MARKETING MANAGEMENT REVIEWER – MIDTERM 2 levels of marketing plan

- Strategic
CHAPTER 2 o Lays out value proposition
The Value Delivery Process - Tactical
- Begins before the product o Specifies marketing tactics
3 phases
- Choosing the value 4 planning activities
o “Homework” marketers must do - Defining the corporate mission
- Providing the value - Establishing strategic business units
o Identify specific product features, prices - Assigning resources to each strategic business unit
and distribution. - Assessing growth opportunities
- Communicating the value
o Utilizing internet, advertising, sales force to 5 Classic questions to define the mission
promote the product • What is our business?
• Who is the customer?
The value chain • What is of value to the customer?
- Tool for identifying ways to create more customer • What will our business be?
value • What should our business be?

5 Core business process

- Market-sensing process Target market definition
o gathering - Focus on selling product or service to a current
- New-offering realization process market
o Researching, developing Strategic market definition
- Customer acquisition process - Focus on potential market
o Defining target market
- Customer relationship management process 5 major characteristcis of a good mission statement
o Building deeper understanding - At its best it reflects a vision, an almost
- Fulfillment management process “impossible dream,” that provides direction for
o Receiving and approving orders the next 10 to 20 years.

• Focus on a limited number of goals

Value delivery network/ supply chain
- How company partners with supplier and
• Stress the company’s major policies and values
distributors • Define the major competitive spheres within
which the company will operate
3 characteristics of core competency • Take a long-term view
- A source of competitive advantage • Are as short, memorable, and meaningful as
- Applications in a wide variety of markets possible
- Difficult for competitors to imitate

Realignment to maximize core competencies

- Redefining the business concept
3 characteristics of SBU – strategic business units
- Reshaping the business scope
- Repositioning the brand identity
- Can be planned separately from the rest of the
company
Central role of strategic planning - Has its own set of competitors
- Managing the businesses as an investment portfolio - Has manager who controls most of the factors
- Assessing the market’s growth rate and the affecting profit
company’s position in that market
- Establishing a strategy Assigning resources to each SBU
- Portfolio-planning models
Marketing plan o Oversimplified and subjective
- Central instrument for directing & coordinating
- Shareholder/market value analysis
marketing efforts
o Newer method

Assessing growth opportunities

 - Intensive growth
o Corporate management should first Porter’s Generic strategies
review opportunities for improving - Overall cost leadership
existing businesses o Achieve lowest production and
- Integrative growth distribution cost
o A business can increase sales and - Differentiation
profits through backward, forward, or o Seeking quality leadership
horizontal integration within its industry - Focus
- Diversification growth o One or more narrow segments
o good opportunities exist outside the
present businesses Strategic group
- Downsizing and divesting older businesses - Firms pursuing same strategy to same target
o Companies must carefully prune, market
harvest, or divest tired old businesses to
release needed resources for other uses Major categories of marketing alliances
and reduce costs - Product or service alliance
o One company licenses to produce its
Corporate culture product
- The shared experiences, stories, beliefs, and - Promotional alliance
norms that characterize an organization o Carry promotion for another company’s
product
Scenario analysis - Logistics alliances
- Firms develop strategy by choosing their view of o Offers logistical services
the future - Pricing collaborations
o Eg. Hotel and rental cars
SWOT Analysis
External Environment 7 Mckinsey’s Elements of Success
- Marketing Opportunity Hardware
o a company has a high probability of - Strategy
profitably satisfying. - Structure
- System
- Environmental threat: Software
o challenge posed by an unfavorable - Style
trend or development o Common way of thinking and behaving
- Skills
Market opportunity analysis (MOA) o Has skills to carry out company’s
- system used to measure the attractiveness and strategy
probability of success - Staff
o Hired, trained, and assigned to right job
Internal Environment - Shared values
- Strengths o Share same guiding values
- Weaknesses
Peter Drucker
Goal formulation - it is more important to “do the right thing”—to
- After SWOT analysis be effective—than “to do things right”—to be
- Developing specific goals for the planning efficient
period o The most successful companies,
4 criteria of MBO – Manages By Objectives however, excel at both
• Unit’s objectives must be arranged
hierarchically Marketing Plan Contents
• Objectives should be quantitative - Executive summary
• Goals should be realistic - Table of contents
• Objectives must be consistent - Situation analysis
 o Presents relevant background data on
sales, cost, market..
- Marketing strategy
o Defines mission, marketing and financial
objectives…
- Marketing tactics
o Outlines marketing activities to execute
marketing strategy
- Financial projections
o Sales forecast, expense forecast, break-
even analysis
- Implementation controls
o Controls for monitoring and adjusting

Evaluating a marketing plan

- Is the plan simple/succinct?
- Is the plan complete?
- Is the plan specific?
- Is the plan realistic?
CHAPTER 3 o Population age mix
o Ethnic and other markets
Marketing information system (MIS) o Educational groups
- consists of people, equipment, and procedures o Household patterns
to gather, sort, analyze, evaluate, and distribute 2. Economic
needed, timely, and accurate information to - Consumer pychology
marketing decision makers. - Income distribution
- relies on internal company records, marketing o Subsistence economies
intelligence activities, and marketing research  Few opportunities for
marketers
Internal record system o Raw material exporting economies
- Supplies result data  Good markets for equipment,
Marketing intelligence system tools, supplies and luxury goods
- Supplies happenings data for the rich
- a set of procedures and sources o Industrializing economies
 New rich class and new middle
8 ways to improve marketing intelligence class demand new types of
- Motivate sales force to report new goods
developments o Industrial economies
- Motivate intermediaries to pass along  Rich markets for all sorts of
intelligence goods
- Hire external experts to collect intelligence
- Network internally and externally 5 Income distribution patters
- Set up a customer advisory panel o Very low incomes
- Take advantage of government-related data o Mostly low incomes
- Purchase information from outside research o Very low, very high incomes
vendors
o Low, medium, high incomes
- Collect marketing intelligence on Internet
o Mostly medium incomes
o Income, savings, debt, credit
5 places to find competitors’ products’ strength and
weaknesses
3. Socio-cultural
• Review forums
o views of ourselves
• Distributor or sales agent feedback sites
• Combo sites offering customer reviews and o views of others
expert opinions o views of organizations
• Customer complaint sites o view of society
• Public blogs o views of nature
o views of universe
Needs and trends
- Fad Core cultural values
o unpredictable, short-lived - Values passed from parents to children
- Trend Subcultures
o direction or sequence of events - Groups with shared values, beliefs, preferences,
o more predictable and durable than a and behaviors
fad
o reveal the shape of the future 4. Natural
- Megatrend
o large change Corporate environmentalism
o slow to form - Opportunities await those who can reconcile
prosperity with environmental protection
o influences us for some time
6 major factors in broad environment
5. Technological
1. Demographic
o Accelerating pace of change
o Worldwide population growth
 o Unlimited opportunities for innovation - Multiplies a base number by several adjusting
o Varying R&D budgets percentages
o Increased regulation of technological
change Area market potential
- Market build-up method
6. political-legal o Used primarily by business marketers
o laws o Calls for identifying all potential buyers
o government agencies - Multiple factor index
o pressure groups o Used primarily by consumer marketers
o Commonly use straightforward index
Measures of market demand Industry sales and market share
- potential market - Identifying competitors and estimating their
o sufficient level of interest in a market sales
offer
- available market Estimating Future demand
o have interest, income, and access to a - Surveys of buyer’s intentions
particular offer o Forecasting and purchase probability
- target market scale
o the company decides to pursue  Forecasting
- penetrated market  art of anticipating what
o are buying the company’s product buyers are likely to do
under a given set of
Market Demand vocabulary conditions.
Market share - Composite of sales force opinions
- higher level of selective demand for a - Expert opinion Past-sales analysis
company’s product - Market-test method

Market-penetration index
- comparison of market level demand to
potential demand level

Share-penetration index
- comparison of current market share to potential
market share

Demand measurement vocabulary

Market Forecast
- market demand corresponding to marketing
expenditure
Market Potential
- the limit approached by market demand
Company Demand
- company’s estimated share of market demand
Company Sales Forecast
- expected level of company sales
Company Sales Potential
- the sales limit approached by company demand

Estimating Current Demand

Total market potential
- Is the maximum sales available to all firms
Chain ratio method
CHAPTER 4 - Focus group research
o gathering of 6 to 10 people carefully
Market Research o goal is to uncover consumers’ real
- links the consumer, customer, and public to the motivations and the reasons they say
marketer through information and do certain things
Marketing insights - Survey research
- how and why we observe certain effects in the o to assess people’s knowledge, beliefs,
marketplace preferences, and satisfaction and to
- Good marketing insights often form the basis of measure these magnitudes in the
successful marketing programs. general population
- Behavioral research
Who does marketing research? o leave traces of their purchasing
- Marketing departments in big firms behavior in store scanning data, catalog
- Everyone at small firms purchases, and customer databases
- Syndicated-service research firms Research Instruments
o gather consumer and trade information - questionnaires
which they sell o consists of a set of questions presented
- Custom marketing research firms to respondents
o hired to carry out specific projects - qualitative measures
- Specialty-line marketing research firms o relatively indirect and unstructured
o provide specialized research services measurement approaches
o ZMET approach
Research conducted at small companies from:  most thoughts and feelings
- engage students/professors shape everything consumers
- use internet think, hear, say, or do.
- check out rivals o Word association
- tap partner expertise  ask subjects what words come
- tap employee creativity to mind when they hear the
brand’s name.
Marketing research process o Projective techniques
STEP 1: define problem and research problems  Give people an incomplete
- Exploratory stimulus and ask them to
o to identify the problem and to suggest explain it.
possible solutions o Visualization
- Descriptive  requires people to create a
o to quantify demand collage depict their perceptions.
- Causal o Brand personification
o to test a cause-and-effect relationship  “If the brand were to come
alive as a person, what would it
STEP 2: develop research plan be like, what would it do, where
Data sources would it live, what would it
- primary data wear, who would it talk to if it
o data freshly gathered for a specific went to a party (and what
purpose or project would it talk about)?”
- secondary data o Laddering
o data that were collected for another  A series of increasingly specific
purpose and already exist somewhere “why” questions can reveal
Research approaches consumer motivation and
- Observational research deeper goals.
o gather fresh data by observing as - technological devices
customers shop or consume products o Galvanometer
o The goal is to immerse the researcher o Tachistoscope
into consumers’ lives
 o Eye-tracking
o Facial detection - marketing-modeling mix
o Skin sensors o Analyzes data from a variety of sources,
o Brain wave scanners to understand more precisely the
o Audiometer effects of specific marketing activities
o GPS Marketing dashboards
- a structured way to disseminate the insights
Sampling plan gleaned from these two approaches.
- Sampling unit - “A concise set of interconnected performance
o Whom should we survey? drivers to be viewed in common throughout the
organization.”
- Sample size - Customer-performance scorecard
o How many people should we survey? o records how well the company is doing
year after year on such customer-based
- Sampling procedure - Stakeholder-performance scorecard
o How should we choose the o tracks the satisfaction of various
respondents? constituencies who have a critical
interest in company’s performance:
Contact Methods employees, suppliers, banks,
- Mail distributors, retailers, and stockholders
- Telephone
- Personal
- Online

STEP 3: collect the information

- generally the most expensive and error-prone
STEP 4: analyze the information
- extract findings by tabulating the data and
developing summary measures.
STEP 5: present the findings
- translating data and information into insights
and recommendations for management
STEP 6: make the decision
- the firm who commissioned the research need
to weigh the evidence

2 approaches to measure marketing productivity

- marketing metrics
o Measures that help marketers quantify,
compare, and interpret performance
CHAPTER 6 • A more direct influence on everyday
Consumer Behavior buying behavior
- The study of how individuals, groups, and
organizations select, buy, use, and dispose of Personal factors
goods, services, ideas, or experiences to satisfy - Age/stage in life cycle
their needs and wants. - Occupation and economic circumstances
- Influenced by cultural, social, and personal - Personality and self-concept
factors - Lifestyle and values

Cultural factors 5 Key psychological process

- Culture Motivation
- Subcultures - A need becomes a motive when it is aroused to
- Social classes a sufficient level of intensity to drive us to act
- Freud’s theory
Social factors o Behavior is guided by subconscious
- Reference groups motivations
o all the groups that have a direct (face- - Maslow’s Hierarchy of Needs
to-face) or indirect influence on their o Behavior is driven by lowest, unmet
attitudes or behavior need
- cliques - Herzberg’s two-factor theory
o small groups whose members interact o Behavior is guided by dissatisfiers and
frequently satisfiers
- family
o most important consumer buying
organization in society
- roles and status
o consists of the activities a person is
expected to perform that connotes a
status

References groups
• Membership groups
– Primary
• family, friends, neighbors, and
coworkers
– secondary
• religious, professional, and Perception
trade-union groups - The process by which we select, organize, and
• Aspirational groups interpret information inputs to create a
– person hopes to join meaningful picture of the world
• Dissociative groups - Selective attention
– those whose values or behavior an o marketers must work hard to attract
individual rejects consumers’ notice
• Opinion leader - Selective distortion
– who offers informal advice or o tendency to interpret information in a
information about a specific product or way that fits our preconceptions
product category - Selective retention
o likely to remember good points about a
family product we like and forget good points
• Family of orientation about competing products
• Consist of parents and siblings - Subliminal perception
• family of procreation o marketers embed covert, subliminal
• person’s spouse and children messages in ads or packaging
 o chooses the best brand as it is
Learning perceived as most important attribute
- Induces changes in our behavior arising from - Elimination-by-aspects heuristics
experience o compares brands on an attribute
- Drive and cues selected probabilistically
- Generalization and discrimination
Types of Perceived risk
Emotions - Functional risk
- Many different kinds of emotions can be linked o The product does not perform to
to brands expectations.
- Physical risk
Memory o The product poses a threat to the
- Short-term vs. long-term memory physical well-being or health of the user
o STM or others
 a temporary and limited - Financial risk
repository of information o The product is not worth the price paid.
o LTM - Social risk
 a more permanent, essentially o The product results in embarrassment
unlimited repository in front of others.
- Associative network memory model - Psychological risk
o views LTM as a set of nodes and links o The product affects the mental well-
- Brand associations being of the user.
o associations consist of all brand-related - Time risk
thoughts, feelings, and so on, that o The failure of the product results in an
become linked to the brand node. opportunity cost of finding another
- Memory encoding satisfactory product.
o describes how and where information
gets into memory Postpurchase behavior
- Memory retrieval - Postpurchase satisfaction
o way information gets out of memory - Postpurchase actions
- Postpurchase uses and disposal
The Buying decision process
Problem recognition Moderating effects on consumer decision making
- The buyer recognizes a problem/need triggered • Low-involvement Consumer Decision Making
by internal/external stimuli • Variety-Seeking Buying Behavior
Information search
- Personal sources Behavioral economics
- Commercial sources • Decision Heuristics
- Public sources – Availability heuristic
- Experiential sources – Representativeness heuristic
the most effective information often comes – Anchoring and adjustment heuristic
from personal or experiential sources or public sources • Framing
that are independent authorities. o Mental accounting

Evaluation of Alternatives
- Expectancy-value model

Purchase decision
- Conjunctive heuristics
o chooses the first alternative that meets
the minimum standard for all attributes
- Lexicographic heuristic