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Summary Marketing an introduction (T1) Gary Armstrong, Philip Kotler
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Every chapter needed for the first marketing exam for most economic / marketing studies.
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14 reviews
By: znoble97 • 3 year ago
By: mattprosser12 • 3 year ago
By: adrienduranton • 3 year ago
By: masonkufs • 3 year ago
By: kroesmax • 5 year ago
By: pascaldiebold • 6 year ago
Most of the key models and phrases are included. However, they are mostly just copied from the book. It is a good "table of contents" however but for deeper understand many linkings are missing
By: Roibin • 6 year ago
besides the fact this summary is years old... I would recommend reading the book for further understanding ;-p this can be a nice help besides actually studying. Good luck amigo!
By: yusufbaglan • 6 year ago
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Marketing ManagementChapter 1 Creating and Capturing Customer Value
Marketing
The process by which companies create value for customers and build strong customer
relationships in order to capture value from customers in return. Satisfying customer needs,
selling and advertising are just part of the marketing mix to create superior customer value.
A simple marketing model Capture value from
customers in return
Understand the Design a Construct an Build profitable Capture value
maketplace and customer driven integrated relationships from customers
customer needs marketing marketing and create to create profits
and wants strategy program that customer delight and customer
deliver superior equity
value
Needs
A state of felt deprivation. Basic physical needs include food, clothing, warmth and safety a
sense of belonging these needs are not created by marketers they’re part of the human
make-up.
Wants
The form human needs take as shaped by culture and individual personality. Example you
need food but you want a big-mac.
Demands
Human wants that are backed by buying power. Depending on an individual’s resources
wants turn into demands for products and services in order to capture most value and
satisfaction.
Market offerings
Some combination of products services, information, or experiences offered to a market to
satisfy a need or want.
,Marketing myopia
The mistake of paying more attention to the specific products a company offers than to the
benefits and experiences produced by these products.
Example: Kodak made a huge mistake on focusing too much on its current line of products.
They were pioneers to digital photography but delayed its release in fear of cutting their
profitable camera roll business. They lost sight of the product only being a tool to an
experience. In Kodak’s case capturing life and moments. By the time they got in on digital
photography it was too late to catch up.
Exchange
The act of obtaining a desired object from someone by offering something in return. This
does not limit itself to physical products. A politician wants votes, a church member.
Marketing consists of actions taken to build and maintain desired exchange relationships.
Market
The set of all actual and potential buyers of product or service. In modern marketing all
parties participate in the marketing process. Buyers and sellers interact and form profitable
customer relations and value.
Arrows represent relationships
Each party in the system adds
that must be developed and
value. Companies can’t deliver
A Modern Marketing System managed to create customer
superior value if suppliers aren’t
value and profitable customer
sharp or intermediaries provide
relationships.
bad service.
Suppliers
Company Marketing Consumer
intermediaries
Competitors
Major environmental forces
Marketing management
The art and science of choosing and target markets and building profitable relationships with
them.
Creating a high quality product with high service, targeting it to the right market
differentiating itself from similar products are some of the things that need to be done in
order to create superior value.
, In order to design a winning strategy a company must answer certain questions.
What customers will we serve (What’s our target market?)
How can we serve the customers best or create superior value (What’s our value
proposition?)
Production concept
The idea that consumers will favor products that are available and highly affordable and that
the organization should therefore focus on improving production and distribution efficiency.
Product concept
The idea that consumers will favor the products that offer the most quality, performance
and features and that the organization should therefore focus on making constant product
improvements.
The selling concept
The idea that consumers will not buy enough of the firm’s products unless it undertakes a
large scale selling and promotion effort. Often used with unsought products or services
things people don’t often think of buying. Focuses on quantity and sales over quality and
building strong relations.
Marketing concept
The marketing management philosophy that holds that achieving organizational goals
depends on knowing the needs and wants of target markets and delivering the desired
satisfaction better than competitors do. The focus is on the customer and value are the paths
to sales and profits. Find the right product for your customer.
Focus on The Selling and Marketing Concepts Contrasted
existing
products and Starting
Focus Means Ends
heavy selling point
The selling Factory Existing Selling and Profits through
concept products promoting sales volume
Sales through
customer
satisfaction
The Market Customer Integrated Profits through
marketing needs marketing customer satisfaction
concept
,Societal marketing concept
The idea that a company’s marketing decisions should consider consumers wants, the
company’s requirements, consumer’s long-run interests, and society’s long run interests.
Sustainable marketing to meet present needs preserving or enhancing the ability to meet
future generations their needs. Putting people before profits.
Customer relationships management
The overall process of building and maintaining profitable customer relationships by
delivering superior customer value and satisfaction. Deals with acquiring, keeping and
growing customers.
Customer-perceived value
The customer’s evaluation of the difference between all the benefits and all the costs of a
marketing offer relative to those of competing offers. A personal thing perceived value can
differ on basis of resources and lifestyle.
Customer satisfaction
The extent to which a product’s perceived performance matches a buyer’s expectations.
Customer –managed relationships
Marketing relationships in which customers, empowered by today’s new digital
technologies, interact with companies and with each other to shape their relationships with
brands. Think social media like twitter and facebook many companies engage in these
websites to gain closer relations with customers.
Customer- generated marketing
Brand exchanges by consumers both invited and uninvited. Companies might engage
consumers in shaping of a product through online polls, or internet stunts. By conversing
with each other consumers are starting to play a larger role in shaping a product and its
experience.
Partner relationship management
Working closely with partners in other company departments and outside the company to
jointly provide greater customer value. The idea that customer value is a joint effort
throughout a company and outside players like suppliers.
Customer lifetime value
The entire amount of purchases a loyal customer will make over a lifetime. Losing a
customer doesn’t mean losing one sale but an entire stream of sales. Customer delight
creates strong relations in return the company can receive maximum value from the
customer.
,Share of customer
The portion of the customer’s purchasing a company receives in its product categories.
Example: Banks wants higher share of wallet, restaurant and supermarkets bigger share of
stomach, airlines bigger share in travel.
Customer equity
The total combined customer lifetime value of all of the company’s customers. A way of
predicting future sales, companies can market new or different categories to gain more
customer equity.
Different customers
Customer relationship groups require different
relationship
Butterflies True friends management
High Good fit between good fit between strategies
Profitability companies offering and companies offering
needs; high profit customer’s needs; Highest
Potential
potential potential profit
profitability
Strangers Barnacles
Low Little fit between Limited fit between
companies offering and company’s offerings and
profitability
customer’s needs; lowest customer’s needs; low
profit potential profit potential
Short-term Long-term
Projected
customers customers
loyalty
The four groups:
‘Butterflies’ are potentially profitable but not loyal, they fit the offering but will likely
move on after enjoying them for short while. The business should try and collect as
much of their business as possible
‘True friends’ are both profitable and loyal a strong fit with the offerings. The firm
wants to keep investing to delight, nurture, retain and grow these customers. True
believers often tell others about their good experiences.
‘Barnacles’ are highly loyal but not very profitable. Limited fit between their needs
and the company’s offerings. For instance a smaller bank customers who bank
regularly but do not generate enough to cover the cost of the maintaining the
account. They’re the most problematic customer. If they can’t become profitable
they should be cut off.
Internet
A vast public web of computer networks that connects users of all types all around the world
to each other and to an amazingly large information repository.
Figure 1.6 pg 58 An expanded Model of the Marketing Process
, Marketing Management
Chapter 2 Company and Marketing Strategy: Partnering to Build Customer
Relationships
Like the marketing
strategy, broad
company strategy must
Steps in strategic planning
be customer focused Business unit, product
Corporate level and market level
Defining the Setting company Designing the Planning marketing
company mission objectives and business portfolio and other functional
goals strategies
Companywide strategic
planning guides
Strategic planning marketing strategy and
planning
The process of developing and maintaining a strategic fit between the
Organization’s goals and capabilities and its changing marketing opportunities.
Mission statement
A statement of the organization’s purpose, what it wants to accomplish in the larger
environment. A mission statement should be market orientated instead of product
orientated. Example: Kraft could say we sell food and drink products, or we help people
around the world live and eat better. The latter is a market-orientated statement.
Guided by a company’s mission statement and objectives management must now set up a
business portfolio or the collection of businesses and products that makes up the company.
Business portfolio
The collection of businesses and products that makes up the company.
Portfolio analysis
The process by which management evaluates the products and businesses that make up a
company. The first step is the identify the key business that make up the company, called
strategic business units (SBU’s) and asses its attractiveness to discover how much support
each SBU gets.
,Growth-share matrix
A portfolio-planning method that evaluates a company’s strategic business units (SBUs) in
terms of market growth rate and relative market share. SBUs are classified as stars, cash
cows, question marks or dogs.
The BCG Growth-Share Matrix
Market
Growth
High Star
?
Rate
The company must decide
Low Cash Cow Dog how much it will invest in
each product or business
(SBU). For each SBI, it must
decide whether to build,
High Relative Low hold, harvest or divest
market
share
Stars are high-growth, high-share businesses or products. They often need heavy
investments to finance their rapid growth. Eventually the growth will slow down and
they turn into cash cows.
Cash Cows are low-growth, high share businesses or products. These established and
successful SBUs need less investment to hold their market-share. Thus they produce
a lot of cash that the company uses to pay its bills and support other SBUs that need
investment.
Question marks are low-share business units and high-growth-markets. They require
a lot of cash to hold their share. Let alone increase it. Management has to think
about which question marks it should try to build into stars and which should be
phased out.
Dogs are low-growth, low-share businesses and products. They may generate enough
to maintain themselves but do not promise to be large sources of cash.
The Growth-Share Matrix has its problems though it can be costly to implement and it may
be hard to define SBUs and measure their market share and growth. It also limits itself to
current SBUs and doesn’t offer much advice for the future.
, Product/Market expansion grid
A portfolio-planning tool for identifying company growth opportunities through market
penetration, market development, product development, or diversification.
Companies can grow by
doing a better job of
penetrating current
markets with current Product/Market Expansion Grid
products.
Existing New
Products Products
Existing Market penetration Product Through diversification,
markets development companies can grow by
starting up or buying
businesses outside their
New current product/markets
Market Diversification
Markets development
Market penetration
A strategy for company growth by increasing sales of current products to current market
segments without changing the product. For instance improvements in the marketing mix,
adjustment to product design, pricing and distribution efforts.
Market development
A strategy for company growth by identifying and developing new market segments for
current company products. For instance demographic markets targeting woman if, your
main market segment is male consumers. Or exploring geographic markets, by expanding
abroad.
Product development
A strategy for company growth by offering modified or new products to current market
segments. For example apple introduced the iPhone to an already large current market. Still
they achieved incredible results with the improvements they made the ‘the phone’.
Diversification
A strategy for company growth through starting up or acquiring businesses outside the
company’s current products and markets. For example Under Armour could start selling
fitness equipment. Companies need to watch out for overextending their portfolio.
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