MGT Merketing Ch01 To Ch07 PDF

Marketing Management
Chapter One
Strategic Planning and the

Process
Kao Phirun: MBA Marketing

Class Introduction
• Instructor: Kao Phirun

– Education:
• MBA Marketing, Australia (2000-2002)
– Work Experience:
• 15 years in Marketing/Sales/Advertising
(1995–Present)
• Student:
– Name …
– Current work …
– Major in …
2
A Warm Up Test
• Using two products you have used, they are

in different category, explain one by one:
– Why you chose that product (motivators)
– Other brands within that product category
– The type of advertising/marketing used
– Whether you might change brands, why?
3
The Marketing Concept
• The marketing concept is the philosophy

that firms should analyze the needs of their
customers and then make decisions to
satisfy those needs better than the
competition.
• The ultimate purpose of the marketing

concept is to help organisations achieve
their objectives.
• So, what is marketing?
4
What Is Marketing?
• Each of us knows something about

marketing because it has been a part of our
life since we had our fist dollar to spend.
• What does the term ‘marketing’ mean to

you?
– Jot down your thoughts and think of some
examples of marketing that you have come
across today?
5
What Is Marketing?
• “an organisational function and a set of

processes for creating, communicating,
and delivering value to customers and for
managing customer relationships in ways
that benefit the organisation and its
stakeholders.”
- The American Marketing Association
• It means – marketing is a business

philosophy based on the concept of
satisfying customer needs
6
Major Types of Marketing
Type Description Example
Goods Marketing designed to create exchange for Strategies to sell computers

tangible products
Service Marketing designed to create exchanges for Strategies to sell insurance

intangible products
Person Marketing designed to create favourable actions Strategies to elect a
toward persons political candidate
Place Marketing designed to attract people to places Strategies to get people to
vacation in Sihanoukville
Cause Marketing designed to create support for ideas to Strategies to get pregnant
get people to change undesirable behaviours women not to drink alcohol
Organisation Marketing designed to attract donors, members, Strategies designed to

participants, or volunteers attract blood donors to Ang
Doung Hospital
7
• “Marketing Management is the process

of planning and executing the conception,
pricing, promotion, and distribution of
ideas, goods, and services to create
exchanges that satisfy individual and
organisational objectives.”
- The American Marketing Association
8
• Marketing plan is an important output

of marketing management.
• Why plan?
– List some benefits of planning!
– Think about planning your next holiday – day

and night activities – as well as planning within
your organisation.
– These benefits of planning apply to marketing

planning too.
9
• Marketing plan seeks to communicate

– An analysis of the current situation,
– The objectives to be achieved,
– The strategies,
– Tactics and budgets by which the above
objectives will be achieved, and
– Control against which achievement will be
evaluated.
10
• In essence planning seeks to address the

following:
Where are we now?
Where do we want to be?
How can be get there?
Did we get there?

11
• We shall see how all company planning

processes trace these steps, but firstly let’s
look briefly at the over strategic planning
process as the context for marketing
planning.
12
Marketing and Strategic Planning
• The role of marketing in strategic planning

– Successful companies know how to adapt to a
continuously changing marketplace. They
practise the art of market-oriented strategic
planning
• Market-oriented strategic planning
– The managerial process of developing and
maintaining a viable fit between the
organisation’s objectives, skills and resources
and its changing market opportunities
13
• Marketing plans are developed in the overall

context of corporate plans and goals,
sometimes called ‘the big picture’.
• So it is important to have an understanding

of the corporate planning process.
14
• Let’s look closely at the strategic planning

process for a business unit which more
closely guides the marketing plans for that
business unit.
• Business unit may be more relevant to a

small organisation.
15
Business Strategic Planning
Mission
Business Objectives
Business Strategies (Plan)
HR Marketing Product Finance

Plan Plan Plan Plan
16
• The Mission
– Seeks to define the organisation’s purpose. It
may embrace:
• What business are we in?
• Who are our customers?
• What is the value we are offering to our customers?
• What business should we be in? (for future)
17
• The Narrow Mission

– Railways business
– Movie business
• The Broad Mission
– Transportation business
– Entertainment business
– Shell – not ‘oil company’ but ‘in energy’
– Xerox – not ‘produce photocopiers’ but
‘improving office efficiency’
– Revlon – not ‘manufacture cosmetics’ but ‘we
sell hope’
18
• Goals or Objectives
– Should we be setting Goals or Objectives?
– There is no consistency between authors.
– In planning we favour the use of Objectives as:
• The term is more specific, goals implies longer-term
aims/ambitions
• Strategies
– Strategies are how the objectives are to be
achieved.
• Now, let’s focus on marketing planning!
19
The Marketing Planning Process
• The marketing plan seeks to achieve

marketing objectives through the planned
application of marketing resources.
• The steps in the marketing planning process

are shown next slide
20
Strategic planning and marketing planning
21
• Situation analysis
–The cooperative environment
–The competitive environment
–The economic environment
–The social environment
–The political environment
–The legal environment
22
• Marketing Objectives
–We are now ready to address ‘where do we
want to be?’ and set our marketing objectives.
–Objectives
– Achievable
– Motivational
– Specific
–Marketing objectives usually match markets and
products (Ansoff’s Matrix)
– Which markets?
– Which products?
23
Ansoff’s Matrix
24
• Target market selection

– We will need to develop different marketing
mixes for different target markets.
• Marketing strategies
– Marketing strategies are how the marketing
objectives are to be achieved.
– We can seek to develop strategies for each ‘P’ of
the marketing mix
• Marketing tactics (or programmes)
– Marketing tactics turn the strategy into action
programmes, allocating responsibilities,
specifying timing and including budgets.
25
• Implementation and control

– Evaluation is perhaps the critical step in the
planning process.
– Are we achieving our objectives?
– If not, why not? Can we modify our strategies?
– A main purpose of quantifying our objectives is
so that we can measure if we are achieving
them.
– We need to establish controls that measure
performance.
– Usually this can be monthly or quarterly, so that
we can be alerted to deviations from the plan
and then hopefully implement corrective action.
26
• Implementation and control…

– Controls are the tools/techniques we utilise to
monitor and evaluate marketing activity.
– In controlling a marketing plan, we need to
evaluate:
• Whether we are achieving our marketing objectives
• The effectiveness of our marketing mix strategies
• Customer satisfaction
27

– If we identify differences between expected and
actual performance we can take corrective
action.
– Often marketers will make contingency plans as
part of the marketing plan.
– Evaluation of marketing mix strategies through
marketing research as appropriate, will provide
valuable information for determining future
marketing mix strategies.
28

– Information from evaluation is the best source of
information for developing more effective
marketing strategies for the future
– So remember
Plan and Evaluate
29
The Marketing Management Process
• Marketing information systems and

marketing research
–Throughout the marketing management
process, current, reliable, and valid information
is needed to make effective marketing decisions
30
• The Marketing Plan Document

– The end product of the marketing planning
process should be the documented marketing
plan.
– The documented marketing plan:
• Executive summary
• Current marketing situation (aka Marketing Audit or
Situation Analysis)
• Marketing objectives
• Marketing strategies
• Action programmes (aka tactics)
• Marketing budgets (+projected P&L Statement)
• Controls
31
• Timescale for marketing plans

– Usually marketing plans are developed for one
year periods although we can also have a
specific marketing plan that supports the launch
of a new product.
32
Any Question?
Chapter One
Strategic Planning and the

Process

Chapter Two
Marketing Research

What Is Marketing Research?
• Marketing research is the process by which

information about the environment is
generated, analysed, and interpreted for
use in marketing decision making.
2
Role of Marketing Research
• Marketing research itself does not make

decisions, but it can increase the chances
that good decisions are made.
• Marketing research can reduce the risks

associated with managing marketing
strategies.
– Examples: Reduce risk of introducing new
products by evaluating consumer acceptance of
them prior to full-scale.
3
Role of Marketing Research
• Marketing research is also vital for

investigating the effects of various
marketing strategies.
– Example: examine the effects of a change in any
element of the marketing mix on customer
perception and behaviour.
4
Marketing Research Process
5
Purpose of the Research
• Managers and researchers should agree on:

– The current situation involving problem to be
researched,
– The specific questions the research is designed
to investigate.
• This step is crucial since it influences the
type of research to be conducted.
6
Plan of the Research
• Once research questions have been

agreed on, research plan can be
developed.
• Three critical issues that influence
research plan:
1. Whether primary or secondary data are
needed,
2. Whether qualitative or quantitative research
is needed,
3. Whether the company would conduct its own
research or contract with a marketing
research specialist.
7
• Primary data: Data collected for the specific

problem under investigation
– Example: to know why users of a brand didn’t
prefer its brand – have to collect primary data to
find out.
• Secondary data: Previously collected data which
could be used for the problem at hand
– Example: to know population size of key market
that the company might enter.
8
• Qualitative research: Face-to-face interviews,

without mathematical concern
– Focus groups: designed to generate insights and
ideas.
– In depth interviews: designed to find out the
meanings that various products or brands have
for an individual or how a product influences a
person’s life.
9
• Quantitative research: systematic procedures

to obtain data
– Observation: watching people and recording
relevant facts and behaviour
• Example 1: do traffic counts at various intersections to
help determine the best locations for stores.
• Example 2: how much time customers spend in various
parts of a store. This information can be used to
designed store layouts more effectively.
10
• Quantitative…
– Surveys: use questionnaire by mail, phone, or in
person.
• Used to investigate customer beliefs, attitudes,
satisfaction, etc.
• Example: Phnom Penh Sports Club uses surveys
improve its marketing strategy:
– How did you hear about PPSC?
» A. Reco
» B. I saw the signs
» C. Advertising
» Others……………………………………………..
– Why did you choose PPSC? (can be more than one)
» Membership fee is affordable.
» Good parking.
» Near my house.
» Others…………………………………………….. 11
• Quantitative…
– Experiments: manipulating one variable and
examining its impact on other variables.
• Example: the price of a product in one test store could
be changed, while left the same in other stores
– Comparing sales in the test store with those in other stores can
provide evidence about the likely impact on a price change in the
overall market.
12
Performance of Research
• A collection of data:
– Obtain and record maximal amount of useful
data.
– Subject to the constraints of time, money, and
respondent privacy.
13
Performance of Research
• The tasks depend on type of data.

– If secondary data are to be used, they must be
located, prepared for analysis, and possibly paid
for.
– If primary data are to be collected, then
observational forms, questionnaires, or other
types of measures must be designed,
– Samples must be drawn and
• interviews must be scheduled or
• preparations must be made for mailing or
• preparations must be made for phoning.
14
Processing of Research Data
• Prepare data for analysis and actual

analysis of them.
• The appropriate analysis techniques for
collected data depend on the nature of the
research question and the design of the
research
– Qualitative data consist of interview records that
are analysed for insights and ideas.
– Quantitative data are analysed in many ways
depending on the objectives of the research.
15
Preparation for Research Report
• Research report is a complete statement of

everything done in a research project.
• Research report includes a write-up of each
of the previous stages as well as the
strategic recommendations.
• Research report must trade off the apparent
precision of scientific jargon for everyday
language that managers can understand.
• Researchers should work closely with
managers to ensure that the study and its
limitations are fully understood.
16
QualitativeTable 2-1 Quantitative Research
Research
Study • Provide insights • Describe target market

Purpose about ideas • Results for strategic
• Exploratory research marketing decisions
before quantitative
study
Types of • Open-ended • Close-ended

Questions • Unstructured • Structured
Data • Depth interviews • Observations

Collection • Focus groups • Surveys
Methods • Experimentation
17
Table 2-1
Qualitative Research Quantitative Research
Sampling • Small • Large
Data • Analyzed by • Entered into database

Analysis researchers who • Use of statistical
collected data methods
• Look for “key
words”
• Subjective
18
Any Question?
Chapter Two
Marketing Research

MK501: Marketing Management
Chapter Three
Consumer Behavior

The Marketing Concept
Profitable Marketing
BEGINS WITH
The Discovery & Understanding

of Consumer Needs
Develop Marketing Mix

to Satisfy Those Needs.
2
What Is Consumer Behaviour?
The process and activities people engage in

when searching for, selecting, purchasing,
using, evaluating, and disposing of
products.
3
Understanding Consumer Behaviour
• An understanding of consumers – their

needs and purchasing behaviours shapes
successful marketing.
• No single theory of consumer behaviour can

totally explain why consumers’ behave the
way they do.
4
An Overview of the Buying Process
5
Social Influences
on Consumer Decision Making
• In terms of consumer behaviour, culture,

social class, and reference groups can
have both direct and indirect effects on the
buying process.
• Direct effect–Refers to direct communication
between the individual and other members
of society.
• Indirect effect–Refers to influence of society
on an individual’s basic values and
attitudes.
6
Social Influences
Culture and Subcultures

• Culture – One of the most basic influences
on an individual’s needs.
• Cultural values are transmitted through
three basic organisations.
– Family
– Religious organisations
– Educational institutions
7
Social Influences
• Marketing managers should:

– Adapt the marketing mix to cultural values.
– Constantly monitor value changes and
differences in both domestic and global markets.
• Subcultures – Exist when people have
more frequent interactions than with the
population at large,
– thus tend to think and
act alike in some
respects.
8
Social Influences
Social Class
• Social classes develop on the basis of such things
as wealth, skill, and power.
• The single best indicator of social class is
occupation.
• For marketing purposes, four different social
classes have been identified:
– Upper class
– Middle class
– Working class
– Lower Class
9
Social Influences
Reference Groups
• Reference = groups that an individual looks
to.
• Primary reference groups = family and close
friends.
• Secondary reference
groups = fraternal
organisations and
professional
associations.
10
Social Influences
Reference Groups
• Family constitutes an important reference
group
• Family life cycle – Useful way of classifying
and segmenting individuals and families
11
Marketing Influences
• Product Influence – As a key task,

marketers differentiate their products from
their competitors.
• Price Influence – Today’s value-conscious
consumers may buy products more on the
basis of price than other attributes.
• Promotion Influence – Marketing
communications plays a critical role in
informing consumers about products and
services.
12
Marketing Influences
• Place Influence
– Convenience increases probability of consumers
finding and buying certain products.
– Products sold in exclusive outlets increase brand
equity.
– Nonstore methods create perceptions of
innovativeness.
• Internet
• Catalogues
13
Situational Influences
• Physical features – Most readily apparent

features of a situation.
– Décor, lighting, aromas, weather.
• Time – A dimension of situations: time of
day, season of the year.
– Evenings, paydays, Khmer New Year.
• Task features – Include requirement to shop
for.
– Shopping for gift is in a different situation than
when shopping for personal use.
14
Psychological Influences
• Product knowledge – Refers to the amount

of information a consumer has stored in his
or her memory about a product.
• Group, marketing, and situational influences
determine level of product knowledge.
15
Consumer Decision Making
The Consumer Decision-Making Process
16
Consumer Decision Making
• Extensive decision making – Requires

high degrees of time and effort as the
purchase is complex, high priced or has
high importance to the consumer.
• Limited decision making – Moderate time
and effort, but may involve some time and
effort to search for and compare
alternatives.
• Routine decision making – Most common
type, and the way people purchase most
packaged goods.
17
Sources of Need Recognition
Need is
recognised
from one or
more of these
Out of Stock Dissatisfaction
New Needs New

or Wants Products
18
Alternative Search
• Personal sources:
– Internal sources – Experience with, and stored
information about products.
– Group sources – Communication from other people
• Marketing sources – Advertising, salespeople,
dealers, packaging and displays.
• Public sources – Publicity from article.
• Experiential sources – Handling, examining and
perhaps trying the actual product.
19
Alternative Search
20
Alternative Evaluation
• Consumer has information about a number

of brands in a product category.
• Some brands in a product category
perceived as viable alternatives for
satisfying a recognised need.
• Each of these brands has a set of attributes
which is relevant to the consumer.
• Consumer will intend to purchase the brand
liked best.
21
Alternative Evaluation
All Available Brands

Brand A Brand B Brand C Brand D Brand E
Brand F Brand G Brand H Brand I Brand J
Brand K Brand L Brand M Brand N Brand O
Evoked Set of Brands

Brand B Brand E
Brand F Brand I
Brand M
22
Evoked Set
• Why does this ad have no copy?
23
Purchase Decision
• The best liked from the evoked set is

purchased.
• NB: Consumer decision making process
does not end with the purchase.
– Brand loyalty, or
– Dissonance
24
Postpurchase Evaluation
Highly Highly
Satisfied Loyal
Retain
Satisfied Loyal
Defect
Dissatisfied Disloyal
25
Any Question?
Chapter Three
Consumer Behaviour

Chapter Four
Business, Government, and

Institutional Buying

Organisational Buying
Decision-making process by which

formal organisations establish the
need for purchased products and
services, and identify,
evaluate, and choose among
alternative brands and suppliers.
2
Buyer Categories
• Producers:
Businesses that buy goods and services in order
to produce other goods and services.
• Intermediaries:
Purchase products to resell at a profit.
• Government agencies:
Government agencies spend millions of dollars on
machinery, equipment, supplies and services.
• Other institutions:
Such as hospitals, museums, universities, and
churches.
3
Organisational Buying Process
Purchase-type Structural Behavioural

influences influences influences
Organisational buying process
Organisational Vendor Purchase Postpurchase

need analysis activities evaluation
4
Purchase-Type Influences
Straight rebuy
Modified rebuy
New task
5
• Buying Situations
– Straight rebuy
• Just re-order for daily needs like office
supplies.
– Modified rebuy
• Buyers review contract – chance that buyers
get better offers.
– New Task
• Need more information for decision making.
6
Purchase Time Number

Complexity
Type Frame Of Suppliers
Straight Rebuy Simple Short One
Modified
Moderate Medium Few
Rebuy
New Task
Complex Long Many
Purchase
7
Structural Influences
Purchasing Roles / Buying Centre
Initiators
Users
Influencers
Buyers
Deciders
Gatekeepers
8
Organisation-Specific Factors
• Orientation – the function may decide the
purchase.
– Technology oriented: engineer personnel.
• Size of the organisation
– If large, joint decision making.
– If small, autonomous decision making.
• Degree of centralisation
– If centralised, less likely for joint decision
making – privately owned small business.
– If decentralised, more likely for joint decision
making – large corporation.
9
Purchasing Policies and Procedures

• Often a purchasing department is
assigned the task of centralised buying for
the whole organisation.
– Sole sourcing – all of a particular product is
purchased from a single supplier – long term
relationship.
– Direct buying – list of approved vendors for
particular products.
– Competitive bidding – for large, one-time
purchases.
10
Behavioural Influences
• Organisational buyers are also influenced by

psychological and social/cultural factors.
– Personal motivations: friendship, personal
ambitions, etc…
– Role perceptions: their own perception of their
role. Organisations can be divided into three
groups based on commitment.
• Innovative firms – weak commitment to expected
norms of behaviour.
• Adaptive firms – moderate commitment.
• Lethargic firms – strong commitment to traditionally
accepted behaviour.
11
Behavioural Influences
– Cultural factors
• France
– The French think others must speak French
• Germany
– Your status. Shake hands at beginning and end.
• Japan
– Clear agenda. Make sure no religion talk.
• Korea
– Can’t compare Korean culture with Japanese
culture.
12
ORGANISATIONAL NEED
VENDOR ANALYSIS
PURCHASE ACTIVITIES
POSTPURCHASE EVALUATION
13
•Organisational Need
–Knowing that they need goods/services
–Needs based on stated objectives of the
organisation.
•Vendor Analysis
–Identify the most appropriate suppliers
–Evaluate the potential suppliers.
• Rate them based on price, quality,
reputation, on-time delivery, payment terms,
and use of technology, etc...
14
An Example of Vendor Analysis
Attributes Rating Scale

Importance Poor Fair Good Excellent
Weights (1) (2) (3) (4)
Price .30 x
Supplier reputation .20 x
Product reliability .30 x
Service reliability .10 x
Supplier Flexibility .10 x
Total score: .30(4) + .20(3) + .30(4) + .10(2) + .10(3) = 3.5
15
•Purchase Activities
–Negotiate the final order after supplier
selected – term of contract.
•Postpurchase Evaluation
–Does the purchase perform as expected?
–Should the supplier be used again?
–May lead the buyer to
• continue,
• modify, or
• end the relationship with the supplier
16
Organisational Buying Distinctions
• Marketing to organisational buyers

versus marketing to consumers:
– Fewer buyers than consumer market
– Larger buyers
• Each buyer purchase a lot compared with
consumer buyer.
– Close supplier-customer relationship
• The seller can afford to spend a lot of time
and money with the buyers.
17
Organisational Buying Distinctions
•Marketing to organisational buyers

versus marketing to consumers…
–Shorter distribution channels.
–Greater emphasis on personal selling.
–Derived demand
– Organisational demand comes from consumer
demand.
18
What is Organisational Buying?

– Professional purchasing
• Buyers are well trained because it is a bulk
buy.
– Several buying influences
• Many people involve with buying.
– Multiple sales calls
• Decision making is longer than consumer
buying therefore we need to follow up many
times.
19
What is Organisational Buying?

– Reciprocity
• Business buyers often select suppliers who
also buy from them
• Eg. A printing paper manufacturer buy fuel
from Caltex when Caltex uses its paper.
– Leasing
• They lease instead of buy
– Conserving capital,
– Getting the latest products.
20
Any Question?
Chapter Four
Business, Government, and

Institutional Buying

Chapter Five
Market Segmentation

What is Market Segmentation?
• “market segmentation is the process of

dividing a market into groups of similar
consumers and selecting the most
appropriate group(s) for the firm to serve.”
• The group or market segment that a firm

selects to focus on is called a target
market.
2
Why Need Market Segmentation?
• A primary reason for studying consumer

and organisational buying behaviour is to
provide bases for effective segmentation.
• The magic of market segmentation is based
on the idea that a single product item
can seldom meet the needs and wants
of all consumers.
3
Marketing Segmentation Process
FIRM’S CURRENT SITUATION
DETERMINE CONSUMER NEEDS AND WANTS
DIVIDE MARKETS ON RELEVANT DIMENSIONS
DEVELOP PRODUCT POSITIONING
DECIDE SEGMENTATION STRATEGY
DESIGN MARKETING MIX STRATEGY
4
Step1: Delineate Firm’s Current Situation
• This first step in market segmentation

process is intended to be a reminder of
tasks to be performed prior to marketing
planning.
• This is to identify ‘what is going on now’
before we move.
5
Step 2: Determine Consumer Needs and Wants
• Successful marketing strategies depend

on meeting consumer needs and wants.
• Firms seek to discover broad variety of
unmet needs.
• And then operate within the firm’s need
satisfaction activities.
6
Step 3: Divide Markets on Relevant Dimensions
• In a narrow sense, this step is often

considered to be the whole market
segmentation.
• Consumers are grouped on the basis of
one or more similarities and treated as a
homogeneous segment.
7
Bases for Consumer Market Segmentation
Geography
Demography
Psychography
Behaviour
8
Geographic Segmentation
Dividing an overall market into homogeneous

groups on the basis of their locations
International
National
Regional/City
9
Demographic Segmentation
• Dividing consumer groups according to

characteristics such as:
– gender,
– age,
– income,
– occupation,
– education,
– race,
– family size,
– family life cycle,
10
No Segmentation
11
Segmented by Gender
12
Segmented by Age
13
Psychographic Segmentation
• Dividing markets on differences in consumer

lifestyles (AIO):
– Activities – work, hobbies, vacations.
– Interests – family, job, community.
– Opinion – social issues, politics, economics.
14
Behavioural Segmentation
• Dividing a consumer population into

homogeneous groups based on
characteristics of their relationships to a
product.
– Benefits that people seek when they buy a
product.
– Usage rates for a product.
– Consumers’ brand loyalty
toward a product.
15
Example of Benefit Sought
Prestige? Safety?
Fuel Economy?
16
Step 4: Develop Product Positioning
• Positioning is the act of designing the

company’s offering and image to occupy a
distinctive place in the mind of the
target market.
• The goal of Positioning is to locate the
brand in the minds of consumers to
maximise the potential benefits to the
firm.
– Giving reason why the target market should
buy the product.
17
Step 4: Develop Product Positioning
• Positioning can be achieved according to

several strategies
• Hyundai: less expensive
• Volvo: Safer
• Toyota: Higher quality
• Lexus: More prestigious
• Clear: Dare to wear black
• Johnson’s Shampoo: Not only for babies but also for
active adults.
• Coke versus Pepsi
• Nike versus Adidas
• Perceptual Map is a visual depiction of
customers perception of competitive
products 18
Perceptual Map
19
Step 5: Decide Segmentation Strategy
There are four basic alternatives:

1. The firm decides not to enter the market if
not profitable.
2. The firm decides not to segment but to be a
mass marketer.
3. The firm decides to market to more than one
segment and design a separate marketing
mix for each
4. The firm decides to market to only one
segment
20
Step 6: Design Marketing Mix Strategy
A. Undifferentiated Marketing
Company
Marketing Market
Mix
B. Differentiated Marketing
Company
Marketing Mix 1 Segment 1
Company
Marketing Mix 2
Segment 2
Company Segment 3
Marketing Mix 3
C. Concentrated Marketing
Company Segment 1
Marketing Segment 2
Mix
Segment 3
21
Undifferentiated Marketing
Single
Marketing
Mix
Organisation
Target Market
22
Undifferentiated Marketing
Example of an ad using
undifferentiated marketing.
Ad’s copy states “A wireless
phone for everyone”
23
Differentiated Marketing
Marketing Mix 1
Marketing Mix 2
Organisation
Target Market
24
Differentiated Marketing
25
Concentrated Marketing
Single
Marketing
Mix
Organisation
Target Market
26
Concentrated Marketing
27
Any Question?
Chapter Five
Market Segmentation

Chapter Six
Product Strategy

Marketing Mix
Product
is the sum of the physical,
psychological, and sociological
satisfactions the buyer
derives from purchase,
ownership, and
consumption.
Price Promotion
Place (Distribution)
2
To Simplify a Product
A
Product tangible good
is
everything that a
idea person receives
in an exchange service
3
Product Classification
A product used to manufacture other

Organisational goods or services, to facilitate an
Product organisation’s operations, or to resell
to other consumers.
Consumer Product bought to satisfy an

Product individual’s personal needs & wants.
4
Raw Materials
Fabricating Parts and

Materials
Installations
Types of Accessory Equipment

Organisational
Products
Operating Supplies
5
Types of Consumer Products

Convenience A relatively inexpensive item that merits little
Product shopping effort.
A product that requires comparison shopping,

Shopping
because it is usually more expensive and found
Product
in fewer stores.
A particular item that consumers search
Specialty
extensively for and are reluctant to accept
Product
substitutes.
Convenience Shopping Specialty

Product Product Product
6
Product Quality and Value
• We often confuse between Quality

and Value.
– Quality
• The degree of excellence or superiority that
an organisation’s product possesses.
– Value
• Value encompasses not only quality but also
price.
• Value = Benefit – Price
• So, value is what the customer gets in
exchange for what the customer gives.
7
Product Line and Product Mix
• Product Line = group of products that

share common characteristics, distribution
channels, customers, or uses.
• Product mix = the full set of products
offered for sale by an organisation.
– May consist of several product lines.
• Product mix exhibits
– Width – number of product lines in the
organisation
– Depth – average number of products in each line
8
Procter & Gambles’ Product Lines and Mix
9
Brands
10
What Is a Brand?
• Brand – a name, term, design, symbol, or other

feature that identifies a seller’s products and
differentiates them from competitors’ products.
• Brand name – part of brand that can be spoken,

including letters, words, and numbers eg. CMU,
7Up.
– Many brand names have become synonymous with the
products – Casio, Xerox, Esky.
• Trade name – full legal name of organisation
– CamGSM Co. Ltd.
• Both buyers and sellers benefit from Branding.
11
Branding
• Factors that serve to increase the strength

of a brand include
1. Product quality when products do what they do

very well.
2. Consistent marketing communications in with

brands tell their story often and well.
3. Distribution intensity whereby customers see

the brand wherever they shop.
4. Brand personality where the brand stands for

something.
12
Branding
• Line extension: Uses brand name to

facilitate entry into a new market segment.
– Eg. Diet Coke, Liquid Tide
• Brand extension: Uses an existing brand
to enter a different product class.
– Eg. Ivory Shampoo, Dove Shampoo
• Family branding: Attaches the corporate
name to a product to either enter a new
market or a new product class.
– Eg. Honda lawnmover, Toyota Lexus
13
Branding
• Dual branding (aka joint branding or co-

branding): Concept where two or more branded
products are integrated.
– Eg. US Airways and Bank of America Visa, Barcadi Rum
and Coca-Cola.
• Multibranding: Assigning different brand names
to each product.
– Eg. Sunsilk, Clear, Dove,
14
Brand Equity
• Brand equity is a set of assets or liabilities

linked to the brand that add or subtract
value.
• A well-managed brand is an asset to an
organisation.
• Assets which brand equity based on can be
usefully grouped into elements as shown
next slide
15
Brand Equity
16
Brand Loyalty
• Creating and maintaining customer loyalty

toward a brand is a major benefit of
branding.
• Brand Loyalty is a customer’s favourable
attitude toward a specific brand.
• Brand Loyalty contributes to a sustainable
competitive advantage (SCA).
• Three degrees of brand loyalty exist.
17
Brand Loyalty
• Brand Recognition – aware brand exists and

is alternative if preferred brand unavailable.
• Brand Preference – preferred over
competitive offerings but substitute
accepted if the brand unavailable.
• Brand Insistence – strongly preferred, no
substitute.
18
Brand Awareness
• Numerous companies employ advertising

aimed at building brand awareness, which in
turn builds brand equity.
• A recognised brand often be selected over
an unknown brand.
19
Perceived Quality
• Customer’s perception about the total

quality of a brand.
• Perceived quality affect the pricing decisions
of the organisations
– Superior quality products can be charged a
premium price.
• Perceived quality gives the customers a
reason to buy the product.
– Can be used for Positioning.
• It also captures the channel member’s
interest.
20
Brand Associations
• Brand association is anything which is deep

seated in customer’s mind about the brand.
• Most popular brand associations

are with the owners of brand:
– Bill Gates and Microsoft.
– Steve Jobs and Apple
21
Other Proprietary Brand Assets
• Other than the four key elements of the

Brand Equity, there might be few more
factors that are considered as intangible
assets
– Patents
– Trademarks
– Channel relationships.
– Supplier relationships.
22
Packaging
• Differentiates relatively homogeneous

products.
• Contributes to “Brand Equity” by creating
new attributes or value.
23
Packaging
24
Packaging
25
Product Life Cycle
Introductory Growth Maturity Decline

Stage Stage Stage Stage
Product
Sales
Dollars
Product
Profits
Time
26
Product Life Cycle and Strategy
27
Product Adoption and Diffusion
28
1. Innovators
– Make up 2.5% of all purchases of the
product;
– They would buy anything because it’s
new;
– Not afraid of trying new products that
suit their lifestyle and will also pay a
premium for that benefit.
29
2. Early Adopters
– Make up 13.5% of purchases;
– Educated opinion leaders and naturally
adopt products based on positive
response of innovators;
– They are the ones who give the market
credibility.
30
3. Early Majority
– Make up 34% of purchases;
– Careful consumers who tend to avoid
risk;
– Also educated but in term of adopting a
new product, they rely on
recommendations from innovators and
early adopters.
31
4. Late Majority
– Make up another 34% of sales;
– Lower socio-economic, skeptical
consumers who buy a product only after
it has become commonplace;
– Price tends to be very important to them.
32
5. Laggards
– Make up 16% of total sales;
– Wait to see if the product will get
cheaper, also called bargain hunters!
– Avoid change, not adopt until traditional
alternatives are no longer available.
33
Product Audit
• The product audit is a marketing

management technique whereby the
company’s current product offerings are
reviewed to ascertain whether each
product should be
– continued as is,
– Improved/modified, or
– deleted
34
Deletions
• Considerations in the deletion decision

include:
– Sales trends: Have sales moved over time?
What has happened to market share?
– Profit contribution: What has been the profit
contribution of the product to the company?
– Product life cycle: Has the product reached a
level of maturity?
– Customer migration patterns: If the product
is deleted, will customers switch to another
product marketed by our firm?
35
Product Improvement
• Alter the product in some way or leave

things the way they are?
• Altering product means changing one or
more of its attributes.
• Attributes: Refer to main features of the
product such as design, package and so
forth.
36
Product Improvement
• Benchmarking: Continuous process of

measuring products, services, and
practices against those of the toughest
competitors.
• Advantages of benchmarking include
– Boosting product quality
– Developing more user-friendly products
– Improving customer order processing activities
– Shortening delivery lead times
37
Organising for Product Management
• Marketing-Manager System: One person is

responsible for overseeing an entire product line
with all of the functional areas of marketing such
as
– research,
– advertising,
– sales promotion,
– sales, and
– product planning.
• Brand-Manager System: A manager focuses on
a single product or a very small group of new and
existing products.
38
Cross Functional Teams in Product Management
and New Product Development
• Use of cross functional teams has become

an important way for
– The product management and
– The development of new products.
• Requirements of managing a cross
functional team include
– Commitment of top management and provision
of clear goals
– Trust among members
– Cross functional cooperation
– Time and training
39
Any Question?
Chapter Six
Product Strategy

40
Chapter Seven
New Product Planning and

Development

New Product Strategy
• Why do organisations need to develop new

products?
• ‘New’ products are not confined to
‘new-to-the-world’ innovations but rather
‘new-to-your-company’ innovations
– Over 90% of new products are the latter
2
New Product Strategy
• New-to-the-world products
– Products that are new inventions.
• New category entries
– Products that take the firm into a new category.
• Additions to product lines
– Products that are line extensions to current
markets.
• Product improvements
– Current products made better.
• Repositioning
– Products targeted for new use or application.
3
Elements of New Product Success
• New products tend to succeed with

– A unique, superior product (quality & value).
– A well-defined product concept prior to
development.
– A deep understanding of customer needs and
wants.
– Market attractiveness (opportunity).
– A clearly defined and well managed new product
development process.
– Teamwork between the organisation’s
departments.
4
Igor Ansoff Strategy
Igor Ansoff (December 12, 1918 – July
14, 2002) was a Russian American.
He is known as the father of Strategic

Management.
5
New Product Development Process
6
Stage 1: Idea Generation
• Where do new product ideas come

from?
– Every product starts as an idea.
– Most ideas do not become products.
– New product development must focus on
meeting customer needs.
– Top management support is critical to
providing an atmosphere that stimulates
new product activity.
7
Stage 1: Idea Generation
• Where do new product ideas come

from?
– Internal sources
– Customers
– Competitors
– Suppliers
– Marketing intermediaries
– Marketing intelligence
8
Stage 2: Idea Screening
• Now, we’ve got lots of ideas the next step is

to screen them.
• The purpose of idea screening is to drop
poor ideas. How?
– We need to develop some objective criteria to
assess the various ideas.
– Can spot through:
• Market size
• Product price
• Development time & costs
• Manufacturing costs
9
Stage 2: Idea Screening
• The firm has to consider three categories to

risk:
1. Strategic risk – Does new product match with
strategic need of the firm?
2. Market risk – Will the product meet a market
need in a value-added, differentiated way?
3. Internal risk – Can the product be developed
on time and within budget?
• Firms should not hastily discount new
products because of a lack of resources or
expertise, instead they should consider
strategic alliances.
10
Stage 3: Project Planning
• Analyse the proposal in terms of

– Production factor,
– Marketing factor,
– Financial factor, and
– Competitive factor
• Establish a development budget with preliminary
marketing and technical research.
• Design a “rough form” product.
• Write up a project plan with estimated costs.
• Review the project plan with top management for
– Not-go decision
– A go decision
11
Stage 4: Product Development
Evaluate the product from the viewpoint of

Engineering, Manufacturing, Finance, and Marketing.
Produce the finished product.
12
Stage 5: Test Marketing
• Until this step, the product is still a

secret of the firm.
• First time for the product to go out for
customer approval.
– Limited quantity of product
– Limited geographical area.
13
Stage 5: Test Marketing
• The main goal of test marketing is to:

– Reduce risk i.e. a test market failure can be
withdrawn saving dollars on a full launch and
with less damage to image/reputation
– To test all components of the marketing mix.
• Upon completion of the test market,
prepare a final marketing plan in
preparation for launch.
14
Stage 6: Commercialisation
• The firm commits to introducing the product

into the marketplace.
• Heavy emphasis is placed on organisational
structure and management talent needed to
implement the marketing strategy.
• Follow-up to eliminate bugs in the design,
production costs, quality control, and
inventory requirements.
15
Stage 6: Commercialisation
Production
Inventory Buildup
Distribution Shipments
Sales Training
Steps in
Marketing a Trade Announcements
New Product
Customer Advertising
16
The New Product Team
17
Causes of New Product Failure
• No competitive point of difference,

unexpected reactions from competitors, or
both.
• Poor positioning.
• Poor quality of product.
• Nondelivery of promised benefits of
product.
• Too little marketing support.
18
Causes of New Product Failure
• Poor perceived price/quality relationship

(value).
• Faulty estimates of market potential and
other marketing research mistakes.
• Faulty estimates of production and
marketing costs.
• Improper channels of distribution selected.
• Rapid change in the market after product
introduction.
19
Research Considerations
• What is the anticipated market demand over time?

• Can the item be patented?
• Any anti-trust issues?
• Can the product be sold through present channels
and sales force?
• If not, what are the new needs?
• At different volume levels, what will be the unit
manufacturing costs?
• What is the most appropriate package in terms of
colour, design, material and so forth?
• What is the estimated return on investment?
• What is the appropriate pricing strategy?
20
Any Question?
Chapter Seven
New Product Planning and

Development

Stages in the Family Life Cycle
1. Bachelor stage: Few financial burdens. Fashion opinion leaders. Buy:
Young, single. basic home equipment, furniture, bikes, cars, games;
vacations.
2. Newly married couples: Highest purchase rate and highest purchase of

Young, no children. durables: cars, appliances, furniture, vacations.
3. Full nest I: Youngest Home purchasing at peak. Influenced by advertising.

child under six. Buy: washers, dryers, TV, baby food, chest rubs and
cough medicines, vitamins, toys.
4. Full nest II: Youngest Financial position better. Less influenced by

child six or over. advertising. Buy many foods, cleaning materials,
bicycles, music instruments.
1
Stages in the Family Life Cycle
5. Full nest III: Financial position still better. Some children get jobs.
Older married couples Hard to influence with advertising. Purchase of
with dependent children. durables: new, more tasteful furniture, cars.
6. Empty nest I: Home ownership at peak. Most satisfied with

Older married couples, no financial position and money saved. Interested in
children living with them. travel, self-education. Make gifts and contributions.
Not interested in new products. Buy: vacations,
luxuries, home improvements.
7. Empty nest II: Older Cut in income. Keep home. Buy: medical appliances,
married. No children living medical care products.
at home. Retired.
8. Solitary Survivor. A: In labour force. Income still good but likely to sell
some properties.
B: Retired. Same medial and product needs as other
retired groups; cut in income. Special need for
2 security.

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Marketing Management

Strategic Planning and the

Kao Phirun: MBA Marketing

• Instructor: Kao Phirun

• Using two products you have used, they are

• The marketing concept is the philosophy

• The ultimate purpose of the marketing

• So, what is marketing?

• Each of us knows something about

• What does the term ‘marketing’ mean to

• “an organisational function and a set of

- The American Marketing Association

• It means – marketing is a business

Goods Marketing designed to create exchange for Strategies to sell computers

Service Marketing designed to create exchanges for Strategies to sell insurance

Organisation Marketing designed to attract donors, members, Strategies designed to

• “Marketing Management is the process

- The American Marketing Association

• Marketing plan is an important output

– Think about planning your next holiday – day

– These benefits of planning apply to marketing

• Marketing plan seeks to communicate

• In essence planning seeks to address the

Where are we now?

Where do we want to be?

How can be get there?

Did we get there?

• We shall see how all company planning

• The role of marketing in strategic planning

• Marketing plans are developed in the overall

• So it is important to have an understanding

• Let’s look closely at the strategic planning

• Business unit may be more relevant to a

Business Strategic Planning

Business Strategies (Plan)

HR Marketing Product Finance

• The Narrow Mission

• Now, let’s focus on marketing planning!

• The marketing plan seeks to achieve

• The steps in the marketing planning process

• Target market selection

• Implementation and control

• Implementation and control…

• Implementation and control…

• Implementation and control…

• Marketing information systems and

• The Marketing Plan Document

• Timescale for marketing plans

Strategic Planning and the

Kao Phirun: MBA Marketing

Kao Phirun: MBA Marketing

• Marketing research is the process by which

• Marketing research itself does not make

• Marketing research can reduce the risks

• Marketing research is also vital for

• Managers and researchers should agree on:

• Once research questions have been

• Primary data: Data collected for the specific

• Qualitative research: Face-to-face interviews,

• Quantitative research: systematic procedures

• The tasks depend on type of data.

• Prepare data for analysis and actual

• Research report is a complete statement of