1. Marketing Management -12th Edition-
Phillip Kotler and Kevin Lane Keller
“Understanding Marketing Management”
Chapter 1 Defining Marketing for the 21st Century
Chapter 2 Developing Marketing Strategies and Plans
2. 2
May 21st, 2014
Instructor: Yoshito Denawa, CPA (Lecturer in Business and
Economy at Kaetsu University)
3. Marketing Management is the leading marketing text because its content
and organization consistently reflect changes in marketing theory and
practice. The very first edition of Marketing Management, published in
1967, introduced the concept that companies must be customer-and-market
driven. But there was little mention of what have now become
fundamental topics such as segmentation, targeting, and positioning.
Concepts such as brand equity, customer value analysis, database
marketing, e-commerce, value networks, hybrid channels, supply chain
management, and integrated marketing communications were not even
part of the marketing vocabulary then.
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10. What is Marketing?
Marketing deals with identifying and meeting human and social needs.
One of the shortest definitions of marketing is “meeting needs profitably.”
When eBay recognized that people were unable to locate some of the
items they desired most and created an online auction clearinghouse or
when IKEA noticed that people wanted good furniture at a substantially
lower price and created knock-down furniture, they demonstrated
marketing savvy and turned a private or social need into a profitable
business opportunity.
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11. What philosophy should guide a company’s marketing efforts? What
relative weights should be given to the interests of the organization,
the customers, and society? Very often these interests conflict. The
competing concepts under which organizations have conducted
marketing activities includes; the production concept, product concept,
selling concept, marketing concept, and holistic marketing concept.
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19. The production concept is one of the oldest concepts in business. It
holds that consumers will prefer products that are widely available and
inexpensive. Managers of production oriented businesses concentrate
on achieving high production efficiency. This orientation makes sense
in developing countries such as China.
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25. The product concept holds that consumers will favor those products that
offer the most quality, performance, or innovative features. Managers in
these organizations focus on making superior products and improving
them over time. However, these managers are sometimes caught up in a
love affair with their products. They might commit the “better-mousetrap”
fallacy, believing that a better mousetrap will lead people to beat a path to
their door. A new product will not necessarily be successful unless the
product is priced, distributed, advertised, and sold properly.
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29. The selling concept holds that consumers and businesses, if left alone,
will ordinarily not buy enough of the organization’s products. The organi-zation
must, therefore, undertake an aggressive selling and promotion
effort. The selling concept is epitomized in the thinking of Sergio Zyman,
Coca-Cola’s former vice president of marketing: The purpose of marketing
is to sell more stuff to more people more often for more money in order to
make more profit. The selling concept is practiced most aggressively with
unsought goods, goods, that buyers normally do not think of buying, such
as insurance, encyclopedias, and funeral plots. However, marketing
based on hard selling carries high risks.
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It assumes that customers who are coaxed into buying a product will like
it; and that if they do not, they will not return it or bad-mouth it or
complain to consumer organizations, or might even buy it again.
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36. The marketing concept emerged in the mid -1950’s. Instead of a product-centered,
“make-and-sell” philosophy, business shifted to a consumer-centered,
“sense-and-respond” philosophy. Instead of “hunting,” marketing
is “gardening.” The job is not to find the right customers for your products,
but the right products for your customers.
Several scholars have found that companies who embrace the marketing
concept achieve superior performance.
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44. Selling , Marketing 3.4.5675895/:;$
Peter Drucker, a leading management theorist, puts it this way.
There will always, one can assume, be need for some selling. But the aim of
marketing is to make selling superfluous. The aim of marketing is to know and
understand the customer so well that the product or service fits him and sells itself.
Ideally, marketing should result in a customer who is ready to buy. All that should
be needed then is to make the product or service available.
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45. The holistic marketing concept is based on the development, design, and
implementation of marketing programs, processes, and activities that
recognizes their breadth and interdependencies. Holistic marketing
recognizes that “everything matters” with marketing – and that a broad,
integrated perspective is often necessary. Four components of holistic
marketing are relationship marketing, integrated marketing, internal
marketing and social responsibility marketing.
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Holistic marketing incorporates internal marketing, ensuring that
everyone in the organization embraces appropriate marketing principles,
especially senior management.
Internal marketing must take place on two levels. At one level, the
various marketing functions – sales force, advertising, customer service,
product management, marketing research – must work together. At
another level, marketing must be embraced by the other departments;
they must also “think customer.” Marketing is not a department so much
as a company orientation.
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64. The cause and effects of marketing clearly extend beyond the company
and the consumer to society as a whole. Are companies that do excellent
job of satisfying consumer wants necessarily acting in the best long-run
interests of consumers and society?
The fast-food hamburger industry offers tasty but unhealthy food. The
hamburgers have a high fat content, and the restaurants promote fries
and pies, two products high in starch and fat. The products are wrapped in
convenient packing, which leads to much waste. In satisfying consumer
wants, these restaurants may be hurting consumer health and causing
environment problem.
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68. Discussion 1
Let’s find the other examples of companies that do excellent job of
satisfying consumer wants, but are not necessarily acting in the best
long-run interests of consumers and society .
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McDonald’s has added healthy items like salads to their menu and replaced polystyrene
foam sandwich clamshells with paper wraps and lightweight recycled boxes. McDonald’s
Corp., which buys 2.5 billion pounds of poultry, beef, and pork a year for its 30,000
restaurants worldwide, ordered its suppliers to eliminate the use of antibiotics that are also
given humans, specifically when those drugs are used to make chickens, pigs and, less
often cattle, grow faster.
The societal marketing concept calls upon marketers to build social and ethical
considerations into their marketing practices.
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Needs, Wants, and Demands
Needs are the basic human requirements. People need food, air, water,
clothing, and shelter to survive. People also have strong needs for
recreation, education, and entertainment. These needs become wants
when they are directed to specific objects that might satisfy the need. An
American needs food but may want a hamburger. A person in Mauritius
needs food but may want a mango, rice and beans. Wants are shaped by
one’s society. Demands are wants for specific products backed by an
ability to pay. Many people want a Mercedes; only a few are willing and
able to buy one.
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71. Needs, Wants, and Demands
Marketers do not create needs: Needs preexist marketers.
Understanding customer needs and wants is not always simple. Some
customers have needs of which they are not fully conscious.
Consider the customer who says he wants an “inexpensive car.” The
marketer must probe further. We can distinguish five types of needs:
1. Stated needs (the customer wants an inexpensive car).
2. Real needs (the customer wants a car whose operating cost, not its initial price, is low).
3. Unstated needs (the customer expect good service from the dealer).
4. Delight needs (the customer would like to dealer to include an onboard navigation system).
5. Secret needs (the customer wants to be seen by friends as a savvy consumer).
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78. Target Markets, Positioning, and Segmentation
A marketer can rarely satisfy everyone in a market. Not every one likes the
same cereal, hotel room, restaurant, automobile, college, or movie. Therefore,
marketers start by dividing up the market into segment. They identify and
profile distinct groups of buyers who might prefer or require varying product
and services mixes. The marketer then decides which segments present the
greatest opportunity – which are its target markets. For each chosen target
market, the firm develops a market offering. The offering is positioned in the
minds of the target buyers as delivering some central benefit(s). For example,
Volvo develops its cars for buyers to whom automobile safety is a major
concern. Volvo, therefore, positions its car as the safest a customer can buy.
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96. Here are 14 major shifts in marketing management that smart companies
have been making in the 21century.
1. From marketing does the marketing to everyone does the marketing.
2. From organizing by product units to organizing by customer segments.
3. From making everything to buying more goods and services from outside.
4. From using many suppliers to working with fewer suppliers in a “Partnership.”
5. From relying on old market position to uncovering new ones.
6. From emphasizing tangible assets to emphasizing intangible assets.
7. From building brands through advertising to building brands through performance
and integrated communications
8. From attracting customers through stores and salespeople to making products
available on line.
9. From selling to everyone to trying to be the best firm serving well-defined target
markets.
10.From focusing on profitable transactions to focusing on customer lifetime value.
11.From a focus on gaining market share to a focus on building customer share.
12.From being local to being “GLOCAL” – both global and local.
13.From focusing on the financial scorecard to focusing on the marketing scorecard.
14.From focusing on shareholders to focusing on stakeholders.
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97. '(
A key ingredient of the marketing management process is insightful,
creative marketing strategies and plans that can guide marketing activities.
Developing the right marketing strategy over time requires a blend of
discipline and flexibility. Firms must stick to a strategy but must also find
new ways to constantly improve it. Marketing strategy also requires a clear
understanding of how marketing works.
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100. The traditional view of marketing is that the firm makes something and then
sells it (Figure 2.1a). Companies that subscribe to this view have the best
chance of succeeding in economies marked by goods shortages where
consumers are not fussy about quality, features, or style – for example,
with basic staple goods in developing markets.
The traditional view of the business process, however, will not work in
economies where people face abundant choices.
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109. Traditionally, companies owned and controlled most of the resources that
entered their businesses, but this situation is changing. Many companies
today outsources less critical resources if they can be obtained at better
quality or lower cost.
The key, then, is to own and nurture the resources and competencies that
make up essence of the business. We can say that a core competency has
three characteristics: (1) It is a source of competitive advantage in that it
makes a significant contribution to perceived customer benefits, (2) it has
applications in a wide variety of markets, and(3) it is difficult for competitors
to imitate.
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116. To understand marketing management, we must understand strategic
planning. Most large companies consist of four organization levels: the
corporate level, the division level, the business unit level, and the product
level. Corporate headquarters is responsible for designing a corporate
strategic plan. It makes decisions on the amount of resources to allocate to
each division as well as on which businesses to start or eliminate. Each
division establishes a plan covering the allocation of funds to each
business unit. Each business unit develops a strategic plan to carry that
business unit into profitable future. Finally each product level (product line,
brand) within a business unit develops a marketing plan for achieving its
objectives in its product market. The marketing plan is the central
instrument for directing and coordinating the marketing effort.
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