Chapter 1:

- Marketing is a process by which companies create value for customers and build strong
customer relationships to capture value from customers in return
-

• Needs
States of deprivation
Physical—food, clothing, warmth, safety
Social—belonging and affection
Individual—knowledge and self-expression
• Wants
Form that needs take as they are shaped by culture and individual personality
• Demands
Wants backed by buying power
• Market offerings are some combination of products, services, information, or
experiences offered to a market to satisfy a need or want
• Marketing myopia is focusing only on existing wants and losing sight of underlying
consumer needs

Exchange is the act of obtaining a desired object from someone by offering something in return
Hence marketing consists of actions taken to build and maintain desirable exchange
relationships with target audiences.
Markets are the set of actual and potential buyers of a product
Marketing management is the art and science of choosing target markets and building
profitable relationships with them
Market segmentation refers to dividing the markets into segments of customers
Target marketing refers to which segments to go after
Production concept is the idea that consumers will favor products that are available or highly
affordable Organization should therefore devote its energy to making continuous product
improvements
Selling concept is the idea that consumers will not buy enough of the firm’s products unless it
undertakes a large scale selling and promotion effort
Marketing concept is the idea that achieving organizational goals depends on knowing the
needs and wants of the target markets and delivering the desired satisfactions better than
competitors do
Societal marketing concept is the idea that a company should make good marketing decisions
by considering consumers’ wants, the company’s requirements, consumers’ long-term
interests, and society’s long-run interests

Chapter 2
Strategic planning is the process of developing and maintaining a strategic fit between the
organization’s goals and capabilities and its changing marketing opportunities

The business portfolio is the collection of businesses and products that make up the company
Portfolio analysis is a major activity in strategic planning whereby management evaluates the
products and businesses that make up the company
Product/market expansion grid is a tool for identifying company growth opportunities through
market penetration, market development, product development, or diversification
Market penetration is a growth strategy increasing sales to current market segments without
changing the product
Market development is a growth strategy that identifies and develops new market segments
for current products
Product development is a growth strategy that offers new or modified products to existing
market segments
Diversification is a growth strategy through starting up or acquiring businesses outside the
company’s current products and markets
Downsizing is the reduction of the business portfolio by eliminating products or business units
that are not profitable or that no longer fit the company’s overall strategy
Value chain is a series of departments that carry out value-creating activities to design,
produce, market, deliver, and support a firm’s products
Value delivery network is made up of the company, suppliers, distributors, and ultimately
customers who partner with each other to improve performance of the entire system
Market segmentation is the division of a market into distinct groups of buyers who have
different needs, characteristics, or behavior and who might require separate products or
marketing mixes
Market segment is a group of consumers who respond in a similar way to a given set of
marketing efforts
Market targeting is the process of evaluating each market segment’s attractiveness and
selecting one or more segments to enter
Market positioning is the arranging for a product to occupy a clear, distinctive, and desirable
place relative to competing products in the minds of the target consumer
Marketing Implementing is the process that turns marketing plans into marketing actions to
accomplish strategic marketing objectives
 Controlling is the measurement and evaluation of results and the taking of corrective
action as needed to ensure the objectives are achieved.
 Operating control
 Strategic control
 Return on marketing investment (Marketing ROI) is the net return from a marketing
investment divided by the costs of the marketing investment. Marketing ROI provides a
measurement
 of the profits generated by investments in marketing
 activities.

Chapter 3:
The marketing environment includes the actors and forces outside marketing that affect
marketing management’s ability to build and maintain successful relationships with customers
Pp lồn
Chapter 4:

Marketing information system (MIS) consists of people and procedures for:

 Assessing the information needs
 Developing needed information
 Helping decision makers use the information for customer
Internal databases are electronic collections of consumer and market information obtained
from data sources within the company network
Marketing research is the systematic design, collection, analysis, and reporting of data relevant
to a specific marketing situation facing an organization
Secondary data consists of information that already exists somewhere, having been collected
for another purpose
Primary data consists of information gathered specifically for the special research plan
Observational research involves gathering primary data by observing relevant people, actions,
and situations
Ethnographic research involves sending trained observers to watch and interact with
consumers in their natural environment
Survey research is the most widely used method and is best for descriptive information—
knowledge, attitudes, preferences, and buying behavior
 Flexible
 People can be unable or unwilling to answer
 Gives misleading or pleasing answers
 Privacy concerns
Experimental research is best for gathering causal information—cause-and-effect
relationships

Chapter 5:
Culture is the learned values, perceptions, wants, and behavior from family and other
important institutions
A subculture is a group of people within a culture with shared value systems based on common
life experiences and situations
Complex buying behavior This type of behavior is encountered when consumers are buying an
expensive, infrequently bought product. They are highly involved in the purchase process and
consumers’ research before committing to invest. Imagine buying a house or a car; these are an
example of a complex buying behavior.
Dissonance-reducing buying behavior
The consumer is highly involved in the purchase process but has difficulties determining the
differences between brands. ‘Dissonance’ can occur when the consumer worries that they will
regret their choice.

Habitual buying behavior

Habitual purchases are characterized by the fact that the consumer has very little involvement
in the product or brand category. Imagine grocery shopping: you go to the store and buy your
preferred type of bread. You are exhibiting a habitual pattern, not strong brand loyalty.

Variety-seeking behavior
In this situation, a consumer purchases a different product not because they weren’t satisfied
with the previous one, but because they seek variety. An example: when you are trying out new
shower gel scents.

Buyer decision making process

Customer satisfaction is a key to building profitable relationships with consumers—to keeping

and growing consumers and reaping their customer lifetime value
Adoption process is the mental process an individual goes through from first learning about an
innovation to final regular use.
 Stages in the process include:

Awareness Interest Evaluation Trial A

Chapter 6:
Business buyer behavior refers to the buying behavior of the organizations that buy goods and
services for use in production of other products and services that are sold, rented, or supplied
to others.
Business buying process is the process where business buyers determine which products and
services are needed to purchase, and then find, evaluate, and choose among alternative brands

Institutional markets consist of hospitals, nursing homes, and prisons that provide goods and
services to people in their care
 Characteristics
 Low budgets
 ‘Captive’ audiences
Chapter 7+8:

Market segmentation
Dividing a market into smaller segments, each with distinct needs, characteristics, or behavior
that might require separate marketing strategies or mixes.

Segmenting Consumer Markets

Geographic segmentation divides the market into different geographical units such as nations,
regions, states, counties, or cities

Demographic segmentation divides the market into groups based on variables such as age,
gender, family size, family life cycle, income, occupation, education, religion, race,
generation, and nationality

Age and life-cycle stage segmentation is the process of offering different products or using
different marketing approaches for different age and life-cycle groups

Gender segmentation divides the market based on sex (male or female)

Income segmentation divides the market into affluent, middle-income or low-income

consumers

Psychographic segmentation divides buyers into different groups based on social class,
lifestyle, or personality traits

Behavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses
of or responses to a product
 Occasions
 Benefits sought
 User status
 Usage rate
 Loyalty status

Multiple segmentation is used to identify smaller, better-defined target groups

 Measurable: The size, purchasing power, and profiles of the segments can be measured.
 Accessible: The market segments can be effectively reached and served.
 Substantial: The market segments are large or profitable enough to serve.
 Differentiable: The segments are conceptually distinguishable and respond differently to
different marketing mix elements and programs.
 If men and women respond similarly to marketing efforts for soft drinks, they do
not constitute separate segments.
 Actionable: Effective programs can be designed for attracting and serving the segments.
Selecting Target Market Segments
Target market consists of a set of buyers who share common needs or characteristics that the
company decides to serve
Evaluating Market Segments
 Segment size and growth
 Segment structural attractiveness
.
 Company objectives and resources
Target Marketing Strategies
Undifferentiated marketing targets the whole market with one offer
 Mass marketing
 Focuses on common needs rather than what’s different
Differentiated marketing targets several different market segments and designs separate offers
for each
 Goal is to achieve higher sales and stronger position
 More expensive than undifferentiated marketing
Concentrated marketing targets a small share of a large market
 Limited company resources
 Knowledge of the market
 More effective and efficient
Micromarketing is the practice of tailoring products and marketing programs to suit the
tastes of specific individuals and locations
Local marketing involves tailoring brands and promotion to the needs and wants of local
customer groups
 Cities
 Neighborhoods
 Stores

Product position is the way the product is defined by consumers on important attributes—the
place the product occupies in consumers’ minds relative to competing products

Chapter 9:
Two ways to obtain new products
Acquisition refers to the buying of a whole company, a patent, or a license to produce someone
else’s product
New product development refers to original products, product improvements, product
modifications, and new brands developed from the firm’s own research and development
Idea generation
is the systematic search for new-product ideas.Sources of new-product ideas:
-Internal
-External
Internal sources refer to the company’s own formal research and development, management
and staff, and intrapreneurial programs
External sources refer to sources outside the company such as customers, competitors,
distributors, suppliers, and outside design firms

Marketing strategy development

refers to the initial marketing strategy for introducing the product to the market
Marketing strategy statement includes:
 Description of the target market
 Value proposition
 Sales and profit goals
Commercialization is the introduction of the new product

Chapter 10:
Price is the amount of money charged for a product or service. It is the sum of all the
values that consumers give up in order to gain the benefits of having or using a product
or service.
Price is the only element in the marketing mix that produces revenue; all other elements
represent costs

Customer Value-Based Pricing

Good-value pricing offers the right combination of quality and good service at a fair
price
Everyday low pricing (EDLP): charging a constant everyday low price with few or no
temporary price discounts
High-low pricing charging higher prices on an everyday basis but running frequent
promotions to lower prices temporarily on selected items
 Value-added pricing differentiates your products by adding features or services that
your competitors don't have and that customers will pay more for.
The goal: to make customers loyal because you're offering services they can't find in
other places.

Value-based pricing is a strategy of setting prices primarily based on a consumer's

perceived value of a product or service. Value pricing is customer-focused pricing, meaning
companies base their pricing on how much the customer believes a product is worth.>>
Value-based pricing is different than "cost-plus" pricing, which factors the costs of production
into the pricing calculation. Companies that offer unique or highly valuable features or services
are better positioned to take advantage of the value pricing model than companies which
chiefly sell commoditized items.
Cost-Based Pricing: Cost-based pricing: setting prices based on the costs for producing,
distributing, and selling the product plus a fair rate of return for effort and risk
Cost-based pricing adds a standard markup to the cost of the product
Competition-based pricing
Setting prices based on competitors’ strategies, costs, prices, and market offerings.
Consumers will base their judgments of a product’s value on the prices that competitors charge
for similar products

Price elasticity of demand illustrates the response of demand to a change in price

Inelastic demand occurs when demand hardly changes when there is a small change in price

Elastic demand occurs when demand changes greatly for a small change in price

The marketing mix consists of: Product, Promotion, Place, Price

Chapter 18:
 Competitive advantages require delivering more value and
satisfaction to target consumers than competitors do
 Competitive marketing strategies are how companies analyze
their competitors and develop value-based strategies for
profitable customer relationships
 Competitor analysis is the process of identifying, assessing, and
selecting key competitors
 Competitor’s objectives Competitor’s strategies

 Profitability  Strategic group

 Market share growth offers the
 Cash flow strongest
 Technological
leadership competition
 Service leadership

A strategic group is a group of firms in an industry following the same

or a similar strategy in a given target market. For example, in the
major appliance industry, General Electric, and Whirlpool belong to
the same strategic group. Each produces a full line of medium-price
appliances supported by good service. In contrast, Sub-Zero and
Viking belong to a different strategic group. They produce a narrower
line of higher-quality appliances, offer a higher level of service, and
charge a premium price.

Customer value analysis determines the benefits that target

customers’ value and how customers rate the relative value of various
competitors’ offers
 Selecting Competitors to Attack and Avoid
Weak versus Strong Competitors
 Most companies prefer to compete against weak
competitors. This requires fewer resources and less time.
But in the process, the firm may gain little. You could argue
that the firm also should compete with strong competitors
in order to sharpen its abilities. Moreover, even strong
competitors have some weaknesses, and succeeding
against them often provides greater returns
Good versus Bad Competitors
 Good competitors play by the rules of the industry. Bad
competitors, in contrast, break the rules. They try to buy
share rather than earn it, take large risks, and play by their
own rules.
Competitive to marketing stragegy
 Entrepreneurial marketing involves visualizing an opportunity
and constructing and implementing flexible strategies
 Formulated marketing involves developing formal marketing
strategies and following them closely
 Intrepreneurial marketing involves the attempt to reestablish an
internal entrepreneurial spirit and refresh marketing strategies
and approaches

Basic competitve stragegy

Overall cost leadership strategy:
a company achieves the lowest production and distribution costs
which allows it to lower its prices and gain market share
Differentiation strategy is when a company concentrates on creating a
highly differentiated product line and marketing program so it comes
across as an industry class leader
Focus strategy is when a company focuses its effort on serving few
market segments well rather than going after the whole market
Operational excellence refers to a company providing value by leading
its industry in price and convenience by reducing costs and creating a
lean and efficient value delivery system

Product leadership refers to a company providing superior value by

offering a continuous stream of leading-edge products or services.
Product leaders are open to new ideas and solutions and bring them
quickly to the

Customer intimacy refers to a company providing superior value by

segmenting markets and tailoring products or services to match the
needs of the targeted customers
Market leader is the firm with the largest market share and leads the
market price changes, product innovations, distribution coverage, and
promotion spending
Market challengers are firms fighting to increase market share
Market followers are firms that want to hold onto their market share
Market nichers are firms that serve small market segments not being
pursued by other firms
Companies need to continuously adapt strategies to changes in the
competitive environment
 Competitor-centered company spends most of its time
tracking competitor’s moves and market shares and trying
to find ways to counter them
Advantage is that the company is a fighter
Disadvantage is that the company is reactive

 Customer-centered company spends most of its time
focusing on customer developments in designing strategies
 Provides a better position than competitor-centered
company to identify opportunities and build customer
relationships

 Market-centered company spends most of its time focusing
on both competitor and customer developments in
designing strategies