Ch. 2 Marketing 341

Criticisms of the 4 P's

Omit or underemphasize service products Need to include packaging as a product decision Does not cater to the buyer's perspective of the four Cs: -Customer solution -Customer cost -Convenience -Communication

Positioning

-Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers -Begins with differentiation -Differentiation: Differentiating the market offering to create superior customer value -The entire marketing program should support the chosen positioning strategy.

Growth-Share Matrix

-Evaluates a company's SBUs in terms of market growth rate and relative market share -Problems: Difficult, time consuming, and costly to implement Difficult to define SBUs and measure market share and growth Focuses on classifying current businesses but provide little advice for future planning

Figure 2.6

-Managing the marketing process requires the four marketing management functions as illustrated in this figure. They include analysis, planning, implementation, and control. -The company first develops company-wide strategic plans and then translates them into marketing and other plans for each division, product, and brand. Through implementation, the company turns the plans into actions. Control consists of measuring and evaluating the results of marketing activities and taking corrective action where needed. Finally, marketing analysis provides the information and evaluations needed for all the other marketing activities.

Mission Statement

-Statement of the organization's purpose -What it wants to accomplish in the larger environment -Market oriented and defined in terms of satisfying basic customer needs -Emphasizes the company's strengths -Focuses on customers and the customer experience the company seeks to create

Market Department Organization

-The company must design a marketing organization that can carry out marketing strategies and plans. -Modern marketing departments can be arranged in several ways. The most common form of marketing organization is the functional organization. Under this organization, different marketing activities are headed by a functional specialist. -A company that sells across the country or internationally often uses a geographic organization. Its sales and marketing people are assigned to specific countries, regions, and districts. -A company with different products or brands may create a product management organization. Under this approach, a product manager develops and implements a complete strategy and marketing program for a specific product or brand. -A market or customer management organization approach is best suited for companies that sell one product line to many different types of markets and customers who have different needs and preferences. -Large companies that produce different products flowing into many different geographic and customer markets employ a combination of the functional, geographic, product, and market organization forms.

Partnering with Other Company Departments

-Value chain: Series of internal departments that carry out value-creating activities -Firm's success depends on how well the various departments coordinate their activities. -Marketers should ensure all the departments are customer-focused and develop a smooth functioning value chain.

Business Portfolio

Collection of businesses and products that make up the company Steps in business portfolio planning: Analyze the firm's current business portfolio Develop strategies for growth and downsizing to shape the future portfolio

Partnering with Others in the Marketing System

Companies should assess: -Their internal value chains. -The value chains of their suppliers, distributors, and their customers. Value delivery network: Made up of the company, its suppliers, its distributors, and its customers who partner with each other -To improve the performance of the entire system

Steps in Strategic Planning Chart

Defining the company mission > Setting company objectives and goals > Designing the business portfolio > Planning marketing and other functional strategies

Marketing Segmentation

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs

Market Targeting

Evaluating each market segment's attractiveness and selecting one or more segments to enter

Portfolio Analysis

Evaluation of the products and businesses that make up the company by the management Steps: -Identifying the strategic business units (SBUs) -Assessing the attractiveness of its various SBUs and deciding the support each SBU deserves The purpose is to direct resources toward more profitable businesses while phasing out or dropping weaker ones.

Market Segment

Group of consumers who respond in a similar way to a given set of marketing efforts

New Consumer Capabilities

Leveling off in buying power A greater variety of available goods and services A great amount of information about practically anything Greater ease in interacting and placing and receiving orders An ability to compare notes on products and services An amplified voice to influence public opinion

Figure 2.8

Marketing Return on Investment-This figure views marketing expenditures as investments that produce returns in the form of more profitable customer relationships. Marketing investments result in improved customer value and satisfaction, which in turn increases customer attraction and retention. This increases individual customer lifetime values and the firm's overall customer equity. Increased customer equity, in relation to the cost of the marketing investments, determines return on marketing investment.

Defining The Mission

Mission statements should... -Serve as a guide for what the organization wants to accomplish -Be "market-oriented" rather than "product-oriented" -Be neither too narrow, nor too broad -Fit with the market environment -Be motivating Mission statements begin with these questions: -What business are we in? -What customers should we serve? What do they value? -How should we develop the firm's capabilities and focus its efforts?

The 4 P's of marketing mix

Product: Variety, Quality, Design, Features, Brand name, Packaging, Services Promotion: Advertising, Personal selling, Sales promotion, Public relations Price: List price, discounts, allowances, payment period, credit terms Place: Channels, Coverage, Locations, Inventory, Transportation, Logistics

Market Development

Strategy: - identify and develop new markets - demographic or geographic - for current products -Bass Pro Shops has aggressively developed new geographic markets for its Outdoor World retail stores

Product Development

Strategy: Offering modified or new products to current markets How? Adding new sizes, flavors, or offering, co-branding products, etc.

Market Penetration

Strategy: to increase sales to current buyers without changing the products being sold Market penetration can be achieved by adding new stores in current market areas, improving advertising, lowering prices, adding services, etc.

Figure 2.7 SWOT

Strengths: Internal capabilities that may help a company reach its objectives Opportunities: External factors that the company may be able to exploit to its advantage Weaknesses: Internal limitations that may interfere with a company's ability to achieve its objectives Threats: Current and emerging external factors that may challenge the company's performance

Figure 2.2

The best-known portfolio-planning method was developed by the Boston Consulting Group, a leading management consulting firm. This figure shows the classification of company's SBUs. Market growth rate provides a measure of market attractiveness. Relative market share serves as a measure of company strength in the market. The growth-share matrix defines four types of SBUs. Stars are high-growth, high-share businesses or products. The second type, cash cows, are low-growth, high-share businesses or products. The third type, question marks, are low-share business units in high-growth markets. Dogs are low-growth, low-share businesses and products. The 10 circles in the growth-share matrix represent the company's 10 current SBUs.