Marketing Management Summary

Marketing strategy
Marketing strategy strategy to achieve certain objects (sales volume/growth rate..)
 consider a firm’s limitations & core competencies
Corporate strategies sum of business unit strategies + plans fr nw business initiatives
Perceived value the value customers already see in the product
Potential value educating customers about product benefits (mrkt cmmnction)
Market the place where buyers & sellers meet
Market segment customers tht r alike: perceivng/using product, buying behavior
 to delineate groups according to their need, market potential & buying behavior
Conscious price parallellism similarity of prices not reached through collusive agreement
Installed base volume of a brand’s product currently used by the customers
Elctrnc commerce channels (EDI) Electronic Data Interchange & internet
 drawbacks: market is limited & security concerns
Personal selling to difficult through mass media/too few prospective buyers
Media advertising efficient for huge groups of prospective buyers/general info

Elements of a marketing strategy:
- Product/market selection (what markets/what product lines?)




element
nt
Importa
- Price (price for individual products/relative to others?)
- Distribution systems (independent distributors/agents?)
- Market communications (direct mail/trade shows/telemarketing?)
- Product service (products which need repair/maintenance)




industry
vary by
s which
Element
- Technnical service (supporting customer’s manufacturing…)
- Plant location (price of shipping/government regulations)
- Brand strategy (kind of image u want to build for ur customers)

Marketing mix all ^ elements together
 Can vary across different markets, growth stages, products, competitors

4P’s (product, price, place, promotion)
- Product attributes+benefits+risks+disadvantages the buyer obtains
o Product/market selection: right target market, prodct, production technology
 Value of the product (most valuable)
 Long-run growth potential (market size/opportunities, profit)
 Resource commitments (invest R&D/marketing/prodction)
 Competitive positioning
 Company-prodct/market fit
- Price
o Skimming introducing with a high price and then bring down
 Lowrisk, maximize unitprofits early, experiences w low volumes
o Penetration pricing quickly invading the market by setting low prices
 Highrisk,replaces competition,quickly scale economies+ experience
 The following conditions have to be met:
 The product must be defect-free
 Sufficient production capacity to fill the demand
 Distribution channels must be available
 Product adaption should be quick

, Price is affected by 5 factors:
o Supply/demand (high spply=low prices/high demand=high prices)
o Production & overhead costs
 Efficient manufacturing/distribution & achieving scale economies
o Competition (price pressures)
 Product differentiation (monopoly because unique prdct)
 Dampen intrabrand competition among resellers
 Exercising price leadership (power to set price levels)
o Buyer bargaining power = able to put downward pressures on price:
 If the buyer group forms a major amount of the company’s sales
 Improve power: differentiating their products
 If the buyer has several options to choose from
 Won’t happen if the customer is satisfied with ur product
o Product value to potential customers (most important)
 Price the product to the value of the product given by customers
 Perceived consumer value differs across market segments
 only successful combined wth functional product differentiation
 otherwise: black-market phenomenon
- Place (distribution channels)
o

Installed base


Market share leadership


Product Channels
superiority strength
o Direct sales reps employees that call directly on its customers
 Big amount,extensive prodct service,technical support, customization
o Sales agents independnt operatrs, carry the lines of several suppliers
 Same as direct sales reps + represent variable cost (commission)
o Distributors buy from many suppliers & have wide product lines
 Small amount of different items + ready & reliable availability
o Retail dealers large infrastructure supplies end-products to consumers
 Some are franchised
 Conform to store design, service quality, product presentation
 wrkng w intermediaries: prdcts r stocked/display properly/prices don’t deteriorate
 factors that gain strength
 Selective distribution instead of intensive distribution
 Superior breadth & quality of the product line
 High supplier-reseller-interdependency
 Supplier’s own saleforce present in resale level
 End-market demand development
- Promotion (Market communications)
o Successful use of channel (telemarketing, third-party influencers, television)

,  Decision-making-unit (DMU)
 Decision-making-process (DMP)
 Awareness (television & print advertising)
 Information (visiting stores & talking w friends)
 Identification options
 Source qualification & short listing
 Selection (salesperson)
 Post-purchase affirmation
o Push-strategy = pushing the product to end-users
 Clerk’s recommendations, resalers after-sale service, presentation
o Pull-strategy = creating end-market demand
 Meaningful brandname, effectively communicating product benefits

Market segmentation by variables:
1. Demographic segmentation (age,sex,income,ethnicity / size,nature,industry type)
2. Geographical segmentation (market potential,competitive intensity,shipping price)
3. Psychographc sgemntation (lifestyle,attitudes towrd work/home+corporate culture)
4. Product use/application (how the product will be used/applied)

Marketing Myopia
- A too narrow industry definition sets restrictions to managerial thinking & strategy
formulation & can lead to the loss of customers & the extinction of the company.
- Be customer-oriented instead of product-oriented
 constantly looking for opportunities to apply their technical know-how to the creation
of customer-satisfying uses that account for the output of successful new products
- The self-deceiving cycle of bountiful expansion & undetected decay (4 conditions)
o Population myth
 Assumption that profits are secured by the population growth
 Lead to a lack of innovation (competitor gains advantage)
o Lack of perceived and credible substitutes for the industry’s major product
 Believe there is no competitive substitute
 Blinded from accepting other alternative products
o Faith in mass production & the benefits of reducing unt costs as output rises
 Leads to an emphasis on selling the product instead of marketing it
 Product-oriented instead of customer-oriented
 prevents from the prodct to adapt to changing customer tastes
o Risk involved in R&D
 Being too focused on product/price reductions
- The company as a whole must exist in order to create value for customers

Strategic insight in three circles