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Work Unit 1.

Introduction to marketing
1.1. Definition of marketing.
1.1.1. Definition of marketing according to a number of authors.
1.1.2. Marketing concept.
1.2. The consumer behaviour.
1.2.1. A marketing oriented approach.
1.2.2. Consumer needs and wants.
1.2.3. The stages of the buyer decisin process
1.3. The market
1.3.1. Types of markets.
1.3.2. Segmentation, demographics and behavior.
1.4. The environment.
1.5. The competitiveness.
1.6. Marketing management.
1.6.1. Marketing planning.
1.6.2. Marketing mix.
1.6.3. SWOT analysis

1.1. Definition of marketing.


1.1.1. Definition of marketing according to a number of authors.
There are many definitions of marketing. The better definitions are
focused upon customer orientation and the satisfaction of customer
needs.
Marketing is the activity, set of institutions, and processes for
creating, communicating, delivering, and exchanging offerings that
have value for customers, clients, partners, and society at large.
(Approved October 2007)
American Marketing Association Board of Directors. Accessed 2012.
Again, in common with Kotler and Armstrong above, the AMA focuses
its definition on value creation and delivery, and the longer-term
retained customer.
The enigma of marketing is that it is one of mans oldest activities
and yet it is regarded as the most recent of business disciplines.
Baker (1976).

Baker introduces the elephant in the room. Marketing has always


been part of business, and it is a myth that it is purely a
contemporary idea.
Also see the Philosophy and Theory of Marketing
Marketing is the social process by which individuals and organizations
obtain what they need and want through creating and exchanging
value with others.
Kotler and Armstrong (2010).
The definiton is based upon an a basic marketing exchange process,
and recognises the importance of value to the customer.
The process by which companies create value for customers and
build strong customer relationships in order to capture value from
customers in return.
Kotler and Armstrong (2010).
Kotler and Armstrong develop their orginal definition to recognise the
importance of the longer-term relationship with the customer. This is
achieved by relationship marketing and Customer Relationship
Management (CRM).
Marketing is the management process for identifying, anticipating
and satisfying customer requirements profitably.
The Chartered Institute of Marketing (CIM). Accessed 2012.
The CIM definition looks not only at identifying customer needs, but
also satisfying them (short-term) and anticipating them in the future
(long-term retention). The definition also states the importance of a
process of marketing, with marketing objectives and outcomes. CIM is
recognised as being one of the most influential marketingbodies in
the world. It is the professional body for marketing in the United
Kingdom.
1.1.2. The marketing concept.

The marketing concept is a philosophy. It makes the customer and the


satisfaction of his or her needs the focal point of all business
activities. It is driven by senior managers, passionate about delighting
their customers.
The marketing concept holds that achieving organisational goals
depends on knowing the needs and wants of target markets and
delivering the desired satisfaction better than competitors do.
Kotler and Armstrong (2010).

The marketing concept arrived after a series of other orientations that


marketing companies underwent during the 20th Century. Initially
there was production orientation where a company focused upon the
science of manufacturing. Then there was a product orientation where
a business is not only focused on the production processes but also
upon the quality and desirability of a particular product. Then
marketing companies progressed to a selling or sales orientation
whereby products will proactively sold based upon features rather
than the benefits to the individual customer and his or her needs.
Hence the arrival of a market orientation which underpins our
marketing concept, where needs and wants are satisfied through the
delivery of value to satisfied customers. Below are some definitions of
the marketing concept which demonstrate the breadth and scope of
the term.

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Marketing is not only much broader than selling, it is not a specialized
activity at all. It encompasses the entire business. It is the whole
business seen from the point of view of the final result, that is, from
the customers point of view. Concern and responsibility for
marketing must therefore permeate all areas of the enterprise.
Drucker (1955, 2007).
Implementation of the marketing concept [in the 1990's] requires
attention to three basic elements of the marketing concept. These
are: customer orientation; an organization to implement a customer
orientation; long-range customer and societal welfare.

Cohen (1991).
Now that you have been introduced to some definitions of marketing
and the marketing concept, remember the important elements
summarised as follows:

Contemporary marketing focuses on the satisfaction of customer


needs, wants and requirements.
Its about the delivery of value to satisfied customers, through an
exchange process.
The philosophy of marketing needs to be owned by everyone from
within the organization.
Future needs have to be identified and anticipated.
There is normally a focus upon profitability, especially in the corporate
sector.
More recent definitions recognize the influence of marketing upon
society.
There is a longer-term relationship with customers.

1.2. The consumer behaviour.


In marketing we tend to use the word customer and consumer almost
interchangeably. However our customer and the consumer are not
strictly speaking the same. A customer is a person or company who
purchases goods and services. A customer becomes a consumer
when he or she uses the goods or services i.e. where there is some
consumption. Customers can be categorised as B2C which stands for
Business-to-Customer (B2C) for example where you buy sweets from
a shop, Business-to-Business (B2B) where the shopkeeper uses the
services of an accountant to write his tax return, C2B which is
Customer-to-Business (C2B) for example where an individual sells his
gold watch to a jewellery store and C2C or Customer-to-Customer
(C2C) where customers sell goods to each other. A great example for
C2C is eBay, where consumers sell goods to other consumers.
1.2.1. A Marketing Oriented Approach
A marketing orientation underpins our focus on the
customer/consumer and their needs and wants. Our marketing
orientation occurs as a result of all of the people from within our
business from the managing director to the receptionist making the
satisfaction of customer needs and wants their whole reason for
being. Now lets take a look at how we find information that will shed
light on what our customers and consumers need and want. The

benefits of a marketing orientation centre on the fact that customers


can be grouped into segments and segments can deliver profits to the
organisation. Customers also need information about products and
services, and how to use them.
Therefore we can define a consumer as an individual who (buys and)
uses a product or service. So the consumer could be the customer
that goes into the shop to buy the sweets. However the final
consumer may not always be the customer. For example, a parent
goes into the sweet shop and buys some sweets. He or she does not
eat them, and so they are not the consumer. The child would eat the
sweets and be the consumer, although he or she did no buy the
sweets and so they are not the initial customer.
The reason we need to know the difference between a consumer and
the customer is that we will want to design communications and
understand the consumer behaviour of the person that instigates and
influences a buying decision as well as the final consumer. For
example the child will influence the mothers decision on which
sweets to buy. However it can be much more subtle, for example a
wife might influence the clothing choices of her husband, or a child
might influence the familys choice of a holiday destination.
1.2.2. Customer needs and wants.
Obviously the terms customer and consumer are often interchanged.
So with a definition of marketing, we will aim to anticipate the needs
and wants of consumers and/or customers. Needs and wants may
differ. So lets return to our mother and her child, since a mother may
wish to feed her child nutritious food at mealtimes, the child may wish
to eat sugary and less healthy food. The mother is the customer and
she purchases based upon her need, whereas the child is the final
consumer and he or she may focus on what they want. So needs and
wants may differ between customers and consumers.
If a marketer can identify consumer buyer behaviour, he or she will be
in a better position to target products and services at them. Buyer
behaviour is focused upon the needs of individuals, groups and
organisations.
It is important to understand the relevance of human needs to buyer
behaviour (remember, marketing is about satisfying needs).
Lets look at human motivations as introduced by Abraham Maslow by
his hierarchy of needs: The hierarchy is triangular. This is because as

you move up it, fewer and fewer people satisfy higher level needs. We
begin at the bottom level.

Physiological needs such as food, air, water, heat, and the basic
necessities of survival need to be satisfied. At the level of safety, man
has a place to live that protects him from the elements and predators.
At the third level we meet our social and belongingness needs i.e. we
marry, or join groups of friends, etc.
The final two levels are esteem and self-actualisation. Fewer people
satisfy the higher level needs. Esteem means that you achieve
something that makes you recognised and gives personal satisfaction,
for example writing a book. Self-actualisation is achieved by few. Here
a person is one of a small number to actually do something. For
example, Neil Armstrong self-actualised as the first person to reach
the Moon.
The model is a little simplistic but introduces the concept a differing
consumer needs quite well.

To understand consumer buyer behaviour is to understand how the


person interacts with the marketing mix. As described by Cohen
(1991), the marketing mix inputs (or the four Ps of price, place,
promotion, and product) are adapted and focused upon the consumer.
The psychology of each individual considers the product or service on
offer in relation to their own culture, attitude, previous learning, and
personal perception. The consumer then decides whether or not to
purchase, where to purchase, the brand that he or she prefers, and
other choices.
1.2.3. The stages of the Buyer Decision Process
The buyer decision process represents a number of stages that the
purchaser will go through before actually making the final purchase
decision. The consumer buyer decision process and the
business/organisational buyer decision process are similar to each
other. Obviously core to this process is the fact that the purchase is
generally of value in monetary terms and that the consumer/business
will take time to actually assess alternatives. For FMCG (Fast Moving
Consumer Goods) the purchase decision process tends to be
shorter/quicker, and for habitual purchase behaviour or repeat
purchases the decision process is short-circuited.

The stages of the buyer decision process are the recognition of the
problem, the search for information, an evaluation of all available
alternatives, the selection of the final product and its supplier (of
course services are included) and then ultimately the post-purchase
evaluation. Lets have a look at each stage and offer a quick
explanation of what its all about, and then lets apply it to an
organisation to help us work out what its all about.
Stage One
Stage one is the recognition of the particular problem or need and
here the buyer has a need to satisfy or a problem that needs solving,
and this is the beginning of the buyer decision process

Stage Two
Stage two is where we begin to search for information about the
product or service. Buyers here begin to look around to find out
whats out there in terms of choice and they start to work out what
might be the best product or service for solving the problem or
satisfying any need.
Stage Three
Stage three sees the evaluation of the available alternatives whereby
the buyer decides upon a set of criteria by which to assess each
alternative.

Stage Four
We buy or select a product/service/supplier at stage four. Individuals
or teams of buyers make the final choice of what to buy and from
whom to buy it.
Stage Five
Interestingly the process does not stop at the point of purchase
because there is a stage five called the post-purchase evaluation. The
process continues even when the product or service is being
consumed by the individual or business. So if it doesnt meet your
needs or solve your problem you can take action to improve the
product or service. Your actions at this point might inform other
potential buyers who would be keen to hear about your experiences
good or bad.

Lets look at an example based upon buying a new smart cellphone.


The first stage is likely to be that you have a need for communication
or access to the Internet, or problem because you cannot interact
with friends using social media. The value added by products such as
Android, iPhone or Windows phone and others should satisfy your
need or solve your problem. So the second stage is where you speak
to your friends and surf the Internet looking at alternatives, which
represent stage two or your information search. As a buyer you
might visit a local cellphone store and speak to the sales staff to help
you complete stage three, i.e. your evaluation of alternatives. Stage
four is the selection of product and you go and make your final
decision and buy your smartphone from a local store or using an ecommerce website. Stage five involves your post-purchase evaluation
whereby you use the phone and have a positive, negative or mediocre
experience of the product. If it doesnt satisfy your needs you take
action and more importantly youll tell others of your problems. If
youre pleased with the product, you will tell your friends and this will
influence stage two (their information search) when they decide to
buy a cellphone.
Remember that organisations and businesses also go through this
process and that teams of individuals contribute to the decisionmaking process. This is called a Decision-Making Unit (DMU).

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The Buyer Decision Process(exercise)
Heres a recap: If a marketer can identify consumer buyer behaviour,
he or she will be in a better position to target products and services at
them. Buyer behaviour is focused upon the needs of individuals,
groups and organisations.
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Make decision.
Action.
Post-purchase behaviour i.e. did it meet your expectations? Did you
use it? Was it reliable? Etc.
It is important to understand the relevance of human needs to buyer
behaviour (remember, marketing is about satisfying needs).
Describe the Buying Decision Process for a mobile/smartphone. Fit
your description around the five stages that follow:

Recognition of a need.
Choice of level of involvement (i.e. justifying you time and effort e.g.
low for bubble gum, high for a holiday).
Identification of alternatives.
1.3. El mercado
1.3.1. What is market? Meaning
Usually, Market means a place where buyer and seller meets
together in order to carry on transactions of goods and services.
But in Economics, it may be a place, perhaps may not be. In
Economics, market can exist even without direct contact of buyer and
seller. This fact can be explained with the help of the following
statement.

"Market refers to an arrangement, whereby buyers and sellers come


in contact with each other directly or indirectly, to buy or sell goods."
Thus, above statement indicates that face to face contact of buyer
and seller is not necessary for market. E.g. In stock or share market,
the buyer and seller can carry on their transactions through internet.
So internet, here forms an arrangement and such arrangement also is
included in the market.
1.3.2. Classification or Types of Market
The classification or types of market are depicted in the following
chart.

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Generally, the market is classified on the basis of:


Place,
Time and
Competition.
On the basis of Place, the market is classified into:
Local Market or Regional Market.
National Market or Countrywide Market.
International Market or Global Market.
On the basis of Time, the market is classified into:
Very Short Period Market.
Short Period Market.
Long Period Market.
Very Long Period Market.
On the basis of Competition, the market is classified into:
Perfectly Competitive Market Structure.
Imperfectly Competitive Market Structure.
Both these market structures widely differ from each other in respect
of their features, price, etc. Under imperfect competition, there are
different forms of markets like monopoly, duopoly, oligopoly and
monopolistic competition.
A monopoly has only one or a single (mono) seller.
Duopoly has two (duo) sellers.

Oligopoly has little or fewer (oligo) number of sellers.


Monopolistic competition has many or several numbers of sellers.
The suffix poly has its origin from Greek word Polus which means
many or more than one.
1.3.3. Segmentation, Demographics and Behavior
Segmentation is the process of breaking down the intended product
market into manageable groups; it can be broken down by:
Behavior

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Needseconomic, functional, psychological, social.


Benefitsquality, service, economy, convenience, speed.
Attitude toward product--Enthusiastic, positive, indifferent, negative,
hostile.
User status--Nonuser, ex user, potential user, first time user, regular
user.
Loyalty status--None, medium, strong, absolute.
BrandFamiliarity-Unaware, aware, informed, interested, desirous,
intending to buy.
OccasionRegular occasion; special occasion, convenience,
comparison shopping, unsought product.
Type of problem solvingneeded-routine, limited, extensive.
Informationrequired-low, medium, high.
Geographic Location
Region of world, country North America, South America, Africa, Asia,
Europe.
Regions within that country (For Example USA) Pacific Northwest,
South, Midwest, New England.
Size of city population under 5,000 people to 4 million or more.
Urban vs. rural country, city, large city = more resources, more
independence; country=more dependence on neighbors and pooling
resources.
Climate cold, hot, rainy, desert, beaches, mountains.
Demographics
Income under $5,000 to $250,000+ a year.
Gender male, female, neither, both.
Age Infant, toddler, preschool, tween (age 8 to 12), teen, college
age, 20, 30, 40, 50, 60, 70-90.
Family size 1 person, 2, 3, 4, 5 or more.
Family life cycle young, single, engaged, DINKS (double income no
kids), SINKS (single income no kids), married with kids (babies,
toddler, elementary school age, teen, older), recently divorced, empty
nester (children have moved out), same-sex couples, single parents,
extended parents (grandparents raising their grandchildren), retired

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(either wealthy or Medicare dependent/poor). There are also


Boomerang Kids (adult children have moved back home),
Cougar/Silver Fox (Cougar is a 40-60 year old weathly, single, career
driven woman seeking a younger man; Silver Fox is a 40-60 year old
wealthy, single, career driven man seeking a younger woman).
Job unemployed, housewife, part-time, full-time, student,
professional, craftsperson, farmer, retired.
Education grade school or less, some high school, high school
graduate, some college, college graduate, graduate degrees.
Religion Christian, Jewish, agnostic, atheist, Muslim, Islam etc.
Race White, Black, Asian, Hispanic, Native American, mixed race,
etc.
Culture/nationalityAmerican, French, English, African, Russian,
Indian etc.
Generation (For Example USA) GI Generation, Silent, Matures, Baby
Boomer, Gen X, Gen Y, Boomlets.
Psychographics

Lifestyle interests, hobbies, activities, interests, opinions, values,


media preferences. Everyone has two lifestyles, the one they are in
now, and the one they desire to be in, which is usually better than the
current one. Almost all decisions are influenced by the buyers current
and desired lifestyle.
Personality traits

1 Sincerity.
2 Excitement.
3 Competence.
4 Sophistication.
5 Ruggedness.
Social class Lower, middle-low, middle, middle-upper, upper, upperupper, working class, blue collar.
Relationship
Customer Type
Product Use
Buying Situation
Purchasing Method
Behavior
Geographic Location
Demographics
Psychographics
Relationship

Kind of relationship weak, strong, arms length dealing, close


partnership.
Customer Type

Type of customer manufacturer, service, government, military, non


profit, wholesaler, retailer, end user.

Product Use

How customers use product installation, components, accessories,

raw material, eaten, professional service.


Buying Situation

Buying situation rebuy, modified rebuy, new purchase.


Purchasing Method

Purchasing methods Internet, long term contract, warranty,


financing, cash on demand.
Posted

1.4. The marketing environment.


The marketing environment surrounds and impacts upon the
organization. There are three key elements to the marketing
environment which are the internal environment, the
microenvironment and the macroenvironment. Why are they
important? Well marketers build both internal and external
relationships. Marketers aim to deliver value to satisfied customers,
so we need to assess and evaluate our internal business/corporate
environment and our external environment which is subdivided into
micro and macro.

Macroenvironment
The macroenvironment is less controllable. The macro environment
consists of much larger all-encompassing influences (which impact
the microenvironment) from the broader global society. Here we
would consider culture, political issues, technology, the natural
environment, economic issues and demographic factors amongst
others.
Again for Walmart the wider global macro environment will certainly
impact its business, and many of these factors are pretty much
uncontrollable. Walmart trades mainly in the United States but also in
international markets. For example in the United Kingdom Walmart
trades as Asda. Walmart would need to take into account local
customs and practices in the United Kingdom such as bank holidays

and other local festivals. In the United Kingdom 2012 saw the 60th
anniversary of Queen Elizabeth IIs reign which was a national
celebration.
The United States and Europe experience different economic cycles,
so trading in terms of interest rates needs to be considered. Also
remember that Walmart can sell firearms in the United States which
are illegal under local English law. There are many other
macroeconomic influences such as governments and other publics,
economic indicators such as inflation and exchange rates, and the
level nature of the local technology in different countries. There are
powerful influencers such as war (in Afghanistan for example) and
natural disasters (such as the Japanese Fukushima Daiichi nuclear
disaster) which inevitably would influence the business and would be
out of its control.
To summarise, controllable factors tend to be included in your internal
environment and your microenvironment. On the other hand less
controllable factors tend to be in relation to your macro environment.
Why not list your own controllable versus uncontrollable factors for a
business of your choice?

Internal Environment
The internal environment has already been touched upon by other
lessons on marketing teacher. For example, the lessons on internal
marketing and also on the functions within an organization give a
good starting point to look at our internal environment. A useful tool
for quickly auditing your internal environment is known as the Five Ms
which are Men, Money, Machinery, Materials and Markets. Here is a
really quick example using British Airways. Looking internally at men,
British Airways employees pilots, engineers, cabin crew, marketing
managers, etc. Money is invested in the business by shareholders and
banks for example. Machinery would include its aircraft but also
access to air bridges and buses to ferry passengers from the terminal
to the aircraft. Materials for a service business like British Airways
would be aircraft fuel called kerosene (although if we were making
aircraft materials would include aluminium, wiring, glass, fabric, and
so on). Finally markets which we know can be both internal and
external. Some might include a sixth M, which is minutes, since time
is a valuable internal resource.
Lets look at an example of how the internal environment would
impact a company such as Walmart. We are looking at the immediate
local influences which might include its marketing plans, how it
implements customer relationship management, the influence of
other functions such as strategy from its top management, research
and development into new logistics solutions, how it makes sure that
it purchases high-quality product at the lowest possible price, that
accounting is undertaken efficiently and effectively, and of course its
local supply chain management and logistics for which Walmart is
famous.
Microenvironment
The microenvironment is made from individuals and organizations
that are close to the company and directly impact the customer
experience. Examples would include the company itself, its suppliers,
other marketing input from agencies, the markets and segments in

which your business trades, your competition and also those around
you (which public relations would call publics) who are not paying
customers but still have an interest in your business. The Micro
environment is relatively controllable since the actions of the business
may influence such stakeholders.
Walmarts Micro environment would be very much focused on
immediate local issues. It would consider how to recruit, retain and
extend products and services to customers. It would pay close
attention to the actions and reactions of direct competitors. Walmart
would build and nurture close relationships with key suppliers. The
business would need to communicate and liaise with its publics such
as neighbours which are close to its stores, or other road users. There
will be other intermediaries as well including advertising agencies and
trade unions amongst others.
1.5. The competitiveness(see powerpoint)

Introduction
Whatever product a marketer has to offer in the market, one thing is
sure, it's going to get competition. It depends on the product type and
marketplace what degree of competition it'll get. For the success of
any business it is necessary to compete effectively with other
businesses. The best way to mitigate competition is to develop
marketing competitiveness. Marketing Competitiveness is the ability
of an marketing organisation to deliver better value to customers than
competitors.
Meaning of Marketing Competitiveness
A universal and exact definition of marketing competitiveness does
not
exist.
Competitiveness
means
different
things
to
different organisations. Some
marketers
view
marketing
competitiveness as the ability to persuade customers to choose their
offerings
over
alternatives;
while
others
view
marketing
competitiveness as the ability to deliver better values to customers

than competitors.
"Marketing Competitiveness is the ability of a business to improve
continuously marketing process capabilities and deliver better value
to customers than competitors."
It is the ability of a business to add more values for its customers than
competitors and attain a position of relative advantage. It leads to a
situation where a business has an advantage over its competitors by
being able to offer better value, quality, and service.
Customer values are the combination of several benefits offered for
a given price, and comprises all aspects of the physical product and
the accompanying services.
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Ways to Improve Marketing Competitiveness


Customer values - Customer values should be viewed not only in
terms of product characteristics, but also in terms of processes which
deliver the product. Both the product and process concept have to be
right to achieve customer satisfaction.
Identify and Promote USP - Unique Selling Proposition is something
that sets a product apart from its competitors in the eyes of existing
customers as well as new customers. Marketers are required to
identify USP of their product and effectively communicate it with the
target audience.
Cost efficient operations - Business is required to be organised and
operated efficiently, so that the cost of production and distribution be
minimised.
Customer delight - Business organisations must provide proper
customer services to delight its customers.
The above points can lead a business to a situation where it has an
competitive advantage over its competitors by being able to offer
better value, quality, and service.
1.6. Marketing Management.
According to Philip Kotler, "Marketing Management is the
analysis, planning, implementation and control of programmes
designed to bring about desired exchanges with target audiences for
the purpose of personal and of mutual gain. It relies heavily on the
adoption and coordination of product, price, promotion and place for
achieving responses.".
Marketing management is a business process, to manage marketing
activities in profit seeking and non profit organisations at different
levels of management. Marketing management decisions are based
on strong knowledge of marketing functions and clear understanding
and application of supervisory and managerial techniques.

Nature of Marketing Management


It Combines the Fields of Marketing and Management
As the name implies, marketing management combines the fields of
marketing and management. Marketing consists of discovering
consumer needs and wants, creating the goods and services that
meet those needs and wants; and pricing, promoting, and delivering
those goods and services. Doing so requires attention to six major
areas - markets, products, prices, places, promotion, and people.
Management is getting things done through other people. Managers
engage in five key activities - planning, organising, staffing, directing,
and controlling. Marketing management implies the integration of
these concepts.
Marketing Management is a Business Process
Marketing management is a business process, to manage marketing
activities in profit seeking and non profit organisations at different
levels of management, i.e. supervisory, middle-management, and
executive levels. Marketing management decisions are based on
strong knowledge of marketing functions and clear understanding and
application of supervisory and managerial techniques. Marketing
managers and product managers are there to execute the processes
of marketing management. We, as customers, see the results of such
process in the form of products, prices, advertisements, promotions,
etc.
Marketing Management is Both Science and Art
Marketing management is art and science of choosing target
markets and getting, keeping and growing customers through
creating, delivering and communicating superior customer value.
(Kotler, 2006). Marketing management is a science because it follows
general principles that guides the marketing managers in decision
making. The Art of Marketing management consists in tackling every
situation in an creative and effective manner. Marketing Management
is thus a science as well as an art.

1.6.1. Marketing Planning.


"Marketing Planning is the process of developing marketing plan
incorporating overall marketing objectives, strategies, and programs
of actions designed to achieve these objectives."
Marketing Planning involves setting objectives and targets, and
communicating these targets to people responsible to achieve them.

It also involves careful examination of all strategic issues, including


the business environment, the market itself, the corporate mission
statement, competitors, and organisational capabilities.
Marketing Planning Process
Marketing planning process is a series of stages that are usually
followed in a sequence. Organisations can adapt their marketing plan
to suit the circumstances and their requirements. Marketing planning
process involves both the development of objectives and
specifications for how to achieve the objectives. Following are the
steps involved in a marketing plan.
1) Mission
Mission is the reason for which an organisation exists. Mission
statement is a straightforward statement that shows why an
organisation is in business, provides basic guidelines for further
planning, and establishes broad parameters for the future. Many of
the useful mission statements motivates staff and customers.
2) Corporate Objectives
Objectives are the set of goals to be achieved within a specified
period of time. Corporate objectives are most important goals the
organisation as a whole wishes to achieve within a specified period of
time, say one or five years.
All the departments of an organisation including marketing
department works in harmony to achieve the corporate objectives of
the
organisation.
Marketing
department
must appreciate the
corporate objectives and ensure its actions and decisions support the
overall objectives of the organisation.
Mission statement and corporate objectives are determined by the
top level management (including Board of Directors) of the
organisation. The rest of the steps of marketing planning process are
performed by marketing department. All the actions and decisions of
the marketing department must be directed to achieve organisation
mission and its corporate objectives.
3) Marketing Audit
Marketing audit helps in analysing and evaluating the marketing
strategies, activities, problems, goals, and results. Marketing audit is
done to check all the aspects of business directly related to marketing
department. It is done not only at the beginning of the marketing
planning process but, also at a series of points during the
implementation of plan. The marketing audit clarifies opportunities
and threats, so that required alterations can be done to the plan if
necessary.
4) SWOT Analysis

The information gathered through the marketing audit process is used


in development of SWOT Analysis. It is a look at organisation's
marketing efforts, and its strengths, weaknesses, opportunities, and
threats related to marketing functions.
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Strengths and Weaknesses are factors inside the organisation that


can be controlled by the organisation. USP of a product can be the
example of strength, whereas lack of innovation can be the example
of weakness.
Opportunities and Threats are factors outside the organisation
which are beyond the direct control of an organisation. Festive season
can be an example of opportunity to make maximum sales, whereas
increasing FDI in a nation can be the example of threat to domestic
players of that nation.
5) Marketing Assumptions
A good marketing plan is based on deep customer understanding and
knowledge, but it is not possible to know everything about the
customer, so lot of different things are assumed about customer.
For example :Target Buyer Assumptions - assumptions about who the target
buyers are.
Messaging/Offering Assumptions - assumptions about what
customers think are the most important features of product to be
offered.
6) Marketing Objectives and Strategies
After identification of opportunities and challenges, the next step is to
develop marketing objectives that indicate the end state to achieve.
Marketing objective reflects what an organisation can accomplish
through marketing in the coming years.
Objective identify the end point to achieve. Marketing strategies are
formed to achieve the marketing objectives. Marketing strategies are
formed to determine how to achieve those end points. Strategies are
broad statements of activities to be performed to achieve those end
points.

7) Forecast the Expected Results


Marketing managers have to forecast the expected results. They have
to project the future numbers, characteristics, and trends in the target
market. Without proper forecasting, the marketing plan could have
unrealistic goals or fall short on what is promised to deliver.
Forecasting Customer Response - Marketing managers have to
forecast the response that the average customers will have to
marketing efforts. Without some idea how the marketing will be
received, managers can't accurately plan the promotions.
Forecasting Marketing cost - To make the marketing plan stronger,
accurate forecast of marketing cost is required to be done.

Forecasting the Market - To accurately forecast the market,


marketing managers have to gain an intimate understanding of
customers, their buying behaviour, and tendencies.
Forecasting the Competition - Forecast of competition like - what
they market, how they market, what incentives they use in their
marketing can help to counter what they are doing.
8) Create Alternative Plan
A alternate marketing plan is created and kept ready to be implement
at the place of primary marketing plan if the whole or some part of
the primary marketing plan is dropped.
9) Marketing Budget
The marketing budget is the process of documenting the expected
costs of the proposed marketing plan. One common method to
allocate marketing budgeting is based on a percentage of revenue.
Other methods are - comparative, all you can afford, and task
method.
10) Implementation and Evaluation
At this stage the marketing team is ready to actually start putting
their plans into action. This may involve spending money on
advertising, launching new products, interacting with potential new
customers, opening new retail outlets etc.
1.6.2. Marketing mix.
The marketing mix is one of the most famous marketing terms. The
marketing mix is the tactical or operational part of a marketing plan.
The marketing mix is also called the 4Ps and the 7Ps. The 4Ps are
price, place, product and promotion. The services marketing mix is
also called the 7Ps and includes the addition of process, people and
physical evidence.

The marketing mix is . . . The set of controllable tactical marketing


tools product, price, place, and promotion that the firm blends to
produce the response it wants in the target market.
Kotler and Armstrong (2010).
The concept is simple. Think about another common mix a cake mix.
All cakes contain eggs, milk, flour, and sugar. However, you can alter
the final cake by altering the amounts of mix elements contained in it.
So for a sweet cake add more sugar!

It is the same with the marketing mix. The offer you make to your
customer can be altered by varying the mix elements. So for a high
profile brand, increase the focus on promotion and desensitize the
weight given to price.
Another way to think about the marketing mix is to use the image of
an artists palette. The marketer mixes the prime colours (mix
elements) in different quantities to deliver a particular final colour.
Every hand painted picture is original in some way, as is every
marketing mix. Lets look at the elements of the marketing mix in
more detail. Click on the links to go to the lesson on each element.

Price
Price is the amount the consumer must exchange to receive the
offering .
Solomon et al (2009).
The companys goal in terms of price is really to reduce costs through
improving manufacturing and efficiency, and most importantly the
marketer needs to increase the perceived value of the benefits of its
products and services to the buyer or consumer.

There are many ways to price a product. Lets have a look at some of
them and try to understand the best policy/strategy in various
situations.
Place
Place includes company activities that make the product available to
target consumers.
Kotler and Armstrong (2010).
Place is also known as channel, distribution, or intermediary. It is the
mechanism through which goods and/or services are moved from the
manufacturer/ service provider to the user or consumer.

Product
Product means the goods-and-services combination the company
offers to the target market.
Kotler and Armstrong (2010).
For many a product is simply the tangible, physical item that we buy
or sell. You can also think of the product as intangible i.e. a service.
In order to actively explore the nature of a product further, lets
consider it as three different products the CORE product, the
ACTUAL product, and finally the AUGMENTED product.
The Product Life Cycle (PLC) is based upon the biological life cycle. For
example, a seed is planted (introduction); it begins to sprout (growth);
it shoots out leaves and puts down roots as it becomes an adult
(maturity); after a long period as an adult the plant begins to shrink
and die out (decline).
The Customer Life Cycle (CLC) has obvious similarities with the

Product Life Cycle (PLC). However, CLC focuses upon the creation and
delivery of lifetime value to the customer i.e. looks at the products or
services that customers NEED throughout their lives.
Promotion
Promotion includes all of the activities marketers undertake to inform
consumers about their products and to encourage potential
customers to buy these products.
Solomon et al (2009).
Promotion includes all of the tools available to the marketer for
marketing communication. As with Neil H. Bordens marketing mix,
marketing communications has its own promotions mix. Whilst there
is no absolute agreement on the specific content of a marketing
communications mix, there are many promotions elements that are
often included such as sales, advertising, sales promotion, public
relations, direct marketing, online communications and personal
selling.
Physical Evidence
(Physical evidence is) . . . The environment in which the service is
delivered, and where the firm and customer interact, and any
tangible components that facilitate performance or communication of
the service.
Zeithaml et al (2008)
Physical Evidence is the material part of a service. Strictly speaking
there are no physical attributes to a service, so a consumer tends to
rely on material cues. There are many examples of physical evidence,
including some of the following buildings, equipment, signs and logos,
annual accounts and business reports, brochures, your website, and
even your business cards.
People
(People are) . . . All human actors who play a part in service delivery
and thus influence the buyers perceptions; namely, the firms
personnel, the customer, and other customers in the service
environment.

Zeithaml et al (2008).
People are the most important element of any service or experience.
Services tend to be produced and consumed at the same moment,
and aspects of the customer experience are altered to meet the
individual needs of the person consuming it.
Process
Process is) . . . The actual procedures, mechanisms, and flow of
activities by which the service is delivered this service delivery and
operating systems.
Zeithaml et al (2008).
There are a number of perceptions of the concept of process within
the business and marketing literature. Some see processes as a
means to achieve an outcome, for example to achieve a 30%
market share a company implements a marketing planning process.
However in reality it is more about the customer interface between
the business and consumer and how they deal with each other in a
series of steps in stages, i.e. throughout the process.
1.6.3. SWOT Analysis
SWOT analysis is a tool for auditing an organization and its
environment. SWOT analysis is the first stage of planning and helps
marketers to focus on key issues. SWOT stands for strengths,
weaknesses, opportunities, and threats. Strengths and weaknesses
are internal SWOT factors. Opportunities and threats are external
SWOT factors. A strength is a positive internal factor. A weakness is a
negative internal factor. An opportunity is a positive external factor. A
threat is a negative external factor. Here is your FREE SWOT template
for you to have a go after youve read our SWOT analysis lesson of
course!.

We should aim to turn our weaknesses into strengths, and our threats
into opportunities. Then finally, SWOT will give managers options to
matchinternal strengths with external opportunities. SWOT is that
simple. The outcome should be an increase in value for customers
which hopefully will improve our competitive advantage.

The main purpose of SWOT analysis has to be to add value to our


products and services so that we can recruit new customers, retain
loyal customers, and extend products and services to customer
segments over the long-term. If undertaken successfully, we can then
increase our Return On Investment (ROI).

Simple rules for successful SWOT analysis.


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Be realistic about the strengths and weaknesses of your organization


when conducting SWOT analysis.
SWOT analysis should distinguish between where your organization is
today, and where it could be in the future.
SWOT should always be specific. Avoid grey areas.
Always apply SWOT in relation to your competition i.e. better than or
worse than your competition.
Keep your SWOT short and simple. Avoid complexity and over analysis
SWOT analysis is subjective.
Once key issues have been identified with your SWOT analysis, they
feed into marketing objectives. SWOT can be used in conjunction
with other tools for audit and analysis, such as PEST analysis and
Porters Five-Forces analysis. So SWOT is a very popular tool with
marketing students because it is quick and easy to learn. During the

SWOT exercise, list factors in the relevant boxes. Its that simple.
Below are some FREE examples of SWOT analysis click to go straight
to them

A word of caution SWOT analysis can be very subjective. Do not


rely on SWOT too much. Two people rarely come-up with the same
final version of SWOT. TOWS analysis is extremely similar. It simply
looks at the negative factors first in order to turn them into positive
factors. So use SWOT as guide and not a prescription.
SWOT Analysis McDonalds

Strengths
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McDonalds has been a thriving business since 1955 and 20 of the top
50 corporate staff employees started as a restaurant level employee.
In addition, 67,000 McDonalds restaurant managers and assistant
managers were promoted from restaurant staff. Fortune Magazine

2005 listed McDonalds as the "Best Place to Work for Minorities."


McDonalds invests more than $1 billion annually in training its staff,
and every year more than 250,000 employees graduate from
McDonalds training facility, Hamburger University.
Weaknesses

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Their test marketing for pizza failed to yield a substantial product.


Leaving them much less able to compete with fast food pizza chains.
High employee turnover in their restaurants leads to more money
being spent on training.
They have yet to capitalize on the trend towards organic foods.
McDonalds have problems with fluctuations in operating and net
profits which ultimately impact investor relations. Operating profit
was $3,984 million (2005) $4,433 million (2006) and $3,879 million
(2007). Net profits were $2,602 million (2005), $3,544 million (2006)
and $2,395 million (2007).
Opportunities
In todays health conscious societies the introduction of a healthy
hamburger is a great opportunity. They would be the first QSR (Quick
Service Restaurant) to have FDA approval on marketing a low fat low
calorie hamburger with low calorie combo alternatives. Currently
McDonalds and its competition health choice items do not include
hamburgers.
They have industrial, Formica restaurant settings; they could provide
more upscale restaurant settings, like the one they have in New York
City on Broadway, to appeal to a more upscale target market.
Provide optional allergen free food items, such as gluten free and
peanut free.
In 2008 the business directed efforts at the breakfast, chicken,
beverage and convenience categories. For example, hot specialist
coffees not only secure sales, but also mean that restaurants get
increasing numbers of customer visits. In 2009 McDonalds saw the
full benefits of a venture into beverages.
Threats
They are a benchmark for creating "cradle to grave" marketing. They
entice children as young as one year old into their restaurants with
special meals, toys, playgrounds and popular movie character tie-ins.
Children grow up eating and enjoying McDonalds and then continue
into adulthood. They have been criticized by many parent advocate
groups for their marketing practices towards children which are seen
as marginally ethical.
They have been sued multiple times for having "unhealthy" food,
allegedly with addictive additives, contributing to the obesity
epidemic in America. In 2004, Michael Spulock filmed the
documentary Super Size Me, where he went on an all McDonalds diet
for 30 days and wound up getting cirrhosis of the liver. This
documentary was a direct attack on the QSR industry as a whole and

blamed them for Americas obesity epidemic. Due in part to the


documentary, McDonalds no longer pushes the super size option at
the dive thru window.
Any contamination of the food supply, especially e-coli.
Major competitors, like Burger King, Starbucks, Taco Bell, Wendys,
KFC and any mid-range sit-down restaurants.
McDonalds is the leading global foodservice retailer with more than
31,000 local restaurants serving more than 58 million people in 118
countries each day. More than 75% of McDonalds restaurants
worldwide are owned and operated by independent local men and
women.

Disclaimer: This case study has been compiled from information


freely available from public sources. It is merely intended to be used
for educational purposes only.

The business is ranked number one in Fortune Magazines 2008 list of


most admired food service companies.
One of the worlds most recognizable logos (the Golden Arches) and
spokes character (Ronald McDonald the clown). According to the
Packard Childrens Hospitals Center for Healthy Weight children age 3
to 5 were given food in the McDonalds packaging and then given the
same food without the packaging, and they preferred the food in the
McDonalds packaging every single time.
McDonalds is a community oriented, socially responsible company.
They run Ronald McDonald House facilities, which provide room and
board, food and sibling support at a cost of only $10 a day for families
with children needing extensive hospital care. Ronald McDonald
Houses are located in more than 259 local communities worldwide,
and Ronald McDonald Care Mobile programs offers cost effective
medical, dental and education services to children. They also sponsor
Olympic athletes
They are a global company operating more than 23,500 restaurants in
109 countries. By being spread out in different regions, this gives
them the ability to weather economic fluctuations which are localized
by country. They can also operate effectively in an economic
downturn due to the social need to seek out comfort foods.
They successfully and easily adapt their global restaurants to appeal
to the cultural differences. For example, they serve lamb burgers in
India and in the Middle East, they provide separate entrances for
families and single women.
Approximately 85% of McDonalds restaurant businesses world-wide
are owned and operated by franchisees. All franchisees are
independent, full-time operators and McDonalds was named
Entrepreneurs number-one franchise in 1997. They have global

locations in all major airports, and cities, along the highways, tourist
locations, theme parks and inside Wal-Mart.
They have an efficient, assembly line style of food preparation. In
addition they have a systemization and duplication of all their food
prep processes in every restaurant.
McDonalds uses only 100% pure USDA inspected beef, no fillers or
additives. Additionally the produce is farm fresh. McDonalds serves
100% farm raised chicken no fillers or additives and only grade-A
eggs. McDonalds foods are purchased from only certified and
inspected suppliers. McDonalds works closely with ranchers, growers
and suppliers to ensure food quality and freshness.
McDonalds only serves name brand processed items such as Dannon
Yogurt, Kraft Cheese, Nestle Chocolate, Dasani Water, Newmans Own
Salad Dressings, Heinz Ketchup, Minute Maid Juice.
McDonalds takes food safety very seriously. More than 2000
inspections checks are performed at every stage of the food process.
McDonalds are required to run through 72 safety protocols every day
to ensure the food is maintained in a clean contaminate free
environment.
. McDonalds was the first restaurant of its type to provide consumers
with nutrition information. Nutrition information is printed on all
packaging and more recently added to the McDonalds Internet site.
McDonalds offers salads, fruit, roasted chicken, bottled water and
other low fat and calorie conscious alternatives.