Chap 1 and 2 MKTG MNGT

Chapter 1
Why is Marketing Management Important?

Defining Marketing
 Some people take marketing to be sales or advertising

 How and why customer orientation of marketing is so important in today’s corporation
 Marketing Framework and define its terms

Marketing is an Exchange Relationship
 Marketing is defined as an exchange between firm and its customer.

 Ideally this dynamic can be a mutually beneficial relationship
 Then exchange continues iterating between the customer and the company
Marketing is an Exchange Relationship
Seeks benefits customer Expects to pay
Seeks profits Offers benefit

company
Figure 1.1 ny
Marketing is and Exchange
Marketing is Everywhere
We can market just about anything:

Why is Marketing Management Important?
• Marketing has evolved beyond being product focused

• We live in a truly customer-oriented and customer-empowered marketing world.
• Marketers ….seek to identify their customers’ needs and wants… seek to make customers happy
and in so doing, make companies more profitable
Marketing and Customer Satisfaction Is Everyone’s Responsibility
• Marketing is a philosophy a way to approach thinking about business

• Marketing orientation should permeate organization:
- Accounting & Finance
- Salespeople
- R& D people
THE MARKETING FRAMEWORK

THE 5C’s, STP, and 4P’s
What is MARKETING FRAMEWORK?
A marketing framework is a visual representation or a logical flow of your marketing plan.

It contains several components that work together as a whole to bring your marketing vision to reality.
By taking the time to write a marketing framework, your options for marketing your small business can
become more clear and you can create an actionable plan for promoting your products or services.
Figure 1.
The Marketing Framework
Figure 2. 5C
The 5 C’s are a good guideline to make the right decisions, and construct a
well-defined marketing plan and strategy.
5C It forces a businessperson to systematically frame the general analysis of
the entire business situation.
Consumer Who are my customer? Does my product will satisfy their needs and wants?
Company
A good tool to find out your company’s strengths and weaknesses is “SWOT”
analysis.
Context
Includes the backdrop of macroenvironmental factor such as: Political and economical
Collaborator issues, social impact, technological developments
Competitor Companies we work together such as distributor, suppliers, resellers, sponsors
Competes with your company in meeting the customer’s needs.
STP- A three-step approach to building a targeted Marketing Plan.

Figure 3. STP
STP
Listing out all the potential
customers you could target in
marketing campaign.
Segmentation
Identifying the segment we
should target with our
marketing efforts.
Targeting
How you align your brand or products

Positioning in the target market. Your positioning
serves as your big-picture guide in
building your marketing campaign
thru the 4P’s.
Figure 4.
The 4P’s
CHAPTER 2
CONTUMER BEHAVIOR
THE THREE PHASES OF THE PURCHASE PROCESS
• Pre purchase Phase- customer identifies that something is lacking

• The Purchase Phase – consumer is creating a consideration set that includes all the brands that
are deemed potential candidates for purchase and that excludes brands that have been
rejected.
• Post Purchase – customer evaluation on their purchases. It includes the purchase process,
posing question about customer satisfaction, repurchase intentions and the likelihood of
generating word of mouth.
The Purchase Process/ Buying Process
Pre purchase: identify need or want

search possible solution
build consideration set
Purchase : narrow consideration set
decide on retail channel
Post purchase: customer satisfaction
likelihood to repeat
generate word of mouth
B2B CUSTOMERS CLASSIFICATIONS-according to what they sell
Installations
Accessories
Raw materials
Components
Business Services
*B2B purchases are often more complicated than consumer purchases because they tend to be big and
expensive. They are also complex because the business customer is an entity-an organization or a group
of people (buying center) and the decision making is done by them.
The Typical Roles in a Buying Center
• The Initiator- the one who planned

• The User –everyone who used the purchase
• The Influencer –the one who suggests/ recommend
• The Buyer –the head administrative person whose responsibilities are to facilitate supplies
• The Gatekeeper –an accountant type whose job is to tighten purse strings.
DIFFERENT KINDS OF PURCHASES
• Impulse Purchase- doesn’t require a lot of thought and have no standard. (straight rebuy)
• Shopping Purchase- requires some thought or planning. (modified rebuy)
• Specialty Purchase- done occasionally, requires a lot of thought and often more expensive. (new
buy)
CUSTOMER INVOLVEMENT
Types of purchases in B2C

and B2B is a Matter of
Customer Involvement
B2C = Convenience Shopping Specialty
*Consumers purchase convenience items, or business customers a straight rebuy , fairly mindlessly. It’s
the proverbial no-brainer.(news of new brand)
*For items that customer care more about, they’ll expend some time and effort prior to the purchase,
seeking out more information to be a smart shopper and obtain good value. In specialty purchases or
new buys, customer involvement and engagement is higher because there is a great deal of effort put
into researching the best brands, quality, and price.
*Customer satisfaction can be fine in low-involvement purchases, but customers won’t generate word
of mouth-they don’t care enough.(they are more likely price sensitive). For high-involvement purchases,
strong followers and satisfied customers can be zealots and brand ambassadors.
B2B = Straight rebuy Modified rebuy New buy
*Implications for loyalty programs: marketer can create programs regardless of the level of customer
engagement, but they’d take different forms;(price discount for low-involvement purchases vs. brand
communities and events for high-involvement products and brands.
*Implications for channel of distribution: low-involvement products need to be widely available so the
customer can pick them up without thinking, while high-involvement products will be sought out by
more customer activity.
*Implications for promotions: for low-involvement products the marketer just hopes to cut through
the noise and clutter, getting the customers’ attention only long enough to register the brand name in
the mind of the customer for sheer familiarity. With high-involvement purchases, customers are hungry
for information and marketers can provide more.
ANATOMY of a GROCERY STORE
 Entrance- (shopping carts and baskets)

 Produce Section- similar items are close together(fruits and vegetables)
 Dairy Section- most commonly purchased (milk) located in an area that requires the customer to
travel through the store
 Complementary items are close(chips and dip)
 Brands aimed for children are put in shelves at their eye level.
 End of the aisle/checkout lanes- hold high profit items or grouped items, designed to inspire
impulse buys . Sometimes these area are used to promotes sales items. “People are 30% more
likely to buy items on the end of the aisle versus in the middle- often because we think what’s at
the end is a better deal ” says Brian Wansink of Cornell University and author of Mindless Eating.
 Checkout counters provide the store the opportunity to capture customer information through
the use of their cards, and it provide insights into customer purchasing decision.
The Marketing Science of CUSTOMER BEHAVIOR
Factors that influence a customer to make a PURCHASE:

Sensation and Perception
Learning & Memory, and Emotions
Motivation
Attitudes and Decision Making
Cultural Differences
SENSATION and PERCEPTION

Imagery visualization. Visual stimuli are very important to marketers, along with other sensory stimuli,
are used to elicit such a reaction and motivate customers to make the purchase.
Colors, sound of brand name, distinct smell (in perfume, or coffee for example), and even catchy logos
are all utilized to make a certain product so appealing to a customer and eventually push him to BUY.
Subliminal Advertising - the idea that an ad can be shown very quickly – few seconds, on TV or
injected in movies, too short that it’s not enough to sink into our consciousness, YET, somehow this
vision is captured sub-consciously by customers, enough to compel action.
LEARNING & MEMORY, AND EMOTIONS

All our sensory and perceptual impressions can become brand association. Simply put, we have stored in
our memory those certain attributes attached to the brand. For example, when somebody mentions
STARBUCKS, coffee with thick foamy milk and other associations are brought into mind.
The first way we learn - CLASSICAL CONDITIONING.

Ivan Pavlov on his salivating dogs: Learning goes through stages.
1st – a food bowl placed in front of a dog, naturally elicits its drool.
2nd
– a bell rung in front of the dog initially elicits no response.
3rd – a bell rung while food bowl is placed in front of the dog elicits drool.
With time, a bell rung in front of a dog elicits drool as it comes to learn the bell is associated with food.
Second way of learning - OPERANT CONDITIONING.

This concept is based on positive reinforcement. Ex. Loyalty Programs - customers are rewarded for their
loyalty using freebies.
Examples are SM Advantage Cards and Starbucks Rewards Card.
EMOTIONS are also extremely important in understanding how customers connect with brands.
Customer satisfaction and dissatisfaction trigger different responses.
MOTIVATION
According to Maslow, customers have to meet their Physiological Needs
before considering buying nice clothes and cars, etc. Once the basic
needs are met, customers are then driven by more abstract motivations
like Love and esteem, etc. Marketers use this hierarchy by trying to
connect their product with a certain level of need. Then imagery is used
to appeal to those motivations. Another use of the Maslow Pyramid is
to create an extended brand line that motivates customers to reach a
higher level. Example is the C-Model of Mercedes targeted for those
who want the brand but cannot afford much.
ATTITUDES AND DECISION MAKING

In the quest of persuading customers to have a positive regard for a brand, to see it as superior to all
others, Marketers want to understand how customers think and what motivates them – through their
Attitudes and Decision Making. Marketers need to enhance attitude about brands and encourage brand
choices. Attitudes in Marketing are a mix of beliefs and important weights (what customers care about)
Beliefs are opinions.
OTHER MORE PREDICTABLE FACTORS:

Social Class and Age
Ethnicity
Country Culture
How do cultural differences affect consumer’s behavior?
SOCIAL CLASS
 more complicated than just economic access to resources
 not just about who earns more
 Old Money vs Nouveau Riche
AGE – different age group have varying preferences
GENDER
Men and women approach shopping with different motives & perspectives.
ETHNICITY AND COUNTRY CULTURE

Our Ethnicity, religion, language, the country we live, and the culture that we live by affects our behavior
as consumers.
All these affect our choice of products and services.

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Chapter 1

Why is Marketing Management Important?

 Some people take marketing to be sales or advertising

 Marketing is defined as an exchange between firm and its customer.

Marketing is an Exchange Relationship

Seeks benefits customer Expects to pay

Seeks profits Offers benefit

We can market just about anything:

• Marketing has evolved beyond being product focused

Marketing and Customer Satisfaction Is Everyone’s Responsibility

• Marketing is a philosophy a way to approach thinking about business

THE MARKETING FRAMEWORK

What is MARKETING FRAMEWORK?

A marketing framework is a visual representation or a logical flow of your marketing plan.

Competitor Companies we work together such as distributor, suppliers, resellers, sponsors

Competes with your company in meeting the customer’s needs.

STP- A three-step approach to building a targeted Marketing Plan.

How you align your brand or products

• Pre purchase Phase- customer identifies that something is lacking

The Purchase Process/ Buying Process

Pre purchase: identify need or want

B2B CUSTOMERS CLASSIFICATIONS-according to what they sell

The Typical Roles in a Buying Center

• The Initiator- the one who planned

DIFFERENT KINDS OF PURCHASES

Types of purchases in B2C

B2B = Straight rebuy Modified rebuy New buy

ANATOMY of a GROCERY STORE

 Entrance- (shopping carts and baskets)

Factors that influence a customer to make a PURCHASE:

SENSATION and PERCEPTION

LEARNING & MEMORY, AND EMOTIONS

The first way we learn - CLASSICAL CONDITIONING.

Second way of learning - OPERANT CONDITIONING.

ATTITUDES AND DECISION MAKING

OTHER MORE PREDICTABLE FACTORS:

AGE – different age group have varying preferences

ETHNICITY AND COUNTRY CULTURE

All these affect our choice of products and services.

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