From book: Peter, J. P. & Donnelly, J. H. (2019). A Preface to Marketing Management, 15th ed. New York: McGraw-Hill Education.
Read chapter 1 and 2 and write a 500-word synopsis of your understanding of the marketing concepts. In your posting, include questions about any marketing concepts that are unclear.
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Prepare two seperate documents for chapter 1 and 2.
Unfortunately i don’t have the text book yet, so please find it yourself.
Chapter 1
Strategic Planning and the Marketing Management Process
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15 e
Chapter Outline
The marketing concept
What is marketing?
What is strategic planning?
The marketing management process
The strategic plan, the marketing plan, and other functional area plans
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Marketing Concept
Organizations should seek to make profit by serving the needs of customer groups
Purpose: To keep the attention of marketing managers on customer orientation
Principal task of the marketing function: Find effective and efficient means of making the business cater to the interests of customers
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Question
When you consider the function of marketing, which word most often comes to mind?
Marketing Defined
Marketing: Activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
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Figure 1.1: Major Types of Marketing
Type Description Example
Product Marketing designed to create exchange for tangible products Strategies to sell
Gateway computers
Service Marketing designed to create exchanges for intangible products Strategies by Allstate to sell insurance
Person Marketing designed to create favorable actions toward persons Strategies to elect a political candidate
Place Marketing designed to attract people to places Strategies to get people to vacation in national or state parks
Cause Marketing designed to create support for ideas, causes, or issues or to get people to change undesirable behaviors Strategies to get pregnant women not to drink alcohol
Organization Marketing designed to attract donors, members, participants, or volunteers Strategies designed to attract blood donors
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Strategic Planning
Activities that lead to the development of organizational mission, organizational objectives, and appropriate strategies to achieve organizational objectives
Jump to
Strategic Planning, Appendix
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Organizational Mission
Mission statement defines the direction in which the organization is heading and how it will succeed in reaching its desired goal
Elements to consider when developing a mission statement
Organization’s history: Objectives, accomplishments, mistakes, and policies
Organization’s distinctive competencies: Things that an organization does well thereby giving it an advantage
Organization’s environment: Opportunities, constraints, and threats that must be identified before a mission statement is developed
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Effective Mission Statement
Focused on markets rather than products
Achievable
Motivating
Specific
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Organizational Objectives
Define what an organization seeks through its ongoing, long-run operations of the organization
Must be specific, measurable, action commitments
Can be converted into specific action
Provide direction
Establish long-run priorities for the organization
Facilitate management control
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Figure 1.3: Sample Organizational Objectives
Area of Performance Possible Objective
Market standing To make our brands number one in their field in terms of market share
Innovations To be a leader in introducing new products by spending no less than 7 percent of sales for research and development
Productivity To manufacture all products efficiently as measured by the productivity of the workforce
Physical and financial resources To protect and maintain all resources: equipment, buildings, inventory, and funds
Profitability To achieve an annual rate of return on investment of at least 15 percent
Manager performance and responsibility To identify critical areas of management depth and succession
Worker performance and attitude To maintain levels of employee satisfaction consistent with our own and similar industries
Social responsibility To respond appropriately whenever possible to societal expectations and environmental needs
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Organizational Strategies
Involve the choice of major directions the organization will take in pursuing its objectives
Organizations can pursue various strategies based on products and markets, competitive advantage, and value
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Organizational Strategies Based on Products
and Markets
Focuses primarily on increasing the sale of present products to present customers
Market penetration
Focuses on finding new customers for present products
Market development
Focuses on developing new products that would be directed primarily to present customers
Product development
Seeks growth through new products for customers not currently being served
Diversification
Jump to
Organizational Strategies Based on Products and Markets, Appendix
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Figure 1.4: Organizational Growth Strategies
Jump to
Figure 1.4: Organizational Growth Strategies, Appendix
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Organizational Strategies Based on Competitive
Advantage
Cost leadership strategy: Firms to focus on being the low-cost company in its industry
Efficiency is stressed
No-frills products are offered
Strategy based on differentiation: Firms seek to be unique in their industry or market segment along particular dimensions that customers value
Firms can charge a premium price
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Organizational Strategies Based on Value
Stresses on the concept of customer value
Focuses on developing and delivering superior value to customers as a way to achieve organizational objectives
Value strategies
Best price
Best product
Best service
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Choosing an Appropriate Strategy
Management should:
Select those strategies consistent with its mission
Capitalize on the organization’s distinctive competencies that lead to a sustainable competitive advantage
Sustainable competitive advantage can be based on either the assets or skills of the organization
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Organizational Portfolio Plan
Involves the allocation of resources across the organization’s product lines, divisions, or businesses
Initially, product lines that can be considered a business are identified and are called strategic business units or SBUs
Characteristics of SBUs
Have a distinct mission and their own competitors
Are a single business or collection of related businesses
Can be planned independently of the other businesses of the total organization
Portfolio models: Methods to determine how resources should be allocated among the various SBUs
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Marketing Management
Process of planning and
executing the conception,
pricing, promotion, and
distribution of goods,
services, and ideas
Creates exchanges
with target groups that
satisfy customer and
organizational objectives
Jump to
Marketing Management, Appendix
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Situation Analysis, 1
Analyzing the position of the firm and its marketing department in terms of its past, present, and future situation
Major areas of concern
Cooperative environment: Includes all firms and individuals who have a vested interest in the firm’s accomplishing its objectives
Competitive environment: Includes primarily other firms in the industry that rival the organization for both resources and sales
Economic environment: Includes the state of macroeconomy and changes in it
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Situation Analysis, 2
Social environment: Includes general cultural and social traditions, norms, and attitudes
Political environment: Includes the attitudes and reactions of the general public, social and business critics, and other organizations
Legal environment: Includes a host of federal, state, and local legislation directed at protecting both business competition and consumer rights
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Marketing Planning: Outputs, 1
Establishing marketing objectives: Provides the framework for the marketing plan
Selecting the target market
Identifying customer needs and organizing resources accordingly
What do customers want or need?
What must be done to satisfy these wants or needs?
What is the size of the market?
What is its growth profile?
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Marketing Planning: Outputs, 2
Ranking the market according to profitability, present and future sales volume, and the match between what it takes to appeal successfully to the segment and the organization’s capabilities
Developing the marketing mix
Marketing mix: Set of controllable variables that must be managed to satisfy the target market and achieve organizational objectives
Comprises product, price, promotion, and place
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Implementation of the Marketing Plan
Involves putting the plan into action and performing marketing tasks according to the predefined schedule
Requires close monitoring and coordination
Measuring results of implemented marketing plan
Comparing results with objectives
Making decisions on whether plan is achieving objectives
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Using library resources
Marketing Information System and Marketing Research
Provides information needed to make effective marketing decisions
Information should be current, reliable, and valid
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Strategic Plan, Marketing Plan, and Other
Functional Area Plans
Ways in which marketing executives are involved in the strategic planning process
Influencing the process by providing important inputs in the form of information and suggestions relating to customers, products, and middlemen
Being aware of what the process of strategic planning involves as well as the results
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Figure 1.6: The Cross-Functional Perspective
in Planning
Jump back to
Figure 1.6: The Cross-Functional Perspective in Planning, Appendix
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Figure 1.7: A Blueprint for Management Action
Jump to
Figure 1.7: A Blueprint for Management Action, Appendix
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