Module 1 THE MARKETING MANAGEMENT PROCESS

identified potential exchange partners

developed offerings
Marketing is a social Factors communicated info
process involving the activities delivered products
necessary to enable individuals collected payments
and organisations to obtain
what they need and want Ultimate
Customers
through exchanges with others Organisational
and to develop ongoing
Recent Developments exchange relationships. Needs & wants Need: gap between actual & desired state
Globalisation Want: Specific way to satisfy need
Increased importance of service
Information Technology Customers buy benefits, not products
- Collect more data about customers Create value Benefits, service & price determine value
Exchange L/T relationships make the lifetime
- New way of communicating with customers
Relationships across functions & firms customer value increase
1. Need
Marketing activities 2. Benefits sought
Process 3. Choice criteria
4. Product/service features
5. Brand/supplier chosen
Vertical integration: Marketing channels: People
Products: Tangible Institutions
all marketing activities part of marketing Products & Services
Services: Less Tangible Activities
are performed by a activities are
Places
single organisation performed b:y
Merchant wholesalers Individuals & Organisations (who are)
Markets (consist of) Interested & Willing (and have)
Agent middlemen
Retailers Resources available
Facilitating agencies
Peoples needs: flow from basic biological and psychological human make-up
Organisations needs: shaped by the organisations strategic objectives and
Utility/price relationship enhanced: Benefits:
relate to resource inputs, capital equipment, supplies, and services necessary ro
Possession utility Transactional efficiency assure theri survival and well-being
Place utility Functional effciency
Peoples want:s: shaped by social influences, their past history, and consumption
Time utility
Experiences
 Module 1 THE MARKETING MANAGEMENT PROCESS process of analysing, planning, implementing, co-
ordinating and controlling programmes involving the
conception, pricing, promotion and distribution of
products, services and ideas designed to create
and maintain beneficial exchanges with target
markets for the purpose of achieving orgartisational
1. Integrate marketing objectives objectives.
and strategy with the companys
FEEDBACK Corporate and Business-level
strategies and resources (FIT):
6. Control of the marketing 2. Analyse the 4Cs
programme (Marketing opportunity
analysis)
Company
5. Implementation of
THE MARKETING MANAGEMENT PROCESS Context (environment)
Customers
the marketing programme Competitors

4. Formulate strategic marketing

programmes for specific situations Market segmentation,
New markets Targeting and
Growth markets 3. Formulate the 4Ps (Marketing mix) Positioning decisions
Mature and declining markets (Strategic Marketing programmes)
Product offering
Price
MARKETING PLAN Promotion
Segmentation: divide customers Place (distribution channels)
Into market segmentsdistinct subset
of people with similar needs,
circumstances and characteristics Positioning: design the product
Targeting: decide on which market
that lead them to respond in a or service offering within the
segments to focus a strategic mktg
similar way to a particular product target segment
programme
or service offering or to a particular
mktg strategic programme
Module 2 CORPORATE STRATEGIES AND THEIR MARKETING IMPLICATIONS

Marketing role Strategy

Firms orientation Influencing factors Components Levels

Early entrants 1. Scope 1. Corporate
1. Product orientation 1. Competitive factors Growing industry
2. Marketing orientation 2. Goals and objectives 2. Business-level (SBU)
Mature industry 3. Allocation of resources 3. Functional/Marketing
3. Sales orientation
Across industries 4. Sources of competitive advantage
2. Stages of development
Across coutrnies (global markets) 5. Synergy
3. Strategic inertia

Business activity Production orientation Marketing orientation

or function
Company sells what it can make; Company makes what it can sell;
Product offering primary focus on functional primary focus on customers' needs and
performance and cost. market opportunities.
Product line Narrow. Broad.
Based on production and distribution Based on perceived benefits provided.
Pricing costs.
Technical research; focus on product Market research; focus on identifying
Research improvement and cost cutting in the new opportunities and applying new
production process. technology to satisfy customer needs.
Protection for the product; minimiseDesigned for customer convenience; a
Packaging costs. promotional tool.
A necessary evil; minimise bad debt A customer service; a tool to attract
Credit losses. customers.
Emphasis on product features, quality Emphasis on product benefits and
Promotion and price.
ability to satisfy customers' needs or
solve problems.
 Module 2 CORPORATE STRATEGIES AND THEIR MARKETING IMPLICATIONS
5. Synergy 1. Scope
across Corporate
businesses in the shared resources, technologies
Corporate
corporate portfolio shared functional competencies Domain: business or industry
Corporate development strategy
across - conglomerate (unrelated) diversification
shared resources
BU product-market
shared functional competencies - vertical integration forward
entries in the BU backward
- acquisition and divesture policies
Marketing across product- shared marketing resources Domain: product market within
market entries shared competencies or activities BU business or industry
Business development strategy:
- concentric (related) diversification
4. Source of Competitive Advantage
Target market definition
Corporate - superior corporate resources; STRATEGY Product-line depth and breadth
- more corporate R&D;
Branding policies
- better organisational Marketing Product-market development plan
processes or synergies
Line extension or product eliminations
BU - competitive strategy; plans
- BU competencies 2. Goal and Objectives

Marketing - effective product positioning; revenue growth

aggregated across
- superiority on one or more of the 4Ps Corporate profitability, ROI
businesses in the
EPS, contribution to stakeholders
corporate portfolio
3. Allocation of Resources sales growth,
new product or market growth
among businesses in the corporate portfolio aggregated across
Corporate profitability, ROI
across functions shared by multiple businesses product-market
BU cash flow,
entries in the BU strenghtening bases of competitive
BU among product market entries in the BU advantage
across functions within the BU
sales, market share
Marketing across 4Ps for a specific product-market entry Marketing for a specific product- contribution margin
market entry customer satisfaction
Module 2 CORPORATE STRATEGIES AND THEIR MARKETING IMPLICATIONS
1. Define the firms mission
6. Develop synergies Fit with:
Sources
firms internal characteristics
knowledge
5. Allocate corporate resources external environment
corporate identity and corporate brand
shared resources Criteria:
Two tools:
Physical: based on existing products or technology
Portfolio models
Functional: based on customer needs + functions to perform
-The BCG growth share matrix to satisfy them
- growth rate: industry attractiveness
Best functional but specifying the customer group and the
- market share: competitive strength products or technologies on whihc the firm will concentrate
Importance of ethic:
Social policies and ethical standards
CORPORATE STRATEGY Specific
2. Define firms objectives Measurable
Four components:
Performance dimension or attribute sought
Measure or index for evaluating progress
Target or hurdle to be achieved
- Multifactor models (GE matrix) Time frame within which the target is to be
accomplished
4. Develop Corporate Growth strategies Trade-off when objectives are multiple

3. Gain a competitive advantage

Company resources that:
other firms do not have
take a long time to develop
are hard to acquire
Value-based planning Employ resources effectively
- Discounted cash flow Develop competitive and marketing
strategies that provide benefits
Communicate benefits effectively
 Module 3 BUSINESS STRATEGIES AND THEIR MARKETING IMPLICATIONS
4. Competitive Advantage 1. Decide how to divide the firm into SBUs
Porter
1. Overall cost leadership Characteristics:
2. Differentiation Homogeneous set of markets to serve
3. Focus (Narrow/Broad) Unique set of product-markets
Control over resources key to success
Miles & Snow
Responsibility for profitability
1. Prospectors
2. Defenders Dimensions (trade-off):
3. Analysers Technical compatibility
4. Reactors Similarity in customer needs
Similarity in personal characteristics

Dimensions
Low-cost
defender
Differentiated
defender
Prospector Analyser 2. Define SBUs objectives
Mature/stable/well- Mature/stable/well
- Broad/dynamic Mixture of defender BUSINESS Break down corporate objectives into
defined domain; defined domain; domains; technology and prospector
Scope mature technology
and customer
mature technology
and customer
and customer
segments not well
strategies STRATEGY subobjectives for each SBU
segments segments established Break down overall SBU objectives into
Goals and
subobjectives for each product-market entry
objectives
Adaptability Very little Little Extensive Mixture of de fender
(new product and prospector
success) strategies
Effectiveness
(sales growth Little Little Large Mixture of defender
and increase and prospector
in market share) strategies
3. Allocate resources within the SBU
Efficiency High High Low Mixture of defender Two tools:
(ROI) and prospector
strategies Portfolio models
Resource Generate excess Generate excess Need cash for Need cash for - The BCG growth share matrix
deployment cash (cash cows) cash (cash cows) product development product development

(question marks or but less so than do - Multifactor models (GE matrix)
stars) prospectors
Value-based planning
Synergy Need to seek Need to seek Danger in sharing Danger in sharing
operating synergies operating synergies operating facilities operating facilities - Discounted cash flow
to achieve to achieve and programmes
and programmes

efficiencies efficiencies better to share better to share
technology/marketing technology/marketing
skills skills
 Module 4 ENVIRONMENTAL ANALYSIS
Demographic
Physical increase in population esp. in growing countries
Technology population aging esp. in developed countries
greenhouse effect (global warming) ethnic composition
internet depletion of natural resources HIV/AIDS pandemic
genetic engineering inadequate water supply shift from rural to urban in growing countries
transistors
plastic

Political/Legal Economic
political/legal risks (confiscation, Gross Domestic Product (GDP)
expropriation, domestication) Purchasing Power Parity (PPP)
political/legal opportunities Components of free-trade agreements (EU)
govt. regulation macroenvironment interest rates
govt. deregulation exchange rate

Environmental analysis Sociocultural

Opportunity/threat matrix individual values
1. Identify macro trends changes
family structure
2. Evaluate impact on the firms
minority rights
l/t profitability and position
leisure-time activities, etc
3. Respond

Sources of macro trends

Trade associations & magazines
Local, state & federal governments
Government sources & business press
Web
Output of macro trends analysis
Quantitative data (markets size - Events no 4 should be closely monitored.
- Events no 3 should probably be dropped, at least for the moment.
& growth rate)
Qualitative data - Events no 1 should be reexamined less frequently to determine
- whether the impact rating -remains basically sound
.
 Module 5 INDUSTRY ANALYSIS AND COMPETITIVE ADVANTAGE
Product-life cycle
Industry: 1.Introduction Competitive advantage
Definition: 2.Growth
group of firms that offer a 3.Shakeout
product or class of products 4.Maturity
that are similar and are
5.Decline
close substitute for one
another
Levels of analysis:
Generic category
Product class Driving forces
Product type (macroenvronmental trends)
Changes in the industrys l/t growth rate
Changes in key buyer segments
Diffusion of proprietary knowledge
Stages in product life cycle
Changes in cost & efficiency
Five competitive Stage
Changes in gvt regulations Introduction Growth Shake - out Mature Decline
forces (Porter)) characteristics
Market growth Moderate High Levelling off Insignificant Negative
Critical success factors Degree to which rate (net of

(concerned with one or management inflation)

Technical change High Moderate Limited Limited Limited
more of the 4 Ps) can perform on in product de sign
these factors Segments Few Few to many Few to many Few to many Few

Industry attractiveness Competitors

Profitability
Small
Negative
Large
Large
Decreasing
Low
Limited
Large for high-
Few
Low
-
market-share
Adoption process: Adopters categories: holders
Firm's normative
1.Awareness Rate of diffusion Innovators responses
2.Interest of innovation Early adopters Strategic Stimulate Build share Build share Hold share Harvest
3.Evaluation Early majority marketing primary
objectives demand
4.Trial Late majority Product Quality Continue Rationalise Concentrate on No change
5.Adoption Laggards improvement quality features
Rate of adoption: improvement
Risk Product line Narrow Broad Rationalise Hold length of Reduce length of
Relative advantage line line
Market segments Price Skimming vs Reduce Reduce Hold or reduce Reduce
Relative simplicity penetration selectively
Compatibility with current behaviour
Ease of small-scale trial Channels Selective Intensive Intensive Intensive Selective

Ease of communication of benefits Communications High High High High to

declining
Reduce
Module 6 UNDERSTANDING CONSUMER BUYING BEHAVIOUR
Psychological and
Social Influences
Personal Characteristics
Culture
High-Involvement Low- involvement Perception and Memory
Subculture High-involvement process
brand familiarity (impulse purchasing)
Social class 1. Problem identification exposure
brand comparison on the shelf
upper (reference) change in actual state attention
brand evaluation after purchase (may
upper middle (quality) change in desired state comprehension
develop brand loyalty)
middle (traditional) 2. Info Search (Memory) retention
inertia vs brand loyalty
working (impulse) Influences:
Factors 3. Evaluation of alternatives
lower (compen. and brand loyalty selectivity
product Experience Product dimensions or attributes
Reference Groups (formal/informal) situational Social acceptability - perceptual vigilance/defense
cost
Family Value-related considerations performance - memory limitations
young singles perceptual organisation
personal Demographic characteristics social
married withchildren Personality - categorisation
availability
married without children Costs of info - integration
environmental and usage situation
middle without children opportunity 4. Purchase = product purchase process Attitudes
older marrieds and unmarrieds psychological 5. Post-purchase evaluation Compensatory models
Sources of info aspirations or expectations - Fishbein model
personal Evaluating and performance evaluation Non- compensatory models
public legitimising function Brand loyalty
commercial Inforrming function Repeated patronage
Psychographics
Types of consumer decision making Demographics
Extent of involvement Life Style
Extent of decision making High Low strivers
Extended (information search; Complex decision making (cars, Limited decision making, achievers
consideration of brand homes, vacations) including variety seeking and pressured
alternatives) impulse purchasing (adult
cereals and snack foods)
adapters
traditionals
Habit/routine (little or no Brand loyalty (athletics shoes, Inertia (frozen vegetables, paper
information search; focus on one adult cereals, cologne, towels)
brand) deodorant)
 Module 6
High- involvement consumer behaviour
Consumers are information processors.
Consumers are information seekers.
Consumers represent an active audience for
UNDERSTANDING CONSUMER BUYING BEHAVIOUR
Low-involvement consumer behaviour
Consumers learn information at random.
Consumers are information gatherers.
Consumers represent a passive audience for

advertising. advertising.

Consumers evaluate brands before buying.
Consumers seek to maximise expected
satisfaction. They compare brands to see
which provides the most benefits related to
their needs and buy on the basis of a
multiattribute comparison of brands.
Personality and lifestyle characteristics are
Consumers buy first. If they do evaluate
brands, it is done after the purchase.
Consumers seek an acceptable level of
satisfaction. They buy the brand least likely to
give them problems and buy on the basis of a
few attributes. Familiarity is the key.
Personality and lifestyle are not related to

related to consumer behaviour because the
product is closely tied to the person's self-
identity and belief system.
Reference groups influence consumer
behaviour because of the importance of the
product to group norms and values.
consumer behaviour because the product is not Marketing decisions for high-nvolvement versus
closely tied to the person's self- identity and
beliefs. low-involvement products or services
- -
Reference groups exert little influence on
consumer behaviour because products are not
Marketing mix Marketing decisions where the
strongly related to their norms and values.
element consumer exhibits high involvement
Product For long-term success, one or more
decisions compelling product benefits are
necessary, regardless of the level of
consumer involvement.
Pricing Price, unless substantially lower, is
decisions likely to be of secondary importance to
performance criteria . High price may
suggest high quality or status, to the
seller's benefit. Demonstrable consumer
benefits are more likely than price to
drive consumer choice.
Promotional Consumers are interested in the
decisions information that sellers provide.
Promotional vehicles that communicate
in greater detail (e.g., print advertising,
Internet, infomercials, personal selling
are likely to be effective.
Distribution Consumers will be relatively less
decisions concerned with convenience in
Purchasing. Relatively less extensive
distribution is necessary
Marketing decisions where the
consumer element exhibits low
involvement
For long-term success, one or more
compelling product benefits are
necessary, regardless of the level of
consumer involvement.
Price offers can be effective in gaining
trial. A sustained low price, compared
to competitors (such as for private label
goods in supermarkets), may provide
sufficient inertia for repeat purchase.
Consumers are not interested in the
information that sellers provide. Large
advertising budgets and a clear focus
on a single demonstrable consumer
benefit are probably necessary to get
the message across.
Consumers will be relatively more
concerned with convenience in
purchasing. Relatively more extensive
distribution is necessary.
 Module 7 UNDERSTANDING ORGANISATIONAL MARKETS AND BUYING BEHAVIOUR
Purchase processes and buyer-seller relationships
Purchase motives use of professional buying specialists Market demographics
derived from consumer demand following prescribed procedures Organisational buyers:
relatively inelastic closer buyer-seller relationship fewer in number
more erratic presence of multiple buying influences larger
more cyclical more apt to buy on specifications geographically concentrated

Goods Services
Raw Materials Organizational Markets Business Services
Natural Buying Centre intangible and evaluated after purchase:
limited supply; few producers; Users long-term relationship, suppliers qualifications,
bulky and low unit value: Influencers experience and reputation critical
short distribution channels Gatekeepers price not important/indicator of quality
Farm Buyers tailored: personal selling important
few producers; seasonal: long distribution Deciders purchased by executives
channels;
standardised: branding not important,
little promotion
Component Materials and Parts Straight rebuy Modified rebuy
high volume: sold directly; Newtask buying
steady and reliable supply important with JIT;
web auctions important
Installations Recognition of a Search for information Evaluation and Purchase Performance
few potential customers; problem or need about products selection of suppliers decision evaluation
large average sale; and suppliers and
tailored: personal selling and system feedback
design service important; Derived demand Value analysis Vendor analysis Purchasing contract:
sold directly Requirement planning Make-or-buy decisions Unethical practices - Long-term contract
Accessories Determining product Information about potential -Reciprociity - Spot market contracts
disomogeneous category: specifications suppliers -Bribes or auctions
no unique marketing strategy - Alliances and
Operating Supplies partnerships
small quantity-purchases: JIT purchasing
long distribution channels; arrangements
price important;
little brand loyalty
 Module 8 MEASURING MARKET OPPORTUNITIES: FORECASTING AND MARKET RESEARCH
Definition: design, Market knowledge
FORECASTING collection, analysis systems:
and reporting of Internal records
research to gather Mktg databases
data related to a Competitive
Object: Approaches: Cautios & Caveats
particular market intelligence (CI)
Market potential Top-down Eplicit assumptions challenge or situation Client contact mgmt
Penetrated Bottom-up: Multiple methods
market - market segments Anchoring bias
Sales forecast - product lines Capacity constraints
as forecast MARKET RESEARCH
Methods Influence of incentive
pay
Implicit assumptions Data sources/
of awareness and Problem/ Types od data/ Design
distribution coverage objectives Approaches research Collect data
Problem: Data sources: Data collection method Problem:
unclear Primary Observation Collector bias
Quantitative Observation- Based Surveys objectives Secondary Survey
1. statistical methods (cheaper and Experiment
Based on existing buyers intention
(based on past history data (better if faster) Contact method:
buyerscurrent Analyse data
- used for established secondary sources Types of data: Face-to-face
behaviour
firms/products) are available)-used Quantitative Mail
salesforce Qualitative Telephoone
2. conjont analysis for existing products
opinion Fax
(used for new Approaches: Report results
products forecast) Quantitative: E-mail
- questionnaires Internet
Judgement or Mathematical Qualitative (often Design the sampling plan
Analogy Market Tests
Intution conducted first): population
Used for new Experimental l(in Chain ratio - focus groups sample size
products when research laboratories) calculation - interviews method
other methods Live test (with real Use of indices - probability or random
are N/A advertising & promotion (BPI, CDI, BDI) - non-probability or
& distribution in stores) convenience
 Module 9
MARKET SEGMENTATION
Objectives:
1. Identify a homogeneous
segment that differs from others
2. Specifcy criteria that define
segment
3. Determine the size and market
potential of each segment
MARKET SEGMENTATION AND TARGET MARKETING
process by which a market is divided into distinct customer subsets of MARKET TARGETING
people with similar needs and characteristics that lead them to respond in
similar ways to a particular product offering and strategic marketing which segment to target based on
programme. evaluation of relative attractiveness of
each segment, the benefits sought and
Criteria or descriptors Process the firm's relative strengths.
1. Demographic 1. Choose criteria to measure
Consumer markets attractiveness and competitive
age; sex; income position Strategies:
occupation; education Attractiveness 1. Mass
race/ethnicity Customer needs and behaviour Differentiation
Industrial markets Market or market segment size and Undifferentiated
macrosegmentation (caracteristics of growth rate 2. Niche
buyers organisations) Macro trends (demographic, 3. Growth
microsegmentation (caracteristics of sociocultural, economic,
individuals) political/legal, techonolgical,
physical)
2. Geographic
Competitive position
3. Geodemographic Opportunities
demographic + geographic Firm and competitor capabilities and Global markets
4. Behavioral Factors resources
Consumer needs Attractiveness of target industry
benefit sought (Porters 5 forces, capacity, driving Country as a Inter-country
choice criteria forces) segment segmentation
Product-related behaviour 2. Weight Each Factor
product usage
3. Assess the current position of
loyalty
each target market on each factor
purchase predisposition
(market-attractiveness/competitive-
purchase influence
posiiton matrix)
General behaviour
4. Project Future Position for Each
life styles (VALS2)
Segment (changes in market
social class
attractiveness and/or competitive
Organisational or firm bahaviour
position)
purchasing structure (centralised/not)
5. Choose Segments to Target,
buying situation (straight, modified, new)
Allocate Resources
Module 9 MARKET SEGMENTATION AND TARGET MARKETING

Market- attractiveness/ competitive position matrix

-

Implications of alternative positions within the market- attractiveness/ competitive

position matrix for target market selection, strategic objectives and resource allocation
Module 10 POSITIONING Definition: designing product offerings and developing
strategic marketing programmes that collectively create
an enduring competitive advantage.
Refers to:
the place a product or brand occupies in customers'
minds relative to their needs and competing products or
brands (customer need considerations)
Porters strategies: the marketer's decision making intended to create such
1. Overall cost leadership a position (competitive considerations)
2. Differentiation
3. Focus

Physical POSITIONING Perceptual

Technical orientation. Consumer orientation.
Physical characteristics. Perceptual attributes.
Objective measures. Perceptual measures.
Data readily available. Needs marketing research.
Physical brand properties. Perceptual brand positions and positioning intensities.
Large number of dimensions. Limited number of dimensions.
Dimensions Represents impact of product specifications and
Represents impact of product specifications and price.
communication.
Direct R&D implications.
o Simple physically-based R&D implications need to be interpreted.
attributes: directly related to a single
physicall dimension such as price, quality,
power, or size.
Complex physically-based
attributes. Ex: speed of a computer system,
roominess of a car, and a product's or
service's being user friendly.
Essentially abstract attributes:
influenced by physical characteristics, but not
related to them in any direct way. Ex.:
sexiness of a perfume, quality of a French
wine, and prestige of a car.
 Module 11 PRODUCT DECISIONS
Convenience Convenience
Shopping Shopping
Speciality Products Services Speciality
Unsought Unsought

Characteristics Quality Marketing mix

Quality Branding Packaging Servicing Intangibles Provides differentiation 4Ps plus:
Provides differentiation Dimensions people (the customer
Consumers benefits protects delivery
tangible care)
Dimensions simplifies shopping facilites use reliability
reliability physical evidence (the
Performance facilitates info process promotes warranty
responsiveness environment, literature,
Reliability confirms right choice provides info repair &
assurance packaging, etc.)
Features helps ensure quality increases safety maintenance
empathy processes (from enquiry
Conformance may statisfystatus needs important in the complaint/
and booking systems to
Durablity Sellers benefits mktg of services Inquiry
after-sales service)
Serviceablity Improves: handling
Aeasthetics mktg programmes credit Marketing-strategy implications of classification
fit & finish) effectiveness training Examples Strategy elements stressed
Perceived Quality brand loyalty claim Maximum distribution (product
(brand name) profit from competitive settlement Convenience Toothpaste, soap, razor blades, availability), consumer advertising
advantage fast price goods magazines, many packaged food (awareness and brand recognition),
quotation & services products, haircuts merchandising
channel relationship - (in store displays)
Alllows brand extension fast order
processing Available in limited number of stores,
Shopping Colour televisions, cars, major personal selling important, limited to
Manufacturer Retailer and distributor appliances, homes, car repair,
goods extensive advertising, seller often
brands brands -
& services family doctors offers financing, warranties and
post purchase service
Individual Family Cobranding Global
Musical instruments, stereo Limited distribution, high price,
lowers risk lower costs For a new segment Speciality
equipment, some brands of men's strong advertising to promote brand
For an existing goods
mutliple brand association clothing, college consultants uniqueness and where available
segment if it adds & services
entries within (pos./neg.) locally
the same easier product value Unsought
Certain medical services, personal Strong promotion, including personal
product class modifications goods
liability insurance, encyclopaedias selling
(pos./neg.) & services
 Module 11 PRODUCT DECISIONS

PRODUCT LINES DECISIONS

Short-line/Long-line Line stretching Brand extension Product systems

Extent to which the lenghten the product use established brand sell package (products +
market can be line for another product service
segmented add items with different class require compatibility
How the company wants size/price/quality association (pos./neg.) between system
to position itself serve new market components
What stage of the market segments scale economies
evolution is Tyoes: close buyer-seller
- early stage: short relationship
upward
- in the L/T: long downward
two-way stretches
Line filling Line extension Dropping products

lenghten the product introduce new products, eliminate weak products

line higher cost based on their
add items extended technological contribution to profits
add/drop features base
tap new market
Objectives:
segments
satisfy more customers
increase sales & profits
full-line supplier to
dealers
ward off competitors
 Module 11 Reasons:
PRODUCT DECISIONS Causes of failure:
New products: changes in technology Introduction of me-too products
New to the world macroenvironment factors
competition Causes of success:
New to the firm
customers and suppliers Product linked to an attractive market
Product-line extensions
Strong market capabilities
Product improvements
NEW PRODUCT DEVELOPMENT

Ideas Generation and Initial Screen Second screen Decision Post-development Pre-coomercialisation Post-launch
Strategic fit: Sources review decision business analysis review
Does the idea align companys staff
with the companys R&D people
mission? salesforce
Does it takes PM
advantage of or mktg researchers
sttrenghten its distributors
Testing and
competencies? competitors validation
Are the resources Field test markets
available? Maktg plan for the product
implemented in a small
Preliminary assessment Detailed Development geographic area Full production &
investigation Opportunity to evaluate market launch
product design
Customer, market and product features results Commercialisation strategies:
Idea technical and
market feasibility competitive analysis price Slow and expensive move directly to a roll out
Primary research channels Laboratory test markets region by region or nationally
Secondary research
brand name Steps launch in the product in 10%
packaging - awareness of country, check results and
communication - trial then roll out globally
- repeat buying
Low cost and confidentiality
Suitable fot small range
of products
No or little info about distribution
 Module 12 PRICING DECISIONS
SBU and mktg strategies Companys SW
Target market characteristics Environmental influences:
Product characteristics PRICE-SETTING DECISION PROCESS - Economic trends
Competitor characteristics - Legal restrictions

Estimate Demand &

Strategic Objectives Perceived value + Estimate Costs
+ Competitive Analysis
= Price setting Methods

Penetration Determine the ceiling of Determine the floor of Reverse engineering to Cost oriented
Differentiation the range of feasible prices the range of feasible prices estimate competitors cost plus or mark-up
Maximum profit Demand curve: product costs rate of return
Cost categories (FC, VC, TC)
- skimming negative slope (typical) No of employees, no and break-even
Measuring costs
- harvesting positive slope size of outlets, efficiency Competition oriented
full
Survivor Demand sensitivity ratios to estimate going rate or
direct
Social perception/preference + competitors service competitive parity
ABC
awareness and attitudes costs discount/premium
Cost and volume relationships Market share
towars alternatives + Customer orientated
economies of scale
ability to pay = perceived value
experience curve
Perceived value - industrial engineering
Price elaticity of demand - overall estimates
elastic - decomposiition
inelastic - compositional
unitary - importance ratings
esp. for value-in-use (reference
Demand estimation
industrial products and product + additional benefits
mktg research (lab or test
consumer durables & cost savings)
market)
esp. for psychological Influences
consumer survey
consumer non durables - customary pricing
regression analysis
- price lining
in-store experiments
- psychological pricing
multiple tests
- odd pricing
- promotional pricing
 Module 13 Objectives:
DISTRIBUTION CHANNEL DECISIONS Rationale for mktg channels:
Availability of human & Trade-off between costs
Product availability
Businesss competitive financial resources and benefits:
Meeting customer
strategy Functional efficiency
service requirements CHANNEL DESIGN Scale efficiency
Promotional effort
Market info Environmental factors Transactional efficiency
3Ps +
Cost effectiveness (ex. technological developments)
Product characteristics
Flexibility

Channel design decision:

Institutions: Channel design alternatives: Which objective is most important?

Merchant Wholesales Promotional effort Availability and

Agent Middlemen:
Cost effectiveness
Market info & postsale customer service Make-or-buy decision
- manufactures agents
Services: Global: These activities must requirements Company salesforce
or reps
Usually short: direct Market entry strategies be controlled by: are more effcient at
- sales agents Consumer goods and
from the creator or exporting (direct(indirect) detailed legal contracts high volume levels
- brokers Services
performer of service contractual (licensing, because of economies
- e-hubs incentive Strategies of retail
to the end user franchising, contract of scale and because
Retailers vertically integrated distribution intensive
-type of merchandise manufacturing, channels exclusive agentscommissions
-broad/narrow range turnkey contruction selective are larger
- pricing policies contract, coproduction, The more important the Supply chain mgmt:
- nature of premises countertrade) availability the more likely Improves customer service
- method of operation direct investment (JV, the use of wholesalers/ levels while simultaneously
(lowmargin/high turnover- sole ownership) agents reducing costs
high margin/low turnover) Channel alternatives Industrial goods and
Nonstore retaiing (ex. domestic middlemen Services Flexibility
Web-sites) foreign middlemen The more important the Channels involving
Facilitating Agents availability and customer middlemen are more
service the more likely flexible than veritically
Consumer goods Industrial goods the use of wholesalers/ integrated systems
agents
Internet:
always improves the Multichannel distribution
search aspect of Dual (two-channel)(to reach
availability different target segments)
improves the acquisition Hybrid (the members perform
aspect of availability only complementary functions for the
if the product can be customer segment)
delivered in digital form
Module 13 DISTRIBUTION CHANNEL DECISIONS
CHANNEL MANAGEMENT

Vertical Management Systems (VMSs) Channels

Sources of Channel conflicts &

Channel Control Incentives:
Corporate Contractual Administered Relational channel power Resolution Strategies
Strategies
Economic: based on Consumer promotion Reasons:
Wholesaler-sponsored Based on economic (pull strategy) - incompatible goals
economic rewards
voluntary chains position or expertise Trade promotions - unclear R/O
Coercive: based on
Retailer cooperatives Administrator: typically punishments (push strategy): - misperceptions
Franchise systems the manufacturer tends Expert: based on - to increase purchases - poor communications
- manufacturer-retailer to dominate economic knowledge or carry larger inventories Resolution strategies:
- manufacturer-whole- rewards and expertise expertise - to increase personal - channell members in
saler Referent: based on selling efforts policy decision
- wholesalerretailer durable benefits - to increase local - increased interaction
- service sponsor- expectations promotional effort - focus on common
Based on norms of
retailer - improved customer goals
mutual trust and Legitimate: based on service - use of mediation &
expectation of contractual agreements role of incentives arbitration
cooperation benefits or common belief changes when L/T - adjust policy
Reliance on economic relationship exists
rewards and often - increased incentives &
Forward Backward rewards
also contractual
When a When a retailer agreements Pull Push
manufacturer or wholesaler Shared economic
assumes assumes owner- Focus on building Focus on gaining
rewards and expertise selective demand
ownership of ship of institutions the cooperation
Trust is necessary and brand loyalty of wholesalers
institutions that that normally
normally follow precede them among potential and/or retailers
them in the in the distribution customers More suitable
distribution channeks More suitable for: for small firms
channels - a product in the
growth stage of LC
- a share leader or
prestigious brand
Module 14 THE PROMOTION MIX
Target audience
Percentage of sales 1. Define the audience to be targeted Change in audience perceptions,
Competitive parity
Objective-and-task
2. Set the promotional objectives (SMART) attitudes, behaviour
3. Set the promotion budget Speed of change
4. Design the promotion mix Degree of change
Promotions components to use
5. Evaluate the results
Activities within each component
Vehicle to employ

Advertising Personal Selling Sales Promotion Public Relations

Consumer promotions (pull
Setting objectives Setting Developing the Measuring results strategy)
Budgets an making creative strategy Sales promotions (push
media choices Before tests strategy)
Hierarchy-of-effect models recall tests
awareness Unique selling sales tests
comprehension Decide reach and frequency proposition to After tests
conviction Types: TV, radio, print media, be delivered Recognition
action out-of-home,exhibition, Source of message tests
direct marketing, internet Nature of appeal Recall tests
Budget =GRPs x cost embodied in the
GRPs (Gross rating points) = message
reach x average frequency
Cost for a proposed media schedule
Module 14 THE PROMOTION MIX
Promotion mix Amount of Control over Cost to reach Strategic
element information Credibility the message one customer suitability
communicated
Varies: little
information in Well- suited to a
Advertising a radio or TV Low Good Low .pull strategy
ad, to lots on a
website
Depends on the
credibility of Very high in
Personal Lots of the company Poor, but developed Well-suited to a
Selling information and the training helps countries, can be push strategy
personality and low elsewhere
sales skills of
the salesperson
Low- and self Consumer
liquidating: promotion
Sales Virtually no generally pays supports a pull
Promotion information Not applicable Good for itself as the Strategy . Trade
product is promotion
purchased supports a push
strategy.
Public Lots of Supports both
Relations information High Poor Very low or nil pull and push
strategies.

Examples of promotional activities

Print advertisements (newspaper and magazine), radio, television,
Advertising billboard, direct mail, brochures and catalogues, signs, in- store displays,
posters, motion pictures, web pages, banner ads and emails.
Sales presentations, sales meetings, sales training and incentive
Personal selling programmes for intermediary salespeople, samples and telemarketing
(either inbound or outbound).
Sales promotion Coupons, sweepstakes, contests, product samples, rebates, tie- ins, self
liquidating premiums, trade shows, trade ins and exhibitions.
Newspaper and magazine articles/reports, television and radio
Public relations presentations, charitable contributions, speeches, issue advertising and
seminars.
 STRATEGIC MKTG PROGRAMMES FOR:
1. NEW MARKET ENTRIES 2. GROWTH MARKETS

Pioneers Followers Late entrants Market leaders (pioneers) Followers

Marketing objectives: Marketing objectives: Marketing objectives:
Increase customers 1. Retain current customers 1. Capture repeat/replacement
awareness and 2. Stimulate selective demand purchases from current
willingness to buy among later adopters customers of the leader
Maxe it easy for Strategies: or other target competitor
people to buy 1. Fortress or posiiton defence 2. Stimulate selective demand
Strategies: 2. Flanker among later adopters
Mass-Market 3. Confrontation Strategies:
penetration 4. Market expansion 1. frontal attack,
Niche penetration 5. Contraction or strategic withdrawal 2. leapfrog strategy,
Skimming and early 3. flanking attack,
withdrawal 4. encirclement,
5. guerrilla attack.

3. MATURE MARKETS 4. DECLINING MARKETS

Mantain competitive Pursue growth or profit Divestment or Remain

advantage opportunities Liquidation
Strategies:
1. Harvesting or milk
Analyser Defender Mantain current Extend volume 2. Manteinance
market share growth 3. Profitable survivor
Strategies: Strategies: Strategies: 3. Niche
1. Differentiation 1. Fortress 1. Increased penetration
2. Low-cost position 2. Flanker 2. Extended use
3. Niche 3. Market expansion
Module 18: IMPLEMENTATION AND CONTROL Organisational fit:
fit between a business's competitive and marketing strategies and
1) the organisational structures,
2) policies,
3) processes,
4) plans necessary to effectively implement those strategies.

Fit between strategies Administrative factors Organisational and Marketing Plan

and marketing interfunctional factors
programmes Types of business strategies
1. Functional Competencies of 1. Executive Summary
Prospector Differentiated Low-cost the SBU Issues
Business strategies: Administrative defender defender
factor 2. Resource Allocation across Objectives
Prospector Strategy
functions
Analyser Actions
SBU Relatively Moderate Relatively 3. Decision Making influence
Differentiated defender Outcome
autonomy high level. level. low level. and participation
Low-cost defender 2. Current Situation
4. SBUs Organisational
Marketing policies and strategies: Shared Relatively Little synergy High level of Target market
in areas central to synergy and Structure
Product and service policies programmes little synergy Competition
-few shared differentiation - shared Important variables:
Price policy and synergy Macroenvironment
programmes. shared programmes. Formalisation
Distribution policies Past product perfomance
programmes Centralisation
Promotion policies Sales forecast
elsewhere Specialisation
Common marketing strategies 3. Performance review
Organisational designs: 4. Key Issues
High incentives High incentives Incentives based
Functional SWOT
Evaluation and based on sales based on profits on profits and
Product management 5. Objectives
reward systems and share or ROI ROI
growth Market management Financial
Matrix Marketing (sales)
5. Functional coordination and 6. Marketing strategy
Critical performance Critical performance Critical performance conflict resolution 7. Actions
dimensions: dimensions: dimensions: Extra for services: 8. Projected P&L statement
Close coordination between 9. Controls
VOLUME ROI ROI operations, sales and 10. Contingency plans
SHARE GROWTH CASH FLOW marketing
Production planning,
standardisation &
procedures to reduce quality
variations required
HRM
Module 18: IMPLEMENTATION AND CONTROL

Organisational structures

Functional Product - management Market - management Matrix

Simple
Centralised and formalised
Little specialisation by product or
customer type.
Relies primarily on hierarchical
mechanisms for resolving
conflicts
Appropriate for:
low-cost defender SBUs in stable
and slow-growth industries
entrepreneurial start-ups,
Decentralised decision making
Increased product specialisation
Less bureaucratic
Appropriate for:
differentiated defender and
analyser SBUs in industries with
complex and relatively unstable
market and competitive
environments.
International organisational structures
A product manager has overall
responsibility for planning and
implementing a national
marketing programme for the
product,
Market managers are given
authority to develop promotion
programmes for a particular user
segment or geographic market.
Least bureaucratic or centralised
Most specialised type of
organisation
Appropriate for:
prospector businesses
management of new product
development projects within
analyser or differentiated
defender businesses.

Little or no formal International division Global structures Decision making

organisation
Either a domestic organisation
handling international transactions
or a separate export department
Used on early international
involvement
Best with a limited number of Functional type Centralised = best when
product that lack cultural sensitivity Structure based on products competion is strong
Area structure Decentralised
Hybrid organisation (combination
of previous; ex. Matrix)
Module 19 MEASURING AND DELIVERING MARKETING PERFORMANCE
Strategic control systems
Monitoring and evaluating a firms
SBU-level strategies
1. Identify key variables to monitor
driven by external forces
driven by actions by the firm
2. Track and Monitor
Measure of variables
Examine relevancy accuracy and
cost of measures
3. Strategy Reassessment
Takes place at periodic intervals
Triggers set in the strategic control
system
Profitability - direct Costing
The Control Process - full costing
1. Set standards of performance (SMART) - ABC
2. Specify and obtain feedback data Market Share/Sales
3. Evaluate feedback data Customer Satisfaction - expectations measures
- performance measures
4. Take corrective action
Product Quality/New product development
Benchmarking
Marketing performance measurement Sales Analysis
Marketing Audit
geographic (county)
1. Who needs what info? 1. Marketing Environment
size of order
2. When and how often is the info needed? Opportunities/threats from external
product, package
3. In what media and in what level of aggregation environment/firm;
customer
should the info be provided? Effect on firms customers, competitors;
channels
4. What contingencies shold be planned for? channel intermediares, suppliers
type of sale
2. Objectives and Strategy
Line items margin and Logic of objectives
Contingency Planning expense analysis Appropriateness of strategy
1. Identify critical assumptions 3. Planning and Control System
controllable Adequacy of the system
uncontrollable Effectiveness and efficiency of new
2. Assign probability product development process
3. Rank ordering the critical assumptions 4. Organisation
4. Track and Monitor Appropriateness of organisation
5. Activate the contingency plan structure
6. Specify response options 5. Marketing Productivity
profitability
efficiency
6. Marketing Functions
Check handling the product mix
7. Ethical
8. Product manager