Solution Manual for Marketing Management 4th EditionMark Johnston Greg
! ! ! ! ! ! ! ! !
Marshall
Chapter 01 !
Marketing! in!Today’s!Business!Milieu!
LEARNING! OBJECTIVES
LO! 1-1 Identify!typical! misconceptions! about! marketing,! why!they!persist,! and! the! resulting!
challenges! for! marketing! management.
LO! 1-2 Define! what! marketing! and! marketing! management! really! are! and! how!they!contribute!
to! a! firm’s! success.
LO! 1-3 Appreciate! how! marketing! has! evolved! from! its! early!roots!to! be! practiced! as! it ! is! today.!
LO! 1-4 Recognize! the! impact! of! key! change! drivers! on! the! future! of! marketing.
CHAPTER! OUTLINE
I. WELCOME ! TO! MARKETING! MANAGEMENT
II. MARKETING! MISCONCEPTIONS
A. Behind! the! Misconceptions
1. Marketing! Is! Highly! Visible! by!Nature
2. Marketing! Is! More! Than! Buzzwords
B. Beyond! the! Misconceptions! and! Toward!the! Reality! of! Modern! Marketing
III. DEFINING! MARKETING
A. Value! and! Exchange! Are! Core! Marketing! Concepts
B. A!New! Agenda! for! Marketing
IV. MARKETING’S! ROOTS! AND! EVOLUTION
A. Pre-Industrial!Revolution
1-1
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw Hill LLC.
, B. Focus! on! Production! and! Products
C. Focus! on! Selling
D. Advent! of!the! Marketing! Concept
1. The! Marketing! Mix
E. Post-Marketing! Concept ! Approaches
1. Differentiation!Orientation
2. Market! Orientation
3. Relationship! Orientation
4. One-to-One! Marketing
V. CHANGE! DRIVERS! IMPACTING! THE! FUTURE! OF! MARKETING
A. Shift ! to! Product! Glut! and! Customer ! Shortage
B. Shift ! in! Information! Power! from!Marketer! to! Customer
C. Shift ! in! Generational! Values! and! Preferences
D. Shift ! to! Distinguishing! Marketing! (Big! M)! from! marketing! (little! m)
1. Marketing! (Big! M)
2. marketing!(little! m)
E. Shift ! to! Justifying! the! Relevance! and! Payback! of!the! Marketing! Investment
VI. YOUR! MARKETING! MANAGEMENT! JOURNEY! BEGINS
VII. SUMMARY
KEY! TERMS
marketing! management! The! leading! and! managing! of!the! facets! of! marketing! to! improve!
individual, ! unit, ! and! organizational! performance.
marketing’s! stakeholders! Any!person! or! entity! inside! or!outside! a! firm! with! whom! marketing!
interacts,! impacts,! and! is! impacted! by.
1-2
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw Hill LLC.
,societal! marketing! The! concept! that,! at!the! broadest! level, ! members! of!society!at! large! can! be!
viewed! as! a! stakeholder ! for! marketing.
sustainability! The! practicing! of!business! that! meet! humanity’s! needs!without! harming! future!
generations.
value! A! ratio! of!the! bundle! of! benefits! a! customer ! receives! from!an! offering! compared! to! the!
costs! incurred! by! the! customer! in! acquiring! that! bundle! of! benefits.
exchange! The! giving! up! of!something! of! value! for! something! desired.
production! orientation! The! maximization! of! production! capacity! through! improvements! in!
products! and! production!activities! without! much!regard! for! what! is! going! on! in!the! marketplace.
sales! orientation! The! increase! of!sales! and! consequently! production! capacity! utilization! by!
having! salespeople! ―push‖! product! into! the! hands! of! customers.
marketing! concept! Business!philosophy!that! emphasizes! an!organization-wide! customer!
orientation! with! the! objective! of! achieving! long-run! profits.
marketing! mix! (4Ps! of! marketing)! Product,! price,! place, ! and! promotion—the! fundamental!
elements! that! comprise! the! marketer’s! tool!kit ! that! can! be! developed! in! unique! combinations! to!
set! the! product! or! brand! apart! from! the! competition.
offering! A! product! or! service! that! delivers! value! to! satisfy! a! need! or! want.
solution! A! bundle! of!benefits! from!an! offering! that! solves! a! problem! or! fills! a! need! of!a!
customer.
differentiation! Communicating! and! delivering! value! in!different! ways!to! different! customer!
groups.
customer! orientation! Placing! the! customer! at! the! core! of! all!aspects! of! the! enterprise.
market! orientation! The! implementation!of!the! marketing! concept,! based! on!the! understanding!
of! competitors! and! listening! to! the! market.
relationship! orientation! Investing! in!keeping! and! cultivating! profitable!current! customers!
instead! of! constantly! having! to! invest! in! gaining! new! ones.
one-to-one!marketing! Directing! energy!and! resources! into! establishing! a! learning! relationship!
with! each! customer ! and! connecting! that! knowledge! with! the! firm’s! production! and! service!
capabilities! to! fulfill! that! customer’s! needs! in! as! custom! a! manner! as! possible.
mass!customization! Combining! flexible! manufacturing! with! flexible! marketing! to! greatly!
enhance! customer! choice.
Marketing! (Big! M)! The! dimension! of! marketing! that! focuses! on! external! forces! that! affect! the!
organization! and! serves! as! the! driver ! of! business! strategy.
1-3
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw Hill LLC.
, strategic! marketing! The! long-term,! firm-level!commitment! to! investing! in! marketing— !
supported! at! the! highest! organization! level—for! the! purpose! of! enhancing! organizational!
performance.
market! creation! Approaches! that! drive! the! market! toward! fulfilling! a! whole! new! set! of!needs!
that! customers! did! not! realize! was! possible! or! feasible! before.
marketing! (little! m)! The! dimension! of! marketing! that! focuses! on! the! functional!or! operational!
level! of! the! organization.
tactical! marketing! Marketing! activities! that! take! place! at! the! functional!or! operational! level!of!a!
firm.
marketing! metrics! Tools! and! processes! designed! to! identify,! track,! evaluate,! and! provide! key!
benchmarks! for! improvement! of! marketing! activities.
marketing! analytics! The! practice! of! measuring, ! managing, ! and! analyzing! marketing!
performance! to! maximize! marketing! effectiveness! and! optimize! return!on!marketing! investment!
(ROMI).
return! on! marketing! investment! (ROMI)! What! impact! an! investment! in! marketing! has! on!a!
firm’s! success, ! especially! financially.
APPLICATION! QUESTIONS
1. Consider! the! various! marketing! misconceptions! introduced! in!this! chapter.
a. Pick! any!two! of!the! misconceptions! and! develop! a! specific! example! of!each! from! your!
own! experience! with! firms! and! brands.
• Catchy! and! entertaining! advertisements! —! or! perhaps! the! opposite,! incessant! and!
boring! advertisements.
• Pushy! salespeople! trying! to! persuade! someone! to! buy! it! right! now.
• Famous! brands! and! their! celebrity! spokespeople,! such! as! Nike’s! athlete! endorsers.
• Product! claims! that! turn! out! to! be! overstated! or! just! plain! false,! causing! doubt! about!
the! trustworthiness! of! a! company.
• Marketing!departments!―own‖!an!organization’s!marketing!initiative.
b. How! will! it ! be! beneficial! for! a! new! marketing! manager! to! understand! the! misconceptions!
that! exist! about! marketing?
Effective! marketing! management! isn’t! about! buzzwords! or! quick! fixes.! In! today’s! business!
milieu,! the! reality! of! marketing! is! that! it! is! a! central! function! and! set! of! processes!
essential! to! any! enterprise.! Moreover,! leading! and! managing! the! facets! of! marketing! in
1-4
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw Hill LLC.
! ! ! ! ! ! ! ! !
Marshall
Chapter 01 !
Marketing! in!Today’s!Business!Milieu!
LEARNING! OBJECTIVES
LO! 1-1 Identify!typical! misconceptions! about! marketing,! why!they!persist,! and! the! resulting!
challenges! for! marketing! management.
LO! 1-2 Define! what! marketing! and! marketing! management! really! are! and! how!they!contribute!
to! a! firm’s! success.
LO! 1-3 Appreciate! how! marketing! has! evolved! from! its! early!roots!to! be! practiced! as! it ! is! today.!
LO! 1-4 Recognize! the! impact! of! key! change! drivers! on! the! future! of! marketing.
CHAPTER! OUTLINE
I. WELCOME ! TO! MARKETING! MANAGEMENT
II. MARKETING! MISCONCEPTIONS
A. Behind! the! Misconceptions
1. Marketing! Is! Highly! Visible! by!Nature
2. Marketing! Is! More! Than! Buzzwords
B. Beyond! the! Misconceptions! and! Toward!the! Reality! of! Modern! Marketing
III. DEFINING! MARKETING
A. Value! and! Exchange! Are! Core! Marketing! Concepts
B. A!New! Agenda! for! Marketing
IV. MARKETING’S! ROOTS! AND! EVOLUTION
A. Pre-Industrial!Revolution
1-1
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw Hill LLC.
, B. Focus! on! Production! and! Products
C. Focus! on! Selling
D. Advent! of!the! Marketing! Concept
1. The! Marketing! Mix
E. Post-Marketing! Concept ! Approaches
1. Differentiation!Orientation
2. Market! Orientation
3. Relationship! Orientation
4. One-to-One! Marketing
V. CHANGE! DRIVERS! IMPACTING! THE! FUTURE! OF! MARKETING
A. Shift ! to! Product! Glut! and! Customer ! Shortage
B. Shift ! in! Information! Power! from!Marketer! to! Customer
C. Shift ! in! Generational! Values! and! Preferences
D. Shift ! to! Distinguishing! Marketing! (Big! M)! from! marketing! (little! m)
1. Marketing! (Big! M)
2. marketing!(little! m)
E. Shift ! to! Justifying! the! Relevance! and! Payback! of!the! Marketing! Investment
VI. YOUR! MARKETING! MANAGEMENT! JOURNEY! BEGINS
VII. SUMMARY
KEY! TERMS
marketing! management! The! leading! and! managing! of!the! facets! of! marketing! to! improve!
individual, ! unit, ! and! organizational! performance.
marketing’s! stakeholders! Any!person! or! entity! inside! or!outside! a! firm! with! whom! marketing!
interacts,! impacts,! and! is! impacted! by.
1-2
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw Hill LLC.
,societal! marketing! The! concept! that,! at!the! broadest! level, ! members! of!society!at! large! can! be!
viewed! as! a! stakeholder ! for! marketing.
sustainability! The! practicing! of!business! that! meet! humanity’s! needs!without! harming! future!
generations.
value! A! ratio! of!the! bundle! of! benefits! a! customer ! receives! from!an! offering! compared! to! the!
costs! incurred! by! the! customer! in! acquiring! that! bundle! of! benefits.
exchange! The! giving! up! of!something! of! value! for! something! desired.
production! orientation! The! maximization! of! production! capacity! through! improvements! in!
products! and! production!activities! without! much!regard! for! what! is! going! on! in!the! marketplace.
sales! orientation! The! increase! of!sales! and! consequently! production! capacity! utilization! by!
having! salespeople! ―push‖! product! into! the! hands! of! customers.
marketing! concept! Business!philosophy!that! emphasizes! an!organization-wide! customer!
orientation! with! the! objective! of! achieving! long-run! profits.
marketing! mix! (4Ps! of! marketing)! Product,! price,! place, ! and! promotion—the! fundamental!
elements! that! comprise! the! marketer’s! tool!kit ! that! can! be! developed! in! unique! combinations! to!
set! the! product! or! brand! apart! from! the! competition.
offering! A! product! or! service! that! delivers! value! to! satisfy! a! need! or! want.
solution! A! bundle! of!benefits! from!an! offering! that! solves! a! problem! or! fills! a! need! of!a!
customer.
differentiation! Communicating! and! delivering! value! in!different! ways!to! different! customer!
groups.
customer! orientation! Placing! the! customer! at! the! core! of! all!aspects! of! the! enterprise.
market! orientation! The! implementation!of!the! marketing! concept,! based! on!the! understanding!
of! competitors! and! listening! to! the! market.
relationship! orientation! Investing! in!keeping! and! cultivating! profitable!current! customers!
instead! of! constantly! having! to! invest! in! gaining! new! ones.
one-to-one!marketing! Directing! energy!and! resources! into! establishing! a! learning! relationship!
with! each! customer ! and! connecting! that! knowledge! with! the! firm’s! production! and! service!
capabilities! to! fulfill! that! customer’s! needs! in! as! custom! a! manner! as! possible.
mass!customization! Combining! flexible! manufacturing! with! flexible! marketing! to! greatly!
enhance! customer! choice.
Marketing! (Big! M)! The! dimension! of! marketing! that! focuses! on! external! forces! that! affect! the!
organization! and! serves! as! the! driver ! of! business! strategy.
1-3
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw Hill LLC.
, strategic! marketing! The! long-term,! firm-level!commitment! to! investing! in! marketing— !
supported! at! the! highest! organization! level—for! the! purpose! of! enhancing! organizational!
performance.
market! creation! Approaches! that! drive! the! market! toward! fulfilling! a! whole! new! set! of!needs!
that! customers! did! not! realize! was! possible! or! feasible! before.
marketing! (little! m)! The! dimension! of! marketing! that! focuses! on! the! functional!or! operational!
level! of! the! organization.
tactical! marketing! Marketing! activities! that! take! place! at! the! functional!or! operational! level!of!a!
firm.
marketing! metrics! Tools! and! processes! designed! to! identify,! track,! evaluate,! and! provide! key!
benchmarks! for! improvement! of! marketing! activities.
marketing! analytics! The! practice! of! measuring, ! managing, ! and! analyzing! marketing!
performance! to! maximize! marketing! effectiveness! and! optimize! return!on!marketing! investment!
(ROMI).
return! on! marketing! investment! (ROMI)! What! impact! an! investment! in! marketing! has! on!a!
firm’s! success, ! especially! financially.
APPLICATION! QUESTIONS
1. Consider! the! various! marketing! misconceptions! introduced! in!this! chapter.
a. Pick! any!two! of!the! misconceptions! and! develop! a! specific! example! of!each! from! your!
own! experience! with! firms! and! brands.
• Catchy! and! entertaining! advertisements! —! or! perhaps! the! opposite,! incessant! and!
boring! advertisements.
• Pushy! salespeople! trying! to! persuade! someone! to! buy! it! right! now.
• Famous! brands! and! their! celebrity! spokespeople,! such! as! Nike’s! athlete! endorsers.
• Product! claims! that! turn! out! to! be! overstated! or! just! plain! false,! causing! doubt! about!
the! trustworthiness! of! a! company.
• Marketing!departments!―own‖!an!organization’s!marketing!initiative.
b. How! will! it ! be! beneficial! for! a! new! marketing! manager! to! understand! the! misconceptions!
that! exist! about! marketing?
Effective! marketing! management! isn’t! about! buzzwords! or! quick! fixes.! In! today’s! business!
milieu,! the! reality! of! marketing! is! that! it! is! a! central! function! and! set! of! processes!
essential! to! any! enterprise.! Moreover,! leading! and! managing! the! facets! of! marketing! in
1-4
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw Hill LLC.
