MARKETING MANAGEMENT

One chapter a week

Before the mid-term exam

- Introduction
- Company and marketing strategy
- Analysing marketing environment
- Managing marketing information to gain customer insights
- Understanding consumer and business buyer behaviour
- Customer

After mid-term exam

- Product, service and brands

- Developing new products
- Pricing
- Marketing channels
- Promotions

Chapter 1: Marketing: Creating Customer Value and Engagement

Engagement: get people’s real attention for your product

Objectives:

1. 1/ Define marketing and outline the steps in the marketing process

Form of the social sciences (concept which could be different)

Not a static thing, it’s a process

Nature science: things are very clear (like the moon)

1. 2/ Explain the importance of understanding the marketplace and customers and

identify the five-core marketplace concept

1. 3/ Identify the key elements of a customer value-driven marketing strategy and

discuss the marketing management orientations that guide marketing strategy

1. 4/ Discuss customer relationship management (CRM) and identify strategies for

creating value for customers and capturing value from customers in return

1. 5/ Describe the major trends and forces that are changing the marketing landscape
in this age of relationships.
What is marketing?

Marketing is engaging customers and managing profitable customer relationships

Goals of marketing

- Attract new customers by promising superior value

- Keep and grow current customers by delivering satisfactions

MARKETING: PAST AND PRESENT

Traditional

- Making a sale
- Abundance of products in the nearby shopping centers
- TV, Magazine and DM ads

Contemporary (NEW)

- Satisfying customer needs

- Imaginative Websites and mobile phone apps, blogs, YouTube and social media (SM)
- Reach customers directly, personally and interactively

Figure 1.1 The Marketing Process: Creating and capturing customer value

Understanding the marketplace and customer’s needs:

Five core customers and marketplace concepts:

Needs
States of felt deprivation

- Physical needs (food, clothing, warmth and safety)

- Social needs (belonging and affection)
- Individual needs (knowledge and self-expression)

Wants
Form taken by human needs when shaped by culture and individual personality
Demands
Human wants that backed by buying power ($)

Market offerings

Product, services, information or experience

- Offered to satisfy a need or want

Marketing myopia: Paying more attention to the specific products than to the benefits and
experience produced

Customer Value and Satisfaction

Customer form expectations about the value and satisfaction or market offering –

- Satisfied customers buy again $

- Dissatisfied customers may switch to competitor

Setting the right level of expectation

- Low expectations may fail to attract buyers

- High expectations may disappoint buyers

Exchange and relationships

Exchange is the act of obtaining a desired object by offering something in return

Marketing

Market

All actual and potential buyer of a product

Seller and consumers market

Figure 1.2 A modern marketing system

Marketing:
1. The company is finding what do you fight for (your customer, their resources, their
time) you want to win the war (by having a good plan)
2. Understand your customer (so many, you cannot satisfy all of them, so you have to
create segments)
3. Give them what they want

Designing a customer Value-Driven Marketing Strategy

Choosing a value proposition

4. The company must decide how it will differentiate and position itself in the
marketplace.

Marketing management orientations

Oldest
5. Production concept (Ford with their practical and cheap cars)
6. Product concept (Lucky toothpaste in Korea – after the war in 50s)
7. Selling concept (ppl don’t really know the product, they want to be oriented)
8. Marketing concept (understanding costumers and give them what they want)
9. Societal marketing concept (evolution of marketing concept > doing good Most
things for the society) recent

Figure 1.4: Three Considerations Underlying the Societal Marketing Concept

Preparing an Integrated Marketing Plan and Program

Major marketing mix tools

4Ps of marketing

10.Product
11.Price
12.Place
13.Promotion

Marketing mix tools should be blended into a comprehensive integrated marketing program
Customer Relationship Management (CRM)

Delivering superior customer value and satisfaction to build and maintain profitable
customer relationships

14.Customer-perceived value (P): Customer’s evaluation of a marketing offer relative

to those of competing offers
15.Customer satisfaction: Extent to which a product’s perceived performance
matches a buyer’s expectations (E)

It’s not easy because marketer job is to define what ppl want so they will do expectation
about what they would like

Consumer-Generated Marketing

Brand exchanges created by consumers

16.Consumers play an increasing role in shaping their own brand experiences and those
of other consumers.

Uninvited and Invited

17.Consumer-to-consumer exchanges
18.Consumers invited by companies (협찬, 스폰서, 홍보대사 등)
1- New product and service ideas
2- Active role in shaping ads

Partner Relationship Management

Working closely with partners both inside and outside the company to jointly bring more
value to customers

Creating Customer Loyalty and Retention

Keeping customers loyal makes good economic sense.

Customer lifetime value

19.the value of the entire purchases a customer makes over a lifetime

Customer defections can be costly

20.Can lose that customer’s lifetime value

21.May cause other customers to switch
The changing Marketing Landscape

1. Digital age
2. Changing Economics Environment
3. Growth of not-for-profit Marketing
4. Rapid Globalization
5. Sustainable Marketing (big issue for the future)

SESSION 3:

Company and Marketing Strategy: Partnering to Build Customer Engagement, Value,

and Relationships

2.1 Explain company-wide strategic planning and its four steps.

Strategic planning:

 Game plan for long-run survival and growth

 Helps to maintain a strategic fit between its goals and capabilities and changing
marketing opportunities.

Steps in Strategic Planning

Like a pyramid:

1- Goals
2- Objectives
3- Missions

Mission statements:

 Statement of the organization’s purpose

 Market oriented defined in terms of satisfying basic customer needs
 Focus on customers and the customer experience
 Emphasize the company’s strengths

Setting Company Objectives and Goals

 Detailed supporting objectives for each level of management

 Setting a hierarchy of objectives
 Business objectives
 Marketing objectives

Business portfolio

 Collection of businesses and products that make up the company

 Steps in business portfolio planning:
 Analyze the firm’s current business portfolio
 Develop strategies to shape the future portfolio
2.2 Discuss how to design business portfolios and develop growth strategies.

Business portfolio

 Collection of businesses and products that make up the company

 Steps in business portfolio planning:
- Analyze the firm’s current business portfolio
- Develop strategies to shape the future portfolio

Portfolio Analysis

 Management’s evaluation, of the products and businesses that make up the

company

- Identify the strategic business units (S B U s)

- Assess SBUs’ attractiveness and decide on the level of support SBU deserves

 Direct resources toward more profitable businesses and phase down or drop its
weaker ones

The BCG (Boston Consulting Group) Growth-Share Matrix

Growth-Share Matrix

 Evaluates a company’s S B U s in terms of market growth rate and relative market

share

 Problems with Growth-Share Matrix

 Difficult, time consuming, and costly
 Difficult to define and measure
 Provides little advice for future planning

The Product/Market Expansion Grid

Downsizing

 Products or business units that are unprofitable or no longer fit the company’s overall
strategy

 Reasons to abandon products or markets

 Rapid growth of the company
 Lack of experience in a market
 Change in market environment
 Decline of a particular product

2.3 Explain marketing’s role in strategic planning and how marketing works
with its partners to create and deliver customer value.

Planning Marketing: Partnering to Build Customer Relationship

 Provides a guiding philosophy

 Marketing concept—company strategy should create customer value and build
profitable relationships

 Provides inputs to strategic planners

 Identify market opportunities and potential to take advantage of them

 Designs strategies for reaching the business unit’s objectives

Partnering with Other Company Departments

 Company departments are links in the company’s internal value chain.

 Firm’s success depends on how well the various departments coordinate their
activities.

 Marketers should ensure all the departments are customer-focused and develop
a smooth functioning value chain.

Partnering with others in the Marketing System

 Companies should assess value chains

 Internal departments
 External: suppliers, distributors and customers

 Value delivery network is composed of the company, its suppliers, its distributors,
and its customers
2.4. Describe the elements of a customer value-driven marketing strategy and
mix and the forces that influence them.

Managing Marketing Strategies and the Marketing Mix

Market Segmentation and Market Targeting

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 targeting

 Evaluating each market segment’s attractiveness and selecting one or more

segments to enter

Market Differentiation and Positioning

 Positioning the product to occupy a clear, distinctive, and desirable place relative to
competing products
 Differentiating the market offering to create superior customer value
 The entire marketing program should support the chosen positioning strategy

The Four Ps of the Marketing Mix

3.1 MARKETING ENVIRONMENT

Outside forces that affect marketing management’s ability to build and maintain successful
relationships with target customers

 Microenvironment: Actors close to the company that affect its ability to serve its
customers
 Macroenvironment: Larger societal forces that affect the microenvironment

Figure 3.1 Actors in the Microenvironment

Suppliers:

Provide the resources needed by the company to produce its goods and services

 Supplier problems seriously affect marketing

 Supply shortages or delays
 Labor strikes
 Price trends of key inputs

Marketing Intermediaries:

Marketing intermediaries help the company to promote, sell, and distribute its products to
final buyers.

- Resellers
- Physical distribution firms
- Marketing services agencies
- Financial intermediaries

Competitors:

Marketers must gain strategic advantage by positioning products strongly against

competitors.
 No single strategy is best for all companies.

Publics:

Publics: any group that has an actual or potential interest in or impact on an organization’s
ability to achieve its objectives

- Financial
- Media
- Government
- Citizen action
- Local
- General
- Internal

Customers:

Five types of customer markets

- Consumer markets
- Business markets
- Reseller markets
- Government markets
- International markets

Figure 3.2: Major Forces in the Company’s Macroenvironment

3.2 DEMOGRAPHIC ENVIRONMENT

Demography is the study of human populations in terms of size, density, location, age,
gender, race, occupation, and other statistics.

 Marketers analyze:
 Changing age and family structures
 Geographic population shifts
 Educational characteristics
 Population diversity

How should marketers respond to demographic changes?

Economic Environment

 Economic factors affect consumer purchasing power and spending

 Economic up and down, such as recession
 Inflation and deflation
 Exchange rates, global trade, etc.

 Outcomes
 Consumers’ price sensitivity
 Changes in consumer spending
 Differences in income distribution

 Economic factors affect consumer purchasing power and spending

 Changes in consumer spending
 Differences in income distribution

How do marketers respond to economic changes?

Nature Environment

Physical environment and natural resources needed as inputs by marketers or affected by

marketing activities

 Environmental sustainability concerns have grown steadily over the past three
decades.

 Trends:
 Increased population, increased middle class  Bigger demand for products 
Shortages of raw materials, increased pollution  Increased government
intervention

Technological Environment

New technologies create new markets and opportunities.

 Digital Technology
 Radio-frequency identification (RFID) is technology to track products through
various points in the distribution channel.
 Robotics
 AI
 IoT

Political Environment
Trade agreements, tariffs, and
import/export restrictions affect
pricing and supply chains.

Major U.S. Legislation Affecting Marketing

Governments regulate industries to ensure fair competition, protect consumers, and

maintain economic stability.

 Legislation regulating business is intended to protect

 companies from each other
 consumers from unfair business practices
 the interests of society against unrestrained business behavior

Cultural Environment

Institutions and other forces that affect a society’s basic values, perceptions, and behaviors

 Persistence of cultural values

 Core beliefs and values have a high degree of persistence.
 Secondary beliefs and values are more open to change.

Responding to the Marketing Environment

• Reactive firms passively accept the marketing environment and do not try to change
it.

• Proactive firms develop strategies to change the environment.

> They take aggressive actions to affect the publics and forces in their marketing
environment.

Corporate Social Responsibility (CSR) and Ethical Consumerism

Socially responsible companies actively seek out ways to protect the long-run interests of
consumers and the environment.

 Companies develop policies, guidelines, and other responses to complex social

responsibility issues.

Socially responsible consumers

 Socially responsible consumers (Ethical consumers) think about consequences of
their consumer behavior

Cause(-Related) Marketing (CRM)

Cause(-Related) Marketing (CRM): a strategic partnership between a business and a social

cause, where a company commits to supporting a charitable or social cause while
marketing its products or services.

 Companies use cause-related marketing to

 Exercise their social responsibility
 Build more positive images

 Primary form of corporate giving

 Controversy—strategy for selling more rather than a strategy for giving


CHAPTER 4: MANAGING MARKETING INFORMATION TO GAIN CUSTOMER INSIGHTS

4.1 Gaining insights about the marketplace and customers

Information + @ = Marketing Insights

 Customer needs and motives for buying are difficult to determine.

 Required by companies to obtain customer and market insights

 Fresh marketing information-based understandings of customers and the
marketplace

 Generated in great quantities with the help of information technology and online
sources
 Big data refers to the huge and complex data sets generated by today’s
sophisticated information generation, collection, storage, and analysis
technologies

The marketing Information System

4.2 Competitive Marketing Intelligence

Systematic monitoring, collection, and analysis of information

 About consumers, competitors, and developments in the marketing environment

Assessing Marketing Information Needs

A good M I S balances the information users would like to have against

 What they really need

 What is feasible to offer

Obtaining, analyzing, storing, and delivering information is costly.

 Firms must decide whether the value of the insight is worth the cost.

Develop information

Internal databases, marketing intelligence, and market research

 Analyze and use the information

4.3 Marketing Research

Systematic design, collection, analysis, and reporting of data relevant to a specific

marketing situation facing an organization

 Approaches followed by firms:

 Use own research departments
 Hire outside research specialists: Ipsos, Kantar, etc.
 Purchase data collected by outside firms (Syndicate firms)

Market research vs marketing research

The Marketing Research Process

Defining the Problem and Research Objectives

Exploratory research

 Used to gather preliminary information

 Helps to define problems and suggest hypotheses

Descriptive research

 Used to better describe the market potential for a product or the demographics and
attitudes of consumers

Causal research

 Used to test hypotheses about cause-and-effect relationships

Research plan

 Outlines sources of existing data

 Determines specific research approaches

 Contact methods
 Sampling plans
 Instruments that researchers will use to gather new data

 Should be presented in a written proposal

 Topics covered in a research plan:
 Problems and research objectives
 Information to be obtained
 How results will help decision making
 Estimated research costs
 Type of data required

Quantitative VS Qualitative Research

Data sources: Secondary Data

 Information that already exists

 Collected for another purpose

 Sources:
 Company’s internal database
 Purchased from outside suppliers
 Commercial online databases
 Internet search engines

Advantages Disadvantages
 Potentially Irrelevant
 Low cost
 Inaccurate
 Obtained quickly
 Dated
 Cannot collect otherwise
 Biased
Primary Data : Original information collected firsthand by a researcher for a specific
purpose.

Research Approaches

 Observational research
 Ethnographic research
 Survey research
 Asking people questions about their knowledge, attitudes, preferences, and
buying behavior
 Experimental research
 Selecting matched groups of subjects, giving them different treatments,
controlling related factors, and checking for differences in group responses
 A/B testing

Sampling plan

 A sample is a segment of the population selected to represent the population as a

whole.

Types of samples

Probability Sample
Simple random Every member of the population has a known and equal chance
sample of selection.
Stratified random The population is divided into mutually exclusive groups (such as
sample age groups), and random samples are drawn from each group.
The population is divided into mutually exclusive groups (such as
Cluster (area) sample blocks), and the researcher draws a sample of the groups to
interview.
Nonprobability Sample
The researcher selects the easiest population members from
Convenience sample
which to obtain information.
The researcher uses his or her judgment to select population
Judgment sample
members who are good prospects for accurate information.
The researcher finds and interviews a prescribed number of
Quota sample
people in each of several categories.

Research instruments

 Questionnaires can be administered in person, by phone, by e-mail, or online.

 Closed-ended questions
 Open-ended questions

 Mechanical instruments include

 People meters
 Checkout scanners
 Neuromarketing

Implementing the research plan

 Data collection
 Processing the data
 Analyzing the data

CHAPTER 5: UNDERSTANDING CONSUMER AND BUSINESS BUYER BEHAVIOR

Consumer buyer behavior:

 Buying behavior of final consumers

Consumer market
 All the individuals and households that buy or acquire goods and services for
personal consumption

The model of Buyer Behavior

Cultural Factors:

 Culture
 Set of basic values, perceptions, wants, and behaviors learned by an individual
from family and other important institutions
 Subculture
 Group of people with shared value systems based on common life experiences
and situations
 Social class
 Relatively permanent and ordered divisions in a society whose members share
similar values, interests, and behaviors

Social Factors

 Groups
 Word-of-mouth influence
 Opinion leaders
 Online social networks
 Family
 Roles and status

Self-
Personal Factors

 Occupation
 Age and family life cycle
 Economic situation
 Lifestyle
 Personality and self-concept

Psychological Factors

 Motivation
 Perception
 Learning
 Beliefs and Attitudes

Maslow’s Hierarchy of Needs

Learning

- 동인(drives)
- 자극(stimuli)
- 단서(cues)
- 반응(responses) = PAVLOV
- 강화(reinforcement)

Beliefs and Attitudes

Buyer decision process

Stages in the buyer decision process

 Need recognition
 Information search
 Alternative evaluation
 Purchase decision
 Postpurchase behavior

ADAPTION AND DIFFUSION PROCESS

Five stages of the adoption process

1. Awareness
2. Interest
3. Evaluation
4. Trial
5. Adoption

The diffusion process for new products

 Innovators, early adopters, early mainstream, late mainstream, or lagging adopters

Characteristics Influencing an Innovation’s Rate of Adoption

5.4 BUSINESS BUYER BEHAVIOR.

 Business buyer behavior

 Purchasing goods and services are used in the production of other products and
services

 Business-to-business (B-to-B) marketers must understand business markets and

business buyer behavior

 Business buying process: Determining which products and services to purchase

 Finding, evaluating, and choosing among alternative suppliers and brands

Business market

 Business markets are huge and involve more money and items than consumer
markets.

 Differ from consumer markets in terms of

 Market structure and demand
 Nature of the buying unit
 Types of decisions and the decision process
Market structure and demand

 Business market structure and demand

 Fewer but larger buyers
 Derived demand: Business demand that comes from the demand for consumer
goods
 Inelastic and fluctuating demand

Nature of the Buying Unit

 Nature of the business market buying unit

 More decision participants, since it is
GROUP DECISION MAKING
 More professional purchasing effort

Types of decisions

 Business purchases
 More complex buying decisions
 Large sums of money
 Complex technical and economic considerations
 Interactions among people at many levels of the buyer’s organization

Decision process

 Buying processes For example, I decide on what to eat

 Longer and more formalized procedures for lunch
 Buyer and seller more dependent on each other VS

WE DECIDE ON WHAT TO EAT FOR

A model of business buyer behavior

 Buying behavior of organizations

 Business-to-business (B-to-B) marketers

 Business buying process

 Market structure and demand

 Types of buying situations

 Buying center—decision-making unit