978-0134492513 Chapter 2 Lecture Notes Part 2

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PPT 2-17

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PPT 2-18

PPT 2-19

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PPT 2-20

Explain marketing’s role in strategic planning and how

marketing works with its partners to create and deliver

customer value.

PLANNING MARKETING: PARTNERING TO

BUILD CUSTOMER RELATIONSHIPS

Within each business unit, more detailed planning takes

place. The major functional departments in each unit must

work together to accomplish strategic objectives.

Marketing provides a guiding philosophy—the marketing

concept—that suggests that company strategy should

revolve around building profitable relationships with

important customer groups.

Marketing provides inputs to strategic planners by helping

to identify attractive market opportunities and by assessing

the firm’s potential to take advantage of them.

Marketing designs strategies for reaching the unit’s

objectives.

Partnering with Other Company Departments

Each company department can be thought of as a link in the

company’s value chain.

A value chain is the series of departments that carry out

value-creating activities to design, produce, market, deliver,

and support the firm’s products.

A company’s value chain is only as strong as its weakest

link.

Success depends on how well each department performs its

work of adding customer value and on how well the

activities of various departments are coordinated.

In practice, departmental relations are full of conflicts and

misunderstandings.

Partnering with Others in the Marketing System

The firm needs to look beyond its own value chain and into

the value chains of its suppliers, distributors, and,

Learning Objective

3

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Key Term: Value

chain

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Ad: True Value

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ultimately, its customers.

More companies today are partnering with other members

of the supply chain to improve the performance of the

customer value delivery network.

Increasingly, today’s competition no longer takes place

between individual competitors. Rather, it takes place

between the entire value-delivery networks created by these

competitors.

Review Learning Objective 3: Explain marketing’s role in

strategic planning and how marketing works with its

partners to create and deliver customer value.

Key Term: Value

delivery network

Assignments, Resources

Use Additional Project 2 here

Use Real Marketing 2.2 here

Use Discussion Question 2-3 here

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PPT 2-21

PPT 2-22

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PPT 2-23

PPT 2-24

Describe the elements of a customer value-driven

marketing strategy and mix and the forces that influence

them.

MARKETING STRATEGY AND THE MARKETING

MIX

Marketing’s role and activities are shown in Figure 2.4,

which summarizes the major activities involved in

managing marketing strategy and the marketing mix.

Marketing strategy is the marketing logic by which the

company hopes to achieve profitable customer

relationships.

Customer Value-Driven Marketing Strategy

Companies know that they cannot profitably serve all

consumers in a given market—at least not all consumers in

the same way.

Market Segmentation

The process of dividing a market into distinct groups of

buyers with different needs, characteristics, or behaviors

Learning Objective

4

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Figure 2.4:

Managing

Marketing

Strategies and the

Marketing Mix

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Key Term:

Marketing strategy

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Key Terms: Market

who might require separate products or marketing programs

is called market segmentation.

A market segment consists of consumers who respond in a

similar way to a given set of marketing efforts.

segmentation,

market segment

Troubleshooting Tip

Market segmentation and market targeting are

universally new concepts to students, unless they

happen to have a parent who works in marketing.

Although this is discussed in detail in a future

chapter, showing how a large, amorphous market

can be broken down into more and more detailed

groups of buyers will help.

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PPT 2-25

PPT 2-26

Market Targeting

Market targeting involves evaluating each market

segment’s attractiveness and selecting one or more

segments to enter.

A company should target segments in which it can

profitably generate the greatest customer value and sustain

it over time.

Market Differentiation and Positioning

Differentiation begins the positioning process. To gain

competitive advantage, the company must offer value to

target consumers. This is accomplished through product

differentiation—actually differentiating the company’s

market offering so that it gives consumers more value.

A product’s position is the place the product occupies

relative to competitors in consumers’ minds.

Marketers want to develop unique market positions for their

products.

Positioning is arranging for a product to occupy a clear,

distinctive, and desirable place relative to competing

products in the minds of target customers.

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Key Term:

Market targeting

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Key Term:

Positioning

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Ad: Southwest

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Key Term:

Differentiation

Troubleshooting Tip

Market positioning can be difficult to understand as

well. Students will normally think of a product in

terms of its features, and although positioning

includes the features, it also spans the concepts of

benefits and perceptions. Using examples of brands

at opposite ends of a price continuum, such as Rolex

and Timex watches, helps drive home what

positioning means.

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PPT 2-27

PPT 2-28

Developing an Integrated Marketing Mix

The marketing mix is the set of tactical marketing tools

that the firm blends to produce the response it wants in the

target market. This is described in Figure 2.5.

Product refers to the goods-and-services combination the

company offers to the target market.

Price is the amount of money customers must pay to obtain

the product.

Place includes company activities that make the product

available to target consumers.

Promotion refers to activities that communicate the merits

of the product and persuade target customers to buy it.

An effective marketing program blends all of the marketing

mix elements into a coordinated program designed to

achieve the company’s marketing objectives by delivering

value to consumers.

Some critics feel that the four Ps may omit or under–

emphasize certain important activities.

From the buyer’s viewpoint, in this age of customer

relationships, the four Ps might be better described as the

four Cs:

Customer solution

Customer cost

Convenience

Communication

Review Learning Objective 4: Describe the elements of a

customer value-driven marketing strategy and mix and the

forces that influence them.

p. 53

Key Term:

Marketing mix

p. 54

Figure 2.5: The

Four P’s of the

Marketing Mix

Assignments, Resources

Use Additional Project 2 here

Use Real Marketing 2.2 here

Use Discussion Question 2-4 here

Use Additional Project 3 here

Use Think-Pair-Share 2 here

Use Outside Example 1 and 2 here

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PPT 2-29

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PPT 2-30

PPT 2-31

List the marketing management functions, including the

elements of a marketing plan, and discuss the

importance of measuring and managing marketing

return on investment

MANAGING THE MARKETING EFFORT AND

MARKETING RETURN ON INVESTMENT

Managing the marketing process requires the four

marketing management functions shown in Figure 2.6.

Analysis

Planning

Implementation

Control

Marketing Analysis

Managing the marketing function begins with a complete

analysis of the company’s situation.

The company must analyze its markets and marketing

environment to find attractive opportunities and avoid

environmental threats.

The marketer should conduct a SWOT analysis by which it

evaluates the company’s overall strengths, weaknesses,

opportunities, and threats.

Learning Objective

5

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Figure 2.6:

Managing

Marketing:

Analysis, Planning,

Implementation,

and Control

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Key Term:

SWOT analysis

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Figure 2.7: SWOT

Analysis: Strengths

(S), Weaknesses

(W), Opportunities

(O), and Threats (T)

Assignments, Resources

Use Critical Thinking Exercise 2-7 here

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PPT 2-32

Marketing Planning

Marketing planning involves deciding on marketing

strategies that will help the company attain its overall

strategic objectives.

A detailed marketing plan is needed for each business,

product, or brand.

Table 2.2 outlines the major sections of a typical product or

brand plan. See Appendix 1 for a sample marketing plan.

A marketing strategy consists of specific strategies: target

markets, positioning, the marketing mix, and marketing

expenditure levels.

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Table 2.2: Contents

of a Marketing Plan

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PPT 2-33

p. 58

Marketing Implementation

Marketing implementation is the process that turns

marketing plans into marketing actions in order to

accomplish strategic marketing objectives.

Implementation involves day-to-day, month-to-month

activities that effectively put the marketing plan to work.

Implementation addresses the who, where, when, and how.

In an increasingly connected world, people at all levels of

the marketing system must work together to implement

marketing strategies and plans.

Successful marketing implementation depends on how well

the company blends its people, organizational structure,

decision and reward systems, and company culture into a

cohesive action program that supports its strategies.

Marketing Department Organization

The company must design a marketing organization that can

carry out marketing strategies and plans.

The most common form of marketing organization is the

functional organization. Under this organization, functional

specialists head the various marketing activities.

A company that sells across the country or internationally

often uses a geographic organization.

Companies with many different products or brands often

create a product management organization. A product

manager develops and implements a complete strategy and

marketing program for a specific product or brand.

For companies that sell one product line to many different

types of markets and customers that have different needs

and preferences, a market or customer management

organization might be best.

A market management organization is similar to a product

management organization.

Marketing managers are responsible for developing

marketing strategies and plans for their specific markets or

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Key Term:

Marketing

implementation

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Photo: Marketing

Planning and

Control

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p. 59

customers.

Large companies that produce many different products

flowing into many different geographic and customer

markets usually employ some combination of the

functional, geographic, product, and market organization

forms.

Many companies are finding that today’s marketing

environment calls for less focus on products, brands, and

territories and more attention on customers and customer

relationships.

More and more companies are shifting their brand

management focus toward customer management.

Marketing Control

Marketing control involves evaluating the results of

marketing strategies and plans and taking corrective action

to ensure that objectives are attained.

Operating control involves checking ongoing performance

against the annual plan and taking corrective action when

necessary. Its purpose is to ensure that the company

achieves the sales, profits, and goals set out in its annual

plan.

Strategic control involves determining if the company’s

basic strategies are well matched to its opportunities.

Marketing strategies and programs can quickly become

outdated, and each company should periodically reassess its

overall approach to the marketplace.

MEASURING AND MANAGING MARKETING

RETURN ON INVESTMENT

Marketing managers must ensure that their marketing

dollars are being well spent.

In the past, many marketers spent freely on expensive

programs, often without considering financial return on

spending. In today’s constrained economy, that is changing.

In response, marketers are using marketing performance

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Key Term:

Marketing control

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PPT 2-34

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PPT 2-35

measures such as marketing return on investment

(marketing ROI)—the net return from a marketing

investment divided by the costs of the marketing

investment.

A company can assess return on marketing in terms of

standard marketing performance measures, such as brand

awareness, sales, or market share.

Some companies are combining such measures into

marketing dashboards—useful sets of marketing

performance measures in a single display.

Increasingly marketers are using customer-centered

measures of marketing impact, such as customer

acquisition, customer retention, customer lifetime value,

and customer equity.

Review Learning Objective 5: List the marketing

management functions, including the elements of a

marketing plan, and discuss the importance of measuring

and managing marketing return on investment.

p. 59

Key Term:

Marketing return on

investment

(marketing ROI)

p. 60

Figure 2.8:

Marketing Return

on Investment

Assignments, Resources

Use Discussion Question 2-5 here

Use Marketing by the Numbers here

Use Think-Pair-Share 3 here

Use Company Case here

Use Video Case here