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principles of marketing table of contents 1 marketing in a changing world ...
Principles of Marketing
Principles of Marketing
Kotler & Armstrong: Principles of Marketing, 9th edition
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Principles of Marketing
Table of Contents
1 Marketing in a Changing World.........................................................................................................................5
1.1 Marketing Model – Core concepts............................................................................................................................5
1.2 Marketing management.............................................................................................................................................6
1.3 Marketing concepts...................................................................................................................................................8
1.4 Challenges in the new connected millennium...........................................................................................................9
2 Strategic Planning and the Marketing Process................................................................................................10
2.1 Strategic planning process......................................................................................................................................10
2.2 Marketing process...................................................................................................................................................12
3 The Marketing Environment.............................................................................................................................15
3.1 Overview.................................................................................................................................................................15
3.2 Microenvironment...................................................................................................................................................15
3.3 Macroenvironment..................................................................................................................................................17
3.4 Responding to marketing environment...................................................................................... .............................19
4 Marketing Research and Information Systems................................................................................................20
4.1 General....................................................................................................................................................................20
4.2 Marketing information system (MIS)......................................................................................................................20
4.3 Marketing research process.....................................................................................................................................21
4.4 Other marketing research considerations................................................................................................................24
5 Consumer Markets and Consumer Buyer Behavior.......................................................................................25
5.1 Model of consumer behavior .................................................................................................................................25
5.2 Characteristics affecting consumer behavior.......................................................................................................... 25
5.3 Types of buying decision behavior.........................................................................................................................29
5.4 The buyer decision process.....................................................................................................................................30
5.5 The buyer decision process for new products.........................................................................................................30
5.6 Consumer behavior across international borders....................................................................................................31
6 Business Markets and Business Buyer Behavior.............................................................................................32
6.1 Overview.................................................................................................................................................................32
6.2 Business buyer behavior.........................................................................................................................................33
6.3 Institutional and government markets.....................................................................................................................35
7.1 Overview.................................................................................................................................................................36
7.2 Market Segmentation..............................................................................................................................................37
7.3 Market targeting......................................................................................................................................................39
7.4 Positioning for competitive advantage....................................................................................................................40
7 Market Segmentation, Targeting, and Positioning for Competitive Advantage...........................................36
8 Product and Services Strategy...........................................................................................................................43
8.1 What is a product?..................................................................................................................................................43
8.2 Product classifications.............................................................................................................................................44
8.3 Individual product decisions...................................................................................................................................46
8.4 Product line decisions.............................................................................................................................................49
8.5 Product mix decisions.............................................................................................................................................50
8.6 Services marketing..................................................................................................................................................51
8.7 International product and services marketing............................................................................... ..........................52
9 New-Product Development and Product Life-Cycle Strategies......................................................................53
9.1 New product development strategy.........................................................................................................................53
9.2 Product life-cycle strategies....................................................................................................................................56
10 Pricing Products: Pricing Considerations and Approaches..........................................................................59
10.1 Introduction...........................................................................................................................................................59
10.2 Factors to consider when setting prices........................................................ ........................................................ 59
10.3 General pricing approaches...................................................................................................................................62
11 Pricing Products: Pricing Strategies...............................................................................................................64
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11.1 New-product pricing strategies.............................................................................................................................64
11.2 Product mix pricing strategies...............................................................................................................................64
11.3 Price adjustment strategies....................................................................................................................................65
11.4 Price changes........................................................................................................................................................68
11.5 Public policy and pricing......................................................................................................................................69
12 Distribution Channels and Logistics Management........................................................................................71
12.1 The nature of distribution channels.......................................................................................................................71
12.2 Channel behavior and organization.......................................................................................................................72
12.3 Channel design decisions......................................................................................................................................74
12.4 Channel management decisions............................................................................................................................76
12.5 Public policy and distribution decisions................................................................................... ............................76
12.6 Physical distribution and logistics management...................................................................................................77
13 Retailing and wholesaling.................................................................................................................................80
13.1 Retailing................................................................................................................................................................80
13.2 Retailer marketing decisions.................................................................................................................................83
13.3 The future of retailing...........................................................................................................................................84
13.4 Wholesaling..........................................................................................................................................................85
13.5 Wholesaler marketing decisions............................................................................................ ...............................86
13.6 Trends in wholesaling...........................................................................................................................................87
14 Integrated marketing communications strategy.............................................................................................88
14.1 The marketing communications mix.....................................................................................................................88
14.2 Integrated marketing communications..................................................................................................................88
14.3 A view of the communication process..................................................................................................................89
14.4 Steps in developing effective communication.......................................................................................................90
14.5 Setting the total promotion budget and mix..........................................................................................................93
14.6 Socially responsible marketing communication....................................................................................................95
15.1 Advertising............................................................................................................................................................96
15.2 Sales promotion..................................................................................................................................................100
15.3 Public relations....................................................................................................................................................101
15 Advertising, sales promotions, and public relations......................................................................................96
16 Personal selling and sales management.........................................................................................................103
16.1 Role of personal selling.......................................................................................................................................103
16.2 Managing the sales force.....................................................................................................................................103
16.3 Principles of personal selling..............................................................................................................................105
17 Direct and online marketing: the new marketing model.............................................................................108
17.1 What is direct marketing?...................................................................................................................................108
17.2 Benefits and growth of direct marketing.............................................................................................................108
17.3 Customer databases and direct marketing...........................................................................................................109
17.4 Forms of direct marketing...................................................................................................................................109
17.5 Online marketing and electronic commerce........................................................................................................110
17.6 Integrated direct marketing.................................................................................................................................112
17.7 Public policy and ethical issues in direct marketing........................................................................................... 112
18 Competitive strategies.....................................................................................................................................113
18.1 Customer relationship marketing........................................................................................................................113
18.2 Competitive marketing strategies........................................................................................................................115
18.3 Balancing customer and competitor orientations................................................................................................118
19.1 Global marketing in the twenty-first century............................................................................ ..........................119
19.2 Looking at the global marketing environment.................................................................................................... 119
19.3 Deciding whether to go international..................................................................................................................121
19.4 Deciding which markets to enter.........................................................................................................................121
19.5 Deciding how to enter the market.......................................................................................................................121
19.6 Deciding on the global marketing program.........................................................................................................122
19 The global marketplace..................................................................................................................................119
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Principles of Marketing
19.7 Deciding on the global marketing organization..................................................................................................123
20 Marketing and society: social responsibilities and marketing ethics
..........................................................124
20.1 Social criticisms of marketing.............................................................................................................................124
20.2 Citizen and public actions to regulate marketing................................................................................................124
20.3 Business actions toward socially responsible marketing....................................................................................126
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Principles of Marketing
1 Marketing in a Changing World
1.1 Marketing Model – Core concepts
Marketing
Five core concepts
–
Needs, wants, demands
–
–
–
–
Products and services
Value, satisfaction, quality
Exchanges, transactions, relationships
Markets
Definition of marketing
–
A social and managerial process whereby individuals and groups obtain what
they need and want through creating and exchanging products and value
with others
–
Simple definition
–
–
Deliver customer satisfaction at a profit
By: (1) attracting new customers by promising superior value, and (2) keep
current customers by delivering satisfaction
Scope of marketing
–
Book has a broad scoping: R&D, communcation, distribution, pricing, service
–
Also buyers carry on marketing activities – e.g. by searching for goods
Main elements of a modern marketing system
– value added in steps
–
Suppliers
–
–
–
Company (marketer) + competitors
Marketing intermediaries
End user market
Needs, wants, demands
Needs
–
States of felt deprivation, part of human makeup
–
Physical and social needs
Wants
–
The form needs take (e.g. food => hamburger)
–
Shaped by culture and personality
Demands
–
When wants are backed by buying power
Products and services
Products
–
Anything that can be offered to satisfy a need or a want
–
–
–
Physical products, services, experiences, persons, places, organizations,
information, ideas
Example: “smoking is bad” idea can be a product, a person can be a product in an
election
Aka: satisfier, resource, marketing offer
Services
–
Just one kind of a product
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Principles of Marketing
Value, satisfaction, quality
(Customer) Value
–
–
–
–
Difference between “value gained by owning and using a product” and “cost of
obtaining the product”
Value gained not necessarily monetary
Similarly cost of obtaining not necessarily monetary
Customers act on
perceived value
[and
perceived cost]
(Customer) Satisfaction
–
Perceived performance relative to expectations
Quality
–
Closely related to satisfaction
–
–
Narrow definition: no defects
Broad definition: ability to satisfy customer needs [circular definition!]
Exchange, transactions,
relationships
Exchange
–
Obtaining a desired object from someone by offering something in return
–
Offerings could be money, product, service, ...
Transaction
–
A trade of values between two parties;
marketing's unit of measurement!
–
Monetary transactions and barter transactions
Relationship (Marketing)
–
Going beyong short term transactions
–
–
Long-term relationships with valued customers, partners, etc
Marketing network
– company and all its supporting stakeholders
Markets
Market – Economist's definition
–
Place (virtual or physical) where buyers and sellers meet
Market – Marketer's definition
–
The set of
actual and potential buyers
of a product
–
The sellers of a product are labeled as the “industry”
Industry – Marketer's definition
–
The sellers of a product
1.2 Marketing management
What is marketing
management
Book definition
–
Analysis, planning, implementation, and control of programs designed to
–
–
... create, build, and maintain beneficial exchanges with target buyers
... for the purpose of achieving organizational objectives
= Finding and increasing (sometimes decreasing) demand
=
Demand management
Demarketing
To shift or reduce demand, not destroy it
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Principles of Marketing
Profitable customer
relationships
Two categories of demand
–
New customers
–
Repeat customers
Traditional focus – attract new customer, transactions
Modern focus – retain
profitable
customers, build lasting relationships
Customer lifetime value of a Taco Bell customer > $12,000 !
Practice
Three stages
–
Entrepreneurial marketing
–
–
–
–
–
–
–
Individuals who live by their wits, knock on doors etc
Marketing department, adopt tools of marketing
Maturing company
Need internal entrepreneurship to avoid stagnation
Get out of office, go into customer's lives, etc
Formulated marketing
Intrepreneurial marketing
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Principles of Marketing
1.3 Marketing concepts
Production concept
Customer
–
Favor products that are available and affordable
Goal
–
Improve production and distribution efficiency
Usefulness
–
Demand exceeds supply
–
Product cost is too high, pressure to decrease
Risk
- [What to do when situation changes?]
Product concept
Consumer
–
Favor products with best quality, performance, innovative features
Goal
–
Improve product features in a continuous fashion
Userfulness
–
[If market is stable, no competing technologies in sight]
Risk
–
Competing technology (spray instead of mouse trap) enters market
Selling concept
Consumer
–
Will not buy enough products unless seller(s) undertake large-scale promotion and
selling effort
Goal
–
Promote product, coax people into buying
Usefulness
–
Unsought goods – encyclopedias, insurance, ...
Risk
–
Dissatisfied customers – will not buy again, will tell 10 people!
“Inside out”
Marketing concept
Customer
–
Buys product that best satisfies needs and wants
Goal
–
Determine needs and wants of target markets
–
Deliver the desired satisfaction more effectively and efficiently than competitors
Risk
–
Short term focus w.r.t. larger social and ethical issues
–
Overlooks long term customer welfare (fast food)
Customer driven marketing
–
When customers know what they want
Customer driving marketing
–
When customers do not yet know they even need something
–
–
Meeting existing latent and future needs by understanding customers better than
they understand themselves
GSM networks, CD players, ...
“Outside in”
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Social marketing concept
Goal
–
Balance (1) Consumer satisfaction in short and long term, (2) society, (3) company
profits
1.4 Challenges in the new connected millennium
Connections
Connecting technologies
–
Computer, Information
–
Communication, Transportation
...
which connect
–
Customers
–
–
–
–
–
–
–
–
More selective, more direct [salad bowl customer base]
Connecting for life
Other departments, supplies and distributors
Strategic alliances
Global, broadened connections
Values and responsibilities
Marketing Partners
World around us
Supply chain
management
= Connecting with partners
Supply chain = raw materials to components to final products to final buyers
SCM = strengthening and optimizing the chain
–
Streamline logistics
–
–
Reduce joint distribution costs
...
Marketing alliance (joint marketing)
Product or service alliance (carry / license other product)
Promotional alliance (join in a promotion)
Pricing alliance (join forces for mutual discounts)
Strategic alliences
1)
2)
3)
4)
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Principles of Marketing
2 Strategic Planning and the Marketing Process
2.1 Strategic planning process
Strategic planning process
Define the company's mission (mission statement)
–
–
Mission statement = statement of purpose, what do we want to accomplish
Requirements
–
–
–
–
–
–
Market oriented (in terms of satisfying customer needs)
Realistic (not too narrow or broad)
Specific
Fit the market environment
Base on distinctive competences
Motivating
Set company objectives and goals
–
Mission turned into detailed supporting objectives and goals for each level of
company management
–
For instance
–
–
–
–
–
Spend 15% of profits into R&D to achieve X
Sell more or reduce costs to cover costs =
marketing goal
Through more salespeople or more advertisting, etc.
“Increase market share by 20% by end of third year”
Broad marketing strategies to cover (broad) marketing goals
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