Session 1 Fundamentals of Marketing Management Flashcards
What is Marketing and Marketing Management?
Marketing is about identifying and meeting human and social needs.
Marketing Management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.
What are the five basic markets in the Marketing Exchange?
(1) Government Markets, (2) Resource Markets, (3) Consumer Markets, (4) Intermediary Markets, (5) Manufacturer Markets
What is a market?
A Market was a physical place where buyers and sellers gathered to buy and sell goods. Economists describe a market as a collection of buyers and sellers who negotiate transactions that involve a particular product or product class.
What does the Marketing Exchange describe?
In the Illustration, a box at the center labeled Government Markets is connected to four boxes on four sides via arrows.
The box at the top is labeled Resource Markets.
The box on the right is labeled Consumer Markets.
The box at the bottom is labeled intermediary Markets.
The box on the left is labeled Manufacturer Markets.
The clockwise flow from the top is as follows: Money from Resource Markets -> moves to Consumer Markets -> moves to Intermediary Markets -> moves to Manufacturer Markets -> goes back to Resource Markets.
What are the four major market forces?
Technology - Globalization - Physical Environment - Social Responsibility
What are the three market outcomes?
New consumer capabilities
New company capabilities
New competitive environment
What are the four fundamental pillars of holistic marketing?
Relationship marketing, integrated marketing, internal marketing, performance marketing
What is the concept of holistic marketing?
There are four broad components characterizing holistic marketing: relationship; integrated; internal and performance marketing.
Increasingly, a key goal of marketing is to develop deep, enduring relationships with people and organizations that directly or indirectly affect the success of the firm´s marketing activities.
Marketers must create prosperity among all these constituents and balance the returns to all key stakeholders. To develop strong relationships with them requires understanding their capabilities and resources, needs, goals and desires.
What is relationship marketing?
Relationship marketing aims to build mutually satisfying long-term relationships with key constituents in order to earn and retain their business
Four key constituents for relationship marketing are customers, employees, marketing partners (channels, suppliers, dealers, agencies) and members of the financial community (Shareholders, investors).
The ultimate outcome of relationship marketing is a unique company asset called marketing network, consisting of the company and its supporting stakeholders with whom it has built mutually profitable business relationships.
The operating principle is simple: Build an effective network of relationships with key stakeholders, and profits will follow.
What is integrated marketing?
Integrated marketing devises marketing activities and programs that create, communicate, and deliver value such that “the whole is greater than the sum of its parts”.
This requires that marketers design and implement each marketing activity with all other activities in mind.
What is performance marketing?
Performance marketing is about financial stability, environmental and social impact. Therefore, performance Marketing requires understanding of the financial and nonfinancial returns to business and society from marketing activities and programs. (Example Ben and Jerry)
What is internal Marketing?
Internal Marketing is the task of hiring, training, motivating employees who want to serve customers well.
Which marketing philosophies are there?
1) The production philosophy (production + product philosophy)
2) The selling philosophy
3) The marketing philosophy
4) The market value philosophy
What is the production philosophy?
The production philosophy comprises the production and product concept.
The production concept is one of the oldest concepts in business. It holds that consumers prefer products that are widely available and inexpensive.
The product concept proposes that consumers favor products offering the highest quality, the best performance, or innovative features.
What is the selling philosophy?
The selling philosophy holds that consumers and businesses, if left alone, will not buy enough of the organization´s products.
what is the marketing philosophy?
the marketing philosophy emerged in the mid 1950s as a customer-centered, sense-and-respond philosophy. -> The job of marketing is not to find the right customers for your products but to develop the right products for your customers.
what is the market value philosophy?
the market value concept is based on the development, design, and implementation of marketing programs, processes, and activities that recognize their interdependence.
The value-based view of marketing acknowledges that everything matters in marketing - and that a broad, integrated perspective is often necessary.
How does the strategic planning process look like?
Corporate planning -> Business Unit planning -> Offering planning
Corporate Headquarters is responsible for designing a corporate strategic plan to guide the whole enterprise. It makes decisions on the amount of resources to allocate to each business unit, as well as on which businesses to start or eliminate.
Each business unit develops a plan to carry that business unit into a profitable future.
Finally, each market offering involves a marketing plan for achieving its objectives. Companies undertake four planning activities:
1) defining the corporate mission
2) building a corporate culture
3) establishing strategic business units
4) assigning resources to each strategic business unit
What is a mission?
A mission is a clear, concise, and enduring statement of the reasons for an organization´s existence. Often referred to as its core purpose, a company´s mission is a long-term goals that provides company employees and management with a shared sense of purpose, direction and opportunity.
How can one define a mission?
To define its mission, a company should address Peter Drucker´s classic questions:
- What is our business?
- Who is the customer?
- What is of value to the customer?
- What will our business be?
- What should our business be?
These simple-sounding questions are among the most difficult a company will ever face. Successful companies continuously ask and answer them.
What characteristics do good mission statements have?
1) They focus on a limited number of specific goals.
2) They stress the company´s major policies and values.
3) They define the major markets that the company aims to serve.
4) They take a long-term view -> The corporate mission defines the ultimate strategic goal of the company; it should be changed only when it ceases to be relevant.
5) They are as short, memorable, and meaningful as possible -> Three-to-four-word mantras are enough.
What is a corporate culture?
Corporate culture can be defined as “the shared experiences, stories, beliefs, and norms that characterize an organization.”
Creating a viable corporate culture is often the key to market success (example southwest airlines)
What is a strategic business unit?
A strategic business unit (SBU) has three characteristics:
1) It is a single business, or a collection of related businesses, that can exist separately from the rest of the company.
2) It has its own set of competitors.
3) It has a manager responsible for strategic planning and profit performance, who controls most of the factors affecting profit.
Strategic business units make up a company´s portfolio.
What is a company´s portfolio?
Strategic business units make up a company´s portfolio. Based on the diversity of the individual strategic business units within the portfolio, these units can be defined as a specialized or diversified.
-> A specialized portfolio involves SBUs with fairly narrow assortments consisting of one or a few product lines
-> A diversified portfolio involves SBUs with broad assortments containing multiple product lines. The primary rationale for a diversified business mix is to take advantage of growth opportunities in areas which the company has no presence.
