Philip Kotler Marketing

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Text of Philip Kotler Marketing

  • 1. MarketingManagement Basic Concepts

2. What is Marketing?

  • Marketing is a social & managerial process by which individuals & groups obtain what they need & want through creating, offering & exchanging products of value with others

3. Needs, Wants, & Demands

  • Needs:
  • A human need is a state of deprivation of some basic satisfaction. People require food, clothing, shelter, safety, belonging & esteem. These are not created by society or marketers. They exist in the very texture of human biology & condition.

4. Wants

  • Desires for specific satisfiers of needs. Although needs are few, wants are many & are continually shaped & reshaped by social forces & institutions.

5. Demands

  • Wants for specific products that are backed by an ability & willingness to buy them. Wants become demand when supported by purchasing power.

6. Products

  • Goods
  • Services
  • Ideas
  • A product is anything that can be offered to satisfy a need or a want
  • A marketers job is to sell the benefits or services built into physical products.

7. Markets

  • Consist of all the potential customers sharing a particular need or want who might be willing & able to engage in exchange to satisfy the need or want.

8. Marketing

  • Is a social & managerial process by which individuals & groups obtain what they need & want through creating, offering, & exchanging products of value with others.
  • Marketing Management is the process of planning & executing the conception, pricing, promotion & distribution of ideas, goods, & services to create exchanges that satisfy individual & organizational goals.

9. Relationship Marketing

  • The practice of building long-term satisfying relations with key parties customers, suppliers, distributors in order to retain their long-term preference & business.

10. Marketing Concept

  • Holds that the key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities toward determining & satisfying the needs & wants of target markets.

11. Selling vs. Marketing

  • Selling focuses on the needs of the seller, marketing on the needs of the buyer.
  • Selling is preoccupied with the sellers need to convert his product into cash, marketing with the idea of satisfying the needs of the customer by means of the product & the whole cluster of things associated with creating, delivering & finally consuming it.
  • Selling is push, Marketing is pull.

12. Societal Marketing

  • Societal Marketing Concept holds that the organizations task is to determine the needs, wants & interests of target markets & to deliver the desired satisfactions more effectively & efficiently than competitors in a way that preserves or enhances the consumers & societys well-being.

13. Marketing Mix

  • Set of marketing tools that the firm uses to pursue its marketing objectives in the target market:
  • Product
  • Price
  • Promotion
  • Place
  • Also known as the4 Ps of Marketing

14. Product

  • Variety
  • Quality
  • Design
  • Features
  • Brand name
  • Packaging
  • Sizes
  • Warranties

15. Price

  • List price
  • Discounts
  • Allowances
  • Payment period
  • Credit terms

16. Promotion

  • Sales promotion
  • Advertising
  • Sales force
  • PR
  • DM

17. Place

  • Channels
  • Coverage
  • Assortments
  • Locations
  • Inventory
  • Transport

18. 4 Ps vs. 4 Cs

  • Product Customer needs/wants
  • Price Cost to customer
  • Place Convenience
  • Promotion - Communication

19. Strategic Business Unit (SBU)

  • It is a single business or collection of related businesses that can be planned separately from the rest of the company.
  • It has its own set of competitors.
  • It has a manger who is responsible for strategic planning & profit performance & who controls most of the factors affecting profit.

20. BCG Model

  • Growth-share matrix
  • Market growth rate on the vertical axis indicates the annual growth rate of the market in which the business operates.
  • Relative market share (horizontal axis) refers to the SBUs market share relative to that of its largest competitor.
  • Growth-share matrix is divided into 4 cells, each indicating a different type of business.

21. BCG Model

  • Question marks :
  • Businesses that operate in high-growth markets but have low relative market shares. Most businesses start off as question marks as the company tries to enter a high-growth market in which there is already a market leader. A question mark requires a lot of cash because a company has to spend a lot of money on overtaking the leader (& has to think hard before doing so).

22. BCG Model

  • Stars :
  • If the question mark business is successful, it becomes a star. A star is the market leader in a high-growth market. A star does not necessarily produce a positive cash flow for the company. The company must spend substantial funds to keep up with the high market growth & fight off competitors attacks.

23. BCG Model

  • Cash cows :
  • When a markets annual growth rate falls to less than 10%, the star becomes a cash cow if it still has the largest relative market share. A cash cow produces a lot of cash for the company. The company does not have to finance a lot of capacity expansion because the markets growth rate has slowed down. Since the business is the market leader, it enjoys economy of scale & higher profit margins. Company uses cash cows to pay bills & support other businesses.

24. BCG Model

  • Dogs :
  • Businesses that have weak market shares in low-growth markets. They typically generate low profits or losses, although they may generate some cash. Dogs often consume more management time than they are worth & need to be phased down or out

25. SBU Strategies

  • Build :
  • Objective is to increase the SBUs market share, even forgoing short-term earnings. Appropriate for question marks whose market shares must grow if they are to become stars.
  • Hold :
  • Objective is to preserve SBUs market share. Appropriate for strong cash cows if they are to continue yielding a large positive cash flow.

26. SBU Strategies

  • Harvest :
  • Objective is to increase the SBUs short-term cash flow regardless of long-term effect. Involves a decision to eventually withdraw from a business by implementing a program of continuous cost retrenchment. Company plans to milk its business. Hope is to reduce costs at a faster rate than any potential drop in sales thus increasing companys cash flow. Appropriate for weak cash cows.

27. SBU Strategies

  • Divest :
  • Here the objective is to sell or liquidate the business because resources can be better used elsewhere. Appropriate for dogs & question marks that are dragging down companys profits.
  • SBUs start as question marks, become stars, then cash cows & finally dogs.

28. GE Model

  • Each business is rated in terms of market attractiveness & business strength. Companies are successful to the extent that they enter attractive markets & possess the required business strengths to succeed in those markets. If 1 of the factors is missing, the business will not produce outstanding results (strong company in unattractive market or weak company in attractive market will not do well).

29. SWOT Analysis

  • S Strength
  • W Weakness
  • O Opportunities
  • T Threats
  • Remember -SW are internal, OT are external

30. Strengths/Weaknesses

  • Marketing :
  • Company reputation
  • Market share
  • Product/service quality
  • Pricing/distribution/promotion/sales force effectiveness
  • Geographical coverage
  • Core competencies

31. Finance

  • Deep pockets
  • Cash flow
  • Financial stability
  • Manufacturing :
  • Economies of scale
  • Latest technology
  • Dedicated work force

32. Organization

  • Visionary capable leadership
  • Dedicated employees
  • Entrepreneurial orientation
  • Flexible/responsive

33. Opportunities

  • A marketing opportunity is an area