MARKETING KOTLER’S NOTES

Part 1: Defining marketing and marketing process

Chapter 1: Marketing: Creating customer value and engagement.

1. What is marketing?
 It is set of strategies and activities by which companies acquire and engage customers,
build strong customer relationships and create superior customer value in order to
capture value from customers in return.
 It is engaging customers and managing profitable relationships, creating value for
customers to capture value from customers in return.
 Consumer research, prod development, communication, distribution, pricing and service
are core marketing activities
 Eg: Amazon: customer value, engagement and relationships (customer focussed)(pg 3)

2. Marketing Process 5 steps

 1st four steps focus on Understand customers, create value and build strong
relationships to reap the value in return (sales, profits, customer equity)(last step)
Step1: Understand the market and needs.

Needs: State of felt deprivation

Wants: Form of human needs as they are shaped by cultural or individual personality.
Demands: Wants that are backed by buying power.

 Market Offerings: Combination of products, services, solutions, and experiences offered to a

market to satisfy a need or want.
 Marketing Myopia: Paying more attention to specific products than to benefits and experiences
produced by these products.
 Market: Set of all potential buyers of products or services.

Step2: Customer Driven marketing strategies. (S-T-P)

 Selecting consumers : segmentation and trageting
 Value proposition: differentiation and positioning.
 Marketing orientations strategies :

Production concept: consumers favour highly available and affordable products; hence
focus on improving production and distribution efficiency.
 Product Concept: products with quality, performance, and features; hence focus on
product improvements (sometimes better solutions and not better products eg: not best
rattrap but chemical spray)
Selling concept: Consumers won’t buy enough unless pushed or large-scale promotion
and selling efforts.
Marketing concept: achieving organisational goals depends on needs and wants and
gaps of target market and deliver better satisfaction than others/ customer centred
sense and respond.
Societal marketing concept: Consumers’ wants, company’s requirements and consumers
long run interest and society’s long run interests; creating shared value; sustainable,
socially and environmentally responsible marketing.

Step 3: Marketing Mix

Strategy to outline which customers to serve.
 Product
 Price
 Place
 Promotion
Step 4: Managing customer relationships and capturing values: Customer value and satisfaction.

Customer- perceived value: Customer’s evaluation of the differences between benefits delivered
and the cost of obtaining and using a market offering, relative to those of comparing and
competing offerings.
Customer satisfaction: The sense of pleasure when products perceived performance matches or
exceeds the expectations.

Tools and programs:

1. Customer loyalty programs
2. Customer Engagement
3. Customer brand advocacy
4. Customer generated marketing like UGCs, media, blogs etc
5. Partner relationship management.
Step5: Capturing value from customers
1. Customer loyalty and retention: Lifetime value: entire stream of purchases made over life of
patronage
2. Growing Share of customer: Portion of customers spending in that products category.
3. Building Customer equity: Total combined Customer lifetime values of all current and potential
customers of company.
Customer equity may be better measure of firm’s performance. Sales and revenue give past
reflections and equity gives future.
4. Building right relationship with right customers.
 Butterflies: Enjoy for time being (brokerage and stocks)
True Friends: Invest, nurture and retain
Strangers: Don’t invest, try to make money on every transaction
Barnacles: If they can’t be mase profitable then fire. (Amazon or other service abuses)

3. The changing market landscape:

The changing environment changes market conditions and requirements eg: digital intervention,
great recession, covid, cultural socio-economic shifts.
Internet of things: Global environment where everything is digitally connected.
Online brand community
Real time marketing: Engaging customers in the momentby linking brands to important
trending topics, real world events, causes etc
Chapter 2: Company and marketing strategy: Build customer engagement,
value and relationships.
1. Companywide strategic planning: Defining marketing’s role

Strategic planning: process of developing and maintaining profitable strategic fit between
organisation’s goals and capabilities and its changing marketing opportunities.

 Mission statement: Organisation’s purpose: what it wants to achieve in larger

environments.
 Business portfolio: The collection of businesses and products that make up the
company. Portfolio analysis refers to evaluation and planning for the future of products
and business that makeup the company. Dropping a current business that is lagging
frees up space, resources and time and managerial attention that can be put to new/
alternate business.

Designing Business Portfolio: 2 steps are required, analysing and developing strategies
for growth and downsizing.
Step1: To identify key SBUs (Strategic business units): The businesses that make up the
company. It can be a company division, product line within a division, a single product or brand.
Step2: Assesses the attractiveness of SBUs and how much each SBU require and deserve
support. 2 main things: Attractiveness and strength of the SBUs’ market or industry.

BCG Growth share matrix

Analyses SBUs in context of market growth rate (attractiveness- vertical axis) and relative
market share( vertical axis- company’s strength in market).
1. Stars – heavy investments required for rapid growth so should become cash cows (growth
will slow down).
2. Cash Cows- low growth, high share business, need lesser investment to hold their state,
provide cash for other operating activities, business.
3. Question marks- low share but higher market growth, require lots of cash to sustain, can
worked upon to become star or otherwise pass out.
4. Dogs- low growth and low market share, just earn to sustain themselves. Do not promise
large cash sources. Can lead to significant opportunities cost, absorbing other relevant
resources.
5. Only cash cows should not be present as their growth would decline at certain time so
company must have star product to keep growing in market.
 6. It depends what SBU to build, hold, invest, divest depending The Bubbles represent company’s
on the matrix allocation. different SBUs, size and position of
Circles is equally important.

Problems in the matrix:

 Might not apply to market facing disruptions or structural changes, where defining market
becomes difficult.

2. Developing strategies for growth and downsizing:

“Profitable growth”: Identify, evaluate and select market opportunities and strategies to capture
them.
We can use market/product expansion grid: portfolio planning tool for identifying company
growth opportunities through market penetration, market development , product development
or diversification.
 1. Market penetration: Growth by increasing sales of current product to current market
segments without changing the products.
2. Market development: Growth by identifying and developing new market segments for
current products.
3. Product development: growth by offering new or modified products to current market
segments.
4. Diversification: growth through starting or acquiring new business outside company’s
current products and markets.
3. Planning marketing strategies to build customer relationships:
 Partnering with other internal departments and others in marketing system
Partnering with other company departments: value chain: the set of internal departments that
carry out value creating activities to design, produce, market, deliver and support a firm’s
products.
Value delivering network: The network composed of the company, suppliers, distributers, and
even customers who partner with each other to improve customer value delivery.

Customer value driven marketing strategies and marketing mix

Marketing strategies: marketing logic by which create customer value and achieve profitable
customer relationships
Who- segmentation and targeting
How- differentiation and positioning. In positioning its brand a company identifies points of differentiation
from competition to create superior customer satisfaction and value. Positioning begins with
differentiation.

Developing integrated marketing mix:

After STDP, marketing mix: 4Ps.
 Product
 Price (only P that contributes to revenue directly).
  Place
 Promotion.

Chapter 10: Pricing

