Marketing Management: Concepts, Strategies, and Insights

Posted on Mar 4, 2025 in Marketing

Marketing Management

Marketing Management is the analysis, planning, implementation, and control of programs designed to help marketing.

Marketing Concepts

Marketing Concepts: Production concept, Product concept, Selling concept, Marketing concept, and Societal marketing concept.

Product Concept

The Product Concept suggests that companies should focus on improving their products. Companies with strong research and development, and technology, often follow this concept.

Production Concept

The Production Concept states that management should focus on improving production and distribution efficiency. This concept works best when demand exceeds supply.

Selling Concept

The Selling Concept asserts that companies must engage in large-scale sales efforts to attract consumers. Consumers may not buy enough of a product unless they are persuaded to do so.

Marketing Concept

The Marketing Concept focuses on customer needs. It emphasizes understanding the needs and wants of the target market and delivering value to satisfy those needs.

Societal Marketing Concept

The Societal Marketing Concept focuses on balancing a company’s profit and consumer wants with society’s interests and environmental concerns.

Difference Between Needs, Wants, and Demand

  • Needs: A basic requirement for survival or a necessity for a person’s well-being. It’s something essential for a person’s physical, psychological, or social well-being. Examples include food, water, and basic human needs.
  • Wants: A desire or a wish for a product or service that is not necessary for survival but can provide life satisfaction. For example, if someone wants food and prefers to eat at a fancy restaurant.
  • Demand: Demand refers to the willingness and ability of a consumer to purchase a specific product or service at a given price and time.

Difference Between Sales and Marketing

  • Selling is seller-oriented, whereas marketing is buyer-oriented.
  • Selling occurs only after a product is produced.
  • The goal of selling is profit, while for marketing, it is satisfaction.
  • Marketing starts long before a company has the product.

Understanding the Marketplace and Customer Needs

Marketplace refers to the environment or space where buyers and sellers come together to engage in economic transactions. It can be a physical location, like a mall, or a digital platform, like an e-commerce website or online store. In a marketplace, there is usually competition between sellers, which can lead to improvements in products and prices to attract new buyers. Marketplaces are often subject to various rules and regulations from the government or industry.

Customer needs are the specific requirements and expectations that customers have when seeking a product or service.

Five Primary Activities Under Value Chain

The value chain, a concept developed by Michael Porter, describes a series of activities that add value to a product or service as it moves through the various stages of production. The five primary activities under the value chain are:

  • Inbound Logistics
  • Marketing & Sales
  • Outbound Logistics
  • Operations
  • Service
  • Inbound Logistics: This involves receiving, storing, and distributing the raw materials and inputs used in the production process. Effective inbound logistics can lead to cost savings and improved production efficiency.
  • Marketing & Sales: This activity focuses on promoting and selling the products or services to potential customers. It includes tasks such as market research, advertising, sales strategy development, lead generation, customer relationship management, and pricing strategies.
  • Outbound Logistics: Once the product is ready, it needs to be distributed to customers. Outbound logistics involves the processes of storing, handling, and delivering the finished products to wholesalers, retailers, or directly to end customers. This stage ensures that products reach the right place at the right time.
  • Operations: The operations stage involves the actual transformation of raw materials into finished products or services. Efficient operations management aims to maximize output while minimizing costs.
  • Service: After the sale is made, providing excellent customer service is crucial for building customer satisfaction and loyalty.

Example: Imagine a bakery whose source ingredients are flour, sugar, eggs, and other baking supplies from local distributors. Bakers use these ingredients to create a variety of baked goods, including cakes, pastries, and bread. They follow specific recipes and use specialized equipment to ensure consistency and quality. Once the baked goods are ready, they are packaged and displayed in the bakery’s storefront. This bakery also offers online orders and local delivery services. The bakery advertises locally, including through social media, flyers, and promotions to attract customers. The bakery also leverages its website to showcase its products and encourage online orders. The staff of the bakery provides excellent customer service, assisting with inquiries, making recommendations, and ensuring a pleasant shopping experience. The bakery also offers customization options for special events like birthdays and weddings.

Value Chain Support Activities

The four support activities are: Firm Infrastructure, Human Resource Management, Technology Development, and Procurement.

  • Firm Infrastructure: This activity encompasses the organizational structure, management style, and administrative processes of the company.
  • Human Resource Management: This activity involves managing the company’s workforce, including recruitment, training, development, compensation, and performance evaluation.
  • Technology Development: It encompasses activities related to product and process innovation.
  • Procurement: Procurement involves the process of sourcing, acquiring, and managing the resources needed for the production of goods or delivery of services.

Measuring and Managing Marketing Efforts

Measuring Marketing Efforts

There are some important aspects to know before measuring marketing efforts: Data Collection and Analysis, Customer Feedback and Surveys, and Competitive Analysis.

  • Data Collection: Collecting relevant data is essential. This data can be gathered through tools like analysis platforms, customer feedback, sales reports, and others. Once collected, the data needs to be analyzed to gain insights into the performance of marketing efforts.
  • Customer Feedback and Surveys: Direct feedback from customers can provide valuable insights into how well marketing efforts are resonating. Surveys and customer reviews can highlight areas for improvement and indicate customer satisfaction levels.
  • Competitive Analysis: Understanding how your marketing efforts compare to those of competitors is crucial.

Managing Market Efforts

There are some important aspects related to managing market efforts: Setting Clear Objectives and Goals, Developing a Marketing Plan, Segmentation and Targeting, and Implementation and Execution.

  • Setting Clear Objectives and Goals: Clearly defined objectives provide direction for marketing efforts. Goals should be specific, measurable, achievable, and relevant.
  • Developing a Marketing Plan: A comprehensive marketing plan outlines the strategies, tactics, and timelines for executing marketing efforts.
  • Segmentation and Targeting: Identifying specific market segments and tailoring marketing efforts to address their unique needs and preferences increases the chances of success.
  • Implementation and Execution: Proper execution involves putting the marketing plan into action. This includes creating content, launching campaigns, managing advertising, and other activities.

Market Environment

Macro Environment includes: PESTEL analysis, sociocultural factors, economic factors, technological trends, environmental factors, and legal & regulatory factors.

  • PESTEL Analysis: This involves evaluating the Political, Economic, Social, Technological, Environmental, and Legal factors that can influence a business.
  • Sociocultural Factors: These include cultural norms, social values, demographics, and lifestyle trends. They can impact consumer preferences and behavior.
  • Economic Factors: Economic indicators like inflation rates, unemployment rates, GDP growth, and exchange rates can affect consumer spending power and purchasing behavior.

Micro Environment includes: customers, competitors, supplies, distribution channels, and stakeholders.

  • Customers: Analyzing customer behavior, needs, preferences, and segments is fundamental.
  • Competitors: Assessing the strengths and weaknesses of competitors, their strategies, market share, and customer base helps in identifying opportunities and threats.
  • Stakeholders: Identifying and managing relationships with stakeholders, including shareholders, employees, partners, and communities, can influence the business’s reputation and success.
  • Distribution Channel: Understanding how products or services reach the end consumer.

Marketing Research

Marketing Research is the function linking the consumer to the marketer through information that identifies and defines marketing opportunities, generating actions, and monitoring marketing performance in order to improve understanding of the marketing process.

Marketing Research Process:

  1. Defining the problem.
  2. Developing a research plan.
  3. Implementing the research plan/collecting and analyzing data.
  4. Interpreting data/Reporting findings.

Consumer Behavior

The Need to Study Consumer Behavior

Studying consumer behavior is essential for several reasons:

  • Understanding Customer Needs and Preferences: By understanding what drives consumers to make certain purchasing decisions, businesses can develop products, services, and marketing strategies that better align with consumer preferences.
  • Market Segmentation and Targeting: Understanding consumer behavior helps in identifying different market segments with specific characteristics and preferences.
  • Price and Promotion Strategies: Understanding how price sensitivity varies among different customer groups helps in setting optimal prices.
  • Brand Loyalty: Knowing what influences customer loyalty and satisfaction helps businesses in building strong and lasting relationships with their customers.
  • Customer Experience and Satisfaction: Knowing what matters most to consumers in terms of their interactions with a business allows for the creation of a more satisfying customer experience.

Characteristics Affecting Consumer Behavior

  • Demographics: Age, gender, income, occupation, education level, marital status, and family size all play a role in shaping consumer preferences and purchasing behavior.
  • Psychographics: This includes lifestyle, values, beliefs, interests, and personality traits.
  • Social Influences: This includes lifestyle, values, beliefs, interests, and personality traits.
  • Motivation: Consumer behavior is driven by needs and wants.
  • Consumer Knowledge: Informed consumers are more likely to make rational, well-considered choices. The level of knowledge a consumer has about a product or service can influence their evaluation and decision-making process.
  • Online Behavior: Digital factors like online reviews, social media influence, e-commerce experiences, and website usability can significantly impact consumer choices.

Market Segmentation

Explaining the Various Bases of Segmentation

There are various bases of segmentation:

  • Demographic Segmentation: This involves dividing the market based on demographic variables such as age, gender, income, education, occupation, marital status, and family size. For example, a company might target products specifically towards young professionals or retirees.
  • Geographic Segmentation: This focuses on where customers are located. For example, a company might market differently to urban versus rural areas.
  • Psychographic Segmentation: This considers the psychological and lifestyle characteristics of consumers. It includes factors like values, beliefs, interests, hobbies, activities, opinions, and personality traits.
  • Loyalty Segmentation: It’s about customers’ loyalty to a brand. It may include categories like loyal customers, occasional buyers, switchers, and non-customers. It helps in targeting efforts to retain and reward loyal customers.
  • Technographic Segmentation: In the context of technology-related products and services, this segments customers based on their level of technology adoption, preferences for certain platforms or devices, or their familiarity with digital tools.
  • Social Class Segmentation: This categorizes customers based on their social and economic status. It takes into account factors like income, education, occupation, and lifestyle. It can be important for products or services with strong social or status implications.

Effective market segmentation helps businesses adapt their offerings and marketing strategies to resonate with the unique needs and preferences of each segment.

Requirements for Effective Segmentation

  • Measurability: The degree to which the size of the market, purchasing power, and profits of a market segment can be measured.
  • Sustainability: The degree to which a market segment is sufficiently large or profitable.
  • Accessibility: The degree to which a market segment can be reached and served.
  • Actionability: The degree to which effective programs can be designed for attracting and serving a given market segment.

Market Targeting

There are two targets in the market:

  • Segment Attractiveness: The degree to which a segment is attractive depends on current and potential competitors and the relative power of buyers and suppliers.
  • Company Fit: Business strengths include:
    • Market share
    • Technology strength
    • Marketing skills
    • Management strengths
    • Forward or backward integration
    • Reputation and Unique products

Niche Marketing

Niche Marketing involves targeting a specific, well-defined segment of the market with specialized products, services, or messaging. Niche marketing focuses on meeting the unique needs and preferences of a smaller, more specialized group of consumers. Niche marketing can be a highly effective strategy for businesses that are able to identify and serve a specific, well-defined segment of the market. Examples include:

  • Organic and Eco-Friendly Products
  • Specialized Dietary Needs
  • Fitness Products
  • Vintage or Handcrafted Goods

Positioning

Meaning: Positioning is a marketing strategy that involves creating a distinct image or perception of a product, brand, or company in the minds of the target market. It’s about how a product or brand is perceived in comparison to competitors.

Errors in Positioning:

  • Over-Promise
  • Under-Deliver
  • Inconsistent Messaging
  • Ignoring Customer Perception
  • Failure to Adapt

Strategies for Positioning:

  • Product Attributes
  • Benefits Offered
  • Usage Occasions
  • Users
  • Activities
  • Personalities
  • Origin
  • Other Brands

Avoiding Wrong Positioning Strategies

  • Underpositioning: A positioning error referring to the failure to position a company, its product, or brand (e.g., with dark spirits – whiskey & brandy going to 25 years old!).
  • Overpositioning: Giving buyers too narrow a picture of the company, its product, or brand (e.g., the Steuben Glass Company makes only glasses that cost Euro 100+).
  • Confused Positioning: Leaving buyers with a confused image of the company (e.g., Burger King in the UK = “the right food for the right times”).
  • Implausible Positioning: When the positioning strategy stretches the perception of the buyers too far (e.g., the Lexus).