A Framework For Marketing Management By (Kotler Keller)
Chapters review and the 3 highlighted points from each chapter:
Chapter 1 :
- What is marketing ?definition, scope and core concepts
Marketing is the process of identifying the social and human wants and needs and communicate the value of the product to meet these wants and needs. or the processes and activities for creating, communicating, delivering, and exchanging value for customers, clients, or work partners. The marketing mix defines the 4 main focus of marketing which consists of the 4p's of marketing Product, Price ,Place ,Promotion and the modern 4P's marketing management which are People , Process,Programs, and Performance.
Market, marketer, and what is marketed
The marketer is the person seeking a response, purchase, vote ,or attention from the prospect supported by some marketing skills and techniques.
Marketers can market almost everything such as Places,companies ,information, product ,ideas, services and many others. (Sell me this pen (The wolf of the wall street movie)it's how to connect the value of the product to the needs and wants of the prospect).
The market is the marketplace that offers the goods and services to the public such as consumer markets, business markets, Global markets, Nonprofit and government markets.
Marketing core concepts are the consumers wants , needs , and demands:
Wants are the basic human needs from food ,electricity, water, clothes, home, and others needs that the human life is hard without it, those needs can be stated,real, unstated,or delight needs, thus, , where wants are the specific objects that meet and satisfy the consumers needs. On the other hand , Demands are the wants for specific product supported by purchasing power or the ability to pay for the product.
Value and satisfaction are the main goals of marketing where they create the combination of quality, services , and price to achieve satisfaction that resulted from the consumer's judgment on the product in terms of expectations and perceived performance.
Marketing channels :
Communication : marketing can be achieved by the word of mouth , referrals, and by building health communication channels with consumers such as Apple questions succession and customer services on their website
Distribution; distribution is another channel for marketing by working in with retailers, wholesalers, and other online and real distribution channels.
services: is the services offered by the company or its employees to satisfy the consumers wants and needs such as AT&T , time-warner , and other services that become a need in our environment .
The supply chain is the channel includes raw material and other components associated with the product production and values added to the finished products to be ready to be sold.
The Value proposition offers a set of benefits that satisfy the needs.
The offering is the combination of products, services, information, and experience.
The brand is the known source of the product such as Nike, apple.
Impression is when consumers view the communication and Engagement are the attention and active involvement with the communication
Paid, owned and earned media is another core concepts of marketing that arises in the last decades.
The new marketing realities is the change in the market due to 3 main factors :
- Technology : technology has changed the way we do business and enhanced the business quality and creativity.
- Globalization :globalization opened opportunities in the market palace form outsourcing to engaging in the global market. Globalization also explained the value of diversity the importance of understanding other business cultures.
- social media and social responsibilities : social media changed that marketing environment to make it easier to access and improved the consumer's capabilities to interact with the publishers or the producers of the product, where also it builds a social responsibility from both the customer side and the producer's side. On the other hand , social media considered as a powerful information and sales channel for the company.
- Marketing management : Marketing management consists of the 4 management p's processes . people , programs, and performance where its task is to develop market strategies and plans , capture insights from data , and connect with customers and build a strong brand name. Marketing management also works to create, delivering, communication the value of the product and creating successful long-term growth and loyalty to the brand.
Chapter 2:
Developing and Implementing marketing strategies and plans
- Marketing and customer value
Value delivery process : This process consists of three stages :
Stage one is identifying the market segment then selecting the appropriate target and develop the value position (STP).
Stage two: providing the value through the product features ,price , and distribution.
Stage three : is communicating the value to consumers through social media or other marketing channels.
The value chain: the value chain consists of all activities directly related to the product from design ,produce, market,and support for the product. The value chain is also a tool in creating more customer value through improved production ,performance , and features of the product.
Core competencies and how to maximize it :
Core competencies are the source in achieving competitive advantages over rivers where it has applications in broader markets and also difficult for rivers to imitate.
Maximizing the core competencies can be achieved through 3 ways either by redefining the business concept , re-shaping the business scope or re-positioning the companies brand identity.
Successful companies attain and sustain Competitive advantages through four ways ,
First Differentiation which is making the product valuable , rare , or better than competitors ,
Second, cost leadership which focuses on eliminating the unnecessary movements,processes, or cost associated with the product,
Third segmentation which consists in focusing on the specific segment of the market .(Market niche)
and employees and organization improved capabilities, creativity , and efficiency.
Strategic planning consists of three key areas
- managing the business as an investment
- assessing the growth rate the companies position
- Establishing the strategy.
Strategic marketing plan :define the target market and value proposition.
Strategic planning tactics :defines the marketing tactics to achieve the plan successfully, including product, features, promotion, merchandise, pricing , sales channels, and services
Strengths , weaknesses , opportunities, and threats.
Marketers, as well as managers, uses this analysis in studying the organization capabilities and results in valuable insights that improve the business.
- Measuring marketing productivity
Marketing metrics : Measures that quantify, compare, and interpret performance
Marketing-mix : Analyzes data from a variety of sources
Dashboards : Interconnected performance drivers to be viewed in common areas in the organization such as sales by department .
Chapter 3:
Capturing Marketing Insights and forecasting demands
The marketing information system (MIS): is consists of all the information about people, equipment,processes,and evaluations for decision-making purposes for leaders , all this information can be gathered from Internal company records such as order-to-payment cycle and Databases , marketing intelligence activities such as sources of information about everyday development of the marketing environment, or Marketing research consists of three categories:
- Syndicated-service research firms
- Custom marketing research firms
- Specialty-line marketing research firms
Marketing research process: The marketing research process involves 6 steps :
- Define the problem
- Develop research plan
- collect information
- analyze information
- present findings
- Make decisions
Forecasting demand : Forecasting demands is one of the factor tools in better understanding the market environment, It consisted of changes in market share ,market forecasting
Market potential
The market Demand Function
Major forces in the broad environment
Chapter 4:
- Customer Perceived Value (CPV):
Consumers perceived value is the comparison of the consumer expectations of the product quality and performance to the actual value of the product, CPV plays a big role in building loyalty and value proposition of the product and the brand in the consumer mind.
Customer satisfaction is the goal of the manufacturer of the goods and services to build loyalty and gain sustainable success, Satisfaction comes from meeting the consumers wants and needs and sometimes exceed those needs to build an excitement motive toward the brand
Quality is the conformance and features of the product compared to the standard design and consumers want and needs. Quality comes in different forms such as the Apple MacBook computers, this design,and features added to the computer makes it unique compared to other computers on the market, additionally , apples offer warranty plans, customers solution center and walk-in customer services at ever store as a tool to support the quality of the brand and maintain a good relationship with their loyal costumers.
The marketing funnel is the strategy of education, attracting, and retaining customers in terms of providing information about the brand and product that usually transform consumers from aware about the brand into loyal customers, the marketing funnel have eight stages :
- Target market : which consists of the target segment or niche market that the product is aiming to cover, so marketers gather information about these segment and communicate with them through different marketing channels such as social media.
- Aware stage : consists of marketing tools to inform unaware market consumers about the benefits and value of the product and brand to build a knowledge and positive idea about the brand.
- open to trial : is the stage when consumers of other brands been attracted to the brand and willing to try the product, this stage is the judgment stage in the consumer mind , where they compare and contrast the brand to other favorable brands.
- triers of the brand are those percentage of consumers that tried the product in the past 3 month and willing to use again.
- Recent user: are those consumers of the brand on the regular basis but not so favorable of the brand, so they might switch to any strongly promoted product.
- Most often used: is the percentage of consumers that are regularly using the brand but using other brands as well.
- Loyal consumers are those loyal costumers of the brand, favorable brand in their perspective and less likely to switch.
Chapter 5:Analysing consumers and business markets
- Factors that influence consumers behaviors and decision-making process.
Consumer behavior is the willingness of consumers to select, buy,use, and dispose of goods and services that satisfy the consumers wants and needs. there are 4 main factors that influence consumers behaviors :
- Cultural : (Cultural, subcultural, and social class)
- social: (Reference group, family, and role and status)
- personal: (age and life cycle stage, occupations, financial status, personality, and self-concept)
- psychological: (Motivation, perception, education, attitudes, and beliefs.
- Five stage model of buying decision process :
- Problem recognition
- information search
- evaluating of alternatives
- purchase decision
- post purchase decision
- Stages of the business buying process :
- Vertical markets
- Pure play" auctions
- spot & barter markets
- Private exchanges
- buying alliances
- Catalog sites
Chapter 6: Identifying market segments and targets
- Segmentation: Market segment or niche consists of the group of consumers that share a similar set of wants and needs such as demographic segmentation, geographic segmentation, behavioral segmentation, and psychographic segmentation.
- Targeting: targeting process includes evaluating segments of the market in process of deciding which market best fit the products features to meet consumers wants and needs
- positioning: Is the process of designing a product or service that satisfy the consumers wants and needs and developing the marketing strategy to meet those wants and needs. The marketing strategy consists of the marketing mix that creates a competitive advantage for both the organization and consumers.
Chapter 7:Crafting the brand positioning and competing effectively
- Developing and establishing a brand position
Understanding position and Value proposition,choosing a competitive frame of reference
, Identifying potential points of- differences among pools, and establishing a brand position.
The goal of positioning is to build a strong image of the brand in the consumer's mind which will support their purchase behaviors, where a good brand position guideline the marketing strategy of the firm by clarifying the brand essence and the goals to be achieved.
- Market -niche strategies: This strategy consists in focusing on a specific niche of the market and works to overcomes its wants and needs and go beyond that to achieve competitive advantage in the market and position the brand as a leader in the market
- Competitive strategies for market Leaders:
This competitive strategy includes :
- Expand total market demand : where expanding the market demand includes adding values to the product that other products miss.
- protecting market share and improve it.Protecting market share and improving it by maintaining sustainable success in the market.
Chapter 8:Creating Brand Equity and Driving Growth
Branding is the process endowing products and services with the power of a brand.
The brand is the name or logo that distinguishes the product from other competitors products that designed to satisfy the same needs in the market. Brand plays a big role for the consumers where brand reduces a risk of dissatisfaction, simplify the decision-making process and evaluated the personal meaning of the product to associated with the brand . Brand illustrates a part of the consumer's identity in terms of likes and dislikes.on the other hand, the brand role for firms is to simplify product handling, organize inventory and accounting, and offers legal protection.
Brand Equity:is the added value endowed to products with consumers, or the promised value to be delivered through the product features that works to satisfy consumers wants and needs
- Measuring and managing brand equity
Measuring brand equity and managing it can be accomplished through :
- Brand audit
- Brand tracking studies
- Brand valuation
- and Analysis of consumers wants and needs
- Growth strategies: A strong brand name is a main factor driving growth.
Eight growth strategies :
- Building market share
- Developing committed customers
- Building a powerful brand
- Innovating new offering and experiences
- Expanding internationally
- Acquisitions, mergers, and alliances
- Building an outstanding reputation
- Partnering with government agencies
Chapter 9: Setting product strategy and introducing new offering
- product definition,product levels, and classifications :
The product is anything that can be offered to the market to meet consumers wants and needs such as physical goods,services,idea,experience, place, organization,or information that is valuable to other people.
Product levels consist of five main levels:
- Core benefit :Specific wants and needs to be offered in the product or service.
- Generic product : the component of the product needed to perform its mission.
- Expected product: the consumer's expectation to be found in the product
- Augmented product : add features that differentiated the product among rivals
- Potential product: explains the future route of the product (recycling)
Product classifications consist of
- The durability of the product or how the product performance in comparison to other products.
- The tangibility of the product, Locations offering the product
- The use
Differentiation by definition means making a valuable, unique, hard to copy product or service that results in a competitive advantage for the firm,product,or service.
Product differentiation includes form, feature, performance and conformance quality, durability, reliability, repairability,and customization.On the other hand , Service differentiation, includes order ease,delivery,maintain and repair ,customer consulting, and customer training.
The product life cycle consisted of 4 main stages :
- Introduction stage: in this stage, the product is in the start-up level and have fewer features added to it, low price and continue product development in quality and features and performance. example VR headsets for games counselors, 26$ and low features
- Growth stage is the stage where the product quality is enhanced and the product position in the market and market share are increasing dramatically fast.
- Maturity stage: Is the stage when the growth rate starts to drop and go slowly in comparison to previous phases, this illustrates that something is going wrong in the product and marketing mix strategy.
- decline stage:Is the stage where the product returns and sale volume starts to decline cause by rivals toke over the market offering the better product , or critical incident affected the brand , product ,or service image and consumers perception.
- New Product development process :
- Idea generation
- idea screening
- concept development and testing
- Marketing strategy development
- business analysis
- product development
- market testing
- commercialization
Chapter 10: Designing and managing services
- Services and Category of service mix are any services that offer the following:
Service is any act or performance that can be offered to public that classified as essentially intangible and does not result in any ownership relation. service can be tangible or intangible to consumers such as network service , road cleaning services and many other forms of services that benefit the human life in many different ways.
The categories of the service mix includes:
- A pure tangible good or service
- A pure tangible good with accompanying service.
- A hyper of one and two.
- A major service with accompanying minor goods
- A pure service
- distinctive characteristics of services:
- Intangibility.
- Inseparability.
- Variability.
- Perishability.
- managing quality and determinants of service quality:
Managing service quality is the main factor in sustaining success for the service in the market, managing service includes focusing on the factors that drive customers switching behavior such as Pricing, inconvenience, core service failure,competition, and Ethical problems.
The determinants of service quality are :
- Reliability.
- Responsiveness.
- assurance.
- Empathy.
- Tangibles.
Chapter 11: (Developing Pricing strategies and Programs )
Understanding Pricing :
The pricing process differs from old style business to new modern business environment, from small firms to large firms, where small firms and old style business; the price is usually set by the top management positions or boss , on the other hand, in the large firms and new modern style of business, the Price is usually set by division and product line managers.
The consumer Psychology and pricing:
Consumers purchase decisions are based on how they perceive prices, their current perspective of the price in comparison to the new pricing and its attachment to quality in the consumer's mind.
Three factors affects the consumer's perceptions of the product and price :
- "Reference Prices Although consumers may have fairly good knowledge of price ranges, surprisingly few can accurately recall specific prices. When examining products, however, they often employ reference prices, comparing an observed price to an internal reference price they remember or an external frame of reference such as a posted “regular retail price.”"
- "Price-Quality Inferences Many consumers use price as an indicator of quality. Image pricing is especially effective with ego-sensitive products such as perfumes, expensive cars, and designer clothing."(Chapter 11 )
- "Price Endings Customers perceive an item priced at $299 to be in the $200 rather than the $300 range; they tend to process prices “left to right” rather than by rounding. Price encoding in this fashion is important if there is a mental price break at the higher, rounded price. Another explanation for the popularity of “9” endings is that they suggest a discount or bargain, so if a company wants a high-price image, it should probably avoid the odd-ending tactic."(Chapter 11)
Setting the Price process :
- selecting the pricing objective: "Five major pricing objectives are: survival, maximum current profit, maximum market share, maximum market skimming, and product-quality leadership."
- Determining Demand : "Price Sensitivity The demand curve shows the market’s probable purchase quantity at alternative prices."
- Estimating costs : Estimating the fixed, variable , and mixed cost associated with the production of the product.
- analyzing competitors cost,price , and offers
- Selecting a Pricing method : Price floor and ceiling (costs = price floor , customers assessment of unique features -= price ceiling , and the competitors prices = orienting point ) such methods that considers two or all three levels of the price : : markup pricing, target return pricing, perceived value pricing, value pricing, EDLP, going-rate pricing, and auction-type pricing.
- Selecting the final Price : other thigs to consider in final price : Impact of Other Marketing Activities The final price must take into account the brand’s quality and advertising relative to the competition,and Company Pricing Policies.
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Chapter 12: Designing and managing integrated Marketing Channels
Marketing channels and value networks :
Marketing channels are sets of interdependent organizations participating in the process of making products or services available for use or consumption. So, Marketing channels are a particular set of marketing channels firm employs.
Importance of channels :
- convert potential buyers into profitable customers.
- creates markets for some products.
Push strategy : "A push strategy uses the manufacturer’s sales force, trade promotion money, or other means to induce intermediaries to carry, promote, and sell the product to end users."(ch12)
Pull strategy:"In a pull strategy the manufacturer uses advertising, promotion, and other forms of communication to persuade consumers to demand the product from intermediaries, thus inducing the intermediaries to order it."(ch.12)
Integrating Multichannel marketing systems :
- lower channel costs
- improve the mrket coverage
- customized selling
- Omnichannel marketing
Value networks : System of partnership and alliances in the business, defines source,augment, and delivery offerings, also creates an awareness of supply chain changes (cost,prices ,and supplies), and lastly, increases efficiency of communications among functional areas online.
The Role of marketing channels :
- Move goods from producers to consumers, wholesaller, or retailors
- serve in creating the instructions of storages and movments of purchased products in the final stage of going out of the comapny
- serve in creating the ordering and payment database .
- create a live communication channel between consumers and producers (Chat with rep)
Channels Levels :
- Zero level such as Online streaming , tv ,or mail services
- One level channels such as Manufacturer to retailor to consumers
- Two level channels such as Man ---- Wholeseller ---- retailor ---- to consumers
- Reverse channels such as recycling.
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Chapter 13: Managing Retailing, Wholesalling, and Logistics .
Definitions:
Retailing : is all the activities in selling goods or services directly to final consumers for personal ,nonbusiness use
Retailer: is any business enterprise whose sales volume comes primarily from retailing.
wholesaling: includes all the activities in selling goods or services to those who buy to resell or for business use .
Private Label brands : is a brand that retailers and wholesalers develop known as house brand .
Three main types of retailers :
- Store retailers : such as specialty store, Department store, Drug store ,superstore and discount store. Four level of services for store retailers : Self-services, self-selection, Limited service, and Full services.
- Non store retailers: Such as Direct marketing , Direct selling , Vendor machines , ATM, and buying services, with technology this type is growing fast .
- Retail organizations such as corporate chain stores, like Gap, IGA, and UPS.
Retailer Marketing decisions :
Includes
: target market, channels, product assortment, procurement, prices, services, store atmosphere, store activities and experiences, communications, and location.
Market Logistics :
Four steps in Supply chain marketing:
- Defines the value propositions to be delivered to the consumers.
- Selecting the best channels design and network strategy for reaching the target market .
- Developing operational excellence in sales forecasting, wearhouse management, transportation management, and material management.
- Implementing the solution with the best information systems, equipment , procedures, and policies.
Four major decision firms need to make :
- How should we handle orders?--------------order processing systems
- Where should we locate the stocks?--------Warehouse management.
- How much stock should we hold?----------Inventory management.
- How should we ship goods ?----------------Transportations management.
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Chapter 14: Designing and Managing Integrated Marketing Communications
The marketing communication is the tool that firms use to inform, persuade, and remind consumers about their product and brand they sell either directly or indirectly.
Marketing communication mix:
consists of eight major modes of communications sorted from lees effective to the most :
- Advertising.
- Sales Promotions.
- Events and experiences.
- Public relations and Publicity.
- Online and social media marketing.
- Mobile marketing.
- Direct marketing (catalog)
- Personal selling
-Macro-model of communication includes message , sender , receiver, noise ,and feedback.
-Micro-model of communication is concentrated more on the consumers specific responses to communications.
Five major steps in developing effective communications :
- Identify the audience.
- Set the communications objectives such as establishing the needs , build brand awaress and attitude, and influence brand purchase intention.
- Design the communications : includes Message strategy (What to say), creative strategy (How to say) , and message source(who should say it)
- Selecting the communication channels.
- Establish the marketing communications budget.
Three factors develop the MC mix:
- Type of the market the product is in.
- Consumers readiness to make a purchase.
- The stage of the product lifecycle.
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Chapter 15: Managing Mass Communications
The five M's of Developing and managing an advertising program
:
Sales Promotions : a collection of incentive tools designed to stimulate quicker or greater purchase of particular products or services.
Five major decisions in sales promotions :
- Establishing objectives.
- Selecting consumers and trade promotions tools.
- selecting business and sales force promotions tools
- Developing sales promotions program. in developing the program, marketers should determine the size of the incentive, the conditions for participation, the duration of the promotion, the distribution vehicle, the timing, and the total sales promotion budget.
- Implementing and evaluating the program.
Another type of promotions is Events and experiences; where this events and experiences role is to help clarify the events objectives and create consumers experiences.
Events objectives :
- To identify with a target market or lifestyle.
- To increase salience of company/product name.
- To create/reinforce key brand image associations.
- To enhance corporate image.
- To create experiences and evoke feelings .
- To express commitment to the community or on social issues.
- To entertain key clients or reward employees.
- To permit merchandising/promotional opportunities.
Public relations :
Public relations (PR) includes a variety of programs to promote or protect a company’s image or individual products.(CH15)
The best PR departments counsel top management to adopt positive programs and eliminate questionable practices . They perform the following five functions:
1. Press relations—Presenting news and information about the organization in the most positive light
2. Product publicity—Sponsoring efforts to publicize specific products
3. Corporate communications—Promoting understanding of the organization through internal and external communications
4. Lobbying—Dealing with legislators and government officials to promote or defeat legislation and regulation
5. Counseling—Advising management about public issues as well as company positions and image.(CH15).
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Chapter 16: Managing Digital Communications: Online, social media , and mobile.
Advantages vs disadvantages of online marketing :
Advantages Disadvantages
- Can offer or send tailored information/messages - Consumers can screen out most messages
-Can trace effects of ads by UVs clicks on a page. -ads can be less effective
-Contextual placement , -Lost of control over online messages via hacks
and place ads in the right spot.
Online Marketing communication options includes :
- Websites
- search ads
- Display ads
- E-mails.
Social media :
Social media allows marketers to establish public voice and presence online.
Social media options :
- Online communities and forums.
- Blogs.
- Social Networks.
Creating Word-of-mouth Buzz:
- Identify influential individuals and companies.
- Supply key people with product samples.
- Work through community influentials.
- Develop word-of-mouth referral channels.
- Provide compelling information.
Mobile marketing includes Mobile apps, being concise is critical , and across markets.
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Chapter 17: Managing personal communications, Direct and Database marketing and personal selling :
Direct marketing is the use of consumer-direct(CD) channels to reach and deliver goods and services to consumers with no middle man included.
Direct marketers can use many different channels to reach individual prospects and customers such as direct mail, catalog marketing, telemarketing, interactive TV, Web sites, and mobile devices.
Companies usually use thier database in marketing.
Advantages and disadvantages of database marketing
Advantages :
- Identify prospects
- decide which customers get offers
- deepen customers loyalty.
- reactivate customers purchase
- Avoid serious customers mistakes.
Disadvantages:
- Some situations are just not conducive to database marketing
- Building and maintaining a customer database is costly
- Employees might resist becoming customer oriented and use data.
- The assumption behind customer relationship management may not alway hold true
- Not all customers are open to build a relationship with companies.
Decisions companies face in designing a sales force such as objectives, strategy, structure, size, and compensation.
Decisions companies face in managing a sales force such as:
- Recruiting
- Selecting
- Training
- Supervising
- Motivating
- Evaluations
Tools in enhancing personal selling skills such as :
- sales technology.
- Using sales time efficiency
- Company account calls annually.
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Chapter 18: Managing marketing responsibly in the Global Economy
Global Industry : –Competitors’ strategic positions in major geographic or national markets are affected by their overall global positions.
Global Firms: Operates in more than one country and captures R&D, production, logistical, marketing, and financial advantages not available to purely domestic competitors.
Decisions in international marketing :
Sustainability :
Is the ability of a firm to sustain success, and to meet humanity's needs without causing any harms to future generation and environment, The 3 p's of sustainability as know as the triple bottom line are People, Planet, and profit.
Corporate social responsibility : is the firms way of raising social responsibility in the organizations through main things areas like :
- Legal behavior
- Ethical behavior
- Social responsibility behaviors
- Sustainability and greenwashing
Building a Creative Marketing Organization:
- Shift to customer-focus
- Appoint marketing offers&task force.
- Get outside help
- Change reward system
- Hire Marketing Talent.
- Develop in-house marketing training
- Istall marketing planing system
- Shift to a process-outcomes focus
- Empower employees.
Cause-Related Marketing : Links the firm’s contributions toward a designated cause to customers’ engaging directly or indirectly in revenue-producing transactions with the firm.
Cause-marketing can :
- build brand awareness.
- enhance brand image.
- establish brand credibility
- evoke brand feelings
- create a sense of brand community
- elicit brand engagement
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