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Assignment of Marketing Management - Doc

   

Added on  2020-10-09

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WOLLEGA UNIVERSITYCOLLEGE OF BUSINESS AND ECONOMICSDEPARTMENT OF BUSINESS MANAGEMENTSCHOOL OF GRADUATE STUDIESMBA PROGRAMASSIGNMENTOFMARKETINGMANAGEMENTBook ReviewPRINCIPLE OF MARKETING MANAGEMENT PHILIP KOTLER VERONICAWONG JOHN SAUNDERS GARY ARMSTRONG, FOURTH EUROPEAN EDITIONPrepared BY: Lalise AmsaluID NO. WUSPG/355/16Submitted to: Neeraj Bali (PhD) JUNE: 2020 Nekemte, Ethiopia1

Chapter 1Marketing nowToday’s successful companies – whether large or small, for-profit or non-profit, domestic orglobal – share a strong focus and a heavy commitment to marketing. Many people think ofmarketing as only selling or advertising. However, marketing combines many activities –marketing research, product development, distribution, pricing, advertising, personal selling andothers – designed to sense, serve and satisfy consumer needs while meeting the organization’sgoals. Marketing seeks to attract new customers by promising superior value, and to keep currentcustomers by delivering satisfaction. We defined marketing as a social and managerial processby which individuals and groups obtain what they need and want through creating andexchanging products and value with others. The core concepts of marketing are needs, wants anddemands; products and services; value, satisfaction and quality; exchange, transactions andrelationships; and markets. Wants are the form assumed by human needs when shaped by cultureand individual personality. When backed by buying power, wants become demands. Peoplesatisfy their needs, wants and demands with products and services. A product is anything thatcan be offered to a market to satisfy a need, want or demand. Products also include services andother entities such as persons, places, organizations, activities and ideas. We explained therelationships between customer value, satisfaction and quality. In deciding which products andservices to buy, consumers rely on their perception of relative value. Customer value is thedifference between the values the customer gains from owning and using a product and the costsof obtaining and using the product. Customer satisfaction depends on a product’s perceivedperformance in delivering value relative to a buyer’s expectations. Customer satisfaction isclosely linked toquality,leading many companies to adopt total quality management (TQM)practices. Marketing occurs when people satisfy their needs, wants and demands throughexchange. Beyond creating short-term exchanges, marketers need to build long-termrelationships with valued customers, distributors, dealers and suppliers. We then definedmarketing management and examined how marketers manage demand and build profitablecustomer relationships. Marketing managements the analysis, planning, implementation andcontrol of programmers designed to create, build and maintain beneficial exchanges with targetbuyers for the purpose of achieving organisational objectives. Marketing is at times alsoconcerned with changing or even reducing demand. Beyond designing strategies to attract new2

customers and create transactions with them, today’s companies are focusing on retaining currentcustomers and building lasting relationships through offering superior customer valueandsatisfaction.The five marketing management philosophies were compared. The productionconcept holds that consumers favor products that are available and highly affordable;management’s task is to improve production efficiency and bring down prices. The productconcept holds that consumers favor products that offer the most quality, performance andinnovative features; thus, little promotional effort is required. The selling concept holds thatconsumers will not buy enough of the organization’s products unless it undertakes a large-scaleselling and promotion effort. The marketing concept holds that achieving organizational goalsdepends on determining the needs and wants of target markets and delivering the desiredsatisfactions more effectively and efficiently than competitors do. The societal marketingconcept holds that the company should determine the needs, wants and interests of targetmarkets. Generating customerPOM4_C01.qxd 6/21/06 7:54 AM Page 36satisfaction and long-run societal well-being are the keys to achieving both the company’s goalsand its responsibilities. Finally, the marketing process linked together the full range of marketingactivities covered in the remainder of this book. Strategy, marketing and planning viewsmarketing as part of a wider organization where marketing is just one activity that helps delivercustomer value. Marketing, and all other functions, are driven by an organisation’smission andvision. Chief among strategic marketing decisions is the choice among the portfolio of activitiesthat a company can pursue. The relationship between marketing and other business functions isas critical to success as is the organization of marketing. Marketing exists within amacroenvironmentof political, economic, social and technological issues that greatly influencemarkets. Closer to a marketer is themicroenvironmentthat is particular to a company. Althoughthe macro- and microenvironments are always in flux and changing, there are three major trendsthat are hugely important to marketing. These are the development of the Internet and e-marketing, globalization, and the social environment and social responsibility.Customersarecentral to marketing activity. All marketing activity ends with the consumers. In trying tounderstand them, marketers draw on ideas from all areas of human knowledge. The study flowsfrom understanding lifestyles, attitudes andbehaviour before there is the need or want for aproduct or service. It examines the processes that lead to an exchange and behavior after apurchase. Most marketing is from business to business. Business-to-business buying is more3

complex than consumer buying because of the number of influences on corporate decisions. Thisvariety and complexity of business-to-business buying is made greater by government andinternational involvement. Marketing research is a wide range of analysis tools. The variety ofthese activities is huge and the technical requirements are so varied that marketing research is adistinct sub-profession of marketing. Marketing strategy aligns an organization with a group ofcustomers whom it can serve better than its competitors do. Market segmentation breaks amarket into groups of similar customers. Target markets are chosen from among the marketsegments and market positioning is used to form favorable associations in customers’ minds. Nolonger does marketing focus on a single transaction but now it seeks to establish relationships.Relationship marketing depends upon knowing customers and providing value. Competitivestrategy recognizes that an organization needs to address competitors ‘reactions in developing amarketing strategy. Successful marketing strategy gives customers value in ways thatcompetitors find hard to match. Marketing is implemented through the four Ps of the marketingmix: product,promotion,price and place. Each of the Ps has many facets and poses a myriad ofalternatives. The marketing strategy guides the choice among the marketing mix so that itprovides customer value.Chapter 2: Strategic marketing partnersStrategic planning is the process of developing and maintaining a strategic fit between theorganization’s goals and capabilities and its changing marketing opportunities. It is the base forthe long term planning of the firm. At a corporate level, the firm starts defining the company’smission. A mission statement is a statement of the organization’s purpose. The mission leads toa hierarchy of goals.Based on this, the management must plan the businessportfolio: the collection of businessesand products that make up the company. Portfolio analysis is the process by whichmanagement evaluates the products and businesses that make up the company. The first step isidentifying the strategic business units (SBU) that are vital to the company. The well-known4

model of the Boston Consulting Group (BCG) sorts the SBUs into a growth-share matrix,leading to four types of SBUs:1.Stars: high growth and high share units, in need of investment.2.Cashcows: low-growth, high share units, producing cash.3.Questionmarks: low-share units, in high-growth markets. Require cash, but can turn outto be unprofitable.4.Dogs: low-growth, low-share units, which are not very profitable.After the units are classified, the company should determine in which units to build share, holdshare, harvest the profits or divest the SBU.Designing the business portfolio also means looking at future businesses. The product/marketexpansion grid is a portfolio-planning tool for identifying company growth opportunitiesthrough:Market penetration: company growth by increasing sales of current products to currentmarket segments without changing the product.Market development: company growth by identifying and developing new marketsegments for current company products.Product development: company growth by offering modified or new products to currentmarket segments.Diversification: company growth through starting up or acquiring businesses outside thecompany’s current products and markets.Companies also need strategies for downsizing, which means reducing the business portfolio byeliminating products or business units that are not profitable or that no longer fit the company’soverall strategy.Marketing provides a philosophy, input and strategies for the strategic business units. Besidescustomer relationship management, marketers must also invest in partner relationshipmanagement to form an effective value chain: the series of internal departments that carry outvalue-creating activities to design, produce, market, deliver and support a firm’s products. When5

trying to create customer value, a firm must go beyond the internal value chain and partner upwith others in the value delivery network. The value delivery network is the network composedof the company, its suppliers, its distributors and ultimately its customers who partner with eachother to improve the performance of the entire system.Marketing strategyMarketing strategy is the marketing logic by which the company hopes to create customervalue and achieve profitable customer relationships. The company must choose which customersto serve and how to serve them. This process involves four steps:1.Market segmentation: dividing a market into distinct groups of buyers who havedifferent, needs, characteristics or behavior and who might require separate products ormarketing programmers. A market segment is a group of consumers who respond in asimilar way to a given set of marketing efforts.2.Market targeting is the process of evaluating each market segment’s attractiveness andselecting one or more segments to enter.3.Positioning is arranging for a product to occupy a clear, distinctive and desirable placerelative to competing products in the minds of consumers.4.Differentiation is actually differentiating the market offering to create superior -customer value.The marketing mix is 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. Product refers to thecombination of goods and service the firm offers. Price is the amount the customer pays toobtain the product. Place refers to the availability of the product. Promotion relates to theactivities that communicate the benefits of the product.Managing the marketing process requires four marketing management functions. The first ismarketing analysis, starting with a SWOT analysis. A SWOT analysis is an overall evaluationof the company’s strengths (S – internal capabilities), weaknesses (W – internal limitations),opportunities (O – external factors that can be profitable) and threats (T – external factors thatmight challenge the company). Secondly, marketing planning involves choosing the right6

marketing strategies. Third is marketing implementation: turning marketing strategies andplans into marketing actions to accomplish strategic marketing objectives. And finally, there ismarketing control: measuring and evaluating the results of marketing strategies and plans andtaking corrective action to ensure that the objectives are achieved. Operating control refers tochecking the performance against the annual plan, while strategic control involves looking at thematch between strategies and opportunities.Nowadays, marketers need to back up their spending by measurable results. The return onmarketing investment (marketing ROI) is the net return from a marketing investment dividedby the costs of the marketing investment. The marketing ROI measures the profits generated byinvestments in marketing activities and can be a helpful tool, but is also difficult to measure.Chapter 3: The marketing environmentThe marketing environment consists of the actors and forces outside marketing that affectmarketing management’s ability to build and maintain successful relationships with targetcustomers. It consists both of the micro and macro environment.The microenvironment7

The microenvironment consists of the actors close to the company that affect its ability to serveits customers, such as: the company itself and its subdivisions and suppliers that provide theresources the firm needs to produce its products.But also of marketing intermediaries, which are firms that help the company to promote, selland distribute its goods to final buyers. Resellers are distribution channel firms. Physicaldistribution firms help the company stock goods, while marketing service agencies are marketingresearch firms. Financial intermediaries include banks and credit companies.Other factors are competitors that operate in the same markets as the firm and the public: anygroup that has an actual or potential interest in or impact on an organization’s ability to achieveits objectives. These can be financial publics, media publics, government publics, local publics,general public and internal publics.Finally, customers are the most important actors. Consumersmarkets consist of individuals thatbuy goods for personal consumption. Businessmarkets buy goods for usage in productionprocesses, while resellermarkets buy to resell at a profit. Governmentmarkets consist of buyerswho use the product for public service, and internationalmarkets consist of all these types ofmarkets across the border.The microenvironmentThe microenvironment consists of the larger societal forces that affect the microenvironmentand consists of multiple factors. Demography: the study of human populations in terms of size,density, location, age, gender, face, occupational and other statistics. Changes in demographicsresult in changes in markets. There are some important demographic trends in today’s world,such as the world population growth and the changing age structure of the world population,where some parts of the world are aging and others have younger populations.In the developed world, there are often generational differences to be found. Baby boomers arethe 78 million people born during the years following the Second World War and lasting until8

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