MARKETING AND SALES MANAGEMENT
CHECK POINT 81: THE MARKETING MANAGEMENT PROCESS (OVERVIEW)

Please Select Any Topic In Check Point 81 Below And Click.

1. WHAT IS MARKETING?
2. BASIC MARKETING CONCEPTS
3. BASIC MARKETING MANAGEMENT GUIDELINES
4. CONNECTION BETWEEN MARKETING AND SALES MANAGEMENT
5. STEPS IN THE MARKETING MANAGEMENT PROCESS
6. BUYING BEHAVIOR
7. MARKETING INFORMATION AND RESEARCH
8. STRATEGIC MARKETING FACTORS
9. EXISTING POSITION IN THE MARKETPLACE
10. MARKETING OBJECTIVES
11. TARGET MARKETING
12. MARKET MEASUREMENT AND FORECASTING
13. MARKETING STRATEGIES
14. MARKETING MIX STRATEGIES
15. PRODUCT STRATEGIES
16. PRICING STRATEGIES
17. PROMOTIONAL STRATEGIES
18. DISTRIBUTION STRATEGIES
19. DIRECT MARKETING
20. MARKETING PLANNING
21. THE MARKETING BUDGET
22. IMPLEMENTATION AND CONTROL OF MARKETING ACTIVITIES
23. THE AMERICAN MARKETING ASSOCIATION CODE OF ETHICS
24. U.S. LEGISLATION WHICH MAY AFFECT MARKETING PRACTICES
25. FOR SERIOUS BUSINESS OWNERS ONLY
26. THE LATEST INFORMATION ONLINE

1. WHAT IS MARKETING?

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DEFINITION OF MARKETING

Business owners and marketing managers must understand various principles of marketing management which represents one of the most critical functions in many organizations.

According to the American Marketing Association:

"Marketing 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 organizational objectives." (1)

Marketing Management entails analysis, planning, implementation, and control of activities designed to develop and maintain a beneficial exchange of ideas, products, and services in the marketplace to meet personal and corporate goals.

One of the most notable experts on marketing management, Philip Kotler, defines Marketing as:

“Marketing is the delivery of customer satisfaction at a profit” and "A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others". (2)

In simplified terms, illustrated below, the Marketing Process may be presented as a flow of products and services from product and service providers through market intermediaries to the end-users, in exchange for money.

 

THE FLOW OF PRODUCTS AND SERVICES IN THE MARKETPLACE

Product And Service Providers

Market Intermediaries

 End-Users

2. BASIC MARKETING CONCEPTS

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Some of the Basic Marketing Concepts are summarized below. (3)

BASIC MARKETING CONCEPTS

A Market.

A market is represented by individuals and organizations, who are or may become buyers for specific products and services.

A Marketplace.

A marketplace is a specified geographic location which contains a number of existing and potential buyers of products and services.

Needs.

These include basic physical needs for water, food, shelter, closing, safety; social needs for recognition, belonging to a group, affection; individual needs for self-expression and achievement; organizational needs expressed by groups of people or businesses.

Wants.

Wants may be expressed by products or services which may be desirable by individuals or organizations to meet their specific individual or organizational needs.

Demands.

Demand for products or services may be expressed by an individual, a group of a individuals or organizations, backed by their respective buying power in the marketplace.

Products And Services.

Products and services are designed to satisfy the needs, wants, and demands of broad range of individuals and organizations in the marketplace.

Customer Value.

A customer value is the difference between the value the customer receives by owning and using a particular product or service and the actual cost of purchasing such product or service.

Customer Satisfaction.

Customer satisfaction is expressed by the buyer of a product or service based on the degree to which such product or service meets the customer's expectations.

Exchange.

Exchange is the act of obtaining a required product or service from someone and offering something of value in return.

Transaction.

A transaction is an exchange or trade of a product or a service between a buyer and a seller, based on mutually agreed terms and conditions, including price, method of delivery, terms of payment, and warranty.

Relationship Marketing.

Relationship marketing is a process of continuous development, maintenance and improvement of profitable and mutually beneficial relationships with customers, distributors, dealers, and suppliers.

Marketing Network.

A marketing network consists of the company, its employees, customers, distributors, dealers, suppliers, and all organizations with whom the company is developing the relationship marketing.

The Operational Concept.

The operational concept suggests that customers will favor high quality products and services, which are available at affordable prices. Management’s task, therefore, is to ensure continuous improvement of operational efficiency and reduction of costs.

The Internet.

The Internet represents a unique electronic media and the largest marketplace in the world, which allows marketers and sellers to offer their products and services directly to potential buyers, re-sellers, and end-users for mutual benefit.

3. BASIC MARKETING MANAGEMENT GUIDELINES

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IMPORTANCE OF THE BASIC MARKETING MANAGEMENT GUIDELINES

It is important to adhere to the Basic Marketing Management Guidelines designed to ensure mutual satisfaction and positive results for both - the marketing organizations and the customers alike. Some of the basic marketing management guidelines for marketing organizations are outlined below. (4)

BASIC MARKETING MANAGEMENT GUIDELINES

1. To Provide The Producers And Consumers With A Freedom Of Choice.

The western-type market economy is driven by a dynamic market demand and is regulated by the principle of supply and demand in the marketplace. The cornerstone of this principle is the freedom of choice which may be exercised by marketers and consumers alike. Marketers, therefore, should remember that both parties are free to act in their best interests to achieve their organizational or individual objectives.

2. To Satisfy The Basic Needs Of Marketing Organizations And Consumers.

Marketing organizations and consumers have a broad range of specific needs that must be identified, evaluated, and fulfilled in the free-market economy. Marketers, therefore, should be aware of the importance of satisfying their respective basic needs, since a long-term business relationship cannot succeed without a short-term mutual satisfaction.  

3. To Avoid Any Discrimination In The Marketing Process.

The marketing organizations should not discriminate against consumers for any reason. Marketers should offer their products and services on an equal basis to all consumers, irrespective of their status, religion, race, gender, buying power, or any other unrelated characteristic. Marketers should remember, that only a discrimination-free market environment will secure a steady and profitable business performance in the long run.

4. To Provide Cost-Effective Products And Services To Consumers.

The marketing system aims at supplying products and services to customers in the marketplace, based on high quality and competitive price. A free economy relies on active competition and informed buyers who stimulate the market efficiency. Marketers should, therefore, offer their products and services to consumers on a cost-effective basis to ensure long-term commercial success in a customer-driven environment.

5. To Offer Product And Service Innovation To Consumers.

The competitive market environment stimulates the producers to develop new products and services which are better and more efficient in their performance. At the same time, this process also stimulates a continuous reduction of various related costs, such as costs of raw materials, manufacturing, packaging, assembly, or distribution. Marketers, therefore, should be prepared to improve the features and quality of their products and services and at the same time to reduce costs to ensure long-term commercial success.

6. To Educate And Inform The Consumers.

The competitive marketing environment also stimulates a continuous educational process of consumers in the marketplace with an objective to secure long-term effective use of products and services and overall customer satisfaction. Marketers, therefore, should be prepared to educate and inform the consumers on a continuous basis to secure long-term viability of their products and services.

7. To Offer Continuous Product And Service Protection To Consumers.

There is a trend in the modern marketing environment toward maximizing consumer protection in terms of possible harm which may be caused by various products and services supplied by marketers. In addition, there are various laws and regulations, imposed by the government to maximize product safety and to prevent deceptive marketing and sales practices. Marketers, therefore, should be prepared to spend additional funds to maximize the consumer protection in the marketplace and to minimize the potential harm to consumers.

4. CONNECTION BETWEEN MARKETING AND SALES MANAGEMENT

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CONNECTION BETWEEN MARKETING AND SALES MANAGEMENT

Many business practitioners often confuse Marketing Management with Sales Management. Although these two functions are strongly interrelated, they do differ in purpose and description. 

Harvard professor Theodore Levitt defines the difference between these two functions as follows:

"Selling focuses on the need of the seller; marketing on the needs of the buyer. Selling is preoccupied with the seller's need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with the creating, delivering and finally consuming it". (5)

A well-known management expert, Peter F. Drucker, suggests that:

"Selling and marketing are antithetical rather than synonymous or even complementary. There will always, one can assume, be a need for some selling, but the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself." (6)

5. STEPS IN THE MARKETING MANAGEMENT PROCESS

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THE MARKETING MANAGEMENT PROCESS

One of the prime responsibilities of every business owner and marketing manager is to initiate the Marketing Management Process in a customer-driven environment and to develop a Marketing Department within the organization. Philp Kotler defines this process as follows:

“Marketing management is the analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives.” (7)

The ultimate objective of an effective marketing management process is to develop, maintain and grow profitable and long-lasting relationships with customers. The planning and control of the marketing management process in various types of organizations entails a number of steps, as outlined below. Obviously, some steps of this process may differ, depending whether this is a manufacturing, merchandising, service, project, or contract management company.*

EVOLUTION OF THE MARKETING AND SALES MANAGEMENT FUNCTION IN A COMPANY

No.

Details

1.

When entrepreneurs start a small business, they usually “wear all management hats”, including the “Marketing And Sales Management Hat”.

2.

When the small business starts to grow, business owners often decide to employ a Marketing And Sales Manager to manage all marketing and sales management functions within the company.

3.

Upon further growth of the company, business owners may decide to separate the marketing and sales management functions and employ a Marketing Manager and a Sales Manager to manage their respective departments

* Note:

Service Operations Management is discussed in detail in Tutorial 4.

Project And Contract Management is discussed in detail in Tutorial 4.

 

STEPS IN THE MARKETING MANAGEMENT PROCESS

Step 1: Understand The Fundamentals Of Buying Behavior.

Step 2: Gather Marketing Information And Conduct Market Research.

Step 3: Examine Strategic Marketing Factors.

Step 4: Evaluate The Company’s Existing Position In The Marketplace.

Step 5: Formulate The Company’s Marketing Objectives.

Step 6: Complete Market Targeting For Your Company’s Products and Services.

Step 7: Measure And Forecast The Market Potential.

Step 8: Select Suitable Marketing Strategies.

Step 9: Develop Detailed Marketing Mix Strategies.

 

 

 

9.1
Product
Strategies

 

9.2
Price
Strategies

 

9.3
Promotion
Strategies

 

9.4
Distribution
Strategies

 

 

 

Step 10: Develop Direct Marketing Strategies.

Step 11: Prepare A Marketing Plan.

Step 12: Summarize The Marketing Budget.

Step 13: Implement, Evaluate And Control Marketing Activities.

6. BUYING BEHAVIOR

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STEP 1: UNDERSTAND THE FUNDAMENTALS OF BUYING BEHAVIOR

The first step in the marketing management process entails the understanding of Buying Behavior in the marketplace. Business owners and marketing and sales managers must know how, why, when, in what quantities, and how often people and organizations buy products and services. It is essential, therefore, to have solid knowledge about the following types of Buyers’ Markets described below.

BUYERS' MARKETS

 
THE CONSUMER
MARKET
  THE ORGANIZATIONAL
MARKET

The consumer market consists of all individuals and households that purchase products and services for personal use.
This market includes three main categories:

  • The Baby Boomers.
  • The Generation X, or GenXers.
  • The Echo Boomers.
 

The organizational market consists of all individuals and organizations that purchase products and services for organizational and commercial use. This market is sub-divided into:

  • The Government Market.
  • The Business Market.

The Business Market is sub-divided into:

  • The Producer Market.
  • The Reseller Market.
 

THE BUYERS' DECISION-MAKING PROCESS

Understanding of buying behavior will help in finding answers regarding different types of people and organizations, who buy various products and services, their reasons for making Buying Decisions, the volume and frequency of purchases, and the timing of making purchasing decisions.

Business owners and marketing managers must also be familiar with the basic steps in the Consumer Decision-Making Process to ensure a successful performance of their company in the consumer market. This process is strongly influenced by a broad range of Consumer Buying Behavior Factors, which include strategic marketing factors, consumers’ individual factors, social and economic factors.

Moreover, it is essential to understand the basic steps in the Organizational Decision-Making Process to ensure the company’s successful performance in the organizational market. This process is influenced by various Organizational Buying Behavior Factors, including the internal organizational factors, individual buyers’ factors, external organizational factors and environmental factors.

Buying Behavior is discussed in detail in Tutorial 5.

7. MARKETING INFORMATION AND RESEARCH

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STEP 2: GATHER MARKETING INFORMATION AND CONDUCT MARKET RESEARCH

The next step in the marketing management process entails gathering and collating Marketing Information and conducting Market Research.

Good market intelligence provides a sound foundation for an effective marketing plan and helps the company’s management to achieve overall business objectives. It is essential, therefore, to develop a strong market intelligence team and to utilize appropriate Sources Of Marketing Information. Some of these sources are outlined below.

SOURCES OF MARKETING INFORMATION

No.

Details

1.

Commercial and trade publications.

2.

Statistical data.

3.

Reports from sales people.

4.

Market research bureau.

5.

Internet.

6.

Information provided by the existing customers.

 

MARKETING INFORMATION SYSTEMS (MIS)

Business owners and marketing managers must develop an effective Marketing Information System (MIS), designed to collect, sort, evaluate, and store relevant information from various sources, and distribute this information to marketing decision-makers in a timely manner to ensure the most effective performance of the marketing department.

This system has a wide range of applications within the organization, including preparation of the company’s sales analysis and sales forecasting reports, development of sales budgets and sales performance ratios by sales person, determination of sales potential by territory, development of sales quotas per sales person, maintaining customer profiles and many more.

Market research represents another essential function within the marketing department. This function is essential in identifying and defining marketing opportunities and problems, generating and evaluating marketing action, monitoring marketing performance, and improving the understanding and effectiveness of the marketing process.

Marketing Information And Research are discussed in detail in Tutorial 5.

8. STRATEGIC MARKETING FACTORS

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STEP 3: EXAMINE STRATEGIC MARKETING FACTORS

After gathering and collating marketing information and conducting appropriate market research, the marketing manager must proceed with the examination of Strategic Marketing Factors. This includes evaluation of Internal and External Marketing Factors, or Marketing Variables, related to the company's overall business activities in the marketplace.

A thorough examination of internal and external marketing factors plays a vital role in the development of an effective marketing plan. Several important internal and external marketing factors are outlined below.

INTERNAL MARKETING FACTORS

No.

Details

1.

Company's size, strengths, weaknesses.

2.

Company's organizational and management structure.

3.

Company's corporate plans and objectives.

4.

Company's products or services.

 

EXTERNAL MARKETING FACTORS

No.

Details

1.

Current market demand for company's products or services.

2.

Influence of competition in the marketplace.

3.

Legal requirements.

4.

Technological developments.

5.

Economic conditions in the marketplace.

6.

Political conditions in the marketplace.

Strategic Marketing Factors are discussed in detail in Tutorial 5.

9. EXISTING POSITION IN THE MARKETPLACE

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STEP 4: EVALUATE THE COMPANY’S EXISTING POSITION IN THE MARKETPLACE

After completing the evaluation of internal and external marketing factors, the marketing manager must proceed with identifying the Company's Existing Position In The Marketplace.

A comprehensive examination of relevant strategic marketing factors will enable the marketing manager to complete this evaluation in a timely manner and prepare the Company’s Existing Position Status Report. Such an evaluation plays a highly important role in the overall marketing plan development process.

The evaluation of the company's existing position in the marketplace entails providing answers to a number of important questions outlined below.

THE COMPANY'S POSITION IN THE MARKETPLACE

No.

Details

1.

How successful is our company in the marketplace in terms of market penetration with our products or services at present?

2.

How do customers rate our company in terms of the product or service quality?

3.

How popular are our products or services in the marketplace?

4.

How strong is the competition in the marketplace?

5.

How do we differ from our main competitors?

6.

What is the short-term market trend in the area of product or service acceptance?

The Company’s Position In The Marketplace is discussed in detail in Tutorial 5.

10. MARKETING OBJECTIVES

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STEP 5: FORMULATE THE COMPAN’S MARKETING OBJECTIVES

The next step in the marketing management process entails formulation of the company’s Marketing Objectives for the forthcoming fiscal period.

Upon evaluating the company's position in the marketplace, the marketing manager will be in a better position to complete the formulation of the company's marketing objectives and prepare the Company’s Marketing Objectives Report for the next twelve months.

The formulation of the company's marketing objectives entails finding answers on a number of important questions outlined below.

THE COMPANY'S MARKETING OBJECTIVES

No.

Details

1.

What specifically do we want to accomplish in the marketplace during the next fiscal period?

2.

What new products or services do we need to introduce to maintain our competitive advantage in the marketplace?

3.

What products or service do we need to phase out during the next fiscal period?

4.

How much additional capital do we need to support our short-term marketing plan?

5.

How should we develop our sales team to meet our marketing plan objectives

Marketing Objectives are discussed in detail in Tutorial 5.

11. TARGET MARKETING

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STEP 6: COMPLETE TARGET MARKETING OF YOUR PRODUCTS AND SERVICES

After formulating marketing objectives, the marketing manager must proceed with the process of Target Marketing of the company’s products or services. This process entails three elements described below.

THE TARGET MARKETING PROCESS

1. Market Segmentation.

Market segmentation entails dividing a market into distinctive groups of buyers, or Market Segments, on the basis of their needs, characteristics, or behavior patterns, who might require specific products or services.

2. Market Targeting.

Market targeting entails evaluating each market segment in terms of its attractiveness, i.e. where a company may have a unique Marketing Opportunity to offer its products or services.

3. Market Positioning.

Market positioning entails arranging for the company’s products or services to occupy a clear, distinctive and desirable place in relation to competing products and services in the minds of the target customers.

 

MARKETING OPPORTUNITY

Marketing Opportunity represents a suitable field of marketing action where a company may have a potential trading advantage. Each feasible marketing opportunity should be examined more closely to establish a suitable method of entering into a specific market.

Identification of suitable marketing segments entails finding answers to a number of important questions, as outlined below. This process will also help the marketing manager in the overall process of marketing plan implementation and development of an appropriate sales team.

Target Marketing is discussed in detail in Tutorial 5.

12. MARKET MEASUREMENT AND FORECASTING

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STEP 7: MEASURE AND FORECAST THE MARKET POTENTIAL

After identifying suitable marketing segments, the marketing manager must proceed with the process of measuring the market potential of each segment and preparing realistic forecasts regarding the company’s marketing opportunities to sell products or services.

There are many different Market Segments where a company may identify sound business opportunities. These segments, known as Target Markets, must be classified according to their industrial activity and grouped into separate target market areas. This will enable the marketing manager to summarize the most suitable target markets, to complete the Measurement And Forecasting Of Market Potential, and to provide answers to a number of important questions outlined below.

Subsequently, the Sales Potential of each area should be evaluated and the most suitable market opportunities selected in accordance with the company's capabilities to gain and maintain a marketing advantage.

THE MARKET POTENTIAL

No.

Details

1.

What is the market potential for our products or services in a specified market segment in the consumer market in terms of units sold?

2.

What is the market potential for our products or services in a specified market segment in the commercial market in terms of dollar value?

Market Measurement And Forecasting is discussed in detail in Tutorial 5.

13. MARKETING STRATEGIES

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STEP 8: SELECT A SUITABLE MARKETING STRATEGY

Once the marketing manager has evaluated the company's existing position, formulated appropriate objectives, and identified and measured target markets, it is necessary to proceed with the selection of a suitable Marketing Strategy.

There are five basic marketing strategies that can be selected by a company in terms of its overall marketing objectives as illustrated below.

FIVE BASIC MARKETING STRATEGIES

• The New Venture Strategy.

This strategy directs the company toward introduction of brand new products or services in the marketplace.

The Growth Strategy.

This strategy directs the company toward expanding its current marketing efforts with existing products or services.

• The Market Development Strategy.

This strategy directs the company toward continuous improvement of the existing product or service lines.

• The Market Retention Strategy.

This strategy directs the company toward maintaining its existing position in the marketplace.

• The Balancing Strategy.

This strategy directs the company toward balancing its current marketing activities to achieve the desired level of profitability and market share.

Marketing Strategies are discussed in detail in Tutorial 5.

14. MARKETING MIX STRATEGIES

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STEP 9: DEVELOP DETAILED MARKETING MIX STRATEGIES

Upon selection of a suitable marketing strategy, the marketing manager must proceed with the development of Detailed Marketing Mix Strategies.

The Marketing Mix, also known as “The Four P”, is a very important marketing concept and it represents a combination of four essential marketing elements illustrated below.

“THE FOUR P" MARKETING MIX

     
Product
Or Service
  Price   Promotion   Place
(Distribution)
The development of a marketing mix strategy will require the marketing manager to formulate four comprehensive strategies as shown below.

FOUR MARKETING MIX STRATEGIES

     
Product
Or Service
Strategy
  Pricing
Strategy
  Promotional 
Strategy
  Distribution
Strategy

Marketing Mix Strategies are discussed in detail in Tutorial 5.

15. PRODUCT STRATEGIES

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STEP 9.1 : DEVELOP DETAILED PRODUCT STRATEGIES

“Product” represents the first “P” in the Marketing Mix concept. The development of detailed Product Strategies, therefore, represents the first step in formulating the Marketing Mix Strategies for the organization.

In order to develop effective product strategies, the marketing manager must be familiar with various issues related to products as outlined below.

PRODUCT-RELATED ISSUES

• Key Factors In Product Creation And Development.

This includes ensuring customer satisfaction, generating profit, providing employment, and meeting company objectives.

Product Development Process.

This entails understanding the six steps in the product development process and how it affects the company’s performance.

• Product Life Cycle.

This entails understanding the four stages of the product life cycle and how it affects the company’s performance.

• Product Life Cycle Characteristics, Objectives And Strategies.

This entails understanding various variables related to the product life cycle and how it affects the company’s performance.

• Product Branding.

This entails understanding the product branding process.

• Product Licensing.

This entails understanding the product licensing process.

• Franchising.

This entails understanding of the franchising process.

Product Strategies are discussed in detail in Tutorial 5.

A marketing manager in a Service Organization should follow similar procedures in developing Service Strategies, and use applicable elements of the product strategies, when this is appropriate.

Service Operations Management is discussed in detail in Tutorial 4.

16. PRICING STRATEGIES

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STEP 9.2: DEVELOP DETAILED PRICING STRATEGIES

“Price” represents the second “P” in the Marketing Mix concept. The development of detailed Price Strategies, therefore, represents the second step in formulating the Marketing Mix Strategies for the organization.

In order to develop effective pricing strategies, the marketing manager must be familiar with various issues related to price, as outlined below.

PRICE-RELATED ISSUES

• Price-Setting Factors.

This entails an understanding of product or service costs, demand, and competition.

Basic Classification Of Costs.

This entails an understanding of direct and indirect costs for various types of companies.

• Price-Setting Methods.

This entails an understanding of various methods used in determining the selling price for the company’s products and services.

• Basic Pricing Strategies.

This entails an understanding of three main strategies: penetration pricing, meet-the-competition pricing, and price skimming.

• Discounts.

This entails an understanding of trade discounts, quantity discounts, cash discounts, and promotional discounts.

• Price Change Management Process.

This entails an understanding of specific steps related to the process of price change and adjustment to meet new conditions in the marketplace.

Pricing Strategies are discussed in detail in Tutorial 5.

A marketing manager in a Service Organization should follow similar procedures in developing Service Pricing Strategies, and use applicable elements of the product pricing strategies, when this is appropriate.

Service Operations Management is discussed in detail in Tutorial 4.

17. PROMOTIONAL STRATEGIES

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STEP 9.3: DEVELOP DETAILED PROMOTIONAL STRATEGIES

“Promotion” represents the third “P” in the Marketing Mix concept. The development of detailed Promotional Strategies, therefore, represents the third step in formulating the Marketing Mix Strategies for the organization.

In order to develop effective promotional strategies the marketing manager must be familiar with the Promotional Strategy Development Process outlined below.

PROMOTIONAL STRATEGY DEVELOPMENT PROCESS

No.

Details

1.

Evaluate the promotional strategy factors.

2.

Establish the overall direction for the promotional strategy.

3.

Analyze the existing situation in the marketplace.

4.

Establish promotional objectives.

5.

Prepare the promotional budget.

6.

Develop effective communication mix.

7.

Formulate the communication message.

8.

Evaluate and control the communication mix.

The marketing manager must also have a good understanding of various elements of the Communication Mix.

COMMUNICATION MIX

Advertising

Personal
Selling

Packaging

Public
Relations

Sales
Promotions
Promotional Strategies are discussed in detail in Tutorial 5.

A marketing manager in a Service Organization should follow similar procedures in developing Service Promotional Strategies, and use applicable elements of the product promotional strategies, when this is appropriate.

Service Operations Management is discussed in detail in Tutorial 4

18. DISTRIBUTION STRATEGIES

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STEP 9.4: DEVELOP DETAILED DISTRIBUTION STRATEGIES

“Place”or “Distribution” represents the fourth “P” in the Marketing Mix concept. The development of detailed Distribution Strategies, therefore, represents the fourth step in formulating the Marketing Mix Strategies for the organization.

In order to develop effective distribution strategies the marketing manager must be familiar with various issues related to distribution outlined below.

DISTRIBUTION-RELATED ISSUES

• Marketing Intermediaries.

This entails understanding the functions of retailers, wholesalers, industrial distributors, manufacturers’ agents, sales agents, rack jobbers, and facilitating agents.

Supply Chain Management.

This entails understanding of specific steps in the supply chain management process for manufacturing, merchandising, service, project, and contract management companies.

• Distribution Channels.

This entails understanding the advantages and disadvantages of various options which are available through two specific types of distribution channels: the consumer channel and the industrial channel.

Distribution Strategies are discussed in detail in Tutorial 5.

A marketing manager in a Service Organization should follow similar procedures in developing Service Distribution Strategies, and use applicable elements of the product distribution strategies, when this is appropriate.

Service Operations Management is discussed in detail in Tutorial 4.

19. DIRECT MARKETING

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STEP 10: DEVELOP DIRECT MARKETING STRATEGIES

Upon the selection of suitable marketing mix strategies, i.e. product or service, price, promotion and distribution strategies, the marketing manager must proceed with the development of Direct Marketing Strategies.

Direct Marketing is an interactive system of marketing which includes various types of advertising, promotion, and personal selling of products and services outlined below.

ELEMENTS OF DIRECT MARKETING

No.

Details

1.

Telephone marketing.

2.

Direct mail marketing.

3.

Online marketing.

4.

Direct selling.

5.

Automatic vending machines.

6.

TV infomercials.

7.

TV home-shopping.

8.

Postcard decks.

Business owners and marketing managers should pay special attention to the Online Marketing of products and services, because the Internet represents the fastest growing marketing media in the 21st century. Online marketing became particularly popular in the last several years because of the recent developments in the Search Engine Optimization (SEO) Methodology.

Direct Marketing is discussed in detail in Tutorial 5.

A marketing manager in a Service Organization should follow similar procedures in developing Direct Marketing Strategies, and use applicable elements of direct marketing strategies, when this is appropriate.

Service Operations Management is discussed in detail in Tutorial 4.

20. MARKETING PLANNING

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STEP 11: PREPARE A MARKETING PLAN

Preparation of the Marketing Plan represents the culmination of the marketing management process. There are two different types of marketing plans, which can be prepared by the marketing manager, as presented below.

TWO TYPES OF MARKETING PLANS

 

New Product Marketing Plan

 

Annual Marketing Plan

This type of plan is prepared when the company plans to introduce new products or services in the marketplace.   This type of plan is prepared for an existing range of products or services.
The marketing plan must be prepared in accordance with the overall objectives of the organization for at least one fiscal period. The Marketing Plan Outline is outlined below.

THE COMPANY'S MARKETING PLAN OUTLINE

No.

Details

1.

Marketing and sales plan summary.

2.

Analysis of the company’s products and services.

3.

Analysis of the company’s resources.

4.

Analysis of the market demands and trends.

5.

Analysis of external marketing factors.

6.

Analysis of the competition in the marketplace.

7.

The existing and potential target markets.

8.

Problems and opportunities in the marketplace.

9.

Marketing and sales objectives.

10.

Marketing and sales strategy.

11.

Marketing and sales budget.

12.

Marketing plan supporting materials.

Marketing Planning is discussed in detail in Tutorial 5.

21. THE MARKETING BUDGET

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STEP 12: SUMMARIZE THE MARKETING BUDGET

Formulation of a Marketing Budget represents the final stage of an effective marketing plan. 

The marketing budget must take into consideration a broad range of activities related to the marketing of products or services as well as activities related to the sales of products or services. The marketing budget preparation process entails finding answers to a number of important questions outlined below.

FORMULATION OF THE COMPANY'S MARKETING BUDGET

No.

Details

1.

What are the anticipated revenues expected from the sale of specific products or services in each market segment selected by our company?

2.

What are the anticipated advertising costs related to our company's efforts of promoting specific products or services?

3.

What are the anticipated costs of the sales team which will be engaged in the process of selling our products or services?

4.

What are the anticipated costs of manufacturing specific products or providing specific services?

5.

What is the anticipated unit cost of each product or service, which our company plans to sell during the next fiscal period?

Marketing Budgets are discussed in detail in Tutorial 5.

22. IMPLEMENTATION AND CONTROL OF MARKETING  ACTIVITIES

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STEP 13: IMPLEMENT, EVALUATE, AND CONTROL MARKETING ACTIVITIES

Finally, when the Marketing Manager and the marketing team complete the marketing plan, and upon approval of all relevant budgets by the company owners, it becomes essential to implement this plan into action. Implementation Of The Marketing Plan entails providing the company's employees with the opportunity to complete all relevant tasks in the most efficient manner.

The marketing manager must monitor the implementation of each marketing task on a continuous basis to ensure that the company meets its overall marketing objectives. Furthermore, the marketing manager must exercise an effective control over all related marketing functions, which were discussed earlier.

RESPONSIBILITY OF THE MARKETING AND SALES MANAGER

The majority of small business owners usually combine all marketing and sales functions under the umbrella of the Marketing And Sales Department. The Marketing And Sales Manager will be responsible for the evaluation, planning, implementation, and control all marketing and sales activities within this department.

However, when the organization grows, the marketing and sales functions are often separated into a Marketing Department and a Sales Department. In this case, the Marketing Manager will be responsible for the implementation of all marketing plans, while the Sales Manager will be responsible for the evaluation, planning, implementation, and control of all Sales Management Activities, which are discussed in detail in Tutorial 5.

Additional detail related to implementation of marketing plans and budgets are provided in Marketing Planning in Tutorial 5.

23. THE AMERICAN MARKETING ASSOCIATION CODE OF ETHICS

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AMERICAN MARKETING ASSOCIATION

American Marketing Association (AMA) has developed a Code Of Ethics which represents a set of specific guidelines designed for its members and covering a broad range of issues.

It is strongly advised, that every business owner and manager becomes familiar with these guidelines and adopts them throughout the routine marketing management process. The AMA Code Of Ethics Guidelines are summarized next. These guidelines also include a List Of The Marketer's Responsibilities outlined below.

Any AMA member found to be in violation of any provision of this Code of Ethics may have his or her association membership suspended or revoked.(7)

THE AMERICAN MARKETING ASSOCIATION CODE OF ETHICS

1. Responsibilities Of The Marketer.

Marketers must accept responsibility for the consequences of their activities and make every effort to ensure that their decisions, recommendations, and actions function to identify, serve, and satisfy all relevant publics: customers, organizations and society.

2. Marketers' Professional Conduct Must Be Guided By:




  • The basic rule of professional ethics: not knowingly to do harm.
  • The adherence to all applicable laws and regulations.
  • The accurate representation of their education, training, and experience.
  • The active support, practice, and promotion of this Code of Ethics.

3. Honesty And Fairness.

Marketers should uphold and advance the integrity, honor, and dignity of the marketing profession by:



  • Being honest in serving consumers, clients, employees, suppliers, distributors, and the public.
  • Not knowingly participating in conflict of interest without prior notice to all parties involved.
  • Establishing equitable fee schedules including the payment of receipt of usual, customary, and/or legal compensation for marketing exchanges.

4. Rights And Duties Of Parties In The Marketing Exchange Process.

Participants in the marketing exchange process should be able to expect that:




  • Products and services offered are safe and fit for their intended uses.
  • Communications about offered products and services are not deceptive.
  • All parties intend to discharge their obligations, financial and otherwise, in good faith.
  • Appropriate internal methods exist for equitable adjustment and/or redress of grievances concerning purchases.

© American Marketing Association, 2000. Reprinted with permission.
 

LIST OF THE MARKETER'S RESPONSIBILITIES

1. In The Area Of Product Development And Management:




  • Disclosure of all substantial risks associated with product or service usage.
  • Identification of any product component substitution that might materially change the product or impact on the buyer's purchase decision.
  • Identification of extra cost-added features.

2. In The Area Of Promotions:



  • Avoidance of false and misleading advertising.
  • Rejection of high pressure manipulations, or misleading sales tactics.
  • Avoidance of sales promotions that use deception or manipulation.

3. In The Area Of Distribution:



  • Not manipulating the availability of a product for purpose of exploitation.
  • Not using coercion in the marketing channel.
  • Not exerting undue influence over the reseller's choice to handle a product.

4. In The Area Of Pricing:



  • Not engaging in price fixing.
  • Not practicing predatory pricing.
  • Disclosing the full price associated with any purchase.

5. In The Area Of Marketing Research:




  • Prohibiting selling or fundraising under the guise of conducting research.
  • Maintaining research integrity by avoiding misrepresentation and omission of pertinent research data.
  • Treating outside clients and suppliers fairly.

6. Organizational Relationships.

Marketers should be aware of how their behavior may influence or impact on the behavior of others in organizational relationships. They should:









  • Not demand, encourage, or apply coercion to obtain unethical behavior in their relationships with others, such as employees, suppliers, or customers.
  • Apply confidentiality and anonymity in professional relationships with regard to privileged information.
  • Meet their obligations and responsibilities in contracts and mutual agreements in a timely manner.
  • Avoid taking the work of others, in whole, or in part, and represent this work as their own or directly benefit from it without compensation or consent of the originator or owner.
  • Avoid manipulation to take advantage of stipulations to maximize personal welfare in a way that unfairly deprives or damages the organization of others.
© American Marketing Association, 2000. Reprinted with permission.

24. U.S. LEGISLATION WHICH MAY AFFECT MARKETING PRACTICES

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FEDERAL LAWS

There are a number of laws and regulations which must be taken into consideration by the marketing manager and employees throughout the marketing management process. Some of these Federal Laws and regulations are outlined below.

U.S. LEGISLATION WHICH MAY AFFECT MARKETING PRACTICES

• The Sherman Anti-Trust Act Of 1880.

Prohibits monopolies or attempts to monopolize trade.
Prohibits contracts, combinations and conspiracies designed to restraint trade in interstate and foreign commerce.

• The Federal Food And Drug Act Of 1906.
• The Food, Drug, And Cosmetic Act Of 1938.
• The Food Additives Amendment In 1958.
• The Kefauver-Harris Amendment In 1962.

Forbids the manufacture, sale, or transportation of adulterated or fraudulently labeled foods and drugs in interstate commerce.
Specifies pre-testing procedures of drugs for safety; and effectiveness and labeling of drugs by generic name. (The Kefauver-Harris Amendment).

• The Meat Inspection Act Of 1906.

Provides for the enforcement of sanitary regulations in the meat packaging industry.
Provides for federal inspection of all companies selling meat in the interstate commerce.

• The Federal Trade And Commission Act Of 1914.

Provides for establishment of a commission of specialists to investigate and to issue cease-and-desist orders to enforce Section 5, which states that "unfair methods of competition in commerce are unlawful."

• The Clayton Act Of 1914.
• The Robinson-Patman Act Of 1936.

Supplements the Sherman Act and provides that violating corporate officials can be held individually responsible. (Clayton Act).
Amends the Clayton Act by adding the phrase "to injure, destroy, or prevent competition."
Defines price discrimination as unlawful.
Provides the FTC with the right to establish limits on quantity discounts, to forbid brokerage allowances except to independent brokers.
Prohibits promotional allowances or the furnishing of services or facilities.

• The Miller-Tydings Act Of 1937.

Amends the Sherman Act to exempt interstate fair-trade (price-fixing) agreements from anti-trust prosecution.

• The Wheeler-Lea Act Of 1938.

Prohibits unfair and deceptive acts and practices regardless of whether competition is injured.
Places advertising of foods and drugs under FTC jurisdiction.

• The Lanham Trademark Act Of 1946.

Requires that trademarks must be distinctive and makes it illegal to make any false representation of goods or services entering interstate commerce.

• The Anti-Merger Act Of 1950.

Amends Section 7 of the Clayton Act to prevent inter-corporate acquisitions which may have a substantially adverse effect on competition.

• The Automobile Information Disclosure Act Of 1958.

Prohibits car dealers from inflating the factory price of new cars.

• The National Traffic And Safety Act Of 1958.

Provides for the creation of compulsory safety standards for automobiles and tires.

• The Fair Packaging And Labeling Act Of 1966.

Provides for the regulation of the packaging and labeling of consumer goods.
Requires manufacturers to state what the package contains, who made it, and how much it contains.
Permits industries' voluntary adoption of uniform packaging standards.

• The Child Protection Act Of 1966.

Prohibits the sale of hazardous toys and articles.
Amended in 1989 to include articles that pose electrical, mechanical, or thermal hazards.

• The Federal Cigarette Labeling And Advertising Act Of 1967.

Requires that cigarette packages include the following statement: “Warning: The Surgeon General Has Determined That Cigarette Smoking Is Dangerous To Your Health.”

• The Truth-In-Lending Act Of 1968.

Requires lenders to state the true costs of a credit transaction.
Prohibits the use of actual or threatened violence in collecting loans.
Restricts the amount of garnishments.
Established a national Commission on Consumer Finance.

• The National Environment Policy Act Of 1969.

Establishes a national policy on the environment.
Provides for the establishment of the Council on Environmental Quality.

• The Fair Credit Reporting Act Of 1970.

Ensures that consumer's credit report will contain only accurate, relevant, and recent information and will be confidential unless requested for an appropriate reason by a proper party.

• The Consumer Product Safety Act Of 1972.

Establishes the Consumer Product Safety Commission and authorizes it to set safety standards for consumer products as well as exact penalties for failure to uphold the standards.

• The Consumer Goods Pricing Act Of 1975.

Prohibits the use of price maintenance among manufacturers and resellers in interstate commerce.

• The Magnuson-Moss Warranty/FTC Improvement Act Of 1975.

Authorizes the FTC to determine rules concerning consumer warranties.
Expands FTC regulatory powers over unfair or deceptive acts or practices.

• The Equal Credit Opportunity Act Of 1975.

Prohibits discrimination in a credit transaction because of gender, marital status, race, national origin, religion, age, or receipt of public assistance.

• The Fair Debt Collection Practice Act Of 1978.

Prohibits to abuse any person and make false statements or use unfair methods when collecting debts.

• The Toy Safety Act Of 1984.

Provides for a quick recall of dangerous toys when found, by the government.

• The Children’s Television Act Of 1990.

Limits the number of commercials aired during the children’s program.

• The Nutrition Labeling And Education Act Of 1990.

Requires that food products labels provide detailed nutritional information.

• The Telephone Consumer Protection Act Of 1991.

Establishes procedures designed to limit unsolicited phone calls from telemarketers. Limits marketers’ use of automatic telephone-dialing systems and pre-recorded voices.
© Principles of Marketing, 7th ed. by Philip Kotler and Gary Armstrong, pp. 88 - 89, 1996, Adapted by permission of Prentice Hall,  Inc., Upper Saddle River, NJ. and Principles of Marketing, 9th ed. by Philip Kotler and Gary Armstrong, p.109.

25. FOR SERIOUS BUSINESS OWNERS ONLY

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ARE YOU SERIOUS ABOUT YOUR BUSINESS TODAY?

26. THE LATEST INFORMATION ONLINE

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WOULD YOU LIKE TO LEARN MORE?

As an added benefit to all members of Business Management Club, you will have access to the Latest Information Online on various topics discussed in this Check Point. You will be able to access this information through Business Links included in the downloadable version of this program. These links are updated on a continuous basis.

Note:

Learn more about your First-Year Free Membership in Business Management Club.

 

LESSON FOR TODAY:
Marketing Is The Oil That Runs The Business Machine!
Joe Griffith