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MARKETING MANAGEMENT PHILIP KOLTER QUESTIONS + ANSWERS AND EXAMPLES FOR FINAL TESTPART 1 CHAPTER 1 CHAPTER 2 CHAPTER 3ContentsChapter 13So why is Marketing crucial for business success?3What is the scope of marketing?4What are some fundamental marketing concepts?6How has marketing management changed in recent years?8What are the task necessary for successful marketing management?94 P Explanation12Holistic marketing15Internal marketing174P Examples18Chapter 220How does marketing affect customer value?20How is strategic planning carried out at different levels of the organization?21Value chain23What does a marketing plan include?26Characteristics of Strategic Business Unit27Value chain example33Core business process:37Strategic business units38Mission Statement39Components of a Corporate Strategic Plan40Chapter 345What are the components of a modern marketing information system?45What are useful internal records for such a system?46What are some influential macroeconomic developments?47What makes up a marketing intelligence system?48Chapter 1049How can a firm develop and establish an effective positioning in the market?49How do marketers identify and analyze competition?51How are brands successfully differentiated?52Apple example52Differnent big and small53Emotional branding55Nike Brand Strategy57Different strategy57Chapter 1559What is a marketing channel system and value network?59What work do marketing channels perform?59How should channels be designed?60What decisions do companies face in managing their channels?60How should companies integrate channels and manage channel conflict?62Roles of marketing channels63Types of Marketing Channels65Horizontal marketing system66Vertical Marketing System68Horizontal VS Vertical Marketing70Chapter 1770What is the role of marketing communications?70What are the major steps in developing effective communications?71Marketing communications mix73Advertising Nike Products76Marketing communication effects77Developing effective communications78What is an integrated marketing communications program?80Toyota81 Chapter 1 So why is Marketing crucial for business success?It informs the audience of the products and services that is being offered by a business. It provides the value of the core product, the usage and additional details that customers usually want to know. This helps with brand awareness as it relates to informative advertising.It helps you understand your customer: During the first stages of the product life cycle, everyone has to do market research where market segmentation is done based on psychographics, behaviour, geographic or demographics. Once the segments have been identified, the target market is then assessed and the product is positioned accordingly.It boost Sales by utilising different ways to promote the product or service that is being offered. This can be done through various mediums which include, word of mouth, social media, direct marketing, press, radio, TV, point of sales, promotions, company website and other channels that assist with attracting and persuading persons to purchase the product or service offered. Through the use of a combination of these mediums, there can be increased sales which positively impacts profitability.

MARKETING MANAGEMENT PHILIP KOLTER QUESTIONS +

ANSWERS AND EXAMPLES FOR FINAL TEST

PART 1 CHAPTER 1 / CHAPTER 2 / CHAPTER 3

Contents

Chapter 1 3

So why is Marketing crucial for business success? 3

What is the scope of marketing? 4

What are some fundamental marketing concepts? 6

How has marketing management changed in recent years? 8

What are the task necessary for successful marketing management? 9

4 P Explanation 12

Holistic marketing 15

Internal marketing 17

4P Examples 18

Chapter 2 20

How does marketing affect customer value? 20

How is strategic planning carried out at different levels of the organization? 21

Value chain 23

What does a marketing plan include? 26

Characteristics of Strategic Business Unit 27

Value chain example 33

Core business process: 37

Strategic business units 38

Mission Statement 39

Components of a Corporate Strategic Plan 40

Chapter 3 45

What are the components of a modern marketing information system? 45

What are useful internal records for such a system? 46

What are some influential macroeconomic developments? 47

What makes up a marketing intelligence system? 48

Chapter 10 49

How can a firm develop and establish an effective positioning in the market? 49

How do marketers identify and analyze competition? 51

How are brands successfully differentiated? 52

Apple example 52

Differnent big and small 53

Emotional branding 55

Nike Brand Strategy 57

Different strategy 57

Chapter 15 59

What is a marketing channel system and value network? 59

What work do marketing channels perform? 59

How should channels be designed? 60

What decisions do companies face in managing their channels? 60

How should companies integrate channels and manage channel conflict? 62

Roles of marketing channels 63

Types of Marketing Channels 65

Horizontal marketing system 66

Vertical Marketing System 68

Horizontal VS Vertical Marketing 70

Chapter 17 70

What is the role of marketing communications? 70

What are the major steps in developing effective communications? 71

Marketing communications mix 73

Advertising Nike Products 76

Marketing communication effects 77

Developing effective communications 78

What is an integrated marketing communications program? 80

Toyota 81

Chapter 1

So why is Marketing crucial for business success?

It informs the audience of the products and services that is being

offered by a business It provides the value of the core product, theusage and additional details that customers usually want to know.This helps with brand awareness as it relates to informativeadvertising

It helps you understand your customer: During the first stages of the

product life cycle, everyone has to do market research where marketsegmentation is done based on psychographics, behaviour, geographic

or demographics Once the segments have been identified, the targetmarket is then assessed and the product is positioned accordingly

It boost Sales by utilising different ways to promote the product or

service that is being offered This can be done through variousmediums which include, word of mouth, social media, directmarketing, press, radio, TV, point of sales, promotions, companywebsite and other channels that assist with attracting and persuadingpersons to purchase the product or service offered Through the use

of a combination of these mediums, there can be increased saleswhich positively impacts profitability

It Engages: Engaging your customers with relevant information

about the company and what’s new is crucial It makes them feel likethey’re in-the-know Marketing helps with this aspect, especially onsocial media, through contests and sweepstakes or even in-storeadvertising or experiential marketing

1 Why is marketing important?

2 What is the scope of marketing?

3 What are some fundamental marketing concepts?

4 How has marketing management changed in recent years?

5. What are the task necessary for successful marketing

management?

It gives you healthy competition based on pricing of products and

services amongst competitors; providing they are not a monopoly inwhich case they can set any price With competition other companiesare given an opportunity to exist on the market where they will try towin consumers through competitive pricing

It builds your brand: Brand reputation is what makes or breaks a

brand In order for your product or services to exist you should aim tohave a good reputation on the market through use of effectivemarketing mediums When your brand is affiliated with a certainstandard you will see increase sales and business expansion

What is the scope of marketing?

Scope: Marketing is a global phenomenon The scope of marketinggoes beyond satisfying the customer’s need Marketing system shouldcontribute to the societies overall wellbeing and protection ofenvironment Marketing management make possible the activities andfunctions which are involved in the distribution of goods and services.Main player, Philip Kotler, who studied marketing management indepth, explained that “Marketing management is the analysis,planning, implementation and control of programmes designed tobring about desired exchanges with target markets for the purpose ofachieving organisational objectives It depends on designing theorganisations offering in terms of the target markets needs anddesires and using effective pricing, communication and distribution toinform, motivate and service the market.” Marketing management isassociated with the developing a definite programme, after carefulanalysis and forecasting of the market situations and the finalimplementation of these plans to attain the objectives of theorganisation Today marketing management is a topic of growinginterest for all organizations Scope of Marketing are involved indifferent types of entities such as Goods, Services Experiences,Events, Persons, Places, Properties, Organizations, Information andIdeas

1 Goods:

Physical goods constitute the major part of a country’s production andmarketing effort Companies market billions of food products, andmillions of cars, refrigerators, television and machines.

2 Services:

As economies advance, a large proportion of their activities is focused

on the production of services Services include the work of airlines,hotels, car rental firms, beauticians, software programmers,management consultants, and so on Many market offerings consist of

a mix of goods and services For example, a restaurant offers bothgoods and services

3 Events:

Marketers promote events Events can be trade shows, companyanniversaries, entertainment award shows, local festivals, healthcamps, and so on For example, global sporting events such as theOlympics or Common Wealth Games are promoted aggressively toboth companies and fans

4 Experiences:

Marketers create experiences by offering a mix of both goods andservices A product is promoted not only by communicating featuresbut also by giving unique and interesting experiences to customers.For example, Maruti Sx4 comes with Bluetooth technology to ensureconnectivity while driving, similarly residential townships offerlandscaped gardens and gaming zones

5 Persons:

Due to a rise in testimonial advertising, celebrity marketing hasbecome a business All popular personalities such as film stars, TVartists, and sportspersons have agents and personal managers Theyalso tie up with PR agencies for better marketing of oneself

6 Places:

Cities, states, regions, and countries compete to attract tourists.Today, states and countries are also marketing places to factories,companies, new residents, real estate agents, banks and businessassociations Place marketers are largely real estate agents andbuilders They are using mega events and exhibitions to marketplaces The tourism ministry is also aggressively promoting touristspots locally and globally.

7 Properties:

Properties can be categorized as real properties or financialproperties Real property is the ownership of real estates, whereasfinancial property relates to stocks and bonds Properties are boughtand sold through marketing

Marketing enhances the need of ownership and creates possessionutility With improving income levels in the economy, people areseeking better ways of saving money Financial and real propertymarketing need to build trust and confidence at higher levels

8 Organizations:

Organizations actively work to build image in the minds of their targetpublic The PR department plays an active role in marketing anorganization’s image Marketers of the services need to build thecorporate image, as exchange of services does not result in the owner-ship of anything The organization’s goodwill promotes trust andreliability The organization’s image also helps the companies in thesmooth introduction of new products

9 Information:

Information can be produced and marketed as a product Educationalinstitutions, encyclopedias, non-fiction books, specialized magazinesand newspapers market information The production, packaging, anddistribution of information is a major industry Media revolution andincreased literacy levels have widened the scope of informationmarketing

10 Idea:

Every market offering includes a basic idea Products and services areused as platforms for delivering some idea or benefit Socialmarketers widely promote ideas Maruti Udyog Limited promoted safedriving habits, need to wear seat belts, need to prohibit children fromsitting near the driver’s seat, and so on

What are some fundamental marketing concepts?

Needs, wants and demands: A need is a state of felt deprivation or

feeling of being deprived of something Human need is the most basicconcept underlying the marketing Need is a part of human nature.There are many kinds of needs such as physical needs, social needs,spiritual needs, etc Needs are shaped up by culture, personality andreligion and they become wants when the need indicate an object tofulfill that need Wants depend upon the internal as well as externalfactors Want is defined in terms of an object that will define the need

If thirst is need, water, a cola drink, or a fruit juice may be the want

If hunger is need, pizza, burger, bread, or chapatti is a want Theremay be more than one object that may fulfill a need and this is called

a want-list People have choices to choose a desired object or servicefrom the want-list to fulfill a particular need However due to limitedresources, people want best value of their money When a want isbacked by buying power, it becomes a demand So if no buying power,

no demand Money is required to create as well as fulfill a demand.This is the most fundamental concept of marketing The marketer has

to know the potential want list of his target market and make themavailable the best value for their money

Target markets, positioning, and segmentation: A marketer can

rarely satisfy everyone in a market Not everyone likes the samecereal, hotel room, restaurant, automobile, college, or movie.Therefore, marketers start by dividing up the market into segments.They identify and profile distinct groups of buyers who might prefer orrequire varying product and services mixes by examiningdemographic, psychographic, and behavioral differences among

buyers The marketer then decides which segments present thegreatest opportunity-which are its target markets For each chosentarget market, the firm develops a market offering The offering ispositioned in the minds of the target buyers as delivering somecentral benefit(s) For example, Volvo develops its cars for buyers towhom automobile Safety is a major concern Volvo, therefore,positions its car as the safest a customer can buy Companies do bestwhen they choose their target market(s) carefully and preparetailored marketing programs.

Offerings and brands: Companies address needs by putting forth a

value proposition, a set of benefits they offer to customers to satisfytheir needs The intangible value proposition is made physical by anoffering, which can be a combination of products, services in

A brand is an offering from a known source A brand name such asmcdonald’s carries many associations in the minds of people:hamburgers, fun, children, fast food, convenience, and golden arches.These associations make up the brand image All companies strive tobuild brand strength-that is, a strong, favorable, and unique brandimage

Value and satisfaction: The offering will be successful if it delivers

value and satisfaction to the target buyer The buyer chooses betweendifferent offerings on the basis of which is perceived to deliver themost value Value reflects the perceived tangible and intangiblebenefits and costs to customers Value can be seen as primarily acombination of quality, service and price (qsp), called the “customervalue triad” value increases with quality and service and decreaseswith price, although other factors can also play an important role.Value is a central marketing concept Marketing can be seen as theidentification, creation, communication, delivery, and monitoring ofcustomer value Satisfaction reflects a person’s comparativejudgments resulting from a product’s perceived performance (or out-come) in relation to his or her expectations If the performance falls

short of expectations, the customer is dissatisfied and disappointed Ifthe performance matches the expectations, the customer is satisfied.

If the performance exceeds expectations, the customer is highlysatisfied or delighted

Customer value is a guiding principle The customer may rank theproducts as per his / her estimate of a products’ capability to satisfy aneed The price attached to the product may also affect this ranking.Ultimately, the customer chooses a product, which gives him / herbest value of his / her money

Short form

Target Markets, Positioning, and Segmentation

Marketers start by dividing the market into segments Afteridentifying market segments, the marketer decides which present thegreatest opportunities - which are its target markets For each, thefirm develops a market offering for which it positions in the minds ofthe target buyer as delivering some central benefit(s)

Offerings and Brands

Companies address customer need by putting forth a VALUEPROPOSITION, a set of benefits that satisfy those needs

The intangible value proposition is made physical by an OFFERING,which can be a combination of products, services, information, andexperiences

A BRAND is and offer from a known source

Value and Satisfaction

Customer Value Triad (Quality, Service, and Price)

- Value perceptions increase with quality and service but decreasewith price

- Satisfaction reflects a person's judgement of a product's perceivedperformance in relation to expectations

How has marketing management changed in recent years? Major Societal Forces

- Network information Technologies

New Company Capabilities

• Marketers can use the Internet as a powerful information and saleschannel

• Marketers can collect fuller and richer information about markets,customers, prospects, and competitors

• Marketers can tap into social media to amplify their brand message

• Marketers can facilitate and speed external communication amongcustomers

• Marketers can send ads, coupons, samples, and information tocustomers who have requested them or given the company permission

to send them

• Marketers can reach consumers on the move with mobile marketing

• Companies can make and sell individually differentiated goods

• Companies can improve purchasing, recruiting, training, andinternal and external communications.

• Companies can facilitate and speed up internal communicationamong their employees by using the Internet as a private intranet

• Companies can improve their cost efficiency by skillful use of theInternet

What are the task necessary for successful marketing management?

In marketing management and marketing leadership these are manytasks that will make you a success, but here’s a few to do to get you

on the right track Successful marketers and marketing leaders will:

Develop a market strategy and plan This is your first task Here

you need to identify the organizations potential long run opportunitieswith consideration of their market experience and core competencies

Capture Market Insights Marketers must take the necessary steps

to understand what is happening both on the inside and outside theorganization This knowledge is acquired by monitoring the marketingenvironment and conducting extensive market research in order toassess buyer needs and wants as well as both the actual and potentialmarket size for your product and/or service

Connect with customers Connecting with customers is a vey big

aid in marketing success With that said a successful marketer mustdevelop a way to create the best value with their product and/orservice for their target market They must also develop and maintainstrong, profitable, and long term relationships with consumers

Build a strong brand A marketer must know and understand how

customers and potential customers perceive their brand Once theyunderstand the strengths and weakness, the positive and negativeperceptions of their brand they then must develop and communicatethe appropriate positioning and deal with their competitorsaccordingly

Shape your marketing offer Your marketing plan is centered

around your product So, when shaping your offer to present tocustomers and potential markets consider not only your product, butyour product quality, design, features, and overall packaging thenprice and offer accordingly

Deliver value A successful marketer delivers value to the actual andpotential market by identifying, recruiting, and linking with retailers,wholesalers, and other marketing channels

Create long term growth A successful marketer creates long term

growth by staying abreast and taking into account ever changingglobal opportunities and challenges as well They also create longterm growth by not only developing a marketing plan, butimplementing it as well

Communicate value A marketer must be successful in

communicating the value that their offer holds This is achievedthrough an integrated marketing communication plan that maximizesexposure such as through sales promotions, direct marketing, andadvertising

Relationship Marketing– Relationship marketing focuses on

building a strong and long-lasting relationship with all who candirectly or indirectly add to the success of an organization The majorparties in business can be its shareholders, employees, channelpartners, customers and financial institutions Thus, relationshipmarketing witnesses a strong bond between these parties byunderstanding their needs, desires and goals

This is the most essential character of holistic marketing that results

in a “marketing network” that shows how well all the stakeholdershave created mutually profitable business relationships Thismarketing network will then decide the position of your business inthe market; stronger the network higher will be its position in themarket

Integrated Marketing– Integrated marketing means how well the 4

P’s of the marketing mix (product, price, place, promotion) are synced

to deliver the efficient message to the prospective customers What soever communication tool viz Television, radio, public relations, printadvertising, m-commerce, email, etc Is chosen by the marketer hemust ensure that every tool contributes its maximum in increasing theefficiency of the message.Integrated marketing, an importantcharacter of holistic marketing must ensure that each communicationtool must give a real and authentic information to the customer

Internal Marketing– Internal marketing means hiring, training,

motivating and inculcating business values in able employees who canserve customers well.This approach is based on a generalunderstanding that if employees do not have full information aboutthe product then how can we expect them to convince the customers

to purchase it.Thus, internal marketing is an important holisticmarketing trait that is prevalent at all the levels of the organization

It enables to know the understanding level of the product among theemployees and thereby imparting the necessary training to meet theexpected results Also, sometimes an employee do not feel good abouthis day to day work or is not satisfied with the work Then the samecan be found out through this approach, and some level of motivationand training can be given to overcome this situation

Performance Marketing– Performance marketing focuses on the

returns to the business from the marketing activities undertaken aswell as the effects of the same on the society as a whole The marketerhas to give answers to the top authority for the amount spent onmarketing activities along with its effects on business

Also, every business has some responsibility towards the society interms of legal, ethical and social context Being a crucial holisticmarketing trait, every marketer must ensure that activitiesundertaken by him to promote the product does not harm thesentiments of customers and should be real in every sense

All the components of holistic marketing show that business works as

a single unit wherein all the functional departments work togethertowards the accomplishment of organizational goal i.e Increasingsales

4 P

Let’s take a closer look at the basic P’s of marketing and particularly

at how they might affect what you do in business

§ Product

Marketers identify a consumer need and then provide the product orservice to fill that need The marketer’s job is to pinpoint andunderstand existing needs, expand upon them, and identify new ones.For example, because there are more singles and small families thesedays than in years past, marketers might see a need for products to besold in smaller quantities and offered in smaller packages

How can this impact other professionals in the business/marketingprocess? Let’s say your company has developed a new product thatgenerates enormous consumer demand Your marketing departmentmay ask you to find a way to speed up the workflow in order to crankout more products faster A year after the product is introduced,however, the market might be flooded with cheap imitations Sinceone marketing strategy is to keep products price-competitive, amarketer may then ask you to find a way to make the product lessexpensively

This relationship works both ways There may be production andindustrial engineers who may see a way to change the work processthat would create additional options for consumers Those engineerswill also be instrumental in design and development of products forwhich human factors and ergonomics are important considerations.Maybe there’s room to add another product line For instance, thatproduct X is still blue but new product Y is red You can suggest this

to your marketing department; it, in turn, would do research to gaugepotential consumer demand for the new line

§ Price

Ideally, a marketer wants to be proactive in setting price rather thansimply react to the marketplace To that end, the marketer researchesthe market and competition and plots possible price points, lookingfor gaps that indicate opportunities When introducing a new product,the marketer needs to be sure that the price is competitive with that

of similar products or, if the price is higher, that the consumersperceive they’re getting more value for their money Perceived valuealso varies by segment Two different segments may perceive differentvalue in the same product or service which presents an opportunityfor price variation with the same product or service

Various other technical professionals can have an important impact onmarketers’ pricing decisions Again, you may be asked to determine ifproductivity can be enhanced so that the product can bemanufactured and then sold—for a lower price

§ Place or distribution

What good is a product if you can’t get it to people who want topurchase it? When marketers tackle this issue, they try to figure outwhat the optimum distribution channels would be For example,should the company sell the product to distributors who thenwholesale it to retailers or should the company have its own directsales force?

Marketers also look at where the product is placed geographically Is

it sold locally, regionally, nationally, and internationally? Will theproduct be sold only in high-end stores or strictly to discounters?Does the product serve a niche market? The answers to all of thesequestions also help shape how a product can be distributed in the bestway

Such distribution questions are potentially of great significance tomany professionals, including industrial and other types of engineers

in a company For instance, whether a product will be marketedregionally or internationally can have enormous implications for

package design as well as obvious areas of the supply chain: logistics,transportation, distribution, and warehousing.

§ Promotion

Promotion encompasses the various ways marketers get the word outabout a product—most notably through sales promotions, advertising,and public relations

Sales promotions are special offers designed to entice people topurchase a product or service or make them aware of a product orservice These can include coupons, rebate offers, two-for-one deals,free samples or trial, and contests

Advertising encompasses paid messages that are intended to getpeople to notice a product This can include magazine ads, billboards,

TV and radio commercials, website ads, event sponsorships, and soforth Perhaps the most important factor in advertising success isrepetition We’re all bombarded with an enormous number of mediamessages every day, so the first few times a prospective customersees an ad, it usually barely makes a dent Seeing the ad over andover is what burns the message into people’s minds That’s why it’sgood to run ads as frequently as possible

Public relations refers to any non-paid communication designed toplant a positive image of a company or product in consumers’ minds.One way to accomplish this is by getting the company or productname in the news This is known as media relations, and it’s animportant aspect of public relations

As with price, changes in demand created by promotions can have a direct impact on the work of many other professionals.

§ Positioning

By employing market research techniques and competitive analysis,the marketer identifies how the product should be positioned in theconsumer’s mind As a luxury, high-end item? A bargain item thatclearly provides value? A fun product? A reliable service? Is there a

strong brand name that supports how the image is fixed in theconsumer’s mind? Once the marketer answers these kinds ofquestions, he or she develops, through a host of vehicles, the rightimage to establish the desired position.

This, too, can affect the work you do If an upscale image is wanted,the materials used in the product and packaging are likely to bedifferent from those used in a bargain product—a fact that could makethe workflow significantly more complex On the other hand, withyour engineering knowledge, you may be able to suggest alternativematerials that would preserve the desired image but be easier or lessexpensive to use

§ Personal Relationships

In recent years, personal relationships have come to the forefront ofmarketing programs Now even the largest companies want theircustomers to feel that they have a personal relationship with thecompany Companies do this in two ways: They tailor their products

as much as possible to individual specifications, and they measurecustomer satisfaction

The firm’s contribution can significantly impact the area of personalrelationships If the work processes the firm creates cannot meet thecustomer time frames, the relationship will be damaged If the firmdevelops manufacturing lines that cannot be tailored to fit individualcustomer needs, it will be difficult for the company to give consumersthe perception of personal commitment If salespeople promisedelivery by a certain date, but the product cannot be produced onschedule, consumers will not be happy

Services add three more “P” considerations, that of people, process,and physical evidence

§ People deliver the service.

§ The process is the method of delivering a service.

§ Physical evidence is the environment surrounding the service.

All are critical core competencies that an organization can leverage intheir service differentiation efforts.

Marketing, engineering, and many other professional activities areinterrelated and interdependent disciplines By understanding therole that marketers play in moving a good or service to consumers,others can operate more effectively, for the present and the future

Holistic marketing

The world is practising the holistic marketing concept, which is based on thedevelopment, design, and implementation of marketing programs, processes, andactivities that recognize their breadth and interdependencies The concept such is in themind of local marketers that holistic marketing is the concept that recognising everythingnowadays has greater impact in the activity of marketing and that a broad, integratedperspective is often necessary Marketing is far less effective if relationship marketing,integrated marketing, internal marketing, and performance marketing is failed to createsynergy Holistic marketing depends on these four components and their coaction is thesource of success

Moreover, the set of tasks necessary for successful marketing management includesdeveloping marketing strategies and plans, capturing marketing insights, connecting withcustomers, building strong brands, creating, delivering, and communicating value, andcreating long-term growth

Marketing and its management is the art and science of choosing target markets andgetting, keeping, and growing customers through creating, delivering, andcommunicating superior customer value

Force fitting marketing is no more viable option Marketing prey is used to be an art butnow it is unethical and in many countries, it is termed as an offence Today’s ourmarketplace like anywhere else is fundamentally different as a result of major societalforces that have resulted in many new consumer and company capabilities in our country

In particular, technology, globalisation, and social responsibility have created newopportunities and challenges for the local and global companies and significantlychanged marketing management It is a high time for companies in Pakistan to seek theright balance of tried-and-true methods with breakthrough new approaches to achievemarketing excellence

The new realties in marketing massive amounts of information and data about almosteverything are now available to consumers and marketers The old credo “information ispower” is giving way to the new idea that “sharing information is power.” Eventraditional marketing activities are profoundly affected by technology.

Marketing is spreading as world is condensing The world has become a smaller place.Globalization has made countries increasingly multicultural and changes innovation andproduct development as companies take ideas and lessons from one country and applythem to another

In this way, in the above approach, a business can get the exact product at an exact pricewith the exact benefits Alongside this, a business can get the exact individuals who willadvertise the product in the exact way If a business does all these things, then it can becertain to get the right consumer at its doorstep This is the complete embodiment ofholistic marketing concept

→ Some key ideas which are essential in Holistic marketing:

Marketing communications is to propel the exact message to the target group and thiswill increase assurance in the consumer for your business thus lifting the brand image.Internal marketing is commercializing amid all the sections in a business

Relationship marketing is constructing a superior association with your consumers, insideand end consumers are advantageous for holistic marketing

Performance marketing is driving the deals and income development of an associationcomprehensively by diminishing expenses and expanding deals

Integrated marketing is where products, administrations and marketing work as one,towards the development of the organization

→ Example of Holistic Marketing Concept:

It is without doubt that an organization has various departments likeR&D and product development, sales and marketing, accounting andfinance, and lastly HR and operations Hence in order to have aholistic marketing concept introduced in the business then theproduct development and R&D should accept the comments and viewsfrom the sales and marketing department in order to launch the

product in the market for the customers to buy it Then again thesedepartments should work intimately with accounting plus finance toget the precise financial plan for the project Sales plus marketingshould communicate with the HR section to get the exact kind ofpersonnel that they require, and at last, admin as well as operationsshould work out a plan to hold these personnel.

In this way, in the above approach, a business can get the exactproduct at an exact price with the exact benefits Alongside this, abusiness can get the exact individuals who will advertise the product

in the exact way If a business does all these things, then it can becertain to get the right consumer at its doorstep This is the completeembodiment of holistic marketing concept

→ Some key ideas which are essential in Holistic marketing:

Marketing communications is to propel the exact message to thetarget group and this will increase assurance in the consumer for yourbusiness thus lifting the brand image

Internal marketing is commercializing amid all the sections in abusiness

Relationship marketing is constructing a superior association withyour consumers, inside and end consumers are advantageous forholistic marketing

Performance marketing is driving the deals and income development

of an association comprehensively by diminishing expenses andexpanding deals

Integrated marketing is where products, administrations andmarketing work as one, towards the development of the organization

Internal marketing

Internal marketing is the need of the hour With customers becomingvery choosy for the type of products that they buy, customerexperience with the company needs to be beyond expectations This iswhere internal marketing plays an important role Internal marketing

happens when the company treats its employees as internalcustomers, and accordingly, each department works in tandem withthe other to give products and results which are best for the company

as well as for the customer

Internal marketing ensures that all employees are working towards acommon cause which is customer satisfaction Top management plays

a crucial role in this regards Dissemination of internal marketingprinciples can be done through training right from the time of hiring

of employees Internal marketing can thrive in an organization only ifthe employees have the right attitude

Example of Internal marketing

Let us take a perfect example of internal marketing from a companylike LG LG is one of the leading consumer durable brands in themarket The company has various products which are developed andmarketed regularly However, internal marketing is mandatory for acompany like LG The marketing and sales department need to worktogether with accounting and finance as well as with logistics andsupply chain to ensure that the right product is delivered at the righttime and the right cost to the customer

When implementing internal marketing, the concentration on internalcustomers is equal to external customers Just like marketingcommunications are carried out for external customers, internaldepartmental communication needs to be carried out for internalmarketing Off course, having an organizational communicationsoftware helps in promoting internal marketing

Other things which can help in the propagation of internal marketingare building the right culture and promoting the correct values in theorganization Implementing this is not as easy as it sounds Cultureand value are two long term intangible assets which can be built withthe help of HR as well as with senior management

Along with regular cultural trainings, standard operating procedureswill help interdepartmental cooperation thereby providing means of

achieving internal marketing 2 way communication and HR initiativeslike 360 degree feedback will help develop more inter connectedactivities thereby improving morale.

The major challenge for internal marketing is the presence of theright communication mechanism Imagine a scenario whereindifferent departments need to interact to complete a project, butthere is no communication mechanism in place and neither is theinteraction being promoted by the senior managers In this case, therewill be several last minute decisions which will need to be taken, andthese decisions can fail because of the lack of co-ordination Thushaving a mechanism which promotes internal communications is mostimportant for internal marketing

Product - A product can be either a tangible good or an intangibleservice that fulfills a need or want of consumers Whether you sellcustom pallets and wood products or provide luxury accommodations,it’s imperative that you have a clear grasp of exactly what yourproduct is and what makes it unique before you can successfullymarket it

4P

Example: You sell clothes for kids ages 2–10 in North America

Price - Once a concrete understanding of the product offering isestablished we can start making some pricing decisions Pricedeterminations will impact profit margins, supply, demand andmarketing strategy Similar (in concept) products and brands mayneed to be positioned differently based on varying price points, whileprice elasticity considerations may influence Promotion and Place.Example: How does your pricing stack up with your competitors? areyour clothes expensive, average or cheap? If you set a high price youmay be price skimming, while price penetration is the opposite Forinstance, if you’re selling kids shoes at $5 you are price penetrating toget a share of the market

Promotion - We’ve got a product and a price now it’s time to promote

it Promotion looks at the many ways marketing agencies disseminaterelevant product information to consumers and differentiate aparticular product or service Promotion includes elements like:advertising, public relations, social media marketing, emailmarketing, search engine marketing, video marketing and more Eachtouch point must be supported by a well positioned brand to trulymaximize return on investment

Example: If the majority of your clients are mothers you may offerthem a discount on their birthday or around the holidays to drivemore sales

Place - Often you will hear marketers saying that marketing is aboutputting the right product, at the right price, at the right place, at theright time It’s critical then, to evaluate what the ideal locations are toconvert potential clients into actual clients Today, even in situationswhere the actual transaction doesn’t happen on the web, the initialplace potential clients are engaged and converted is online

Example: You may decide to get your clothes inside high-end storesand boutiques if the price of the clothes is high Alternatively, youmight place them at Costco if you offer very affordable clothes

 Example of coca cola

Product in the Marketing mix of Coca cola

The company has the widest portfolio in beverage industry comprising

of 3300 products Beverages are divided into diet category, 100% fruitjuices, fruit drinks, water, energy drinks, tea and coffee etc As perNielson’s data, Coca cola is the No.1 brand in sparkling beverages,juice, and retail packaged water in 2010 Coca cola has its marketpresence around 200 countries Coca cola brands in India are Fanta,Maaza, Limca, sprite, Thums up, Minute Maid, Nimbu fresh, Nestediced tea etc

Price in the Marketing mix of Coca cola

Due to the availability of wide range products, the pricing is doneaccording to the market and geographic segment Each sub-brand ofcoca cola has different pricing strategy Their pricing strategy isbased on the competitors pricing, Pepsi is the direct competitor tocoke Beverage market is said to be a oligopoly market (few sellersand large buyers), hence they form into cartel contract to ensure amutual balance in pricing between the sellers.

Place in the Marketing mix of Coca cola

Coca cola is the world’s most favorite brand and is available all overthe world The distribution system of coca cola follows the FMCGdistribution pattern The effective distribution network of coke hasalmost eroded the small and middle level players in the market InIndia they have captured even the rural market by extensivedistribution and have eroded the market share of Bovonto, Kalimarketc

Promotions in the Marketing mix of Coca cola

Coca cola adopts various advertising and promotional strategies tocreate an increased demand in the market by associating with lifestyle and behaviour and mainly targeting value based advertising Youare more likely to see a coke ad individualised for a particular festival

or in with a general positive message

Coca cola uses CSR as its marketing tool to gain emotional benefits inconsumers mind The current promotions through CSR include

“Support my school” campaign with NDTV It has many brandambassadors like Shahrukh khan, Hrithik Roshan, South Indian ActorVijay and Trisha, Ghambir, Aamir khan etc and has signed contractrecently with Imran khan

It allows price discounts and allowances to distributors and retailersand uses various types of sales promotions in order to push moreproducts into the market It employs both push strategythroughpromotions and pull strategy through advertisements and campaigns

Also Read about Marketing Mix or about the Marketing strategy ofCoca cola & the SWOT analysis of Coca cola.

Chapter 2

How does marketing affect customer value?

The marketing mix consists of the four p's product, price, promotion,and place and each P contributes to customer value To providevalue, the firm must offer a mix of products and services at pricestheir target markets will view as indicating good value Thus, firmsmake trade-offs between the first two p's, product and price, to givecustomers the best value The third P, promotion, informs customersand helps them form a positive image about the firm and its productsand services The last P, place, adds value by getting the appropriateproducts and services to customers when they want them and in thequantities they need

I understand these are general terms, but they will help you to createvalue as you understand your Customer’s need and perceptions Let

us take some examples on how to create Customer Value:

1 Giving a price that makes the Customer believe he is getting morethan he pays for the benefits he gets versus competitive offers

2 Reducing the price, or keeping the same price and givingsomething extra over competition (this could be service, betterattention, an add on to the product)

3 Making it convenient for the Customer to buy, and how he wants tobuy and pay

4 For B2B getting a proper price justification, not just a price

1 How does marketing affect customer value?

2 How is strategic planning carried out at different levels of the

organization?

3. What does a marketing plan include?

5 For dealers, the feeling the company will grow and offer newproducts for the dealers to sell These are things that the dealer maynot have an experience of, but dos Value

6 The image of the company, including the brand and the trust in thecompany or when the Customer appreciates the Values of thecompany including sustainability These create Value for theCustomer

7 Giving the Customer a product that works as it is meant to (asperceived by the Customer) and easy for him/her to understand anduse (so that no unnecessary time or energy has to be expended)

8 Making the Customer feel valued For example:

Smiling at and being attentive to a Customer creates value for him.Ignoring him/her destroys value for the Customer

Making it easy for the Customer to contact the company, and anassurance that an answer will be given when and how promised (howmany times do you have to wait to talk to someone and how often doess/he promises to call back and how often do you get a call)

Not making you repeat questions or answers, and keep relating theproblem

Receiving a call from a service person confirming his/her visit (theCustomer is not kept wondering whether the service visit will takeplace)

Not answering queries destroys Value

How is strategic planning carried out at different levels of the organization?

Strategic planning is the process of developing a plan, guideline orroadmap for a small business that, based on its mission/vision/valuesand stated goals and objectives, indicates specific strategies andtactics or actions that will be taken to achieve these goals Strategicplanning should guide the efforts of the entire organization; however,

it is not unusual for more than one strategic plan to be in place anoverall organizational plan, for instance, that drives the developmentand implementation of other related plans that might includemarketing plans, HR plans, finance plans or department-specific plan.Strategic planning has to be carried out by both middle managementand top level management It is so because middle management is intouch with entry level marketing executives which makes the middlemanagement understand the pulse of the customers Middlemanagement and top level management understand both strategicand management principle Hence strategic management has to becarried out by both middle management and top level management

What is the difference between a business plan and a strategic plan?

Answer A business plan is a formal statement of a set of businessgoals The reasons why they are attainable and the plan for reachingthose goals also contain background information about theorganisation or team in attempt to reach those goals Business plansmay also target changes in perception and branding by the customer,client , tax payer or large community when the existing businessplan is to assume a major change or when planning a new ventureLevels of planning and strategies Plans for a firm can be made atseveral different levels At the corporate level, the managementconsiders the objectives of the firm as a whole For example,Microsoft may want seek to grow by providing high quality software,hardware, and services to consumers To achieve this goal, the firmmay be willing to invest aggressively

Plans can also be made at the business unit level For example,although Microsoft is best known for its operating systems andapplications software, the firm also provides Internet access andmakes video games Different managers will have responsibilities fordifferent areas, and goals may best be made by those closest to thebusiness area being considered It is also more practical to hold

managers accountable for performance if the plan is being made at amore specific level Boeing has both commercial aircraft and defensedivisions Each is run by different managers, although there is someoverlap in technology between the two Therefore, plans are neededboth at the corporate and at the business levels.

Occasionally, plans will be made at the functional level, to allowmanagers to specialize and to increase managerial accountability.Marketing, for example, may be charged with increasing awareness ofMicrosoft game consoles to 55% of the U.S population or to increasethe number of units of Microsoft Office sold Finance may be chargedwith raising a given amount of capital at a given cost Manufacturingmay be charged with decreasing production costs by 5%

The firm needs to identify the business it is in Here, a balance must

be made so that the firm’s scope is not defined too narrowly or toobroadly A firm may define its goal very narrowly and then missopportunities in the market place For example, if Dell were to defineitself only as a computer company, it might miss an opportunity tobranch into pdas or Internet service Thus, they might instead definethemselves as a provider of “information solutions.” A company shouldnot define itself too broadly, however, since this may result in loss offocus For example, a manufacturer of baking soda should probablynot see itself as a manufacturer of all types of chemicals Sometimes,companies can define themselves in terms of a customer need Forexample, 3M sees itself as being in the business of making productswhose surfaces are bonded together This accounts for both Post-Itnotes and computer disks

A firm’s mission should generally include a discussion of thecustomers served (e.g., Wal-Mart and Nordstrom’s serve differentgroups), the kind of technology involved, and the markets served

Several issues are involved in selecting target customers We willconsider these in more detail within the context of segmentation, butfor now, the firm needs to consider issues such as:

 The size of various market segments;

 How well these segments are being served by existing firms;

 Changes in the market—e.g., growth of segments or change intechnology;

 How the firm should be positioned, or seen by customers Forexample, Wal-Mart positions itself as providing value in retailing,while Nordstrom’s defines itself more in terms of high levels ofcustomer service

Value chain

A value chain includes the activities that take place within a company

in order to deliver a valuable product or service to their market Eachstage of the value chain adds more value The value chain provides atool to visualize a firm's productivity by identifying the thousands ofdiscrete activities involved "The value chain provides a rigorous way

to understand the sources of buyer value that will command apremium price, and why one product or service substitutes foranother," says Porter

Value chain analysis is used by business analysts, project managers,and administrators to evaluate which activities provide the greatestopportunities to maximize profitability and achieve a competitiveadvantage It is quite common for C-level executives to face thechallenge of “how do we innovate?” Therefore, global organizationssuch as Procter & Gamble, Intuit, Shell, Nokia, Apple, and Samsunghave adopted value chain analysis to help implement winningstrategies that aid them in soaring past the competition

Primary Activities

Primary activities relate directly to the physical creation, sale,maintenance and support of a product or service They consist of thefollowing:

Inbound logistics – These are all the processes related to receiving,

storing, and distributing inputs internally Your supplier relationshipsare a key factor in creating value here

Operations – These are the transformation activities that change

inputs into outputs that are sold to customers Here, your operationalsystems create value

Outbound logistics – These activities deliver your product or service

to your customer These are things like collection, storage, anddistribution systems, and they may be internal or external to yourorganization

Marketing and sales – These are the processes you use to persuade

clients to purchase from you instead of your competitors The benefitsyou offer, and how well you communicate them, are sources of valuehere

Service – These are the activities related to maintaining the value of

your product or service to your customers, once it's been purchased.There are also four “support activity” centers that support these fiveprimary functions They are found on the model in a vertical

"umbrella" over the primary functions because these operations getdistributed throughout the entire enterprise

Support Activities

These activities support the primary functions above In our diagram,the dotted lines show that each support, or secondary, activity canplay a role in each primary activity For example, procurementsupports operations with certain activities, but it also supportsmarketing and sales with other activities

Procurement (purchasing) – This is what the organization does to

get the resources it needs to operate This includes finding vendorsand negotiating best prices

Human resource management – This is how well a company

recruits, hires, trains, motivates, rewards, and retains its workers.People are a significant source of value, so businesses can create aclear advantage with good HR practices

Technological development – These activities relate to managing

and processing information, as well as protecting a company'sknowledge base Minimizing information technology costs, stayingcurrent with technological advances, and maintaining technicalexcellence are sources of value creation

Infrastructure – These are a company's support systems, and the

functions that allow it to maintain daily operations Accounting, legal,administrative, and general management are examples of necessaryinfrastructure that businesses can use to their advantage

Companies use these primary and support activities as "buildingblocks" to create a valuable product or service

Starbucks

Primary activities

Inbound logistics: This refers to the agents of the company purchasingcoffee beans in Africa, communicating the importance of qualitystandards in the coffee beans and building strategic partnerships withsuppliers

Operations: Starbucks is currently in over 50 countries, with bothdirect stores operated by the company and licensing deals

Outbound logistics: The normal process is Starbucks selling theirproducts in store without any intermediaries Recently, there are nowretail products available in select supermarket chains

Marketing and Sales: There is no heavy investment in marketing, butspecials and tastings are common, especially when new stores open.Service: One of their main objectives is to provide superior levels ofcustomer service

Support activities

Infrastructure: This is all of the general activities that are required tokeep the stores operational, like management, finance, legal supportand government relations