Marketing Management

By Dr. Amgad Fahmey

CHAPTER 1
INTRODUCTION TO MARKETING

 Marketing Management Definition:

Marketing is defined to be the process responsible for anticipation, identification and

satisfaction of customer needs through a profit.
 Marketing Concept:
Search for customers’ needs to satisfy it and make profit at the end.

 Marketing equation:
A- Input
Company (product or service) + (customer needs)
B- Processing
(Identification & satisfaction of customer needs)
C- Output
Profit
(Tangible money / Intangible (reputation)
Can we create needs?
NO
Maslow
  Needs: State of felt deprivation including physical, social and individual needs.
I.e. Hunger (something basic)

 Wants: Form that a human need takes as shaped by culture and individual personality.
I.e. Bread (something I desire to satisfy the need)

 Demand: Human wants backed by buying power.

I.e. Money (purchasing power or the ability & willing to buy a product)

 Marketing Function (Manager):

He is the bridge between the company & customer.
His functions are (APIC).
Analysis – Planning – Implementation - Control

 Analysis: Performance, compotators, pricing, products, customer needs.

 Planning: Marketing strategy, setting objectives, segmentation, promotion, branding.
 Implementation: Tasks, personal task (responsible), time duration, budget.
 Control: Monitoring, evaluation, corrective action for performance & results if deviated.

 Marketing & Sales concepts contrasted:

 The marketing concept
Market → Customer needs →Integrated marketing → Profits through customer
satisfaction

 The selling concept

Factory → Exciting product → Selling & Promoting → Profits through sales volume
  Marketing Evaluation Concepts: Production Concept
Industry Revolution in year 1805 Product Concept
Selling Concept
Marketing Concept
Social Marketing Concept

1- Production Concept.
It holds that customers will prefer products that wifely available and inexpressive.
A- Economy of scale
High quantity of Raw materials to reduce cost.
Production of only one product with huge quantity..
Minimize your production facilities
This will lead to a mass production & cost reduction.
B- High market demand
To make profit

2- Selling Concept.
Push Strategy
It holds that customers and businesses will ordinary not buy enough of the
organization’s products, therefore the organization must undertake aggressive selling
& promotion effort.
This will lead to the appearance of the Intermediaries (whole seller & retailers)
Take excess inventory with special payment facilities & use push strategy, through
discounts & offers to push for product to customer.

3- Product Concept.
It holds that consumers will favor those products that offer the most quality,
performance or innovative features.
In order to compete effectively, the product needs to have features that appeal to
individual consumers.
This will lead to (R&D) Research & Development
To develop the product continuously (customer will pay for self- esteem).
 4- Marketing Concept.
Pull Strategy
It holds that the key of achieving organizational goals consists of the company being
more effective than competitors in creating delivering and communicating superior
customer value to its chosen target markets.

Know the customer needs & satisfy these need

Pull the customer.

1- Reactive marketing orientation

Understanding & meeting consumers’ expressed needs.
2- Researching or imagining latent consumers’ needs through ‘probe- and- learn’
process.

5- Corporate social responsibility (CSR).

‘Social marketing Concept’
To serve/ develop society
(Adds to the marketing concept for the objective of preserving & enhancing customer’s
& society’s wellbeing.

Production Concept

 Consumers favor products that are available and highly affordable

 Improve production and distribution.
Product Concept
 Consumers favor products that offer the most quality, performance, and
innovative features.
Selling Concept
 Consumers will buy products only if the company makes a substantial effort to
promote/ sell these products.
Marketing Concept
 Focuses on needs/ wants of target markets & delivering satisfactions better
than competitors.
Societal Marketing Concept
 Adds to the mktg. concept “…for the objective of preserving & enhancing
consumer’s & society's wellbeing.”
 Selling focuses on the needs of the seller
Marketing focuses on the needs of the buyers

 Ethics.
Rules to regulate relation between people to determine what is right & wrong
Products may be
 Ethical & legal
 Ethical & illegal
 Unethical & legal
 Unethical & illegal
 Consumerism.

It is an organized movement of citizens & government agencies to improve the rights & power
of buyers in relation to sellers.
Customer: Is the purchaser, who makes the purchase order.
Consumer: Is the end user, who use the product.

The consumer Bill of Rights.

 The right to be informed.

 The right to be safe.
 The right to choose.
 The right to be heard.

Understanding a Consumer’s Basic Rights

 To be informed and protected against fraudulent deceitful and misleading statements,

advertisements, labels, etc.; and to be educated as to how to use financial resources
wisely.
 To be protected against dangerous and unsafe products.
 To be heard by government and business regarding unsatisfactory or disappointing
practices.
 To be able to choose from several available goods and services.
CHAPTER 2
PLANNING AND BUDGETING

 Plan
It is a way of achieving something.
Example: The shopping list you take to the supermarket is a simple example.
Planning includes:
1-Setting objectives.
2-Selecting strategies, tactics and policies.

Strategy is the method used to achieve objectives.

e.g. we will achieve our objective of increasing profits by growing market share in
existing market
Tactics is how resources are deployed in an agreed strategy.
e.g. we will set up a new telephone call center and target new customers
Objectives are quantified goals.

 Conditions for Marketing Plan

1- Marketing plan should be for one year.
Exception:
TOP - Tactical operation plan -: it’s a plan for short term duration.

2- Marketing plan should be per one product.

Exception:
The company is sole trader, buy one product.
The company is new.
In case of crisis.

Why not less than a year?

 Due to market dynamics.
 It will be short duration to see the results.
 Marketing activities are accumulated.
 The impact of the marketing plan can be shown after some time.
 The financial plan duration is one year.
  Contents and structure of the Marketing Plan
1- The executive summary
2- Situational analysis and target market
SWOT – PESTEL – GAP – PORTER 5 FORCES MODEL – QUANTITIVE ANALYSIS
3- Marketing objectives
SMART
4- Marketing strategies
TOWS – GENERIC – GROWTH
5- STP
SEGMENTATION – TARGETTING - POSITIONING
6- Marketing mix

7- Marketing tactics
PROMOTION – PRODUCT - PLACE
8- Budgets
A&P (Advertising & promotion)
9- APIC
Analysis – planning – Implementation - control
10- Control

KPIs – Corrective actions

  Situational analysis and target market
SWOT analysis
• Strengths (internal)
• Weaknesses (internal)
• Opportunities (external)
• Threats (external)
Definitions
Strength A particular skill or distinctive competence which organization
possesses & will aid in achieving its stated goals.
Weakness Any aspect of the company that may hinder the achievement of
stated goals.
Opportunities Any feature that creates advantageous conditions to the firm in
relation to a particular objective or set of them.
Threats Any environmental development which present problems & may
hinder the achievement of org. objectives

Internal

 Company (Assets – history – capitals – branches)

 Product
 Employees
 Portfolio
+ve strength – ve weakness
External

 Compotators
 Regulation (PESTEL)
 Customers
 Suppliers
 Distributers
+ve opportunities -ve threats
External models:
PESLET - PORTER – QUANTATIVE – SWOT (+ve opportunities & -ve threats)
Internal models:
GAP – SWOT (+ve strength & – ve weakness)
PESTEL ANALYSIS

1- Political factors
2- Economic factors
3- Socio-cultural factors
4- Technological factors
5- Ecological
6- Legal

 Political
 Political situation of the government.
 Pressure group (e.g. NGOs)
 Taxation & customs policy
 Economic Factors
 GDP
 Exchange rate
 Interest rate
 Inflation rate
 Unemployment rate
 VAT
 Shadow money (money that government can’t trace it)
 Socio-cultural factors
 Social class
A – B – C1 – C2 – D - E
Social class Income Education Occupation
A Wealth Boucher degree & above Business owners
B High >60k Boucher degree & above Top MGT
C1 Middle >10k Boucher degree & above First Line MGT
C2 2k-4k Lower education Entry level/Middle level
D Irregular income No education Irregular jobs
E No income No education No Jobs

• Life style
• Demographic distribution
Culture
 Language
 Religion
 Superstitions
 Etiquette
 Customs
  Traditions
 Notion of time.
 Technological
• New discoveries and innovations
• Speed of technology transfer
• Rates of obsolescence
• Internet Information technology
• Others
 Ecological
 Adoption
 Production
 Legal
• Environmental protection laws
• Employment laws
• Competition law
• Consumer protection law (4 Rights)
• Contract law
• Patency

QUANTITIVE ANALYSIS

Brand Competitors USP MS RMS Notes

name (unique (Market (relative MS)  Market leader
selling point) share) = MS/RMS  Challenger
 Follower
 Nicher
  Marketing Objective S Specific

Should be a SMART objective

M Measurable

Difference between goal & objective A Achievable

Goal: Something I need to achieve but not quantified.

R Realistic
Objective: It is a quantified goal.
T Time related

Example of SMART objective

To sell 1 million bottle of 0.6L pure life water at the end of 2024
S specific 0.6L pure life water
M measurable 1 million bottle
A achievable analysis
R realistic analysis
T time bound end of 2024

How to write objective?

Sell 1 million bottle
Achieve 3M profit
Gain 5% Market share
Grow 30% more sales
Create 30% awareness (if new product)
  Marketing Strategies

• TOWS strategies

• Competitive strategies (Porter)

• Growth strategies (Ansoff)

Main function is to convert weakness into strength and match between your strengths
with opportunities.
It’s a long term strategy.

Transform W → S
Transform S → O
Transform T → O
Transform T → S
Generic or Competitive strategy (Porter)
Three main strategies
1- Cost leadership – the cheapest
2- Diffraction – USP (unique selling point)
3- Niching (focusing) – very small sector of customers & very low amount products
units with very high value.

Growth strategy (Ansoff)

1- Market penetration
Increase customers + gain new customers
2- Market development
Open new branches in new places – go to new markets (e.g. KSA / Dubai..etc)
3- Product development
R&D – Make partial product (e.g. cola zero)
Make new products (e.g. water product)
4- Diversification
Related Diversification or unrelated Diversification.

In marketing strategies,
It’s mandatory to work by growth strategy, you can use ONE or more from growth
strategy.
It’s mandatory to work by TOWS strategy S TO O
If there is competitors, it worth to work by generic strategy.
 S.T.P.

 Market Segmentation

Determining distinct groups of buyers (segments) with different needs,

characteristics, or behavior.

 Market Targeting

Evaluating each segment’s attractiveness and selecting one or more segments to

enter.
 Market Positioning

Arranging for a product to occupy a clear, distinctive, and desirable place relative
to competing products in the minds of target consumers.
Steps in Market Segmentation, Targeting, and Positioning

 Market Segmentation
“There is No Zero Segmentation”
Levels of Market Segmentation
Dividing markets into smaller segments that can be reached more efficiently & effectively
with products & services that match their unique needs.
Mass marketing
Same products to all consumers (e.g. coca cola)
Segment marketing
Different products to one or more segments (e.g. Marriott)
Segmentation variables
 Market Targeting
 Once the firm has identified its market-segment opportunities, it has to decide how many
and which ones to target.
 Marketers are increasingly combining several variables in an effort to identify smaller,
better-defined target groups.
Targeting by:
1- Age 4- Life style
2- Gender 5- City
3- Social class 6- According to Brand loyalty

We can draw profile for the target segment.

If you are male from 18-24 Y live in Cairo & interested in healthy life style.

Market Positioning
How the customers are perceiving the product versus other products in the market.

1- Product Benefits (USP in my product)

2- Product features (slogan e.g. MacDonald’s “ the fastest delivery in Egypt”
3- Positioning by occasion (time)
4- User category
5- Against other product (competitor products)
6- Hybrid basis “mix between more than one factor”
Marketing Mix

6 Aspects and 4 levels for any product (Brand)

PLC - Product life cycle
plc - Public liability company

Notes:
 There is no cut off points between phases.
 Not all products will pass through the phases.
 R&D should make product development in maturity phase, should enter new product
to the market.
Cycle of New product entering the market
6 Aspect Introduction Growth Maturity Decline
Product Modify Keep it as it is Keep it as it is Change in its
features not in
product core
Reduce price
Clearance
Price Increasing stable Stable (offers) Decline
stable
Place Increasing in Increasing in stable Decline
(distribution distribution distribution
area) areas. areas.
Promotion Inform the Differentiate Remind Persuade
customers my product customers by DRIP
(awareness) than others my product
Sales Increasing Increasing Stable Decline
Profits Losses Profit Stable or Decline
maximization reduced
Should reduce
cost to
increase profit

Should all products pass by the 4 promotions levels? NO

E.g. Technology products- pass by Introduction & Growth, then Growth & Decline

Models for promotion objectives:

 DRIP model
 AIDA model
A – Awareness I – interest D – desire A – action
Soft sale = convince customer
Hard sale = offers & discounts (e.g. buy one get one free)

Product life cycle extension

We do this process in maturity level to increase maturity period in the market.
Leave original product as it is & modify on it.
Promote for both, the original & the modified one.
R&D
We do this process in decline level – Make New Brand –

Boston Consulting Group Matrix (BCG) model

Market share (MS % compared with Market leader (RMS)

 ? → Industry is in high growth while product has low MS

Action:
1- Invest → MS increases → Product with move to level.
2- Invest → MS decreases → Stop investment → Diverts.
 → Industry is in high growth & the product has high market share.
Action:
1- Make investment till it reach to be a RMS (min 80% from MS)
  Cash Cow → Low growth but high MS
Action:
1- Use the profit in investment in or ? products.
2- Use the profit in R&D to make new profit.
3- Use the money & take it as a pure profit.
 DOG → Low growth with low MS
Action:
1- Diverts.

Pricing
The physical value of the product.
Factors affecting prices:
1- Cost → (fixed cost + variable cost = total cost)
2- Competitor
3- Customer
4- Company objective
Rapid (ROI) Penetration
(Return on investment) (selling more from same product)
Breakeven point = Zero profit
Total Revenue = Total Cost

Example:
1 2 3 4 5
T.C. 120 140 180 200 210
T.R. 80 1200 150 200 230
-40 -20 -30 0 +20
↓
NOT BREAKEVEN POINT
As the profit is not equal Zero
Promotion:
The tool in which we are communicating with our customers.
IMC : Integrated Marketing Communication
Integration between Marketing tools – promotion tools – communication tools.

Marketing tools or promotional tools or communication tools

1- Advertising
2- Direct marketing
3- Public relation
4- Sales promotion
5- Personal selling
 ATL – above the line
 BTL – below the line
 TTL – through the line
The line separate between promotional tools according to number of audience reached by
each tool.

Personal selling:
One to one, could be face to face or over the phone, or could be with more than one person.
1- Prospection (determine who will buy)
2- Pre-approach
3- Approach
4- Presentation (FAB Technique – future advantage benefit technique)
5- Handling objections
6- Closing (contract)
7- Follow-up
Upselling cross selling
e.g. sell 1L instead of 0.6L e.g. buy other product with the main product
Sales promotion:
I add extra value to the customer.
 Paid/Direct
BOGOF (buy one get one free)
 Non Paid/Indirect
Loyalty program
Samples / testers
Gift with purchase
Capons
Contest / sweepstake

Public Relation
Tool to communicate with the customer to build good relation.
1- Press conference
2- Press release
3- VNR (video news release) – demo or animated video for the product.
4- Website /Social Media owned pages.
5- Sponsorship
6- CSR (corporate social responsibility)
7- Exhibition
8- Road show
9- Corporate hospitality event
Direct Marketing
1- SMS
2- Email
3- WhatsApp
Advertising
1- T.V.
2- Radio
3- Outdoor
4- Press
5- Online
Sponsored Ads. Website (banner ads. – pop up ads.)
 Budget
How much the company intend to spend
Methods:
1- Task method
2- Percentage of sales
3- Competitive parity
4- All you can afford
5- Same as Last Time (S.A.L.T.)