Marketing Management

Endalkachew Abebe (PhD)

 Chapter Outline

Chapter 1 – An overview of marketing and marketing management

Chapter 2 – Marketing Environments

Chapter 3 – Analyzing Marketing Opportunities and understanding the markets

Chapter 4 – Market Matching Strategy

Chapter 5 – Managing Marketing Mix Elements

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 Chapter One

An Overview of Marketing
And
Marketing Management
Marketing Defined:

• Many people think of marketing only as selling and advertising.

• Selling and advertising are only the tip of the marketing ice-berg.

• Marketing is one of three key core functions that are central to all
organizations.

• Marketers act as the customers’ voice within the firm & marketers are
responsible for many more decisions than just advertising or sales:
• Analyze industries to identify emerging trends.
• Determine which national and international markets to enter or exit.
• Conduct research to understand consumer behavior.

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 • Design integrated marketing mixes – products, prices, channels of
distribution, and promotion programs.

• Marketing is an organizational function and a set of processes for creating,

communicating, and delivering value to customers and for managing customer
relationships in ways that benefit the organization and its stakeholders (The
American Marketing Association).

• Marketing is a social and managerial process by which individuals and groups

obtain what they need and want through creating and exchanging products and
value with others (Philip Kotler).

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 What is Marketing?
Marketing is the delivery of customer satisfaction at a profit.

The Goal of Marketing is:

• To attract new customer by promising superior value, and

• To keep current customers by delivering satisfaction.

• Marketing, more than any other business function, deals with customers.

• Creating customer value and satisfaction are at the very heart of

modern marketing thinking and practice.
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 Cont’d,…

• Some people believe that only large business organizations operating

in highly developed economies use marketing,

• but sound marketing is critical to the success of every

organization

• whether large or small, for profit or non – profit, domestic or

global.

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 Cont.……..…

• To explain marketing definition, we examine the following important

terms
Needs, Wants, and Demands

Needs:

• Human needs are states of felt deprivation

• Human have many complex needs:

• Physical needs for food, clothing, warmth, and safety
• Social needs or belonging and affection
• Individual needs for knowledge and self – expression
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Wants:
• Want are the form taken by human needs as they are shaped by
culture and individual personality.
• People have almost unlimited wants but limited resources
• They want to choose products that provide the most value and
satisfaction for their money

Demands:
• When backed by buying power, wants become demands.
• Consumers view products as bundles of benefits and choose products
that give them the best bundle for their money.

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 Products and Services

Product:
• Anything that can be offered to a market to satisfy a need or want.
• The concept of product is not limited to physical objects – anything
capable of satisfying a need can be called a product.

Services:
• Services are activities or benefits offered for sale that are essentially
intangible and do not result in the ownership of anything.

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 Values, Satisfaction, and Quality
Values:
• is the d/ce b/n the benefits the customer gains from owning and using a product and the
costs of obtaining the products.

• Customers often do not judge product value and costs accurately or objectively, they act on
perceived value.

Satisfaction:
• depends on a product’s perceived performance in delivering value relative to a buyer’s
expectation.

• If the product’s performance falls short of the customer’s expectations, the buyer is
dissatisfied.

Quality:
• Customer satisfaction is closely linked to quality.

• Quality has a direct impact on product performance.

• Quality can be defined as “freedom from defects”. 11

 Exchange, Transactions, and Relationships
Exchange :
• The act of obtaining a desired object from someone by
offering something in return
Transaction :
• A trade b/n two parties that involves at least two things of
value, agreed – upon conditions a time & place of agreement,

Relationship marketing :
• The process of creating, maintaining, and enhancing strong,
value – laden relationships with customers and other
stakeholders 12
 Markets
• The set of all actual and potential buyers of a product or service
Communication

Industry Products / Services Market (a collection of

(a collection of sellers) buyers)

Money

Information

A simple marketing system

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 Main actors and forces in a modern marketing system

Competitors

Marketing
intermediaries End user market
Suppliers

Company
(marketer)

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 Objectives of Marketing

• In the modern business world the objective of marketing is more than

making profit. The following are the aims of marketing:
• Intelligent application of modern marketing policies;
• To develop policies and their implementation for a good result;
• To suggest solutions by studying the problems relating to marketing;
• To find sources for further information concerning the market problems;

• To strengthen existing marketing function;

• To take suitable actions as required.

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 The Scope of Marketing
• Marketing is typically seen as the task of creating, promoting, and delivering
goods and services to consumers and businesses.

• In fact, marketing people are involved in marketing through 10 types of entities:

goods, services, experiences, events, persons, places, properties, organizations,
information and ideas.

• Goods/ products- any tangible offerings, which provide functional value/

benefit to customers/ consumers.

• Services- are intangible products.

• As economies advance, growing proportions of the activities are focused on
the production of services.
• E.g. work of airlines, hotels, car rentals firms, beauticians, maintenance and
repair people. 16
 Cont.……..…
• Experience- by orchestrate/ arranging/ several services and goods one can
create, stage, and market experiences.
• There is a market for different experiences. E.g. management contract.

• Events- are happenings or usually something important.

• Marketers must promote time-based events such as Olympics, major trade
shows, sport events and artistic events.

• Persons- Celebrity marketing has become a major business. Celebrity is fame and
honor.
• E.g., some one seeking fame would hire a press agent to plant stories in
newspapers and magazines.

• Today every film star has an agent, personal manager and ties to a public
relations agency. 17
 Cont.……..…
• Places- cities, states, regions, and whole nations compete actively to attract tourists,
factories, company headquarters, and new residents. Nowadays,

• Far-East Asia is attracting huge multinational companies, as there is cheap resource for
their business.

• Properties- properties are intangible rights of ownership of either real property (real
estate) or financial property (stocks and bonds)

• Organization- organized body of persons or organized system.

• Organizations actually work together to build a strong favorable image in the minds of
their publics.

• Information- information can be produced and marketed as a product.

• In today's modern markets, marketing cannot take place without reliable information.

• Marketers have to know about the users of product, and customers or consumers have
to know the quality of product through information.
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 Cont.……..…

• Ideas- every market offering includes a basic idea at its core.

• Producers manufacture the product in the factories and they sell
HOPE in the stores.
• The buyer of drill is really buying a hole.
• Products and services are platforms for delivering some idea or
benefits.
• Marketers search hard for the core need they are trying to satisfy.

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 Importance of Marketing

• Marketing’s broader importance extends to society as a whole.

• Marketing has helped introduce and gain acceptance of new products that
have eased people’s lives.

• It can inspire enhancements in existing products as marketers innovate to

improve their position in the marketplace.

• Successful marketing builds demand for products and services, which, in turn,
creates jobs.

• successful marketing also allows firms to more fully engage in socially

responsible activities

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 The Goal of Marketing

1. Attract new customers by promising superior value.

2. Keep and grow current customers by delivering satisfaction

• Marketing, more than any other business function, deals with customers.

• Creating customer value and satisfaction are at the very heart of modern
marketing thinking and practice.
• Some people believe that only large business organizations operating in
highly developed economies use marketing, but sound marketing is critical
to the success of every organization – whether large or small, for profit or
non – profit, domestic or global

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 Marketing Management
 If marketing is understood as such, what is marketing management then?
 It consists of Marketing + Management
 Therefore, let us define management first
Management – is
 The process of performing the five managerial functions
 The art of getting things done with and through people
 The effective and efficient utilization of scarce resources for achieving
organization goal

 The analysis, planning, implementation, and control of programs designed to create, build,
and maintain beneficial exchanges with target buyers for the purpose of achieving
organizational objectives.

 the art and science of choosing target markets & getting, keeping, & growing customers via
creating, delivering, & communicating superior customer value
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 Cont.……..…
• Marketing Management Involves:
• Demand Management &
• Building Profitable Customer Relationships
• Demand Management: The organization has a desired level
of demand for its products, at any point in time,
• There are eight different states of demands and the
corresponding tasks facing marketing managers., and
• Marketing management must find ways to deal with these
different demand states.

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 Cont.……..…
• Negative demand- A market is said in a state of negative demand
if a major part of the market dislikes the product and even pays a
price to avoid it.
• E.g. Christian meat in Muslim countries or meat generally
among the vegetarians as in India.

• The marketing task is to analyze why the market dislikes the

product and whether a marketing program consisting of product
redesign, lower prices and more positive promotion can change
beliefs and attitudes.

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 Cont.……..…
• No demand - When there is no demand, the target consumers may
be unaware of, or uninterested in the product.
• The marketing task is to find ways to connect benefits of the
product with the person's natural needs and interest.
• E.g., Farmers may not be interested in new way of farming or in
the package of extension.
• The marketing task is to demonstrate benefits that will be driven
by members who have been encompassed in the package.

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 Cont.……..…
• Latent demand - Many consumers may share a strong need that
cannot be satisfied by an existing product.
• There might be a strong latent demand for completely a new
product, which was not available in the market until then.
• For example, harmless cigarettes, or fuel-efficient cars, or cars
that use water for their fuel.

• The marketing task is to measure the size of the potential market

and then develop goods and services to satisfy the latent demand.

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 Cont.……..…
• Declining demand- Consumers begin to buy the product less
frequently or not at all
• For example, churches have seen membership decline, private
colleges have seen application fall.
• When such is the case, the marketer must analyze the causes of
decline and determine whether the demand can be re-stimulated
by new target markets, by changing product features, or by more
communication that is effective.

• The marketing task is to reverse declining demand through creative

remarketing. 27
 Cont.……..…
• Irregular demand- demand that varies on a seasonal, daily, or
even hourly basis, causing problems of idle or overworked
capacity.
• For example, much mass transit equipment is idle during off
peak hours and insufficient during peak travel hours.
• Museums are under visited on weekdays and overcrowded on
weekends.

• The marketing task, called synchro marketing, is to find ways to

alter the pattern of demand through flexible pricing, promotion
and incentives.

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 Cont.……..…
• Full Demand - Consumers are adequately buying all products put into the
marketplace.

• The marketing task is to maintain the existing level of demand in the face of
changing consumer preferences and increasing competition.
• The organization must maintain/improve its quality and continually measure
consumer satisfaction.

• Over-full demand- Some organizations face a demand level that is higher than
they can handle.
• When demand level is higher and overcrowded,

• The marketing task called demarketing requires finding ways to reduce

demand temporarily or permanently to the level it can be handled.
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 Cont.……..…
• Demarketing can be classified into two:
1. general demarketing and
2. selective demarketing.

• General Demarketing seeks to discourage overall demand and takes

such steps as raising prices and reducing promotion and service.

• Selective demarketing consists of trying to reduce demand from

those parts of the market that are less profitable or less in need of
the product.

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 Cont.……..…
• Unwholesome demand- some products are dangerous to society as a
whole.
• Such products will attract organized effort to discourage their
consumption.
• Unselling campaigns have been conducted against cigarettes,
alcohol, hard drugs, handguns, X-rated moves, large families &
environmental pollution.

• The marketing task is to get people who like some something to give
it up, using such tools as fear message, price hikes and reduced
availability.
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• Building Profitable Customer Relationships :

• Beyond designing strategies to attract new customers

and create transactions with them,

• companies now are striving to retain current

customers and build lasting customer relationships.

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 Marketing Management Philosophies
• The role that marketing plays within a company varies according
to the overall strategy and philosophy of each firm.

• There are five alternative concepts under which organizations

conduct their marketing activities:
• Production concept
• Product concept
• Selling concept
• Marketing concept
• Societal marketing concepts
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Marketing Management
Marketing Management
Philosophies
The role that marketing plays within a company varies according to the overall
strategy and philosophy of each firm.

Production Concept Product Concept Selling Concept

Believes that consumers will Holds that consumers will The idea that consumers will
favor products that are favor products that offer not buy enough of the
available and highly the most quality, organization’s products
affordable and management performance, and unless the organization
should focus on improving innovative features. undertakes a large – scale
production and distribution selling and promotion effort.
efficiency.
Marketing Management

Marketing Management Philosophies Cont'd

Marketing Concept Societal Marketing Concept

Holds that achieving organizational Organization should determine the needs,

goals depends on determining the wants, and interests of target markets and
needs & wants of target markets and deliver the desired satisfactions more
delivering the desired satisfactions effectively and efficiently than
more effectively and efficiently than competitors in a way that maintains or
competitors do. improves the consumer’s and society’s
well – being.
 Activity

1. How does marketing create peace to the society? Or

how marketing can bring about a more peaceful world?
2. What is marketing myopia? Explain using example.

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Group Assignment

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 Marketing Strategy Template

• Executive Summary
• Business Overview:
• Brief description of your business, its products/services,
and target audience.
• Marketing Objectives:
• Clearly defined & measurable goals for your marketing
efforts.

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 Cont.……

• Target Market Analysis

• Customer Segmentation:
• Identify and describe different segments of your target market.
• Customer Persona:
• Create detailed profiles of your ideal customers.
• Market Trends:
• Analyze current industry trends and their impact on your
business.

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 Cont.……

• SWOT Analysis
• Strengths:
• List internal factors that give your business an advantage.
• Weaknesses:
• Identify areas that need improvement or pose challenges.
• Opportunities:
• External factors that could positively impact your business.
• Threats:
• External factors that could negatively affect your business.
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 Cont.……

• Competitive Analysis
• Competitor Identification:
• List and analyze key competitors.
• Competitive Advantage:
• Highlight what sets your business apart from
competitors.
• Market Share:
• Assess your current and potential market share.

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 Cont.……
• Marketing Mix (4Ps)
• Product/Service
• Description:
• Detailed overview of your product or service.
• Unique Selling Proposition (USP):
• Communicate what makes your product/service unique.
• Price
• Pricing Strategy:
• Explain your pricing approach and rationale.
• Discounts/Promotions:
• Outline any special pricing or promotions. 42
 Cont.……
• Place
• Distribution Channels:

• Detail how your product/service reaches customers.

• Location Strategy:
• If applicable, describe your physical presence.

• Promotion
• Advertising Channels:
• Specify the platforms and mediums for promotion.
• Marketing Collaterals:
• List materials used for promotion (brochures, ads, etc.).
• Digital Marketing:
• Detail your online presence and strategies. 43
 Cont.……
• Marketing Budget
• Allocation:
• Breakdown of budget across different marketing channels.
• ROI Measurement:
• Metrics and tools to measure the effectiveness of your spend.

• Implementation Plan
• Timeline:
• Create a schedule for the execution of marketing activities.
• Responsibilities:
• Assign tasks and responsibilities to team members.
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 Cont.……
• Monitoring and Evaluation
• Key Performance Indicators (KPIs):
• Define metrics to measure the success of your marketing efforts.
• Monitoring Tools:
• Specify tools and methods to track KPIs.

• Feedback Mechanism:
• Establish a system for collecting and acting on customer feedback.

• Conclusion

• Summary:
• Recap of key points in the marketing strategy.

• Next Steps:
• Outline the immediate next steps for implementation. 45