Summary IBA YEAR I - Marketing Management (BT1203)
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Course
Marketing Management (BT1203)
Institution
Erasmus Universiteit Rotterdam (EUR)
Summary of all the compulsory literature of the course Marketing Management (BT1203) of the International Bachelor of Business Administration. Consist of the mandatory readings from week one: the marketing environment, week two: market research, competitive analysis, consumer behaviour, week three:...
marketing management bt1203 [rsm elective] | ibcom ba year II - term I (2020-2021) [by gycc]
MARKETING MANAGEMENT
(summary + reading notes) by gycc
compulsory literature;
multiple articles by multiple authors
WEEK ONE | THE MARKETING ENVIRONMENT
Marketing Strategy: An Overview - Harvard Business School, 1999
A strategy = a plan of action designed to achieve certain defined objectives.
Objectives = in business firms, objectives may be stated in terms as sales, volume, rate of growth,
profit percentages, market share, and return on investment (ROI) etc.
Strategies are developed at multiple levels in the organization: corporate, divisional, business unit,
and departmental. Together they are an integrated plan for the whole enterprise meaning
Corporate strategies = the sum of business unit strategies + any plans for new business initiatives
Marketing strategy = at the heart of the business plan. Businesses exist to deliver product and service
to markets. To the extent that they serve this purpose well and efficiently, they grow and profit.
Other components of a business unit strategy (e.g. finance, production, and R&D) must support the
business’s marketing mission. Similarly marketing objectives and strategies have to be formulated to
assess the firm’s core competencies and its resource limits.
ELEMENTS OF MARKETING STRATEGY
A marketing strategy (marketing mix) is composed of several interrelated elements:
1) Product/market selection (most important) = what market will we serve with what product
lines?
2) Price = what prices for individual products; how will products in the line be prices relative
to each other; will we offer quantity discounts, deferred payment plans and/or rental options;
what kind of price promotions will be needed to compete effectively?
3) Distribution systems = the wholesale & retail channels through which our products and
services move to the ultimate users. May include business entities as the company’s
salesforce, independent distributors, agents, and franchised outlets
4) Market communications = includes components as print & tv marketing, direct mail, trade
shows, point-of-sale merchandise displays, sampling and telemarketing. Depending on the
nature of the business and its markets, the marketing strategy may include other elements.
5) Product service = an example: a company whose products need repair and maintenance must
have programs for product service. These are often business units themselves with extensive
repair shops, service personnel, and spare parts inventories.
6) Technical service = for some businesses, this is an important element in helping to support
customers’ manufacturing and product development operations.
7) Plant location = in many enterprises, this is a critical strategic component. If the product
can be economically shipped only within a limited distance of the plant and/or if the product
is customized to buyers’ specifications, plant location may effectively define the geographic
market boundaries. Example. Metal containers, corrugated boxes or government regulations
requires local manufacturing, plant location becomes country-market select decisions.
8) Brand strategy = consumer goods often have to choose between using a family brand name
(such as Kraft for cheeses, jams and jellies) or a product-specific name (such as Lite)
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, marketing management bt1203 [rsm elective] | ibcom ba year II - term I (2020-2021) [by gycc]
9) Marketing mix = The combination of these several factors and others, and the relative
emphasis on each in a marketing program. It varies considerably from one product/market to
another and over different stages of marketing growth. Some firms may rely more heavily on
a certain element while another firm relies more on another element. It also varies between
competitors selling the same products in the same market.
Example. consumer packaged goods manufacturers (as Kellog) advertise extensively to move their
products through distribution channels and off supermarket shelves while retailers (as Wal-Mart) sell
the same products at much lower prices under their own private brand labels with little/no advertising.
The 4 Primary elements in any marketing mix:
1. Product/market selection
2. Pricing
3. Distribution
4. Market communications
1. PRODUCT / MARKET SELECTION
= the most important choice made by any organization; what markets will it serve with what products.
Product/market selection decisions commit the firm to particular customers groups, specific fields of
technology & a certain competitive environment.
Product = the total package of attributes the customer obtains when making a purchase
Product benefits might include:
+ what the product does
+manufacturer & retailer warranties
+ repair service
+ technical assistance,
+ the value of the brand name; implied product quality & reliability
+ assurance of ongoing product availability
+ development of personal relationships between buyer and seller
Example. a watch = instrument for telling time, piece of jewelry, serves as status symbol (as Rolex).
Other meanings could also be convenience and/or the pleasure of the shopping experience.
Any list of product attributes also includes negatives!
Examples: cars repair frequency and cost may be negative factors for a family on a vacation tour; take
risks on the tour provider’s performance to the expectations in case of advanced billing & weather.
● Bottom line: product meaning must be defined in terms of full range of benefits, risks and
disadvantages.
● Seller’s opinion on a product is irrelevant; what counts for strategic planning purposes =
the prospective purchaser’s opinion and the value he or she places on the seller’s products vs
its competitive offering.
NOTE: Distinguishing perceived value and potential value
Perceived value = the customer’s existing perception of the product
Potential value = what buyer can be educated to recognize. This is accomplished through market
communications.
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, marketing management bt1203 [rsm elective] | ibcom ba year II - term I (2020-2021) [by gycc]
Market = a pocket of latent demand
■ A wide range of exogenous factors new market opportunities;
■ major source= new technology in fields as electronics, aerospace, and medical sciences.
■ Population growth & increases in national and personal incomes also create new markets and
expand existing ones.
■ Societal needs as crime prevention, health care, and population control “…”
■ Shifts in culture, style & public tastes in food, clothing, entertainment, the arts & travel lead
to new market opportunities “…”
MARKET SEGMENTATION
Markets can be described in terms of segments; a market segment = a set of potential customers are
similar in the way they perceive and value the product, in their buying behavior, and product usage.
1st step in product/market selection: defining relevant market segments; creates a framework
for developing market strategy.
Markets may be segmented along several dimensions:
Demography = demographic segmentation depends on factors such as family income, age, sex,
ethnicity, and educational background as explanatory variables for differences in taste, buying
behavior, and consumption patterns
Example. Population Services Inc. used this four-quadrant matrix to address distinctions among
segments.
■ In the industrial market: the size of the enterprise, its nature (e.g. nonprofit) and type of
industry (e.g., services) are demographic variables – explain patterns of buying behavior.
Geography = Geographic segmentation frameworks are useful in both consumer and industrial
markets. Different areas of the country and different parts of the world may vary significantly in
terms of market potential, competitive intensity, product-form preferences, and government trade
regulations
■ Another geographic variable=economical shipping distance. High weight- or bulk-to-value
products, plant location, will define the market area. Similarly, the desire of the customer to
be close to the supplier, as in the case of customized products and services may effectively
limit the market geographically.
■ However, with the increasing globalization of markets, geographic segmentation variables
have declined somewhat in importance vs. others. Product uses and preferences and buying
behavior across the world are becoming more common.
Psychographic variables = So-called psychographic typologies try to segment markets according to
lifestyles and attitudes toward self, work, home, family, and peer-group identity. Each generation has
their needs for products and services, political persuasions, and residential preferences thus: consist of
a distinct and very high-potential market segment
■ In the industrial sectors this is comparable to corporate culture; some enterprises take more
risks than others, have more to gain as an early adopter of new products and technologies,
some focus on price factors and others focus on developing long-term relations with suppliers
based on technical and service contributions.
Product application and use = the way industrial purchasers use the product and how it fits into
their process and systems may provide the basis for market segmentation. For example, technologies
for manufacturing for different fabrics vary from one another.
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