Chapter 12 Marketing management
1. Evolution of marketing thought ................................................................................................ 4
1.1. Operation oriented management .......................................................................................... 4
1.2. Sales operated management................................................................................................ 4
1.3. Marketing oriented management .......................................................................................... 5
1.4. Consumer oriented management ......................................................................................... 5
1.5. Strategic approach to marketing ........................................................................................... 5
1.6. Relationship marketing ......................................................................................................... 5
2. Marketing concept...................................................................................................................... 6
2.1. Profitability............................................................................................................................ 6
2.2. Consumer orientation ........................................................................................................... 6
2.3. Social responsibility .............................................................................................................. 6
2.4. Organizational integration..................................................................................................... 7
2.5. Merits of marketing concept.................................................................................................. 7
3. Defining marketing..................................................................................................................... 7
4. Components of marketing process .......................................................................................... 7
5. Market research.......................................................................................................................... 8
5.1. Need for information ............................................................................................................. 8
5.2. Marketing research methodology.......................................................................................... 8
5.3. Market forecasting ................................................................................................................ 9
5.3.1. Sales forecasting .......................................................................................................... 9
5.3.2. Forecasting on profit contribution .................................................................................. 9
6. Consumer behavior .................................................................................................................... 9
6.1. Determinants of consumer behaviour ................................................................................... 9
6.1.1. Individual factors......................................................................................................... 10
6.1.2. Group factors .............................................................................................................. 10
6.2. Consumer decision making ................................................................................................ 10
7. Market segmentation ................................................................................................................ 10
7.1. Total market approach – market aggregation ..................................................................... 11
7.2. Market segmentation approach .......................................................................................... 11
7.3. Requirements for meaningful market segmentation............................................................ 11
7.4. Criteria for market segmentation......................................................................................... 11
7.5. Segment profiles................................................................................................................. 12
Chapter 12 Marketing management.doc 1
,8. Target market selection and positioning................................................................................. 12
9. Marketing instruments.............................................................................................................. 12
10. Product decisions ................................................................................................................ 12
10.1. Product offering .................................................................................................................. 12
10.2. What is a product?.............................................................................................................. 12
10.3. Classification of consumer products ................................................................................... 13
10.4. Brand decisions.................................................................................................................. 13
10.4.1. Meaning of brands ...................................................................................................... 13
10.4.2. Advantages to use brand names – consumer ............................................................. 13
10.4.3. Advantages to use brand names – marketer............................................................... 13
10.4.4. Brand loyalty ............................................................................................................... 13
10.4.5. Manufacturer, dealer or generic brands ...................................................................... 14
10.4.6. Individual / family brands ............................................................................................ 14
10.5. Packaging decisions........................................................................................................... 14
10.5.1. Different kinds of packaging........................................................................................ 14
10.5.2. Choice of package design........................................................................................... 14
10.6. Product differentiation......................................................................................................... 14
10.7. Product obsolescence ........................................................................................................ 15
10.8. Multiproduct decisions ........................................................................................................ 15
10.9. New product decisions........................................................................................................ 15
10.10. Nature of products life cycle............................................................................................ 15
10.11. Marketing strategy during products life cycle .................................................................. 16
10.11.1. Introductory phase .................................................................................................. 16
10.11.2. Growth phase ......................................................................................................... 16
10.11.3. Maturity phase ........................................................................................................ 16
10.11.4. Declining phase ...................................................................................................... 16
11. Price decisions ..................................................................................................................... 17
11.1. Meaning of a price .............................................................................................................. 17
11.2. Price determination process ............................................................................................... 17
11.2.1. Cost price ................................................................................................................... 17
11.2.2. Market price................................................................................................................ 17
11.2.3. Target price ................................................................................................................ 17
11.2.4. Final price ................................................................................................................... 18
11.3. Adaptions to final prices...................................................................................................... 18
11.3.1. Skimming process ...................................................................................................... 18
11.3.2. Market penetration price ............................................................................................. 18
11.3.3. Market price level........................................................................................................ 18
11.3.4. Leader prices .............................................................................................................. 18
11.3.5. Odd prices .................................................................................................................. 18
11.3.6. Bait prices................................................................................................................... 19
Chapter 12 Marketing management.doc 2
, 12. Distribution decisions.......................................................................................................... 19
12.1. Description of distribution ................................................................................................... 19
12.2. Choice of distribution channel............................................................................................. 19
13. Channel leadership .............................................................................................................. 19
13.1. Manufacturers as channel captain ...................................................................................... 19
13.2. Retailer as channel captain ................................................................................................ 19
13.3. Market coverage................................................................................................................. 20
13.4. Physical distribution............................................................................................................ 20
14. Marketing communication decisions.................................................................................. 21
14.1. Nature of marketing communication ................................................................................... 21
14.2. Advertising.......................................................................................................................... 21
14.2.1. Advertising media ....................................................................................................... 21
14.2.2. Advertising message................................................................................................... 21
14.3. Personal selling .................................................................................................................. 22
14.4. Direct marketing ................................................................................................................. 22
14.5. Sales promotion.................................................................................................................. 22
14.6. Publicity.............................................................................................................................. 22
14.7. Public relations ................................................................................................................... 23
14.7.1. Defining public relations.............................................................................................. 23
14.7.2. Public relations media................................................................................................. 23
Chapter 12 Marketing management.doc 3
1. Evolution of marketing thought ................................................................................................ 4
1.1. Operation oriented management .......................................................................................... 4
1.2. Sales operated management................................................................................................ 4
1.3. Marketing oriented management .......................................................................................... 5
1.4. Consumer oriented management ......................................................................................... 5
1.5. Strategic approach to marketing ........................................................................................... 5
1.6. Relationship marketing ......................................................................................................... 5
2. Marketing concept...................................................................................................................... 6
2.1. Profitability............................................................................................................................ 6
2.2. Consumer orientation ........................................................................................................... 6
2.3. Social responsibility .............................................................................................................. 6
2.4. Organizational integration..................................................................................................... 7
2.5. Merits of marketing concept.................................................................................................. 7
3. Defining marketing..................................................................................................................... 7
4. Components of marketing process .......................................................................................... 7
5. Market research.......................................................................................................................... 8
5.1. Need for information ............................................................................................................. 8
5.2. Marketing research methodology.......................................................................................... 8
5.3. Market forecasting ................................................................................................................ 9
5.3.1. Sales forecasting .......................................................................................................... 9
5.3.2. Forecasting on profit contribution .................................................................................. 9
6. Consumer behavior .................................................................................................................... 9
6.1. Determinants of consumer behaviour ................................................................................... 9
6.1.1. Individual factors......................................................................................................... 10
6.1.2. Group factors .............................................................................................................. 10
6.2. Consumer decision making ................................................................................................ 10
7. Market segmentation ................................................................................................................ 10
7.1. Total market approach – market aggregation ..................................................................... 11
7.2. Market segmentation approach .......................................................................................... 11
7.3. Requirements for meaningful market segmentation............................................................ 11
7.4. Criteria for market segmentation......................................................................................... 11
7.5. Segment profiles................................................................................................................. 12
Chapter 12 Marketing management.doc 1
,8. Target market selection and positioning................................................................................. 12
9. Marketing instruments.............................................................................................................. 12
10. Product decisions ................................................................................................................ 12
10.1. Product offering .................................................................................................................. 12
10.2. What is a product?.............................................................................................................. 12
10.3. Classification of consumer products ................................................................................... 13
10.4. Brand decisions.................................................................................................................. 13
10.4.1. Meaning of brands ...................................................................................................... 13
10.4.2. Advantages to use brand names – consumer ............................................................. 13
10.4.3. Advantages to use brand names – marketer............................................................... 13
10.4.4. Brand loyalty ............................................................................................................... 13
10.4.5. Manufacturer, dealer or generic brands ...................................................................... 14
10.4.6. Individual / family brands ............................................................................................ 14
10.5. Packaging decisions........................................................................................................... 14
10.5.1. Different kinds of packaging........................................................................................ 14
10.5.2. Choice of package design........................................................................................... 14
10.6. Product differentiation......................................................................................................... 14
10.7. Product obsolescence ........................................................................................................ 15
10.8. Multiproduct decisions ........................................................................................................ 15
10.9. New product decisions........................................................................................................ 15
10.10. Nature of products life cycle............................................................................................ 15
10.11. Marketing strategy during products life cycle .................................................................. 16
10.11.1. Introductory phase .................................................................................................. 16
10.11.2. Growth phase ......................................................................................................... 16
10.11.3. Maturity phase ........................................................................................................ 16
10.11.4. Declining phase ...................................................................................................... 16
11. Price decisions ..................................................................................................................... 17
11.1. Meaning of a price .............................................................................................................. 17
11.2. Price determination process ............................................................................................... 17
11.2.1. Cost price ................................................................................................................... 17
11.2.2. Market price................................................................................................................ 17
11.2.3. Target price ................................................................................................................ 17
11.2.4. Final price ................................................................................................................... 18
11.3. Adaptions to final prices...................................................................................................... 18
11.3.1. Skimming process ...................................................................................................... 18
11.3.2. Market penetration price ............................................................................................. 18
11.3.3. Market price level........................................................................................................ 18
11.3.4. Leader prices .............................................................................................................. 18
11.3.5. Odd prices .................................................................................................................. 18
11.3.6. Bait prices................................................................................................................... 19
Chapter 12 Marketing management.doc 2
, 12. Distribution decisions.......................................................................................................... 19
12.1. Description of distribution ................................................................................................... 19
12.2. Choice of distribution channel............................................................................................. 19
13. Channel leadership .............................................................................................................. 19
13.1. Manufacturers as channel captain ...................................................................................... 19
13.2. Retailer as channel captain ................................................................................................ 19
13.3. Market coverage................................................................................................................. 20
13.4. Physical distribution............................................................................................................ 20
14. Marketing communication decisions.................................................................................. 21
14.1. Nature of marketing communication ................................................................................... 21
14.2. Advertising.......................................................................................................................... 21
14.2.1. Advertising media ....................................................................................................... 21
14.2.2. Advertising message................................................................................................... 21
14.3. Personal selling .................................................................................................................. 22
14.4. Direct marketing ................................................................................................................. 22
14.5. Sales promotion.................................................................................................................. 22
14.6. Publicity.............................................................................................................................. 22
14.7. Public relations ................................................................................................................... 23
14.7.1. Defining public relations.............................................................................................. 23
14.7.2. Public relations media................................................................................................. 23
Chapter 12 Marketing management.doc 3
