MANAGING THE MARKETING

PROCESS
Managing the Marketing Process is intended to present the basic
content of marketing in a concise and informative manner. In
addition to presenting basic marketing information, the course
attempts to develop in the reader an understanding of "the
marketing management concept

Chapter 1 Introduction to Marketing

Marketing Defined
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Marketing has been defined as a bridge

between production and consumptionencompassing all those activities
performed in order to get goods and
services into the hands of consumers.
Marketers with a stronger consumer
orientation and a broader management
approach place emphasis, in defining
marketing, on its role in directing the flow
of goods and services to the consumer

Basic Economic Functions

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Marketing is a regulating force, allocating

scarce resources and influencing the
distribution and size of income for both
individuals and firms. Basically, marketing
is closely related to the broader field of
economics. Marketing is viewed by
economists as creating time, place and
possession utilities - that is having goods
when and where they are wanted, and then
completing the transfer to provide
possession utility

Chapter 2 - Marketing Research

Market Research
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Marketing research includes various

subsidiary types of research, the most
important being

(1) product research

(2) market analysis
(3) sales research
(4) consumer research
(5)advertising research

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Sources of market information:

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Primary data

Surveys
Observation
Field experiments
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Secondary data
internal company records,

trade, professional, and

business associations; university research bureaus;
libraries; and consulting, advertising, and other firms.

Chapter 3 - The Consumer and the Market

A Market Defined
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a market implies a demand for a

product or service and the existence of
three factors:

People with needs

Purchasing power
Buying behavior reflects the manner in
which consumers express their wants,
needs, and desires

segments
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Every general market consists of a

series of smaller, ever increasingly
homogeneous submarkets called
segments

Chapter 4 - Marketing Costs

Versus Marketing Strategies

Economies of Scale
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The myth of volume. Marketers tend to have

a built-in bias toward increasing sales
volume at all costs

Trading Up and Trading Down

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Introduction of more expensive products than

the original line is trading up. Introduction of
cheaper products than the original line is
trading down.
Trading up. When trading up, the biggest hurdle
to overcome is the gaining of acceptance for a
higher-priced product identified with a low-priceline image
Trading down. When trading down, sales of the
new product often are not great enough to offset
reduced sales of the original higher-priced line

Cost-Profit Decisions
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Sunk costs. A sunk cost is past investment of

money in an enterprise. The primary example of
a sunk cost is depreciation expense, which is
merely an allocation of the original cost of an
asset (less estimated salvage value) over its
useful life
Opportunity cost
This concept implies that the real cost of
committing your resources to any one course of
action is not only their actual value but all other
possible alternatives forgone.

Chapter 5 - The Consumer as a Variable

Response to Stimuli
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Basically, the conclusion is this: Stimuli, be it

price changes or other factors, merely elicit
responses or present an occasion for responses.
It does not determine responses.
The consumer is viewed as being in the position
of an intervening variable between any given
stimuli, and any particular responses. Most
habits, attitudes, and motives are learned, with
varying degrees of alterability ranging from
permanency to complete flexibility.

Identifying Group Behavior

Patterns
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Formal groups
Informal groups
Social classes

Formal vs. Informal

Formal
Families
Business units
Football teams
Church units

Informal
Fathers, mothers, teen-agers
Executives, secretaries
Athletes, fullbacks, coaches
Pastors, churchgoers

Chapter 6 - Consumer Motivation

Maslow Model of Needs

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Physiological needs.
Need for safety.
Need for belongingness or love.
Need for esteem and status.
Need for self-actualization.

Chapter 7 - Product as a Variable

Product Defined
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What consumers want is a product with a

capacity to give satisfaction. This may
include the actual product, plus
accessories, installation, instructions,
service warranties, brand identification,
and attractiveness which fulfills
psychological needs

Product Classifications
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Consumer goods versus industrial goods

Consumer goods are the goods or services
destined for the ultimate consumer. They
can be used without further processing
Industrial goods are those goods and
services which are destined to be sold
primarily for use in producing other goods or
rendering services

Other Product Classifications

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Convenience goods. These are goods from which

the probable gain from making price and quality
comparisons is thought to be small relative to the
value of the customers time and effort
Shopping goods. Shopping goods are those
products that are important enough to consumers to
make it worth there while to make comparisons on
the basis of quality, price, style, and suitability
Specialty goods. Specialty goods have real, or
believed, characteristics or brand identification.
Unsought goods. Unsought goods are those that
consumers do not yet want, or do not realize they
want

Chapter 8 - Product Planning

Reasons for product failure

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High failure rates among new products

primarily center around (1) failure to test the
product and the market, (2) the use of
unreliable tests, (3) ineffective marketing
support, (4) unexpected high costs, (5) poor
timing, and most importantly, (6) the speed
with which new ideas can be copied and
made obsolete.

Product Life Cycle

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The life cycle of most products can be

divided into four major stages: introduction of
the product, a growth stage, a maturity stage,
and a saturation and market decline stage.

Product Life Cycle

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Introduction into market. Existence of a product

being introduced for the first time must be made
known to potential consumers through heavy
promotion. Consumer education may also be
necessary if the product has new users or will alter
significantly the consumers habit patterns. The
introductory stage is therefore usually characterized
by losses due to large promotional outlays and
development expenditures.
Market growth. Enter competitors who usually try to
copy successful products. However, the innovators
profits begin to be substantial if the product is well
accepted. Depending on the nature of the product, or
ability to duplicate it, this stage may last for weeks
or years.

Product Life Cycle

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Market maturity. By this stage there are either many

competitors, or entry into the market is restricted due
to size of existing firms
Competition is intense and profits are declining, with
cost cutting a prime objective. Most automobiles,
household appliances, and television sets are in the
market maturity stage.
Market decline. In the saturation and market-decline
stage, innovators are introducing new products, and
only loyal consumers who resist change will stay on
to the bitter end. Those firms whose products are
sharply differentiated may continue to make profits,
while other firms begin to incur reduced profits or
losse

Product Life Cycle

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Shrinking life cycles. Growing competition

and technological capabilities of research
units have greatly reduced innovative
advantages. This suggests that rather than
sit back and watch your product pass
through the life cycle, it may be more
profitable to either alter it early in the cycle
and rephase it, or continually introduce a
mix of new or related items.

Chapter 9 - Product Identification and

Consumer Response

Importance of Brands
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To the consumer
Some customers derive psychic satisfaction
from the use of well-known branded products
over and above the advantages they derive from
the reliable quality and physical factors of the
brand.
To the seller
Brands also aid the seller in their advertising and
display programs. The brand is often of greater
help in demand stimulation than is the company
name or features of the produc

Importance of Packaging
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Packaging has become an important

industry. Rising costs, due in part to a shift
from emphasis on protection to a
combination of protection - promotion, find
the amount spent solely on packaging
materials approximating the total amount
spent on advertising

Chapter 10 - Pricing and Price Theory

Price, Value, and Utility

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Utility, refers to the attributes of an item

that make it possible to satisfy wants.
Value expresses the power of exchange
of an item for other goods and services
Price as an influential variable and is a
measure of both utility and value

Chapter 11 - Pricing Patterns and

Objectives

actual pricing patterns

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List Price
A price, usually published, which makes no allowance for
trade or other discounts, rebates, or commissions is
called a list price
Discount and Allowances
Quantity discounts
They can be separated into two major categories.

Cumulative discounts take into consideration total volume

purchased over a given time period.
Noncumulative discounts are expected to encourage the
buyer to order in large quantities, incurring economies for
both buyer and seller

actual pricing patterns-cont.

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Trade discounts
Seasonal discounts
Promotional allowances
Brokerage allowances

Price Techniques of Retailers

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Image development
Increasing traffic
The ABCs of team pricing
Step-up selling

Chapter 12 - Pricing and Business

Decisions

Cost-Oriented Price
Determination
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This approach resembles a cost-plus-afair-return strategy of pricing. This

means that the selling price for a product
is equal to total cost plus an amount to
cover a desired return or profit. Retailers
and wholesalers often use traditional
markups over invoice costs to determine
their selling prices

Chapter 13 - Promotional Decisions and

Demand Stimulation

Promotion as a Marketing
Variable
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The promotional mix is composed of varying

quantities of four factors: (1) advertising; (2)
personal selling; (3) special sales promotion;
and (4) publicity and public relations. One of
the decisions that marketing people must
make involves what proportions of each
factor they should choose

Chapter 14 - Advertising

Some types of advertising

objectives
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Introducing new products.

Entering a new market area.
Obtaining dealer outlets.
Building a corporate image.
Increasing sales or share of market.
Supporting other selling efforts.
Reaching customers inaccessible to
salespeople.
Educating consumers

When Advertising is Most

Effective
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When the product is on the upswing

When product differentiation is desired
When there are hidden qualities
When emotional motives dominate
When sufficient funds are available

Chapter 15 - Personal Selling and

Sales Promotion

The Selling Function

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Personal selling is the oldest and most

flexible method of selling. It usually
involves a direct, personal contact with the
buyer. It includes (1) across-the-counter
selling, (2) house-to-house selling, (3)
selling by manufacturers and wholesalers
salespeople who call upon retailers, and (4)
the selling done by technically trained
specialists who call upon industrial buyers

Sales Promotion
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Consumer promotions
Usual consumer techniques include distribution of
samples, coupons offering discounts, varying types
of contests, and product demonstrations
Dealer and distributor promotions
Trade promotions include such services as
conducting training programs for middlemens
salespeople, giving management advice, and the
installation of displays. In addition, many thousands
of dollars are awarded by manufacturers to their
distributors and retailers as prizes for sales contests.
Also, display, advertising, and buying allowances are
common promotional procedures

Chapter 16 - Sales Force Management

Managing Issues
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Avoidance techniques
Sales Meetings
Conducting Better Meetings
Setting goals and/or objectives
Routinization.
Meeting human needs
Communicating.
Follow-up evaluation

Chapter 17 - Retailing

Retailers
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Retailing can be best defined as, all

activities incident to selling goods and
services to ultimate consumers. The
activities performed consist of buying an
assortment of goods, making the goods
available to segments of the market at the
proper time and place, and advertising,
promoting, and selling these goods to
customers. The term merchandising is
often used to describe these activities

Chapter 18 - Physical Distribution and

Channel Selection: Part I

Basic Channel Choices

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The primary decision in physical distribution

and channel selection usually borders
around whether or not a firm should perform
a given marketing function itself, or have it
performed by someone else.

Chapter 19 - Physical Distribution and

Channel Selection: Part II

Nature of Industrial Goods

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For consumers goods, the traditional

channel is Manufacturer -> Wholesaler->
Retailer-> Consumer, but in industrial
goods, the traditional and most widely
used channel is directly from
manufacturer to user

Industrial goods classified

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Industrial goods are classified into six

distinctive groups: (1) raw materials, (2)
fabricating materials and parts, (3) operating
supplies, (4) installations, (5) accessory
equipment, and (6) services

Chapter 20 - The Channel Functions

What is a Channel
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Two brief descriptions of channel activity may aid in

understanding the nature of the channel function. A
channel is:
. . . a series of relationships among
firms and the final users toward
which marketing effort is directed.
. . . a combination of flows between agencies and
final users.
The key words in these statements are:
-series of relationships
-combination of flows

Chapter 21 - Marketing Services

Service Goods
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Nonowned Service Goods

This category includes all tangible goods
that are used by consumers but are not
owned by them. All rental goods ranging
from car and truck rentals to sets of china
or crystal for a wedding reception fall into
this service area
Owned Serviced Goods
Any tangible good owned by a consumer
that is worked on by someone else is an
owned service good. Ownership is the key

Overall Characteristics of
Services
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Four basic characteristics distinguish

services from goods, often referred to as
4 Is of services: intangibility,
inseparability of production and
consumption, inventory, and
inconsistency. These characteristics are
important because they pose several
unique marketing problems

Chapter 22 - International Marketing

An International Marketing Mix

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Product policy
Pricing policy
Promotion policy
Distribution policy

Chapter 23 - Marketing Information

Systems and Packages

INFORMATION NEEDS OF MARKETING

MANAGERS
Rank Main Information Needs
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Improving new product development

Improving the use of mrkt information
Measuring and managing brand equity
Market orientation and bottom line
Market segmentation and implementation
Identifying, and responding to competitors
Studying buyer behavior
Strategic new product issues

Chapter 24- Internet Marketing

Internet
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The Internet is already the most competitive

business environment we have seen.
Buy.com, Amazon.com, and thousands of
other web retailers admit to huge financial
losses. They believe it is essential to build
a strong brand name web presence right
now. However, this strategy can easily
back fire due to the incredible price wars
and lack of customer loyalty.

Internet-Loyality
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Building a loyal customer base online

requires the same steps as building a loyal
customer base in the bricks and mortar
world. Offering superior service will keep
people coming back even if you are not the
low cost leader.
On time delivery is only part of what it
means to provide superior service.
Business involves solving problems.
Companies that can effectively solve these
problems usually succeed.

End of Presentation