Summary Introduction to Business Management Chapter 13

Chapter 13 Marketing Management

What is marketing management
 The process of planning and executing the conception, pricing, marketing communication and distribution of ideas,
products and services to create exchanges that satisfy individual and organizational goals
 Marketing management monitors competitors, develops strategies to use opportunities and counters threats


Evolution of marketing thought:
 Operation-oriented management:
 Focuses on optimising internal processes to improve production and delivery of products or services
 The focus was on what the business can produce with their resources

 Sales-oriented management:
 Less emphasis on customer needs and satisfaction
 Objective was to sell the products at any cost
 Had to get rid of the overproduced stock & didn’t care if consumers were exploited

 Marketing-oriented management:
 Centres on understanding and meeting customer needs and preferences to drive business success and growth
 Not just sales and price to be considered but also:
– Quality of products, packaging, choice of distribution channels, method of informing potential customers

 Consumer-oriented management:
 Emphasises tailoring products and services to directly address and fulfil the specific desires and requirements of
individual consumers
 Quality & packaging of a product, price, the distribution channel & the marketing communication methods

 The strategic approach to marketing:
 Involves developing long-term plans and strategies based on market research and analysis to achieve sustainable
competitive advantage and business objectives

 Relationship marketing:
 Focuses on building and maintaining long-term, mutually beneficial relationships with customers to foster loyalty
 Long term relationships with suppliers ensure availability of raw materials and inventory
 Primary objective is to establish and maintain relationships with loyal profitable clients
 Loyal customers important - basis of organization operations
 Goodwill - establish a favourable corporate image with public


The marketing concept
 Business philosophy that emphasizes meeting needs and wants of customers as the path to achieving business success

, Directs all marketing decisions about products, distribution methods, marketing communication and price determination
 Four principles of the marketing concept
 Profitability
 Consumer orientation
 Social responsibility
 Organisational integration

Principle of profitability
 The primary aim of marketing
 Long-term profit maximisation, which supports the development of products that meet market demands

Principle of Consumer Orientation
 Emphasis is placed on what the consumer needs
 Even though consumer is very important - satisfaction of consumer needs can never be achieved
 Satisfaction can only be given within constraints of profit objective and resources of business
 Consumer oriented means consumer must be supplied with adequate and correct info
 If needs of consumers not met, competitors will use opportunity as advantage, by producing products demanded

Principle of Social responsibility
 Business should make a contribution to the community with whom it does business.
 Business often discharge this responsibility by spending money on projects like housing, education
 Objectives = create a stable economic, social and political environment for future profits
 Enhances corporate image with employees, consumers & public

Principle of Organizational Integration
 Cooperation between different departments in organisation to attain the business’s mission and objectives


The components of the marketing process
 Product Transfer:
 Marketing involves moving a product from a business to a consumer, aiming to satisfy needs through an exchange

 Consumer Choice:
 Free-market society, consumers choose products based on needs and price willing to pay, without being compelled

 Persuasion and Transaction:
 Marketers use strategies to persuade consumers, leading to transactions between the marketer and the consumer

 4 variables are used to make decisions: (4 P’s)
 Product itself
 Place where it is offered (distribution)
 Marketing communication methods to inform customer (Promotion)
 Price - reflects the products value

 Decisions about use of 4 Ps → marketing strategy
 Marketing offering should not satisfy individual but market segment

,  From the different market segments, a target market is selected




Market research
 Gain information about the market, competitors & other environmental challenges
 Management receives feedback from customers & the environment by conducting market research
 Do SWOT analysis before decisions are made

 Info collected via environmental scanning should include:
 External variables and internal resources (records and reports) about prices
 Sales figures and market trends
 Changes in market share
 Information from market research needs to:
 Consumer preferences
 Increase understanding of relevant market segments
 New legislation
 Be pertinent to planning and controlling
 Product schedules
 Help in decision-making.
 Internal financial problems