Chapter 2 - Essentials of Marketing Textbook (McGraw-Hill 17th edition)

marketing management process

the process of

(1) planning marketing activities

(2) directing the implementation of the plans

(3) controlling these plans

Strategic Management Planning

the managerial process of developing and maintaining a match between an organization's resources and its market opportunities

A Marketing Strategy Mix

Marketing Strategy: specifies a target market and a related marketing mix.

It is a big picture of what a firm will do in some market

Target Market

A fairly homogenous (similar) group of customers to whom a company wishes to appeal

A Marketing Mix

The controllable variables the company puts together to satisfy this target group.

What is a Marketing Strategy?

the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships.

Target Marketing vs Mass Marketing

Target marketing: A marketing mix is tailored to fit some specific target customer.

Mass Marketing: The typical production-oriented approach - vaguely aims at "everyone" with the same marketing mix.

What Makes up a marketing mix?

The Four Ps

Product, Price, Place, Promotion

Channel of Distribution

Any series of firms (or individuals) that participate in the flow of products from producers to final user or consumer

Short and runs directly from a producer to a final user or consumer

Personal Selling

direct spoken communication between sellers and potential customers

mass selling

communicating with large numbers of potential customers at the same time

Advertising

any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor

Publicity

any unpaid form of nonpersonal presentation of ideas, goods, or services

Sales promotion

marketing activities - other than personal selling, advertising, and public relations - that stimulate consumer buying and dealer effectiveness.

Marketing Plan

a written statement of a marketing strategy and the time-related details for carrying out the strategy.

1. What marking mix will be offered, to whom

2. What company resources (shown as costs) will be needed at what rate (month by month perhaps)

3. What results are expected (sales and profits perhaps monthly to quarterly, customer satisfaction levels, and the like)

Operational Decisions

short-run decisions to help implement strategies

Marketing Analytics

The practice of measuring, managing, and analyzing performances to maximize its efficiency and effectiveness

Firms Marketing Program

Customer Lifetime Value (CLV)

The total profits a single customer contributes to a firm over the length of the relationship.

The thee marking metrics needed to satisfy a customer lifetime value

1. Average profit margin

2. Retention rate

3. Acquisition Cost

Retention Rate

the percentage of customers retained as compared to the total number of customers

Acquistion cost

the expense required to acquire a new customer

Customer equity

the expected earnings stream (profitability) of a firm's current and prospective customers over some period of time

Customer Equity Approach

1. acquire new customers (Starter Pack)

2. retain current customers (Automatically sign-up next month)

3. enhance customer value (Value Pack)

Breakthrough opportunities

opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time

SWOT analysis

strengths, weaknesses, opportunities, threats

Market Penetration

Trying to increase sales of a firm's present products in its present markets, probability through a more aggressive marketing mix.

Market Devlopment

Trying to increase sales by selling present products in new markets.

This may involve searching for new uses for a product.

Product Development

Offering new or improved products for present markets.

Diversification

moving into totally different lines of business