............Pd, brand, deal, purchase timing and amount

Characteristics Affecting Consumer Behaviour

Extent of group influence on product and brand choice
Factors influencing behaviour





Psychological Factors

Motivation, Perception, Learning,
Maslow's hierarchy of needs






Types of Buying Decision Behaviour
Buyer decision process

Steps between evaluation of alternatives and a purchase derision

The Buyer Decision Process for New Products

Stages in the Adoption Process
Adopter categorization on (he basis of relative time of adoption of innovations)

Ch 7: Business Markets and Business Buyer Behaviour
Ch 8: Market Information and Marketing Research
 
 

Part Three

Core Strategy

 
Ch 9: Market Segmentation and Targeting
Ch 10: Positioning


Ch 11: Building Customer Relationships: Customer Satisfaction, Quality, Value and Service

Rubbermaid's success results from a simple but effective competitive marketing strategy: to offer consistently the best value to customers. First, the company carefully studies and listens to consumers. It uses demographic and lifestyle analysis to spot consumer trends and conducts focus groups, interviews and in-home product tests to learn about consumer problems and needs, likes and dislikes. Then it gives consumers what they want -  a continuous flow of useful, innovative and high-quality products.

Innovation and new-product development have become a kind of religion in the company.

This chapter tells in more detail how companies can win customers and outperform competitors. The answer lies in the marketing concept - in doing a better job of meeting and satisfying customer needs.
 
Customer delivered value

Customers are satisfied when their expectations are met and delighted when their expectations are exceeded. Satisfied customers remain loyal longer, buy more, are less price sensitive and talk favourably about the company.
 
For customer-centred companies, customer satisfaction is both a goal and an essential factor in company success. Companies that achieve high customer satisfaction ratings make sure that their target market knows it.
These and other companies realize that highly satisfied customers produce several benefits for the company. They are less price sensitive and they remain customers for a longer period.
Thus the purpose of marketing is to generate customer value profitably.
Delivering Customer Value and Satisfaction
To answer this, we will examine the concepts of a value chain and value delivery system.
The value chain breaks the firm into nine value-creating activities in an effort to understand the behaviour of costs in the specific business and the potential sources of competitive differentiation. The nine value-creating activities include five primary activities and four support activities.
 

 
  Value Delivery System
 
 
Retaining Customers
 
• Basic. The company salesperson sells the product, hut does not follow up in any way.

• Reactive. The salesperson sells the product and encourages the customer to call whenever he or she has any questions or prohlems.

• Accountable. The salesperson phones the customer a short time after the sale to check whether the product is meeting the customers expectations. The salesperson also solicits from the customer any product improvement suggestions and any specific disappointments. This information helps the company continuously to improve its offering.

• Proactive. The salesperson or others in the company phone the customer from time to time with suggestions about improved product use or helpful new products.

• Partnership. The company works continuously with the customer and with other customers to discover ways to deliver better value.

Implementing Total Quality Marketing
The task of improving product and service quality should be a company's top priority. Much of the striking global successes of Japanese companies resulted from their building exceptional quality into their products
 
Quality is our best assurance of customer allegiance, our strongest defence against foreign competition and the only path to sustained growth and earnings
 
Performance quality refers to the level at which a product performs its functions.
Conformance quality refers to freedom from defects and the consistency with which a product delivers a specified level of performance.
 
Marketing's commitment to the whole process needs to be particularly strong because of the central role of customer satisfaction to both marketing and total quality management (TQM). Within a quality-centre company, marketing management has two types of responsibility.
First, marketing management participates in formulating the strategies and policies that direct resources and strive for quality excellence.
Secondly, marketing has to deliver marketing quality alongside product quality.
 
Within quality programmes, marketing has several distinct roles.
Firstly, marketing has responsibility for correctly identifying customers' needs and wants, and for communicating them correctly to aid product design and to schedule production.
Second, marketing has to ensure that customers' orders are filled correctly and on time, and must check to see that customers receive proper instruction, training and technical assistance in the use of their product. Thirdly, marketers must stay in touch with customers after the sale, to make sure that they remain satisfied. Finally, marketers must gather and convey customers' ideas for product and service improvement back to the company.
 
Ch 12: Creating Competitive Advantages
 
Three winning strategies and one losing one:
Overall cost leadership
Differentiation Here the company concentrates on creating a highly differentiated product line and marketing programme, so that it comes aeross as the class leader in the industry.
Focus. Here the company focuses its effort on serving a few marke segments well rather than going after the whole market.
Operational excellence. The company provides superior value by leading its industry in price and convenience
Customer intimacy. The company provides superior value by precisely segmenting its markets and then tailoring its products or services to match exactly the needs of targeted customers. It specializes in satisfying unique customer needs through a close relationship with and intimate knowledge of the customer. It builds detailed customer databases for segmenting and targeting, and empowers its marketing people to respond quickly to customer needs. It serves customers who are willing to pay a premium to get precisely what they want, and it will do almost anything to build long-term customer loyalty and to capture customer lifetime value
Product leadership. The company provides superior value by offering a continuous stream of leading-edge products or services that make their ownand competing products obsolete. It is open to new ideas, relentlessly pursues new solutions, and works to reduce cycle times so that it can get new products to market quickly. It serves customers who want state-of-theart products and services, regardless of the costs in terms of price or inconvenience. Examples include Nokia, Tefal and Nike.

Market-Leader Strategies
The leader has the largest market share and usually leads the other firms in price changes, new product introductions, distribution coverage and promotion spending.

Leading firms want to remain no. 1, This calls for action on four fronts.
First, the firm must find ways to expand total demand.

Second, the firm can try to expand its market share further, even if market size remains constant.
Sales promotions and price reductions can produce increased share quickly, but such gains are made at the expense of profitability and disappear once the promotion ends.More often market share gains are achieved by long-term investment in quality, innovation or brand building
.Third, a company can retain its strength by reducing its costs.

Fourthly, the firm must protect its current market share through good defensive and offensive actions.
Defending its Position
First, it must prevent or fix weaknesses that provide opportunities for competitors.
The best defence is a good offence and the best response is continuous innovation.

Part Four

Product

 
Ch 13: Brands, Products., Packaging and Services
Ch 14: Product Development and Life-Cycle Strategies
Ch 15: Marketing Services
 

Part Five

Price

 
Ch 16: Pricing Considerations and Approaches
Ch 17: Pricing Strategies
 

Part Six

Promotion

 
Ch 18: Integrated Marketing Coinmunication Strategy
Ch 19: Mass Communications: Advertising, SalesPromotion and Public Relations
Ch 20: Personal Selling and Sales Management
 

 

Part Seven

Place

 
Ch 21: Managing Marketing Channels
Ch 22: Direct and Online Marketing