Marketing Concept:Org. should seek to make a profit by serving the needs of customer groupsPurpose: focus attention of marketing managers on serving broad classes of customer needs (customer orientation)Strategic Planning:Organizational mission;Organizational objectivesOrg. strategies: based on:Products and marketsMarket penetration: present products; present customersIncrease sale of present products to present customersTactics: price reduction, ads that stress many benefitsMarket development: present products; new customersProduct development: new products; present customersDiversification: new products; new customersStrategies based on:Competitive advantage: (Michael porter)Cost leadership vs. differentiationValue:Offer best price: Dell, CostCo, Southwest airlinesBest product: Nike, Rubbermaid, Starbucks, MicrosoftBest service: Airborne Express, Roadway, Lands EndChoose the Appropriate Strategy:Strategy which gives you a sustainable competitive advantageKey to SCA is focus and build on assets and skills that will lead to long term performance gainsOrganizational Portfolio PlanIdentify strategic business units (SBU)Have a distinct missionHave their own competitorsThey are a single business or collection of related businessesCan be planned independently of the total organizationOnce identified, resources should be allocated efficiently to SBUsThe Marketing Management Process (defined on pg. 14)Emphasizes serving target market needs as the key to achieving organizational objectivesSituational Analysis: (6 major areas of concern)Analyses of past trends, and current situations are most useful for predicting the future situation1. Cooperative environment:all firms and individuals who have a vested interest in the firms accomplishments of its objectivessuppliers, resellers, other departments of firm, sub-departments and employees of marketing departmentprimarily related to methods of increasing efficiencyconstraints consist of unresolved conflicts, shortages of materials2. Competitive Environment:consists of other firms (rivals) in the industryopportunities include: acquiring competing firms, offering better value to customers and attracting them away from competitors, and driving competitors out of the industryconstraints include demand stimulation activities of competing firms, and consumers who cannot be lured from competitors3. Economics environment: the state of the macroeconomy and changes in it bring about marketing opportunities and contraintschanges in inflation and unemploymentdevelopments in technology can create opportunities and threats4. Social Environment: includes general cultural and social traditions, norms, and attitudeschanges in these values bring about the need for new products and servicesbusiness practices which are contrary to social values become political issues which are resolved by legal contraintsex: public demand for cleaner environment lead to govt requirements of auto manufacturers to meet certain gas mileage and emissions standards5. Political Environment: includes attitudes and reactions of general public, social and business critics, and other orgs such as the Better business Bureauadapting business and marketing practices to these attitudes can be an opportunityex: unbreakable childrens toys, high efficiency air conditioners, more economical automobiles6. Legal Environment: includes a host of federal, state, and local legislation directed at protecting both business competition and consumer rights.Can be a constraint but also an opportunity to market safer and more efficient productsMarketing Planning:1. Establish marketing objectives: derived from organizational objectivesmust be specified and performance must be measurablestandards of performance or tasks to be achieved by certain dates2. Selecting Target market: identify consumer needs and organize resources to satisfy them profitably4 important questions must be answered:1. What do customers want or need?2. What must be done to satisfy these wants/needs3. What is the size of the market4. What is its growth profilepresent and potential target markets are ranked according to profitability, present and future sales volume, and match between what it takes to appeal successfully to the segment and the orgs. Capabilitiesthose that offer greatest potential are selected3. Developing the Marketing Mix: set of controllable variables that must be managed to satisfy the target market and achieve organizational objectivescontrollable variables classified into 4 major areas:product, price, promotion, placeChannels of distributionMarketing mix is the core of the marketing management processFormal statement of decisions that have been made on marketing activitiesImplementing Marketing Plan: involves putting plan into action and performing marketing tasks according to the predefined scheduleControl of Marketing plan: involves three steps;1. results of implemented marketing plan are measured2. Results are compared with objectives3. Decisions are made on whether the plan is achieving objectivesCross-Functional Strategic Planning: bringing managers and employees together to participateAdvantage: ability to consider situations from a number of viewpointsAvoid costly mistakes and poor solutionsJapanese manufacturers use thisUS manufacturers use contrasting tactics. (divisions work separately)Figure 1.6 illustrates cross-functional perspective of strategic planningMarket Segmentation: the process of dividing a market into groups of similar consumers and selecting the appropriate groups for the firm to serve6 steps1. Delineate firm’s current situation:intended to be a reminder of tasks to be performed prior to marketing planning2. Determine consumer needs and wants3. Divide markets on relevant dimensions (3 Q’s to consider)Should the segmentation be priori or post hoc?Priori approach: decide on appropriate basis for segmentation before doing any research on the marketPost Hoc approach: people are grouped into segments based on research findingsUsed to segment for entirely new productsHow does one determine the relevant dimensions or bases to use for segmentation? (figure 5.2)Benefit segmentation: segment based on the benefits that consumers seek from a certain productMarket oriented approachPsychographic Segmentation: focuses on segmenting based on consumer lifestylesMeasured by asking Q’s about activities, interests, and opinions. (AIO) questionsVALS (values and lifestyles) fig. 5.4Continued details