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Objective 1-1 Define marketing and outline the steps in the marketing process.
Marketing: Strategies and activities to acquire and engage customers, build relationships, and create customer value
Marketing process: Five steps
Understanding marketplace and customer needs
Designing customer value-driven marketing strategy
Constructing marketing mix for superior value delivery
Engaging customers, building profitable relationships, and creating delight
Capturing value from customers
Objective 1-2 Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
- Outstanding marketing companies prioritize understanding customer needs, wants, and demands
- They design market offerings to satisfy customer desires and build value-laden relationships
- Aim to capture customer lifetime value and increase share of customer
- Result: Increased long-term customer equity for the firm
- Core marketplace concepts include: needs, wants, demands, market offerings, value, satisfaction, exchange, relationships, and markets
- Companies create a value proposition, promising benefits to satisfy customer needs
- Value proposition fulfilled through market offerings, delivering customer value and satisfaction
- Resulting in long-term exchange relationships with customers
Objective 1-3 Identify the key elements of a customer value–driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Designing a winning marketing strategy involves:
Identifying target market segments through market segmentation
Selecting segments for cultivation through target marketing
Deciding on differentiation and positioning in the marketplace
Five competing market orientations:
Production concept: Focus on production efficiency and price reduction
Product concept: Emphasis on product quality, performance, and innovation, requiring minimal promotional efforts
Selling concept: Belief that large-scale selling and promotion efforts are necessary to stimulate consumer buying
Marketing concept: Prioritizes understanding target market needs and wants, delivering desired satisfactions more effectively and efficiently than competitors
Societal marketing concept: Promotes customer satisfaction and long-term societal well-being through sustainable marketing strategies to achieve company goals and social responsibilities
Objective 1-4 Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Customer relationship management (CRM) defined as:
Engaging customers
Building and maintaining profitable relationships
Delivering superior value and satisfaction
Customer-engagement marketing:
Aims for brand integration into consumers' conversations and lives
Involves direct and continuous customer involvement in shaping brand experiences
Goal of CRM and customer engagement:
High customer equity, representing total customer lifetime values
Building lasting relationships:
Requires creation of superior customer value and satisfaction
Company captures value from customers:
In form of profits and customer equity
Objective 1-5 Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Marketing experiencing dramatic changes, requiring new thinking and strategies
Digital age providing new ways to understand, engage, and relate to individual customers
Advances in digital, social, and mobile media revolutionizing marketing
Online, mobile, and social media marketing offering selective targeting and deeper engagement
Big data and improved marketing analytics, including AI, enhancing customer interaction
Not-for-profit organizations integrating marketing into their strategies
Global connectivity influencing marketers' relationships with customers, partners, and competitors
Marketers addressing social and environmental impacts of their actions
Major development: Engaging customers and creating/capturing customer value
Marketers seizing opportunities to build value-laden relationships with customers, partners, and society
Objective 2-1 Explain company-wide strategic planning and its four steps.
Strategic planning sets stage for company's planning
Marketing contributes to strategic planning, with defined role in overall plan
Strategic planning involves:
Developing strategy for long-term survival and growth:
Defining company's mission
Setting objectives and goals
Designing business portfolio
Developing functional plans
Mission should be:
Market-oriented
Realistic
Specific
Motivating
Consistent with market environment
Mission transformed into detailed supporting goals and objectives
Goals and objectives guide decisions about business portfolio
Each business and product unit develops detailed marketing plans aligned with company-wide plan
Objective 2-2 Discuss how to design business portfolios and develop growth strategies.
Management plans business portfolio guided by company's mission statement and objectives
Aims to create portfolio aligning with company's strengths and weaknesses to environmental opportunities
Analyzes and adjusts current business portfolio
Develops growth and downsizing strategies for future portfolio adjustments
Companies may use formal portfolio-planning methods
Many companies adopting customized portfolio-planning approaches suited to their unique situations and business environments
Objective 2-3 Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value.
Major functional departments collaborate under the strategic plan
Marketing contributes to strategic planning with marketing concept philosophy and insights on market opportunities
Marketing designs strategies within business units to achieve objectives profitably
Emphasizes partnership relationship management with other departments to create an effective value chain serving the customer
Partners effectively with other companies in the marketing system to create a competitively superior value delivery network
Objective 2-4 Describe the elements of a customer value–driven marketing strategy and mix and the forces that influence them.
Customer engagement, value, and relationships central to marketing strategy
Market segmentation, targeting, differentiation, and positioning used to divide total market
Company selects segments it can best serve and decides how to bring value to target consumers
Designs integrated marketing mix to produce desired response in target market
Marketing mix includes product, price, place, and promotion decisions (the four Ps)
Objective 2-5 Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment.
Company engages in marketing analysis, planning, implementation, and control to find best strategy and marketing mix
Marketing plan serves as blueprint for articulating and implementing marketing strategy
Main components of marketing plan: executive summary, current marketing situation, objectives, strategies, execution plans, budgets, and controls
Implementation crucial for successful execution of strategies
Marketing departments organized in functional, geographic, product, or market management structures
Shift towards customer relationship management in organizational focus
Marketing organizations responsible for operating and strategic control
Marketing accountability a top concern, necessitating better measures of marketing return on investment
Increasing use of customer-centered measures in strategic decision making
Objective 4-1 Explain the importance of information in gaining insights about the marketplace and customers.
Marketing process begins with understanding marketplace and consumer needs
Company transforms collected data into useful information and customer insights
Information on competitors, resellers, and market forces also necessary
Marketers see information as important strategic asset and marketing tool
Well-analyzed information aids in better decision-making and identifies growth opportunities
Information contributes to competitive advantage
Objective 4-2 Define the marketing information ecosystem and discuss its parts.
Marketing information ecosystem (MIE) includes people, processes, and assets for assessing managers' information needs, developing information, and applying it for actionable insights
Well-designed MIE begins and ends with users
MIE assesses information needs, serving marketing and other managers, and may extend to external partners
Develops information from internal databases, marketing intelligence activities, and market research
Internal databases provide quick but often need adaptation for marketing decisions
Marketing intelligence activities gather everyday information from the external marketing environment, including digital platforms
Market research collects information relevant to specific marketing problems
MIE helps users analyze and apply information to develop actionable customer and market insights
Objective 4-3 Outline the role of marketing research and the steps in the marketing research process.
Traditional marketing research transformed by new digital data gathering technologies
Traditional methods like in-person surveys and focus groups giving way to more agile, immediate, and cost-effective digital methods
Traditional marketing research still widely used and important despite changing role
Marketing research process:
Define problem and research objectives (exploratory, descriptive, or causal)
Develop research plan for collecting primary and secondary data
Implement research plan by gathering, processing, and analyzing information
Interpret and report findings, applying sophisticated statistical procedures and models
Internal and external secondary data sources offer quicker and cheaper information, but primary data may be necessary
Primary data collection methods include observation, surveys, interviews, experiments, digital text analysis, sensors, and online tracking
Each primary data method has advantages and disadvantages
Various research contact methods (mail, telephone, personal interview, online) have unique advantages and drawbacks
Substantial shift towards digital contact methods in recent trends
Objective 4-4 Explain how companies analyze and use marketing information.
Data from internal databases, marketing intelligence, and marketing research require organization and analysis
Many companies utilize customer relationship management (CRM) platforms for integrated data analysis, gaining a 360-degree view of individual customers
Marketing analytics applied to extract meaningful patterns from big data, gain customer insights, and assess marketing performance
Increasing use of artificial intelligence (AI) in marketing analytics for assessing, addressing, servicing, and selling to customers
Marketing data must be converted into information and insights for better marketing decisions
Marketing information ecosystem (MIE) ensures availability of useful information and insights to decision-makers
Use of regular reports, updates, and nonroutine information for special situations facilitated through company intranets and extranets
Modern technology allows marketing managers direct access to marketing information anytime and from anywhere
Objective 4-5 Discuss the special issues some marketing researchers face, including public policy and ethics issues.
Special marketing research situations in small business, not-for-profit, and international contexts
Small businesses and nonprofits can conduct effective research with limited budgets
International marketing research follows similar steps as domestic research but faces challenges like cultural and language differences
Public policy and ethical issues in marketing research include maintaining consumer privacy, securing data, and preventing misuse of findings
Companies must address these issues proactively
Objective 5-1 Define the consumer market and construct a simple model of consumer buyer behavior.
Consumer market includes individuals and households acquiring goods and services for personal use
Simplest model of consumer buyer behavior: stimulus-response model
Marketing stimuli (the four Ps) and environmental forces (economic, technological, etc.) enter consumer's decision process
Consumer's characteristics and decision process result in observable buyer responses
Responses include brand choice, purchase location and timing, brand engagement, and relationship behavior
Objective 5-2 Explore the four major factors that influence consumer buyer behavior.
Consumer buyer behavior influenced by four key sets of characteristics: cultural, social, personal, and psychological
Culture is fundamental determinant of wants and behavior, subcultures add diversity based on factors like age and ethnicity
Brands and marketing campaigns increasingly multicultural, aiming to appeal to consumer similarities across subcultural segments
Marketers supplement general-market offerings with products tailored to specific subcultural segments like Hispanic American, Black American, and Asian American consumers
Social factors such as reference groups, family, friends, and influencers strongly influence product and brand choices
Personal characteristics like age, life-cycle stage, occupation, economic circumstances, personality, and lifestyle impact buying decisions
Psychological factors (motivation, perception, learning, beliefs, and attitudes) provide insights into buyer decision-making process
Objective 5-3 Understand the stages in the buyer decision process and the major types of buying decision behavior.
Buyer decision process consists of need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior
Marketer's role: Understand buyer behavior at each stage and influencing factors
Need recognition: Consumer identifies problem or need that product or service can satisfy
Information search: Consumer seeks more information about potential solutions
Alternative evaluation: Consumer evaluates brands in choice set using gathered information
Purchase decision: Consumer makes decision and buys product
Post-purchase behavior: Consumer takes action based on satisfaction or dissatisfaction
Buying behavior varies based on product type and decision complexity
Complex buying behavior: High involvement, significant brand differences
Dissonance-reducing behavior: High involvement, little brand difference
Habitual buying behavior: Low involvement, little brand difference
Variety-seeking buying behavior: Low involvement, significant brand differences
Marketers must understand customer journey to create positive brand experiences leading to purchase behavior, engagement, and advocacy
Digital world offers opportunities to enhance customer journey at different points in time and space.
Objective 5-4 Describe the adoption and diffusion process for new products.
Product adoption process: Awareness, interest, evaluation, trial, adoption
New-product marketers focus on helping consumers and organizations move through these stages
Diffusion process for new products: Consumers respond at different rates based on characteristics
Consumer categories: Innovators, early adopters, early mainstream, late mainstream, lagging adopters
Different marketing approaches may be needed for each group
Marketers target potential early adopters, especially opinion leaders, to promote new products
Six product characteristics influencing adoption rate: Relative advantage, compatibility, complexity, trialability, observability, risk
Objective 6-1 Define the business market and explain how business markets differ from consumer markets.
Business market includes organizations buying goods/services for production, resale, or rental
Differs from consumer markets with fewer but larger buyers, derived demand, and complex buying decisions
Objective 6-2 Identify the major factors that influence business buyer behavior.
Business buyers' decisions vary with straight rebuys, modified rebuys, and new tasks
Buying center comprises individuals with different roles influencing decisions
Environmental, organizational, interpersonal, and individual influences affect buying process
Objective 6-3 List and define the steps in the business buying decision process.
Eight stages: problem recognition, need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification, performance review
New task buying involves all stages, while modified or straight rebuys may skip some
Majority of B-to-B purchases occur within long-term customer relationship framework
Objective 6-4 Discuss how online, mobile, and social media have changed business-to-business marketing.
Rise of e-procurement enables online purchasing by business buyers, providing access to new suppliers and faster order processing
Business marketers leverage online, mobile, and social media platforms for engagement, marketing, sales, support, and relationship management
Objective 6-5 Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions.
Institutional markets (schools, hospitals) serve captive patrons with low budgets
Government markets (federal, state, local) purchase goods/services for public needs
Government buying characterized by open bidding, negotiated contracts, and strict oversight, requiring more forms and time for orders
Objective 7-1 Define the major steps in designing a customer value–driven marketing strategy: market segmentation, targeting, differentiation, and positioning.
Begins with selecting customers and determining value proposition
Four steps: Market segmentation, targeting, differentiation, positioning
Segmentation divides market into distinct groups with separate needs
Targeting evaluates segment attractiveness and selects segments to serve
Differentiation creates superior customer value different from competitors
Positioning carves unique space for market offering in target customers' minds
Objective 7-2 Discuss the major bases for segmenting consumer and business markets.
Consumer: Geographic, demographic, psychographic, behavioral segmentation
Business: Demographics, operating characteristics, purchasing approaches, situational factors, personal characteristics
Segmentation effectiveness relies on segments being measurable, accessible, substantial, differentiable, actionable
Objective 7-3 Explain how companies identify attractive market segments and choose a market-targeting strategy.
Evaluate segment size, growth, attractiveness, compatibility with objectives and resources
Choose from undifferentiated, differentiated, concentrated, or micromarketing targeting strategies
Selection depends on company resources, product nature, variability, life-cycle stage, market variability, and competitive strategies
Objective 7-4 Discuss how companies differentiate and position their products for maximum competitive advantage.
Three steps: Identifying possible differentiations, choosing advantages, selecting positioning strategy
Value proposition: Full mix of benefits on which brand is positioned
Winning value propositions: More for more, more for the same, same for less, less for much less, more for less
Positioning statements summarize target segment, positioning concept, and points of difference with competition
Effective communication and delivery of chosen position to market
Objective 18-1 Discuss the need to understand competitors as well as customers through competitor analysis.
Effective marketing strategy considers competitors alongside customers
Building profitable relationships requires outperforming competitors in satisfying customer needs
Competitor analysis involves identifying major competitors, understanding objectives, strategies, strengths, weaknesses, and reaction patterns
Continuous competitive intelligence collection, interpretation, and distribution are essential
Marketing managers should access reliable competitor information to inform decisions
Objective 18-2 Explain the fundamentals of competitive marketing strategies based on creating value for customers.
Strategy depends on industry and market position: leader, challenger, follower, or nicher
Market leader aims to expand total market, protect and expand market share
Market challenger aggressively seeks to expand market share by attacking competitors
Market follower avoids risks but seeks growth opportunities, sometimes achieving higher returns
Market nicher specializes in specific end use, customer size, group, geographic area, or service
Objective 18-3 Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization.
Competitive orientation is vital but should not overshadow customer focus
Companies may face more risk from emerging consumer needs and new competitors than existing ones
True market-centered organizations balance customer and competitor considerations for a genuine market orientation
