CHAPTER 1: Marketing in the Twenty-First 3.

Unstated Needs
Century 4. Delight Needs
5. Secret Needs
10 TYPES OF ENTITIES ( WHAT IS MARKETED?)
MARKETPLACE: A physical like a store
1. Goods
2. Services MARKETSPACE: A digital like online shopping
3. Events
4. Experiences METAMARKET: Cluster of complementary products and
5. Persons services closely related in the minds of consumers, but
6. Places spread across a diverse set of industries e.g. automobile
7. Properties
8. Information VALUE PROPOSITION: set of benefits that satisfy the
9. Idea needs
10. Organization
BRAND: an offering from a known source
MARKETING: Identifying and meeting societal needs.
According to American Mktg. Assoc.: Marketing is the CUSTOMER VALUE TRIAD: quality, service, price
activity, set of institutions, and processes for creating,
communicating, delivering, and exchange offerings that SUPPLY CHAIN: longer channel stretching from raw
have value for customers, clients, partners, and society materials to components to finished goods carried to
at large. final buyers

MARKETING MANAGEMENT: Art and science of COMPETITION: all the actual and potential rival
choosing target markets and getting, keeping, and offerings and substitutes a buyer might consider.
growing customers through creating, delivering, and
communicating superior customer value. It is the VALUE as a ratio between what the customer gets and
process of planning and executing the conception, what he gives.
pricing, promotion, and distribution of ideas, goods, and
services to create exchanges that satisfy individual and VALUE= Benefits/ Costs = (Functional benefits +
organizational goals. emotional benefits) / (Costs Monetary costs + time costs
+energy costs + psychic costs)
MARKET SEGMENTATION: identify and profile distinct
groups of buyers who might prefer or require varying EXCHANGE, the core of marketing, involves obtaining a
products and marketing mixes. Market segments can be desired product from someone by offering something in
identified by examining demographic, psychographic, return. Exchange is a value-creating process because it
and behavioral differences among buyers. normally leaves both parties better off. Note that
exchange is a process rather than an event
MARKET OFFERING: The offering is positioned in the
minds of the target buyers as delivering some central TRANSACTION involves at least two things of value,
benefit(s). agreed-upon conditions, a time of agreement, and a
place of agreement. Note also that a transaction differs
INDUSTRY: Collection of sellers from a transfer.
MARKET: Collection of buyers
TRANSFER, A gives a gift, a subsidy, or a charitable
NEEDS: Basic human requirements contribution to B but receives nothing tangible in return.
Typically, the transferer expects something in exchange
WANTS: Needs become wants when they are directed for his or her gift—for example, gratitude or seeing
towards a specific object to satisfy those needs. changed behavior in the recipient

DEMANDS: wants for specific products backed by the RELATIONSHIP MARKETING aims to build long-term
ability to pay mutually satisfying relations with key parties—
customers, suppliers, distributors—in order to earn and
MARKETER: someone who seeks a response – retain their long-term
attention, purchase, etc. from another party called preference and business. It cuts down on transaction
PROSPECT. costs and time. The ultimate outcome of relationship
marketing is the building of a unique company
5 types of needs asset called a marketing network.

1. Stated Needs MARKETING NETWORK consists of the company and

2. Real Needs its supporting stakeholders (customers, employees,
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suppliers, distributors, university scientists, and others) businesses, if left alone, will ordinarily not buy enough of
with whom it has built mutually profitable business the organization’s products.
relationships. The organization must, therefore, undertake an
aggressive selling and promotion
Marketing Channels effort.

1. COMMUNICATION CHANNELS deliver MARKETING CONCEPT: the key to achieving

messages to and receive messages from target organizational goals consists of the company being more
buyers. They include newspapers, magazines, effective than its competitors in creating, delivering, and
radio, television, mail, telephone, billboards, etc. communicating customer value to its chosen target
2. DISTRIBUTION CHANNELS to display or markets.
deliver the physical product or service(s) to the
buyer or user. There are physical distribution
channels and service distribution channels, HOLISTIC MARKETING CONCEPT: based on the
which include warehouses, transportation development. Design, and implementation of marketing
vehicles, and various trade channels such as programs, process, and activities. Acknowledges that
distributors, wholesalers, and retailers. EVERYTHING matters in marketing.
3. SELLING/ SERVICE CHANNELS to effect
transactions with potential buyers. Selling 4 broad components of Holistic Marketing Concept
channels include not only the distributors and
retailers but also the banks and insurance 1. Internal Marketing: Mktg, dept., senior mgt,etc.
companies that facilitate transactions.
2. Integrated Marketing: communications,
Marketing Environment products and services, channels

1. TASK ENVIRONMENT includes the immediate 3. Performance Marketing: sales revenue, brand,
actors involved in producing, distributing, and equity, ethics, etc.
promoting the offering, including the company,
suppliers, distributors, dealers, and the target 4. Relationship Marketing: customer, channels,
customers. partners
2. BROAD ENVIRONMENT consists of six
components: demographic environment,
economic environment, natural environment, Societal Marketing Concept: the organization’s
technological environment, political-legal task is to determine the needs, wants, and interests of
environment, and social-cultural environment. target markets and to deliver the desired satisfactions
These environments contain forces that can more effectively and efficiently than competitors in a way
have a major impact on the actors in the task that preserves or enhances the consumer’s and the
environment, which is why smart marketers society’s well-being.
track environmental trends and changes closely.
 “Selling focuses on the needs of the seller;
MARKETING MIX is the set of marketing tools that the marketing on the needs of the buyer. Selling is
firm uses to pursue its marketing objectives in the target preoccupied with the seller’s need to convert his
market. Marketing-mix decisions must be made to product into cash; marketing with the idea of
influence the trade channels as well as the final satisfying the needs of the customer by means
consumers. of the product and the whole cluster of things
associated with creating, delivering and finally
Four Ps Modern 4 Ps Four Cs consuming it” by: Theodore Levitt of Harvard
Product People Customer solution
Price Performance Customer cost
 Customer retention is thus more important than
Place Processes Convenience customer attraction.
Promotion Programs Communication
 The ultimate purpose of the marketing concept
PRODUCTION CONCEPT: consumers prefer is to help organizations achieve their objectives.
products that are widely available and inexpensive.

PRODUCT CONCEPT: consumers

favor those products that offer the most quality,
performance, or innovative features

SELLING CONCEPT: consumers and

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  Circle’s Area is proportional to the dollar-volume
CHAPTER 2& 3: Winning Markets through size of each business
Strategic Planning, Implementation, and Control  Location of each business unit indicates its
market growth rate and relative market share.
STRATEGIC PLAN: guide the whole enterprise and  Market Growth Rate on the vertical axis
deciding about resource allocations as well as starting indicates the annual growth rate of the market in
and eliminating particular businesses. It shape the which the business operates.
company’s businesses and products so that they yield  Relative market share, which is measured on
target profits and growth and the horizontal axis, refers to the SBU’s market
keep the company healthy despite any unexpected share relative to that of its largest competitor in
threats that may arise. the segment.

Three key areas The growth-share matrix is divided into four cells,
each indicating a different type of business
1. managing a company’s businesses as an
1. QUESTION MARKS (Q1) are businesses that
Investment Portfolio
operate in high-growth markets but have low relative
2. assessing each business’s strength by market shares. A question mark requires a lot of cash
considering the market’s growth rate and the because the company is spending money on
company’s position and fit in that market plant, equipment, and personnel.
3. development of strategy, a game plan for
achieving long-term objectives
2. STARS (Q2) are market leaders in a high-growth
MARKET-ORIENTED STRATEGIC PLANNING is the market. A star was once a question mark, but it does
managerial process of developing and maintaining a not necessarily produce positive cash flow; the
company must still spend to keep up with the high
viable fit among the organization’s objectives, skills, and
market growth and fight off competition.
resources and its changing market opportunities.
3. CASH COWS (Q3) are former stars with the largest
VALUE CHAIN: Tool for identifying ways to create value relative market share in a slow-growth market. A cash
cow produces a lot of cash for the company (due to
MISSION STATEMENT: provides employees with a economies of scale and higher profit margins), paying
shared sense of purpose, direction, and opportunity. the company’s bills and supporting its other
Good mission statements focus on a limited number of businesses.
goals, stress the company’s major policies and values,
and define the company’s major competitive scopes 4. DOGS (Q4) are businesses with weak market shares
in low-growth markets; typically, these generate low
profits or even losses.
Competitive Scopes

1. Industry scope
2. Products and applications scope:
3. Competence scope
4. Market-segment scope:
5. Vertical scope
6. Geographical scope

Three Dimensions Of Business

1. Customer groups,
2. Customer needs,
3. Technology

 The purpose of identifying the company’s

strategic business units is to develop separate
The next task is to determine what objective, strategy,
strategies and assign appropriate funding to the
and budget to assign to each SBU. Four strategies can
entire business portfolio
be pursued:
Boston Consulting Group Approach: developed and 1. BUILD: To increase market share, even forgoing
popularized the growth-share matrix short-term earnings to achieve this objective if
necessary. Building is appropriate for question marks
 Circles represent the current sizes and positions whose market shares must grow if they are to
of eight business units in a hypothetical become stars.
company.
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 2. HOLD: To preserve market share, an appropriate identify opportunities to achieve further growth
strategy for strong cash cows if they are to continue within the company’s current businesses (market-
yielding a large positive cash flow. penetration strategy, market-development strategy,
product-development strategy, diversification
3. HARVEST: To increase short-term cash flow strategy)
regardless of long-term effect. Harvesting involves a
decision to withdraw from a business by implementing
 INTEGRATIVE GROWTH OPPORTUNITIES:
a program of continuous cost retrenchment. The hope
identify opportunities to build or acquire
is to reduce costs faster than any potential drop in
sales, thus boosting cash flow. This strategy is businesses that are related to the company’s
appropriate for weak cash cows whose future is dim current businesses (backward integration (acquiring
and from which more cash flow is needed. Harvesting a supplier), forward integration (acquiring a
can also be used with question marks and dogs. distributor), or horizontal integration (acquiring a
competitor).
4. DIVEST: To sell or liquidate the business because the  DIVERSIFICATION GROWTH
resources can be better used elsewhere. This is OPPORTUNITIES: identify opportunities to add
appropriate for dogs and question marks that are attractive businesses that are unrelated to the
dragging down company profits. company’s current businesses (concentric
diversification strategy, horizontal diversification
 Successful SBUs move through a life cycle, strategy, conglomerate diversification strategy)
starting as question marks and becoming stars,
then cash cows, and finally dogs SWOT ANALYSIS: overall evaluation of a
business’s strengths, weaknesses,
The General Electric Model: each business is rated in opportunities, and threats
terms of two major dimensions— market attractiveness
and business strength MACROENVIRONMENT FORCES: demographic,
economic, technological, political-legal, and social-
GE matrix is divided into NINE CELLS cultural

 The three cells in the upper-left corner indicate MICROENVIRONMENT ACTORS: customers,
strong SBUs suitable for investment or growth. competitors, distributors, and suppliers
 The diagonal cells stretching from the lower left
to the upper right indicate SBUs of medium MARKETING OPPORTUNITY: an area of buyer need in
attractiveness these should be pursued which a company can perform profitably. Opportunities
selectively and managed for earnings can be classified according to their attractiveness and
 The three cells in the lower-right corner indicate their success probability
SBUs low in overall attractiveness, which the
company may want to harvest or divest.
 INTENSIVE GROWTH OPPORTUNITIES:

ENVIRONMENTAL THREAT: a challenge posed by an

unfavorable external trend or development. Threats
should be classified according to seriousness and
probability of occurrence

GOAL FORMULATION: specific goals for the planning

period

STRATEGY: game plan for achieving those goals.

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Three Generic Types of marketing strategies by: 5. Marketing strategy
Michael Porter 6. Action programs:
7. Projected profit-and-loss statement
1. OVERALL COST LEADERSHIP: achieve the lowest
production and distribution costs so that it can price
8. Controls
lower than competitors and win more market
Organization of the Marketing Department
2. DIFFERENTIATION: achieving superior performance
in an important customer benefit area, such as being 1. Functional Organization: The most common
the leader in service, quality, style, or technology—but
form of marketing organization consists of
not leading in all of these things
functional specialists (such as the sales
3. FOCUS: focuses on one or more narrow market manager and marketing research manager)
segments, getting to know these segments intimately
and pursuing either cost leadership or differentiation 2. Geographic Organization: A company selling
within the target segment. in a national market often organizes its sales
force (and sometimes other functions, including
marketing) along geographic lines
VALUE-DELIVERY PROCESS: task of any business is
to deliver value to the market at a profit 3. Product- or Brand-Management
Organization: Companies that produce a
2 views variety of products and brands
 The traditional view is that the firm makes
something and then sells it; assumes that the
4. Market-Management Organization: companies
sell their products to a diverse set of markets
company knows what to make and that the
market will buy enough units to produce profits
for the company. 5. Product-Management/Market-Management
Organization: Companies that produce many
The Value-Delivery Sequence products that flow into many markets tend to
adopt a matrix organization
1. First Phase, choosing the value, represents the
strategic “homework” 6. Corporate-Divisional Organization: As
multiproduct-multimarket companies grow, they
2. Second Phase, providing the value
often convert their larger product or market
3. Third Phase, communicating the value groups into separate divisions with their own
departments and services
Steps in the Marketing Process
7. Global Organization: Companies that market
1. ANALYZING MARKET OPPORTUNITIES: assess internationally
buyer wants and needs, etc.
2. DEVELOPING MARKETING STRATEGIES:
 Organization is one factor contributing to
prepares a positioning strategy
effective marketing implementation
3. PLANNING MARKETING PROGRAMS: marketing
managers must make basic decisions on marketing
expenditures, marketing mix, and marketing  Strategy addresses the what and why of
allocation, 4 Ps, etc. ( Identify expenditure, Divide, marketing activities, Implementation addresses
and Allocate) the who, where, when, and how.
4. MANAGING THE MARKETING EFFORT: organize
the firm’s marketing resources to implement and
control the marketing plan

MARKETING PLAN: created for each product line or

brand is one of the most important outputs of planning
for the marketing process

Contents of a Marketing Plan

1. Executive summary and table of contents

2. Current marketing situation
3. Opportunity and issue analysis
4. Objectives
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 Chapter 3: Collecting information and
Forecasting Demand

MARKETING INFORMATION SYSTEM (MIS):

consists of people, equipment, and procedures
to gather ,sort, analyze, and evaluate, and
distribute needed, timely, and accurate
information to marketing decision makers

Internal records and Database System:

INTERNAL RECORDS: supplies results data

 ORDER-TO-PAYMENT- CYCLE: the

heart of internal record system
 SALES INFORMATION SYSTEM :
 DATABASES, DATA WAREHOUSING,
and DATA MINING

MARKETING INTELLIGENCE SYSTEM: set of

procedures and sources that managers use to
obtain everyday information about developments
in the marketing environment. Supplies
happenings data

MARKETING INSIGHTS: provides diagnostic

information about how and why we observe
certain effects in the marketplace, and what that
means to marketers

MARKETING RESEARCH: Systematic design,

collection, analysis and reporting of data and
findings relevant to a specific marketing situation
facing the company

Marketing Research Process

1. Define the Problem, decision

alternatives, and objectives
2. Develop research plan (data sources,
research approaches, instruments, sampling
plans, and contact methods)
3. Collect the Information
4. Analyze the Information
5. Present the findings
6. Make the Decision

POTENTIAL MARKET: set of consumers with enough

level of interest in a market offer

AVAILABLE MARKET: set of consumers who have

interest, income, and access to a particular offer

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TARGET MARKET: part of the qualified available CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
market the company decides to pursue process of carefully managing detailed information about
the individual customers and all customer touch points to
PENETRATED MARKET: set of consumers who are maximize loyalty.
buying the products
TOUCH POINTS: any occasion on which customer
MARKET DEMAND: total volume that would be encounters the brand and product from actual
bought by a defined customer group in a defined experience to marketing communications to casual
geographical area in a period of time observation

MARKET FORECAST: shows expected demand not the CHAPTER 5: Analyzing Consumer Markets
maximum demand
CONSUMER BEHAVIOR: study of how consumers
MARKET POTENTIAL: limit approached by market select, buy, use, and dispose goods, etc to satisfy needs
demand as industry marketing expenditures approach and wants
infinity for a given marketing environment
SOCIAL CLASSES: relatively homogeneous and
FORECASTING: the art of anticipating what buyers are enduring divisions in a society, etc
likely to do under a given set of conditions
Major Factors Of Consumer Behaviors
6 Major Forces in a Broad Environment
1. CULTURAL
1. Demographic: population size, growth rate, 2. SOCIAL
diversity, etc 3. PERSONAL
2. Economic: available purchasing power 4. PSYCHOLOGICAL
depends on current income, prices, savings,
debt, credit availability MOTIVE: a need becomes a motive when it is aroused
3. Natural: environmental issues to a sufficient level of intensity to drive us to act.
4. Technological: technologies, innovation, R&D,
etc. 1. PERCEPTION: process by which we select,
5. Political- Legal: laws, government agencies, organize, and interpret information inputs to
and pressure groups create meaningful picture
2. LEARNING
3. EMOTIONS
Chapter 4: Creating Long-Term Loyalty 4. MEMORY
Relationships
The Buying Decision Process: 5 Stage Model
CUSTOMER-PERCEIVED VALUE (CPV): The
difference between prospective customers’ evaluation of 1. Problem recognition
all the benefits and costs of an offering and the 2. Information search
perceived alternatives 3. Evaluation of Alternatives
4. Purchase decision
TOTAL CUSTOMER BENEFIT: perceived monetary 5. Post-purchase behavior
value

TOTAL CUSTOMER COST: perceived bundle of

costs customer’s expect to incur

QUALITY: totality of features and characteristics of a

product or service that bear on its ability to satisfy stated
or implied needs.

PROFITABLE CUSTOMER: overtime yields a revenue

stream exceeding by an acceptable amount the
company’s cost stream for attracting ,selling, and serving
the customer

CUSTOMER LIFETIME VALUE (CLV) net present value

of the stream of future profits expected over the
customer lifetime purchases