04/11/23 1-1

Product or Offering Product or Offering

Value and Satisfaction Value and Satisfaction

Needs, Wants, and DemandsNeeds, Wants, and Demands

Exchange & TransactionsRelationships & Networks Exchange & TransactionsRelationships & Networks

Target Markets & Segmentation Target Markets & Segmentation

Marketing Channels Marketing Channels

Supply Chain Supply Chain

Competition Competition

Marketing Environment Marketing Environment

Core Concepts of MarketingCore Concepts of Marketing

04/11/23 1-2

Price Promotion

Cost Communication

MarketingMix

ProductPlace

CustomerSolution

Convenience

The Four P’s vs. The Four CsThe Four P’s vs. The Four Cs

04/11/23 1-3

Production ConceptProduction Concept

Product ConceptProduct Concept

Selling ConceptSelling Concept

Marketing ConceptMarketing Concept

Consumers prefer products that are widely available and inexpensive

Consumers favor products that offer the most quality, performance,

or innovative features

Consumers will buy products only ifthe company aggressively

promotes/sells these products

Focuses on needs/ wants of target markets & delivering value

better than competitors

Company Orientations Towards the Marketplace

Company Orientations Towards the Marketplace

04/11/23 1-4

Image valueImage value

Personnel valuePersonnel value

Services valueServices value

Product valueProduct value

Totalcustomer

value

Totalcustomer

value

Monetary costMonetary cost

Time costTime cost

Energy costEnergy cost

Psychic costPsychic cost

Totalcustomer

cost

Totalcustomer

cost

Customerdelivered

value

Customerdelivered

value

Determinants of Customer Delivered Value

Determinants of Customer Delivered Value

04/11/23 1-5

Measuringresults

Diagnosingresults

Takingcorrective

action

ImplementationImplementationPlanningPlanning

Corporateplanning

Divisionplanning

Businessplanning

Productplanning

Organizing

Implementing

ControlControl

Strategic Planning, Implementation, & Control Process

Strategic Planning, Implementation, & Control Process

04/11/23 1-6

Limited number of goals

Stress major policies & values

Define competitive scopes

Good Mission StatementsGood Mission Statements

04/11/23 1-7

3 ?Question marks

? ??21

Cash cow

6

Dogs

8

710x 4x 2x 1.5x 1x 10x 4x 2x 1.5x 1x

Relative Market Share.5x .4x .3x .2x .1x .5x .4x .3x .2x .1x

Stars

5

4

Boston Consulting Group’s Growth-Share Matrix

Boston Consulting Group’s Growth-Share Matrix

20%-20%-18%-18%-16%-16%-14%-14%-12%-12%-10%-10%- 8%-8%- 6%-6%- 4%-4%- 2%-2%- 00M

arke

t G

row

th R

ate

04/11/23 1-8

Market Attractiveness: Competitive

Position Portfolio Classification

Market Attractiveness: Competitive

Position Portfolio Classification

MA

RK

ET

AT

TR

AC

TIV

EN

ES

SM

AR

KE

T A

TT

RA

CT

IVE

NE

SS

5.005.00

3.673.67

2.332.33

1.001.00

Lo

wL

ow

Med

ium

Med

ium

Hig

hH

igh

Reliefvalve

Flexiblediaphragms

Fuelpumps

Aerospacefittings

Clutches

Hydraulicpumps

Joints

StrongStrong MediumMedium WeakWeakBUSINESS STRENGTHBUSINESS STRENGTH

1.001.002.332.333.673.675.005.00

Invest/growInvest/grow Selectivity/earningsSelectivity/earnings Harvest/divestHarvest/divest

04/11/23 1-9

4. Diversification2. Marketdevelopment

Newmarkets

1. Marketpenetration

Existingmarkets

Existingproducts

3. Productdevelopment

Newproducts

Intensive Growth Strategies:Ansoff’s Product/Market Expansion

Grid

Intensive Growth Strategies:Ansoff’s Product/Market Expansion

Grid

04/11/23 1-10

1

4

2

3

HighHigh

LowLow

HighHigh LowLow

Att

ract

iven

ess

Att

ract

iven

ess

Success ProbabilitySuccess Probability OpportunitiesOpportunities

Opportunity MatrixOpportunity Matrix

1.1. Company develops a more Company develops a more powerful lighting systempowerful lighting system

2.2. Company develops a device Company develops a device for measuring the energy for measuring the energy efficiency of any lighting efficiency of any lighting systemsystem

3.3. Company develops a device Company develops a device for measuring illumination for measuring illumination levellevel

4.4. Company develops a Company develops a software program to teach software program to teach lighting fundamentals to TV lighting fundamentals to TV studio personnelstudio personnel

04/11/23 1-11

Threat MatrixThreat Matrix

1.1. Competitor develops a Competitor develops a superior lighting systemsuperior lighting system

2.2. Major prolonged Major prolonged economic depressioneconomic depression

3.3. Higher costsHigher costs

4.4. Legislation to reduce Legislation to reduce number of TV studio number of TV studio licenseslicenses

1

4

2

3

HighHigh

LowLow

HighHigh LowLow

Se

rio

us

nes

sS

eri

ou

sn

ess

Probability of OccurrenceProbability of Occurrence ThreatsThreats

04/11/23 1-12

SkillsSkills

Sharedvalues

Sharedvalues

StaffStaff

StyleStyle

StrategyStrategy

StructureStructure

SystemsSystems

The McKinsey 7-S Framework

The McKinsey 7-S Framework

04/11/23 1-13

Sell the productMake the product

ProcureDesignproduct Make Price Sell Advertise/

promote Distribute Service

(a) Traditional physical process sequence

(b) Value creation & delivery sequence

Choose the Value Provide the Value Communicate the Value

Strategic marketing Tactical marketing

The Value-Delivery ProcessThe Value-Delivery Process

04/11/23 1-14

Executive Summary & Table of Contents

Current Marketing Situation

Opportunity & Issue Analysis

Objectives

Marketing Strategy

Action Programs

Projected Profit-and-loss

Controls

The Marketing PlanThe Marketing Plan

04/11/23 1-15

Defining the Problem & Research Objectives

Defining the Problem & Research Objectives

ExploratoryResearch

DescriptiveResearch

CausalResearch

•Test cause-and-effect relationships.

•Tests hypotheses about cause- and-effect relationships.

•Test cause-and-effect relationships.

•Tests hypotheses about cause- and-effect relationships.

•Sheds light on problem - suggest solutions or

new ideas.

•Sheds light on problem - suggest solutions or

new ideas.

•Ascertain magnitudes.•Ascertain magnitudes.

04/11/23 1-16

Research ApproachesResearch Approaches

BehavioralBehavioral

Focus-groupFocus-group

SurveySurvey

ExperimentalExperimental

ObservationalObservational

04/11/23 1-17

Secondary Data SourcesSecondary Data Sources

• Internal SourcesInternal Sources

• Government PublicationsGovernment Publications

• Periodicals and BooksPeriodicals and Books

• Commercial DataCommercial Data

• On-LineOn-Line• AssociationsAssociations• Business InformationBusiness Information

04/11/23 1-18

The Marketing Research Process

The Marketing Research Process

Defining theDefining theproblem andproblem and

researchresearchobjectivesobjectives

Defining theDefining theproblem andproblem and

researchresearchobjectivesobjectives

DevelopingDevelopingthe researchthe research

planplan

DevelopingDevelopingthe researchthe research

planplanCollect the Collect the informationinformationCollect the Collect the informationinformation

Analyze theAnalyze theinformationinformationAnalyze theAnalyze theinformationinformation

Present thePresent thefindingsfindings

Present thePresent thefindingsfindings

04/11/23 1-19

Good Marketing Research...Good Marketing Research...

• Is scientificIs scientific

• Is creativeIs creative

• Uses multiple methodsUses multiple methods

• Realizes interdependence of models & dataRealizes interdependence of models & data

• Acknowledges the cost & value of informationAcknowledges the cost & value of information

• Maintains “healthy” skepticismMaintains “healthy” skepticism

• Is ethicalIs ethical

04/11/23 1-20

Buyer’s decisionprocess

Problem recognitionInformation searchEvaluationDecisionPost-purchase behavior

Otherstimuli

EconomicTechnologicalPoliticalCultural

Buyer’scharacteristics

CulturalSocialPersonalPsychological

Buyer’s decisions

Product choiceBrand choiceDealer choicePurchase timingPurchase amount

Marketingstimuli

ProductPricePlacePromotion

Model of Buying BehaviorModel of Buying Behavior

04/11/23 1-21

CulturalCultural

SocialSocial

Family & LifestyleFamily & Lifestyle

PsychologicalPsychological

BuyerBuyer

Characteristics Affecting Consumer Behavior

Characteristics Affecting Consumer Behavior

04/11/23 1-22

Consumer Buying Roles

DeciderDecider

Buyer Buyer

UserUser

Influencer Influencer

InitiatorInitiator

KeyFamily

DecisionRoles

04/11/23 1-23

ComplexBuying

Behavior

Dissonance-Reducing Buying

Behavior

Variety-SeekingBehavior

HabitualBuying

Behavior

Significantdifferences

betweenbrands

Fewdifferences

betweenbrands

HighInvolvement

LowInvolvement

Four Types of Buying Behavior

Four Types of Buying Behavior

04/11/23 1-24

ProblemProblemrecognitionrecognition

Informationsearch

Evaluation ofalternatives

Purchasedecision

Post-purchasebehavior

Consumer Buying ProcessConsumer Buying Process

04/11/23 1-25

TotalSet Aware-

nessSet

Consid-erationSet

ChoiceSet Decision

Decision Making SetsDecision Making Sets

04/11/23 1-26

Potential Entrants(Threat ofMobility)

Potential Entrants(Threat ofMobility)

Buyers(Buyer power)

Substitutes(Threats ofsubstitutes)

Suppliers(Supplier power)

Suppliers(Supplier power)

IndustryCompetitors

(Segment rivalry)

Five Forces Determining Segment Structural

Attractiveness

Five Forces Determining Segment Structural

Attractiveness

04/11/23 1-27

Specific Attack Strategies

Specific Attack Strategies

• Price-discountPrice-discount• Cheaper goodsCheaper goods• Prestige goodsPrestige goods• Product proliferationProduct proliferation• Product innovationProduct innovation• Improved servicesImproved services• Distribution innovationDistribution innovation• Manufacturing cost reductionManufacturing cost reduction• Intensive advertising promotionIntensive advertising promotion

04/11/23 1-28

1. Identify Basesfor Segmenting the Market

2. Develop Profilesof Resulting Segments

3. Develop Measuresof Segment Attractiveness

4. Select TargetSegment(s)

5. Develop Positioningfor Each Target Segment

6. Develop MarketingMix for Each Target Segment Market

Positioning

MarketTargeting

Market Segmentation

Steps in Segmentation, Targeting, & Positioning

Steps in Segmentation, Targeting, & Positioning

04/11/23 1-29

Bases for Segmenting Consumer Markets

Bases for Segmenting Consumer Markets

Occasions, Benefits, Uses, or Attitudes

Behavioral

GeographicRegion, City or MetroSize, Density, Climate Demographic

Age, Gender, Family size and Fife cycle, Race, Occupation, or Income ...

Lifestyle or PersonalityPsychographic

04/11/23 1-30

Product DifferentiationProduct Differentiation

Form FeaturesPerfor-mance

Quality Conform-

anceQuality

Durability ReliabilityRepair-

abilityStyle Design

04/11/23 1-31

Differences Worth Establishing

AffordableAffordable SuperiorSuperior

ProfitableProfitable

PreemptivePreemptive

DistinctiveDistinctive

ImportantImportant

04/11/23 1-32

… … the act of designing the the act of designing the company’s offering and image to company’s offering and image to occupy a distinctive place in the occupy a distinctive place in the

the target market’s mind. the target market’s mind.

p. 298

Positioning is...Positioning is...

04/11/23 1-33

IdeaIdeaGenerationGeneration

ConceptConceptDevelopmentDevelopmentand Testingand Testing

MarketingMarketingStrategyStrategy

DevelopmentDevelopment

IdeaIdeaScreeningScreening

BusinessBusinessAnalysisAnalysis

ProductProductDevelopmentDevelopment

MarketMarketTestingTesting

CommercializationCommercialization

New Product Development ProcessNew Product Development Process

04/11/23 1-34

What is a Brand?What is a Brand?

Attributes Benefits Values

Culture

User

Personality

04/11/23 1-35

Brand StrategiesBrand Strategies

BrandExtension

New

Bra

nd

Nam

e

Product Category

LineExtension

Existing

Existing

MultibrandsNew NewBrands

04/11/23 1-36

The Three C’s Modelfor Price Setting

Costs Competitors’prices andprices ofsubstitutes

Customers’assessmentof uniqueproductfeatures

Low Price

No possibleprofit at

this price

High Price

No possibledemand atthis price

04/11/23 1-37

AdvertisingAdvertising

Personal SellingPersonal Selling

Any Paid Form of Non-personal Presentation by an Identified

Sponsor.

Any Paid Form of Non-personal Presentation by an Identified

Sponsor.

Sales Promotion Short-term Incentives to Encourage Trial or Purchase.

Public Relations

Direct MarketingDirect Communications With

Individuals to Obtain Immediate Response.

Protect and/or Promote Company’s Image/products.

Personal Presentations.

The Marketing Communications MixThe Marketing Communications Mix

04/11/23 1-38

AdvertisingPublic, Pervasive, Expressive, Impersonal

AdvertisingPublic, Pervasive, Expressive, Impersonal

Sales PromotionCommunication, Incentive, Invitation

Sales PromotionCommunication, Incentive, Invitation

Public Relations & PublicityCredibility, Surprise, Dramatization

Public Relations & PublicityCredibility, Surprise, Dramatization

Personal SellingPersonal Confrontation, Cultivation, Response

Personal SellingPersonal Confrontation, Cultivation, Response

Direct MarketingNonpublic, Customized, Up-to-Date, Interactive

Direct MarketingNonpublic, Customized, Up-to-Date, Interactive

Step 6: Decide on Communications Mix

Step 6: Decide on Communications Mix