Core concepts of marketing by philip kotler pdf

Introduction

Week 1 Notes MKT 220

Many people think of marketing as only selling or advertising. But marketing combines many activities – marketing research, product development, distribution, pricing, advertising, personal selling and others – designed to sense, serve and satisfy consumer needs while meeting the organizations goals.

Marketing seeks to attract new customers by promising superior value and to keep current customers by delivering satisfaction. Marketing operates within a dynamic global environment. Rapid changes can quickly make yesterday’s winning strategies obsolete – so marketers constantly face new challenges and opportunities.

© Kevin W. Fitzgerald, 2011

© Kevin W. Fitzgerald, 2012

This Week’s Objectives…

Week 1 Notes MKT 220

At the end of this week you should be able to:

1. Define what marketing is and discuss its core concepts.

2. Explain the relationship between customer value, satisfaction and quality.

3. Define marketing management and understand how markets manage demand and build profitable customer relationships.

4. Compare the 5 marketing management philosophies.

5. Analyze the major challenges facing marketers heading into the next century.

© Kevin W. Fitzgerald, 2012

What is Marketing?

Week 1 Notes MKT 220

“Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others.”

-Philip Kotler

© Kevin W. Fitzgerald, 2012

Core Marketing Concepts

Week 1 Notes MKT 220

Exchange transactions and relationships

Core Marketing Concepts

© Kevin W. Fitzgerald, 2012

Example: Marketing

Week 1 Notes MKT 220

The Disney Company

The Walt Disney company is a master at marketing. They use their brand to cross sell all their products. Their theme parks sell toys and movies, the movies sell toys and trips to the theme parks and the toys do the same. They use every medium, from RadioDisney to ABC broadcasting, in their marketing efforts.

© Kevin W. Fitzgerald, 2012

Core Concepts of Marketing

Week 1 Notes MKT 220

Target Markets and Segmentation

Needs, Wants, and Demands

Product or Offering

Value and Satisfaction

Exchange and Transaction

Relationship and Networks

Marketing Channels

Supply Chain

Competition

Marketing Environment

© Kevin W. Fitzgerald, 2012

Consumer Motivation

 Needs – state of felt deprivation for basic items such as food, clothing and complex needs such as for belonging

 Wants – form that a human needs to take as shaped by culture and individual personality.

 Demands – human wants backed by buying power.

Week 1 Notes MKT 220

© Kevin W. Fitzgerald, 2012

Satisfying A Consumers Needs and Wants

 Products – anything that can be offered to a market for attention, acquisition, use or consumption which might satisfy a need or want. (examples: persons, places, organizations, activities and ideas)

 Services – activities or benefits offered for sales that are essentially intangible and don’t result in the ownership of anything. (examples: banking, airline, hotels, accountants)

 Ideas – ways of thinking about things. (examples: concepts, memberships, belonging)

Week 1 Notes MKT 220

© Kevin W. Fitzgerald, 2012

How Customers Obtain Products and Services

 Exchanges – act of obtaining a desired object from someone by offering something in return

 Transactions – trade of value between parties. Usually involves money and a response.

 Relationships – building long-term relationships with consumers, distributors, dealers and suppliers.

Week 1 Notes MKT 220

© Kevin W. Fitzgerald, 2012

Marketing Forces

Week 1 Notes MKT 220

Suppliers

Company (Marketer)

Competitors

Marketing Intermediaries

End-User Market

Environment

© Kevin W. Fitzgerald, 2012

The Four “P”s

Marketing Mix

Product

Price

Place

Promotion

Customer Cost

Customer Solution

Customer Communications

Customer Convenience

Week 1 Notes MKT 220

© Kevin W. Fitzgerald, 2012

What is Marketing Management?

Week 1 Notes MKT 220

“Marketing Management is 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 success.”

-Gary Armstrong & Philip Kotler

© Kevin W. Fitzgerald, 2012

Marketing Management Philosophies

Week 1 Notes MKT 220

Production

Product

Selling

Marketing

Societal Marketing

© Kevin W. Fitzgerald, 2012

Societal Marketing

Week 1 Notes MKT 220

Societal Marketing

Company (profits)

Consumers (want satisfaction)

Society (human welfare)

© Kevin W. Fitzgerald, 2012

Customer Delivered Value

Place Existing Products

Selling & Promotion

Profits through Sales Volume

Customer Needs

Market Integrated Marketing

Profits through Customer

Satisfaction

Starting Point Focus Means End

(a) The Selling Concept

(b) The Marketing Concept

Week 1 Notes MKT 220

© Kevin W. Fitzgerald, 2012

Fitzgerald Fun Fact

Week 1 Notes MKT 220

Customer Service and Satisfaction

Stew Leonards, the largest dairy store in the world, has an important customer relations program in place – just two rules.

1. The customer is always right.

2. When in doubt, refer to rule #1.

© Kevin W. Fitzgerald, 2012

Marketers Respond to New Challenges

Relationship Marketing

Customer Lifetime Value

Integrated Marketing Communications

Target Marketing

Individualization

Customer Databases

Channels as Partners

Model-based Decisions

Every Employee is a Marketer

Customer Share

Week 1 Notes MKT 220

© Kevin W. Fitzgerald, 2012

Key Terms

Week 1 Notes MKT 220

•Customer Satisfaction

•Customer Value

•Demands

•Demarketing

•Exchange

•Internet

•Market

•Marketing

•Marketing Concept

•Marketing Management

•Needs

•Products

•Product Concept

•Production Concept

•Relationship Marketing

•Selling Concept

•Service

•Societal Marketing Concept

•Total Quality Management (TQM)

•Transaction

•Wants

© Kevin W. Fitzgerald, 2012

Relevant Websites

Week 1 Notes MKT 220

American Marketing Association (AMA) http://www.ama.org

Business Marketing Association (BMA) http://www.marketing.org

Marketing Magazine http://www.marketingmag.ca

Sales & Marketing Management http://www.salesandmarketing.com

Wilson Web Marketing Information Center http://www.wilsonweb.com/webmarket

KnowThis.com – Marketing Virtual Library http://www.knowthis.com

MouseTracks – The history of internet marketing http://nsns.com/MouseTracks/

Consulting Firms use of Market Segmentation http://www.dssresearch.com/library/segment/understanding.asp

http://www.ama.org/
http://www.marketing.org/
http://www.marketingmag.ca/
http://www.salesandmarketing.com/
http://www.wilsonweb.com/webmarket
http://www.knowthis.com/
http://nsns.com/MouseTracks/
http://www.dssresearch.com/library/segment/understanding.asp
© Kevin W. Fitzgerald, 2012

Strategic Planning and the Marketing

Process

Week 1 Notes MKT 220

Charter Oak State College Principles of Marketing Kevin W. Fitzgerald, 2012

Notes based on Marketing, an Introduction by Gary Armstrong & Philip Kotler

© Kevin W. Fitzgerald, 2012

Introduction

Week 1 Notes MKT 220

Strategic planning sets the stage for the rest of a company’s planning. Marketing contributes to strategic planning, and the overall plan defines marketing’s role in the company. Although formal planning offers a variety of benefits to companies, not all companies know how to use it well.

Strategic planning involves developing a strategy for long-run survival and growth. It consists of four steps: defining the companies mission, setting objectives and goals, designing a business portfolio and developing a functioning plan.

Marketing provides inputs to strategic planning and serves as a guiding philosophy for customer focus. Marketers design strategies to help meet objectives and to carry out profitable programs.

© Kevin W. Fitzgerald, 2012

This Week’s Objectives…

Week 1 Notes MKT 220

At the end of this week you should be able to:

1. Explain company wide strategic planning and its 4 steps

2. Discuss how to design business portfolios and growth strategies.

3. Explain functional planning strategies and assess marketing role in strategic planning.

4. Describe the marketing process and the forces that influence it.

5. List the marketing management functions, including the elements of a marketing plan.

© Kevin W. Fitzgerald, 2012

What is Strategic Planning?

Week 1 Notes MKT 220

“Strategic planning is the process of developing and maintaining a strategic fit between the organization goals and capabilities and its changing marketing opportunities.”

-Gary Armstrong & Philip Kotler

© Kevin W. Fitzgerald, 2012

Corporate Level

Week 1 Notes MKT 220

Defining the company mission

Setting company objectives and goals

Designing the

business portfolio

Planning, marketing and other functional strategies

Business Unit Product and

Market Levels

© Kevin W. Fitzgerald, 2012

Strategic Planning Process

Week 1 Notes MKT 220

Define the Company Mission

Create a Mission Statement

Set Company Objectives and Goals

© Kevin W. Fitzgerald, 2012

Designing the Business Portfolio

Week 1 Notes MKT 220

Analyze Current Business Portfolios

Develop Growth Strategies

Plan Functional Strategies

© Kevin W. Fitzgerald, 2012

Growth Share Matrix

Week 1 Notes MKT 220

Question Marks

Low

Cash Cows

Stars

Dogs

M a r k e t G

r o w

t h

R a t e

Relative Market Share

$

High

L o

w H

ig h

© Kevin W. Fitzgerald, 2012

Product/Market Expansion Grid

Week 1 Notes MKT 220

3. Product Development

2. Market Development

1. Market Penetration

4. Diversification

E x is

t in

g

M a r k e t s

New ProductsExisting Products

N e w

M

a r k e t s

© Kevin W. Fitzgerald, 2012

The Market Process

Week 1 Notes MKT 220

Target Consumers

•Market Segmentation

•Market Target

•Market Positioning

Develop Marketing Mix

•Price

•Product

•Place

•Promotion

© Kevin W. Fitzgerald, 2012

Marketing Strategy

Week 1 Notes MKT 220

Target Customers

Product

PricePlace

Promotion

Competitors

Publics

Marketing Intermediaries

Suppliers

Technical/physical Environment

Social/ Cultural

Environment

Demographic/ Economic

Environment

Political/Legal Environment

© Kevin W. Fitzgerald, 2012

The Four Ps

Week 1 Notes MKT 220

Product Product Variety

Quality

Design

Features

Brand Name

Packaging

Sizes

Services

Warranties

Returns

Promotion Advertising

Personal Selling

Sales Promotion

Public Relations

Price List Price

Discounts

Allowances

Payment Period

Credit Terms

Place

Channels

Coverage

Assortment

Locations

Inventory

Transportation

Logistics

Target

Customers

Intended

Positions

© Kevin W. Fitzgerald, 2012

Market Analysis

Week 1 Notes MKT 220

Analysis

Planning

Develop

Strategic Plans

Develop

Marketing Plans

Implementation

Cary out plans

Control

Measure Results

Evaluate Results

Take Corrective

Action

© Kevin W. Fitzgerald, 2012

Contents of a Marketing Plan

Week 1 Notes MKT 220

Executive Summary

Current Marketing Situation

•Market Description

•Product Review

•Competition Review

•Distinction Review

Threats & Opportunity Analysis

Objectives and Issues

Market Strategy

Action Program Budget

Control

© Kevin W. Fitzgerald, 2012

The Control Process

Week 1 Notes MKT 220

What do you want to

achieve

What is happening

Why is it happening

What should we do about it

Take Corrective Action

Evaluate Performance

Measure Performance

Set Goals

© Kevin W. Fitzgerald, 2012

Key Terms

Week 1 Notes MKT 220

•Business Portfolio

•Diversification

•Growth – share matrix

•Market Development

•Market Penetration

•Market Positioning

•Market Segment

•Market Segmentation

•Market Targeting

•Marketing Audit

•Marketing Control

•Marketing Implementation

•Marketing Process

•Marketing Mix

•Marketing Strategy

•Marketing Statement

•Marketing Analysis

•Product Development

•Product/market Expansion Grid

•Strategic Business Unit (SBU)

•Strategic Planning

•Value Chain Value Delivery Network

Charter Oak tate College Kevin W. Fitzgerald 2005

© Kevin W. Fitzgerald, 2012

Relevant Websites

Week 1 Notes MKT 220

How to write Marketing Plans: http://linz1.net/biz/mktpl.html http://home3.americanexpress.com/smallbusiness//resources/expanding/

mktplan/ http://gov.on.ca/OMAFRA/english/busdev/facts/95-079.htm http://www.morebusiness.com/templates_worksheets/bplans

Strategic Planning http://businessweek.com/1996/35/b34901.htm

IMC Strategic Development http://ww.imcstrategic.com

Integrated Marketing Communications, Inc. http://www.intmark.com

The Phelps Group www.phelpsgroup.com

http://linz1.net/biz/mktpl.html
http://home3.americanexpress.com/smallbusiness//resources/expanding/mktplan/
http://gov.on.ca/OMAFRA/english/busdev/facts/95-079.htm
http://www.morebusiness.com/templates_worksheets/bplans