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Summary Marketing Management with MyMarketingLab
Te gebruiken bij
Auteur(s): Kotler, Keller
Druk/Jaar van uitgave: 14e/2012
Remarks & Related
Summary of the book. Based on the 14th edition from 2012.
Zoek recente samenvattingen & studiehulp
Chapter 1: Defining marketing for the 21st century
Nowadays economy is based on the Digital Revolution and information management. It promises more accurate levels of production, more targeted communications, and more relevant pricing, and is therefore characterized by the so-called Information Age.
The new economy differs a lot from the old economy, which was based on the Industrial Revolution, manufacturing industries, and standardization of products to achieve economies of scale. The old economy is characterized by the Industrial Age, which focused on mass-production and mass-consumption with a focus on efficiency.
The new economy has provided more capabilities to both consumers and businesses. Consumers can now:
Find the lowest prices, caused by their increase in buying power.
Access a greater variety of available goods and services. (e.g. through Amazon.com)
Access large amounts of information about anything
Interact, place and receive orders easily, 24/7 and from any location.
Compare notes on products and services.
Companies can now operate powerful new information and sales channels to inform the consumer and promote their businesses and products.
e.g. Using Web sites:
Collect fuller and richer information about markets, customers’ needs, prospects, and competitors.
Businesses can speed up and facilitate internal Communication among employees.
Businesses can now communicate with customers and prospects in a “two-way” manner, and have more efficient transactions.
e.g. Extranets with suppliers:
Send ads, coupons, samples, and information to those customers that requested it.
Customize offerings and services to the needs and wants of individual customers.
Improve purchasing, recruiting, training, and internal and external communications.
e.g. Internet, allows organizations for the comparison of prices, improving purchasing, logistics and operations, saving costs and improving accuracy and quality.
These new capabilities of consumers and customers create new forces, which raise the question and focus on how these new forces will change marketing.
Marketing deals with identifying and meeting human social needs; it is about meeting peoples’ needs profitably. Companies are motivated to take a private or social need and turn it into a profitable business opportunity, e.g. Ikea identified the need for good furniture and lower prices.
Companies at greatest risk are those that fail to monitor their customers and competitors and to continuously improve their value offerings.
There is a new way of marketing in which firms focus on delivering high product quality and winning long term customer loyalty (Harley Davidson). This way of marketing is calld Radical Marketing. The ten rules of “radical marketing” are guidelines including CEO direct involvement, being close to the customer, rethinking the marketing mix, and focusing on brand integrity. The three stages of marketing practice are as follows:
There are many ways in which effective marketing can take place. Whatever way one uses, marketing is the task of creating, promoting, and delivering goods and services to consumers and businesses.
The scope of marketing involves a broadened view of marketing (including goods, services, and ideas). Marketing entities have broadened to include marketing of goods, services, experiences, events, properties, people, places, organizations, ideas, and information. Market managers nowadays are also responsible for demand management in which they seek to influence the level, timing and composition of demand. There are eight different states of demand that they can find and influence; each with corresponding marketing tasks:
Negative demand: market doesn’t like the product.
No demand: market is unaware of or uninterested in the product.
Latent demand: a demand for which a product doesn’t exist (e.g. healthy cigarettes)
Declining demand: The task is to reverse it through creative remarketing.
Irregular demand: demand varies; e.g. seasonal (ice cream).
Full demand: Volume of business is adequate. The task is to improve quality and continually measure consumer satisfaction.
Overfull demand: Demand too high. The task is to: Demarket (general or selective): finding ways to reduce demand temporarily or even permanently.
Unwholesome demand: Demand for discouragement of consumption e.g. against cigarettes. The task is to use fear messages, price hikes, and reduce availability.
Task: Synchromarketing: Use flexible pricing, promotion, and other incentives to alter the pattern of demand.
Marketing tasks have gained a broadened view to include more decisions, which vary in importance depending on the marketplaces they operate in: consumer, business, global, and nonprofit markets. For example, tools to better understand the customer are less important in nonprofit and governmental markets than in consumer and business markets, where more purchasing power is present.
Marketing Concepts and Tools
Marketing is an organizational function and a set of processes for creating, communicating , and delivering value to customers and for managing customer relationships in ways that are beneficial for the organization and its stakeholders.
Marketing Management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior value to the customer.
Segmentation means dividing up the market and identifying market segments by examining demographic, psychographic, and behavioral differences among consumers.
Target Markets are the segments that provide the greatest opportunity.
A marketplace is physical while a marketspace is digital (e.g. internet shopping).
A metamarket is a cluster of complementary services and products, which are closely related in the minds of consumers but are spread across a diverse set of industries.
A marketeer is someone actively seeking one or more prospects for an exchange of values. A prospector has been identified as willing and able to engage in an exchange.
A need consist of basic human requirements. Wants are desires for specific satisfiers of needs. Demands are wants for specific products that are backed by an ability and willingness to buy them.
There are five different kinds of needs:
Stated needs (The customer wants an inexpensive car.)
Real needs (The customer wants a car whose operating cost, not its initial price, is low.)
Unstated needs (The customer expects good service from the dealer.)
Delight needs (The customer would like the dealer to include an onboard navigation system.)
Secret needs (The customer wants friends to see him as a savvy consumer.)
Marketing is becoming more and more involved in key general management activities. There are five key functions for a Chief Marketing Officer (CMO) in leading marketing within the organization:
Strengthening the brands
Measuring marketing effectiveness
Driving new product development based on customer needs
Gathering meaningful customer insights
Utilizing new marketing technology
A value proposition is a set of benefits and values a company offers to customers to satisfy their needs. An offering is the intangible value proposition. A brand is an offering from a known source.
The process of obtaining desired product from someone by offering something in return is called an Exchange. When making an exchange it is important to analyze the wants of both parties. A basis for a transaction exists if there is a sufficient match or overlap in the want lists. A transaction is a trade of values between two or more parties. Trading goods or services for other goods or services is called a barter transaction. Transfer (different from transaction) is the passing of a product without necessarily receiving anything tangible in return.
The Holistic Marketing Concept is an approach that tries to recognize and reconcile the scope and complexities of marketing activities. If one would apply the holistic marketing concept, internal marketing, integrated marketing, performance marketing and relationship marketing all have to be included.
Relationship marketing: aims to build a mutually satisfying long-term relationship with customers and business partners.
Integrated marketing: there are many marketing activities that can create value for customers but they all have to be coordinated well in order to maximize their joint effects. Marketers should always conduct one marketing activity with all other activities in mind.
Internal marketing is done by hiring, training and motivating employees who want to serve customers well
Performance Marketing: understanding returns to the business from marketing activities and programs.
A reaction sought by marketers is called the Behavioral response. Marketing includes actions undertaken to elicit desired responses from a target audience. Relationship marketing tries to build long-term, “win-win” transactions between marketers and key parties (suppliers, customers, distributors), building a mutually satisfying long-term relation with key parties, cutting down transaction costs and time.
The ultimate desired outcome of relationship marketing is an unique company asset called a marketing network of mutually profitable business relationships. Competition is increasing between marketing networks; which indicates that success depends on the better network.
Marketing channels are means used to reach a target market and are critical for successful marketing.
There are three channels for marketing offerings:
Communication (e-mail, toll free numbers).
Distribution (distributors, wholesalers, retailers, and agents).
Service channels (warehouses, transportation companies, banks, insurance companies that facilitate transactions).
A supply chain refers to the long channel process which reaches from the raw materials and components to the final product/buyers. It represents a value delivery system
Competition - Includes actual and potential rival offerings and substitutes. A broad view of competition is need for the marketer to recognize the levels of competition, based on substitutability: brand, industry, form, and generic competition.
The marketing environment consists of:
The task environment (immediate actors in the production, distribution, and promotional environments). The broad environment (demographic, economic, natural, technological, political/legal, and social/cultural).
Marketing mix is the set of marketing tools firm uses to pursue marketing objectives with the target market. These tools can be classified into the following groups which represent the sellers view of the marketing tools available for influencing buyers: product, price, place, promotion. The 4 P’s correspond with the customer’s four C’s (customer solution, customer cost, convenience, communication).
Company Orientations toward the Marketplace
There are six competing concepts under which organizations conduct marketing activities, they include:
1. Production concept: assumes consumers will prefer those products that are widely available and low in cost.
2. Product concept: assumes consumers will prefer those products that offer the best combination of quality, performance, or innovative features. This concept has little or no customer input or competitor research and can therefore have a negative effect. It can lead to Leavitt’s marketing myopia: “customers do not buy drill bits; they buy ways to make holes”.
3. Selling concept: This concept assumes that in order to enact exchanges with consumers, organizations must undertake aggressive selling and promotion efforts because of consumers’ passiveness. Consumers must be “coaxed” into buying. It is practiced mainly with unsought goods (insurance, encyclopedias), in non-profit areas (charity), and when a firm has overcapacity. High risks are involved since an unsatisfied customer can easily spread complaints to others.
4. Marketing concept: assumes that being more effective than competitors in integrating marketing activities toward determining and satisfying the needs and wants of target markets is the key to achieving organizational goals consists. E.g. “The job is not to find the right customers, but the right products for your customers”. Companies must carefully chose their target market, understand customer needs, engage in integrated marketing (having all departments of company work together to serve the customers interests) and finally produce profits by satisfying their customers. Hurdles to adopting the marketing concept include organized resistance, slow learning, and fast forgetting.
5. Customer concept: this concept is about shaping separate offers, services, and messages to individual customers, relying on the building of high customer loyalty and lifetime value. It requires large investments in order to gather the information, hardware and software.
6. Societal marketing concept: The task of the organization is to determine the needs, wants, and interests of target markets, which requires marketers to build social and ethical considerations into their marketing practices in such a way that preserves or enhances the consumer’s and the society’s well-being. It calls upon marketers to find a balance between company profits, consumer want satisfaction, and public interest. Cause-Related Marketing is one form of this concept, in which a business with an image, product, or service to market builds a relationship or partnership with a “cause” for mutual benefit; e.g. Patagonia sells sweaters made from recycled plastic bottles.
Because of major new forces of globalization, deregulation, and technological advances, business and marketing are changing.
Customers are expecting more and better products and services, increasing brand competition leads to increasing promotion costs and decreasing profit margins, and store-based retailers suffering because of the many new channels allowing for more competition.
Company responses and adjustments include re-engineering the firm, outsourcing goods and services, e-commerce, benchmarking, alliances (networking), partner-suppliers, market-centered, local and global marketing (versus only local), decentralization to encourage innovative thinking and marketing (more entrepreneurial).
Marketer are responding and adjusting through customer relationship marketing, customer lifetime value, customer share, target marketing, customization, customer database, integrated marketing communications to deliver consistent brand image, consideration of channel members as partners, recognizing every employer as a marketer, and basing decisions on models and facts.
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