Chapter 1

Introduction to Marketing

Marketing: A social/managerial process to create, communicate, deliver, and exchange offerings that have value for customers, clients, partners & society.

Core Concepts

• Need: State of felt deprivation.
• Want: Need shaped by culture/personality.
• Demand: Wants backed by buying power.
• Market: Set of actual/potential buyers.
• Exchange: Act of obtaining desired object.

Marketing Orientations

• Production: Consumers favor available/affordable.
• Product: Focus on highest quality/features.
• Selling: Aggressive promotion & hard selling.
• Marketing: Customer-centric (satisfy needs/wants).
• Societal: Satisfy wants + care for society's well-being.

Holistic Marketing Components

"Everything matters!" Recognizes breadth & interdependence.

1. Relationship marketing
2. Integrated marketing
3. Internal marketing
4. Social responsibility marketing
5. Performance marketing

Customer Value & Satisfaction

Cust. Value = What customer GETS - What they GIVE.

• Total Cust. Value: Product, Service, Personal, Image.
• Total Cust. Cost: Money, Time, Energy, Psychic.

CRM & Value Chain

Cust. Dev. Process

Suspects $\rightarrow$ Prospects $\rightarrow$ Disqualified/Qualified $\rightarrow$ 1st Time $\rightarrow$ Repeat $\rightarrow$ Clients $\rightarrow$ Members $\rightarrow$ Advocates $\rightarrow$ Partners.

CRM Role

• Reduces info search
• Identifies profitable customers
• Tracks interactions

Value Chain (Porter)

• Primary: Inbound/Outbound logistics, Operations, Mktg/Sales, Service.
• Support: Procurement, Tech, HR, Infra.

Mktg Mgmt Process

Chapter 2

Mktg Opportunities Analysis

Market Opportunity

A favorable set of environmental circumstances offering an acceptable probability of success.

• Sources: Short supply, Improvement, Innovation, Weak competitors, Changing wants.
• Types: Expand new mkts, Prod line expansion, Integration, Faster delivery, M&A, Alliances, E-com.

Marketing Environment

Totality of forces affecting mktg decisions. Features: Dynamic, Complex, Multi-faceted, Long-term impact, SWOT-related.

Micro vs. Macro Environment

Micro (Task) Environment

Close to org. Affects ability to serve customers.

• Internal: Vision, goals, strengths/weaknesses, core competency within firm.
• External Micro: Customers, Producers/Suppliers, Competitors, Marketing Intermediaries, Public.

Macro Environment

Uncontrollable external forces shaping opportunities & posing threats.

• Economic, Demographic, Socio-cultural, Technological, Political-legal, Natural, Competitive.

Strategic Portfolio Models

BCG Matrix

Strategic Business Unit (SBU)

An organization's individual business/division with its own plan. Evaluated via models.

GE McKinsey Model

More sophisticated 3x3 grid. Plots Industry Attractiveness vs Business Strength.

Marketing Plan Contents

• Title, Table of Contents, Cover letter
• Historical bg, Exec Summary
• Situation Analysis (SWOT)
• Mktg Goals & Strategies
• Action Prog, Budgets, Control

Chapter 3

MkIS & Demand Measurement

Marketing Info System (MkIS)

Structured complex of persons, machines, procedures to generate orderly flow of pertinent info for decision making.

5 Components:

1. Internal Records System
2. Info Processing System
3. Marketing Intelligence System
4. Marketing Decision Support System (MDSS)
5. Marketing Research System

Decision Support Sys (MDSS)

Software/hardware tools to interpret data for action. Contains: Databank, Statistical bank, Model bank.

Market Intelligence Sources

• Published materials
• Observing competitors' physical evidence
• People doing business w/ competitors
• Competitor recruits/employees

Marketing Research & Demand

Research Process

1. Define problem & set objs
2. Develop Research Plan (sources, approach, instruments, sample)
3. Collect Info
4. Analyze & interpret data
5. Prepare written report

Estimating Current Demand

• Area Mkt Potential: Build-up method, Factor index.
• Total Mkt Potential.
• Company Share Estimate.

Estimating Future Demand

• Executive opinion
• Opinion survey
• Past sales analysis
• Market test method

MkIS in Nepal:
Developing practices. Needs implementation of IT policy. Transitioning to use IT for mktg planning, control, e-marketing, & CRM.

Chapter 4

Segmentation, Target & Position

Market Segmentation: Process of dividing large, heterogeneous markets into smaller, homogeneous sub-markets that match a total marketing program.

Req. for Effective Seg.

• Diff in customer response
• Measurable
• Accessibility
• Large size (Substantial)
• Stability

Consumer Mkt Bases

• Demo: Age, gender, income.
• Geo: Area, climate, density.
• Psycho: Social class, lifestyle.
• Behav: Benefits, usage rate, loyalty.

Targeting & Positioning Strategies

Target Market Selection

Evaluate based on: Size/growth, Structural attractiveness, Company objectives/resources.

• Market aggregation strategy
• Market segregation strategy
• Concentrated (Niche) strategy
• Multiple-segment strategy

Ways to Differentiate

1. Physical (Form, feature, durability) | 2. Service (Delivery, install) | 3. Personal | 4. Channel | 5. Promotion | 6. Image.

Positioning Types

• Specific product features
• Benefits / Problem solution
• Specific usage occasions
• User category
• Against another product
• Product class dissociation

Nepal Market Segmentation Practices

1. Non-Systematic:

• Competitor's strategy
• Past experiences
• Hunches
• Indian product's strategy

2. Systematic:

• Geographic
• Demographic
• Psychographic
• Behavioral

Chapter 5

Competitors Analysis

Industry vs Market Concept

Industry: Group offering close substitutes.
Market: Looks beyond industry at potential/existing competitors satisfying same need.

Key Competitor Analysis

1. Identify: Customer or Strategic approach.
2. Assess Strategies/Objs.
3. Assess Strengths/Weaknesses: Share of market, mind, heart.
4. Estimate Reaction Patterns:
   • Laid-back (ignores)
   • Selective (reacts to specific)
   • Tiger (aggressive)
   • Stochastic (unpredictable)

Porter's 5 Forces Model

Role-Based Strategies

1. Market Leader

• Market Expansion Strategy
• Market Defense Strategy
• Market Share Expansion

2. Mkt Challenger

Aim: Inc share. Target leader/equals/small firms.

Weapons:

• Price cuts, Lower price goods
• Product innovation/variety
• Improved distribution/service
• Aggressive promotion

3. Follower & Nicher

Follower (Imitation):

• Counterfeiter, Cloner
• Imitator, Adaptor

Nicher: Leader in small mkt ignored by large firms.

Chapter 6

Product Strategies

Levels of Product

Product Classification

• Consumer: Convenience, Shopping, Specialty, Unsought.
• Industrial: Entering, Foundation, Facilitating.

New Product Dev (NPD) Process

1. Ideas Generation
2. Screening Ideas
3. Business Analysis
4. Product Dev & Testing
5. Test Marketing
6. Commercialization

Branding & Packaging

Branding Strategies

• Line Branding: Common concept extended.
• Range Branding (Extension): Diff categories, same name.
• Umbrella Branding: Company name = Brand name (Eastern World favored).
• Double Branding: Company + Product name.
• Endorsement: Product dominant, Co. takes back seat.

Packaging & Labeling

Levels: Primary, Secondary, Shipping.

Objectives: Physical/Barrier protection, Information, Mktg, Security, Convenience.

Labels: Brand, Grade, Informative. (Consider lang, govt rules, consumer info).

Product Life Cycle (PLC) Strategies

• Intro: Rapid/Slow Skimming OR Rapid/Slow Penetration.
• Growth Stage.
• Maturity: Mkt modification, Prod modification, Mix modification.
• Decline Stage.

Chapter 7

Pricing Strategies

Price: Value that will purchase a finite quantity/weight of goods/services. Pricing is the determination of this exchange value.

Pricing Objectives

• Profit-oriented: Target return, Profit max.
• Sales-oriented: Sales/Market share growth.
• Status quo: Stabilize, meet comp, survival.
• Quality-oriented: Quality leader/imitation.

Major Pricing Policies

• Price Flexible: One price vs Price discrimination.
• Geographical: FOB, Zone, Base point, Uniform delivery, Freight absorption.
• Product Mix: Product line, Optional feature, Captive, Two-part, Product-bundling.

Discounts & Promos

Discounts/Allowances:

• Quantity, Trade, Cash, Price-off, Seasonal.

Promotional Pricing:

• Leader pricing
• Special event pricing
• Psychological pricing

Price Changes & Responses

Price Change Strategies

• Price increase
• Price decrease
• Price maintain

Price Response Strategy

• Competitive price strat.
• Do nothing strategy
• Non-price competition

Buyer's Reaction Factors

• Price Elasticity of Demand
• Perceptual Factors

Competitor's Reaction:
Reactions differ based on market structure: 1) Only one large competitor vs 2) More than one competitor.

Chapter 8

Channel & Logistic Strategies

Marketing Channel: Set of interdependent organizations involved in making a product/service available for use. Functions: Info, Promo, Contact, Negotiation, Phys Dist, Financing, Risk taking.

Channel Design

Consumer Products:

• Prod $\rightarrow$ Cons
• Prod $\rightarrow$ Ret $\rightarrow$ Cons
• Prod $\rightarrow$ Whol $\rightarrow$ Ret $\rightarrow$ Cons
• Prod $\rightarrow$ Agt $\rightarrow$ Ret $\rightarrow$ Cons
• Prod $\rightarrow$ Agt $\rightarrow$ Whol $\rightarrow$ Ret $\rightarrow$ Cons

Industrial Products:

• Prod $\rightarrow$ Ind Users
• Prod $\rightarrow$ Agt $\rightarrow$ Users
• Prod $\rightarrow$ Ind Dist $\rightarrow$ Users
• Prod $\rightarrow$ Agt $\rightarrow$ Ind Dist $\rightarrow$ Users

Channel Selection Factors

• Customer: Type, number, geo conc, order size.
• Company: Control desire, mgr ability, finance, services required.
• Product: Nature, unit value, technicality, weight/size.
• Middlemen: Services, availability, sales vol, attitude.
• Competitive Environment.

Channel Conflict & Logistics

Channel Conflicts

Types: Horizontal, Vertical, Multi-Channel (Intertype).

Causes:

• Goal incompatibility
• Unclear roles
• Communication gap
• Perceptual / Ideological differences

Marketing Logistics

Mgmt of physical flow from supplier to purchaser.

Functions:

• Transport: Rail, Highway, Water, Pipeline, Air.
• Warehousing
• Inventory mgmt & control
• Order processing
• Material handling / Cust service

Chapter 9

Integrated Mktg Comms (IMC)

Promotion: Element that serves to inform, persuade, and remind the market. Components: Adv, Personal Selling, Sales Promo, PR, Direct Mktg.

Advertising

Paid, non-personal, identified sponsor.

Web Ads Importance:

• Mass reach, Cost-effective
• Prompt, Personal touch

Types:

Product, Service, Retail, Political, Inst., Directory, Direct-Response.

Sales Promo & PR

Sales Promo: Short-term incentives for quick response.

Trade Promo: Buying/buy-back allowance, free goods, push money.

PR: Deliberate effort for mutual goodwill.

Tools: External/Internal media, Media relations.

Publicity & IMC

Publicity: Unpaid communication (credible, fast, cost-benefit). Forms: Press release, feature article, press conf, sponsorship.

IMC: Comprehensive plan evaluating strategic roles of various comm disciplines for added value.

Personal Selling Process

Indoor Sales

1. Drawing attention
2. Reception & Inquiry
3. Demonstration of goods
4. Meeting objections
5. Selection of goods
6. Additional sales
7. Seeing off with praise

Outdoor Sales

1. Prospecting customer
2. Pre-approach & Approaching
3. Presentation
4. Attracting attention, interest, desire
5. Creating conviction (handle objection)
6. Close (receive order)
7. Departure & follow up

Qualifications for Sales Success

Hard working, Timely, Emotional maturity, Responsive, Dependable, Technical knowledge, Confidence, Good listener, Conscientious, Initiative.

Chapter 10

Evaluation & Control

Marketing Control: Process of establishing standards, evaluating actual performance by comparing with standards, and reducing differences.

Importance of Control

• Detection of Deviations
• Locate Responsibility for Failure
• Self-examination by Employees
• Matching Environmental Changes
• Organizational Complexity
• Plan Reformulation

Types of Control

1. Annual plan control
2. Profitability control
3. Efficiency control
4. Strategic control

Strategic & Annual Plan Control

Strategic Control

Tracking a strategy as it is being implemented, detecting problems in premises, making adjustments.

Significance:

• Provides right directions in decision making
• Early warning system
• Cost effective
• Focus on key performance

Annual Plan

Deciding in advance activities necessary to achieve primary goals.

Measures of Control:

• Analysis of different sales & market share
• Market expenses-to-sales analysis
• Financial analysis
• Customer/stakeholder attitude analysis

Marketing Control Process

Effective Eval of Mktg Program

Market reaction, Customer response, Sales performance, Return-on-investment (ROI).