MMGT602: Marketing Management
Topic outline
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In this course, you will learn the important components of marketing and marketing strategy. Since this is a graduate-level course, we will take a strategic approach as we navigate through the various units. You are therefore expected to think strategically as a marketing manager or upper-level marketing executive does. We will begin with the strategic planning process and the role of marketing in this process. We will then move into the external environment and address various components of the external environment within which the marketer must function. Afterward, we will look at the marketing mix, otherwise referred to as the 4Ps of marketing: product, price, promotion, and place. Marketers exercise the components of the marketing mix in accordance with the teaching plan of the firm while confronted with the dynamic aspects of the external environment. Finally, you will discover the importance of a strategic marketing plan and learn how the marketing plan aligns with the mission and vision of the firm and the stated objectives of the firm's strategic plan.
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Marketing is a key function within organizations. Marketing a firm's goods and services is strategic and tactical. The strategic plan of a firm will incorporate a marketing plan.
Completing this unit should take you approximately 4 hours.
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Marketing is about creating, communicating, delivering, and exchanging offerings (products and services) that benefit its customers, the organization (business, nonprofit, government), stakeholders, and society. A market consists of people, individuals, and organizations with the desire and the ability to buy a specific offering. A target market consists of one or more specific groups of potential customers who can respond to a marketing program. The marketer uses the controllable factors of the marketing mix of product, price, promotion, and place (distribution), historically known as the 4 Ps of marketing, to the consumers in the target market amidst the uncontrollable environmental forces in society. The uncontrollable environmental forces are generally categorized as social, economic, competitive, technical, and regulatory.
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Modern businesses conduct their operations based on a strategic plan to function efficiently and profitably. The newly formed business will normally prepare a "business plan" to obtain capital from investors or lenders. Existing businesses generally write a "strategic plan", which is usually revised yearly. Although the terminology mentioned above differs, the fundamentals of the plan are essentially the same. Strategic planning plays a vital role in the operation of the business in that it sets the direction for the use of the firm's resources and coordinates the activities among the employees such that they are all going in the same direction. Any organization that lacks a plan is likely headed for failure. As the expression goes, "if you don't know where you're going, any road will take you there".
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An organization's marketing plan plays a crucial role in the general strategic planning of the organization and is an essential part of the written strategic plan. As the marketing function is at the forefront of the organization, and its purpose is to develop and promote attractive offerings to its customers, the responsibility of this function cannot be understated. Marketing efforts convert to sales revenue coming in the company's front door. Therefore, the firm must assess and understand where its revenues are coming from.
Customer retention is at the top of the list. The important question to be answered is, "how many customers will we retain during the next fiscal year"? Most companies know well that retaining customers by keeping them satisfied produces a long-term benefit for future sales and the resulting income streams. Furthermore, maintaining satisfied customers is significantly less expensive and more cost-effective when compared to the cost of finding new customers. Therefore, a difference in customer retention rates between 80 to 90% can result in millions of dollars for the firm. Therefore, a firm's strategic planning is highly dependent upon the proper analysis of marketing management, and this is the foundation upon which the strategic plan is written".
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Environmental scanning is necessary to observe current trends and changes within the macro-environment, industry, and competitive environment. This analysis, together with the firm's resources and capabilities, is considered to set the course of action using the marketing mix – the 4 Ps. As discussed in Unit 1, we learned that environmental scanning is a key component of developing the firm's strategic plan. In Unit 2, we will discuss the important role that marketing plays in developing and executing the environmental scanning process.
Completing this unit should take you approximately 7 hours.
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Environmental scanning aims to uncover changes and trends in the macro-environment and the competitive industry environment that may affect an organization's marketing strategy. As we know, we live in a dynamic world wherein change is the natural order. Marketers must therefore observe current changes and anticipate future changes within the external environment that may require the firm to adjust its marketing strategy and offerings to stay current with observable trends.
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Various factors comprise the macro-environment, or the environment that affects all businesses and industries. Marketers are subject to local, regional, national, and international forces that occur regularly. Accordingly, marketers must adapt to the changes and consider what adaptations may be required strategically and tactically to the marketing mix.
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The industry and competitive environment include companies closer to the firm. All firms work within an industry and compete with rival firms. Furthermore, businesses purchase raw materials and supplies from their suppliers and sell them to their customers. Companies that supply substitute products that the firm offers must be considered, along with potential new entrants into the industry which could compete with the firm's offerings.
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Marketing managers must be realistic and practical in determining what offerings the firm can effectively provide to the marketplace. Resources of the firm are tangible and intangible, and capabilities represent what the firm can produce through the coordinated efforts of its management and employees.
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As we move away from the uncontrollable external factors of the macro-environment and the competitive industry environment, we will now address the controllable decisions that a firm must make within the marketing mix. Firms that market the products and services manage their marketing efforts by implementing the 4 Ps, or marketing mix. This is distinctively different from studying and assessing the environment, which affects the marketer, as the marketer has no control over the various external factors. Marketers must be deliberate in establishing a marketing mix strategy and executing the strategy toward their customers after properly analyzing the external environment.
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Market segmentation is necessary for the determination of target markets. The firm must commit resources to the identified target markets that are most likely to respond to marketing actions undertaken by the firm. The firm must identify the position of its offerings, whereby the consumer understands the differentiated attributes of the products or services offered and the value proposition offered to the consumer. Branding goods and services is important for many marketers to develop brand loyalty and equity.
Completing this unit should take you approximately 10 hours.
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Successful marketers understand that their products and services are not all things for all people and must therefore determine the appropriate target markets through segmentation. The successful 20th-century American merchant, John Wanamaker, said, "Half the money I spend on advertising is wasted; the trouble is I don't know which half". This is precisely the challenge that marketers face. We don't want to waste money by promoting a product to consumers who will likely not buy it. Market segmentation is the process of dividing a market of potential customers into groups, or segments, based on different characteristics. The segments created are composed of consumers who will respond similarly to marketing strategies and who share traits such as similar interests, needs, or locations. Next, we will discuss the different means of market segmentation.
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In the previous sections, we discussed segmentation approaches and methods. Segmentation is important as an exercise of a means to an end. The result of segmentation is the determination of target markets. Product and service offerings can have one or more target markets, depending on what we offer. For example, a firm that sells grass seed may have consumer and business markets. Consumer markets would be seen in brick and mortar retail hardware stores, landscaping stores, or online websites. Business markets would be golf courses, landscape contractors, municipalities, and other large buyers that would purchase larger quantities in different packaging forms.
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In this section, we will address the important elements of why consumers would be interested in the product(s) of the firm. A competitive advantage must be developed, which can be accomplished in several ways through the marketing mix. For example, price advantage by offering a lower price than the competition for a comparable product. Exceptional customer service is another way of attracting buyers. Positioning a firm's product is demonstrating how the product differs from competing products through its various product attributes or features. The differentiation must be seen through the eyes of the consumer, so the promotional strategy must make this clear to the consumer. Branding is important for many, but not all products. Branding is a promise. Consumers must understand what the brand represents, such as superior quality, prestige, dependability, and so on.
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Product branding is important to many marketing practitioners. Various aspects of branding must be considered, such as brand awareness, brand loyalty, and brand equity. In this section, we will consider how successful branding is developed. From the perspective of the marketing firm, the brand is a promise to deliver the attributes that the brand is known for. For the consumer, the brand is a perception of what their expectations are of the brand. Strong branding delivers strong sales and profits for the firm, and the consistency in brand performance results in repeat business of satisfied customers.
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Consumer and organizational marketing differ in several aspects and approaches undertaken by the firm. Consumer buying behaviors differ from buying behaviors and processes undertaken by organizations. Service marketing presents different challenges to firms providing services solely or services related to product offerings.
Completing this unit should take you approximately 6 hours.
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Consumer marketing, or providing products to the final consumer, has distinctive challenges in applying the marketing mix. As there are numerous types of consumer products, marketers tend to categorize them into product groupings or product offerings. Buyer behavior differs according to the type of consumer goods being sought and purchased. Accordingly, product offerings are categorized as convenience offerings, shopping offerings, specialty offerings, and unsought offerings.
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Organizational buyers are varied and include for-profit businesses, non-profit organizations, and governmental entities at different levels. Their purchasing process includes factors different from those seen in consumer markets. Organizations purchase goods and services in an orderly fashion and for exceptionally good reasons. The purchases are usually monetarily large and involve collective decision-making. Furthermore, purchase decisions and the purchase decision processes generally take a long time compared to consumer purchases. The emphasis is on running the organization, so factors of quality, delivery, and reliability are often at the forefront of the purchase decision.
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Marketing of services uses the marketing mix, but the challenges of service marketing are rather distinctive compared to product marketing. In the U.S. economy, there has been a transition into what we now call a "service economy". Manufacturing of products has gradually shifted to countries that have low labor costs; therefore, service marketing has become more important for service providers to understand and implement over the past few decades. We will examine the "4 Is" of service marketing, which are intangibility, inseparability, inconsistency, and inventory. These aspects of services require the marketer to consider the distinctive challenges of marketing services to consumers and organizations.
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The product life cycle, an important strategic concept, varies according to the product or service offered, and determines the extent and frequency of new product offerings. Marketing research informs the firm about consumer needs and purchasing characteristics to guide marketing actions. Product development is key to the firm's sustainable marketing activities.
Completing this unit should take you approximately 5 hours.
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Successful marketers understand the concept of the product life cycle. Products have a life span, as they are not expected to last forever. The challenge that marketers face is low long the product life cycle will be, and what form will it take?
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Marketing research is an important aspect of marketing. The goal of marketing is to identify consumer needs and satisfy those needs through the firm's offerings. How do we identify consumer needs? Does our product satisfy consumers' needs? What target markets are we attempting to reach with our offerings? These are questions that can be answered through marketing research. Marketers must consider "the self-reference criterion" when creating marketable offerings. As a simple example, a marketing manager may personally like the color navy blue, and therefore decides to offer his product in this color because she likes it. Does this satisfy consumer needs? Perhaps, but the point is we need to determine whether the color navy blue is attractive to the consumers in the target market.
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Product development often occurs after the requisite marketing research has been completed and findings are reported. As we have seen in the previous section, products have a life cycle. Accordingly, marketers must be forward thinking and develop new products, or redevelop existing products, when their products approach the maturity and decline stages in the product life cycle.
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Channels of distribution determine how a firm intends to deliver the product to the consumer. It represents the "place" of the 4 Ps, the marketing mix. Supply chain represents the sourcing of materials and is also a channel of distribution for suppliers of the firm. Logistics concerns the physical distribution of products and services to the consumer.
Completing this unit should take you approximately 7 hours.
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Distribution channels vary according to the product or service offered, consumer preferences, and industry specific distribution practices. Often multichannel distribution of offerings is practiced, as there are numerous ways to deliver the product or service offering to the consumer; and consumers vary according to their individual purchasing behaviors.
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A supply chain is a network between a company and its suppliers to produce and distribute a specific product to the final buyer. This network includes different activities, people, entities, information, and resources. The supply chain also represents the steps to get the product or service from its original state to the customer. The supply chain is broader than a distribution channel because it includes purchase, acquisition, logistics, material management, product development, storage, warehouse, distribution, traffic management, inventory control, and all related things. The distribution channel is a part of supply chain management, mainly the movement of finished products from manufacturing facilities to end users.
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Logistics is the process of planning and executing the efficient transportation and storage of goods from the point of origin to the point of consumption. Logistics aims to meet customer requirements in a timely, cost-effective manner. Logistics is a significant component of supply chain management, value chain analysis, and distribution channels, wherein the efficient physical handling and transport of goods adds value to the offering. Logistics is more of an operational term; it involves planning and executing the physical flow of goods from origin to destination.
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Product promotion, informing your target market of your products and services, is executed in several ways. The firm must decide on the appropriate mix of promotional messages to deliver to the customer, based upon the target market, combined with the resources of the firm. Pricing of the firm's offerings is determined by the firm's target segments and positioning strategy.
Completing this unit should take you approximately 3 hours.
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Product and service promotion is key to effective marketing. Many people think that "marketing" is promotion. Informed students of marketing know differently. However, consider the impact of promotion on our daily lives. We wake up in the morning and listen to promotional messages on the radio and TV. We check our emails, use the internet, and receive promotional messages. We travel to work or school and see billboards along the way. We sometimes find ourselves humming tunes to promotional messages using music.
Marketers need to know that even though your offering (product or service) may be superior to all competing products, you cannot sell it if people do not know about it. Word of mouth referrals have worked for centuries and still work, but to a lesser extent than they did hundreds of years ago. Today we have a global economy with a hypercompetitive business environment. This requires the marketer to inform the consumer and prospective consumer about the product or service offering and the features, advantages, and benefits that the offering provides to the consumer.
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As consumers, we have observed various pricing methods while shopping for our own goods and services. As marketers we must develop a pricing strategy. The pricing strategy must address the objectives that we intend to accomplish. For example, are we interested in obtaining greater market share, or are we pricing for high profitability, or introducing a new product to attract consumers with an introductory low price?
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The marketing plan provides the strategic objectives and actions to be undertaken to successfully market the goods and services offered by the firm. An understanding of the written plan of marketing objectives and initiatives, a plan of execution, and a schedule of timely reviews of the execution tactics and results will be demonstrated.
Completing this unit should take you approximately 3 hours.
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Marketing objectives must be SMART: Specific, Measurable, Achievable, Realistic and Time Bound. Therefore, using the SMART acronym provides marketers a guideline to set and write down effective marketing objectives. For example, writing an objective that sets a sales target of a 10% increase is inadequate, because it is not time bound. The objective must further say that the 10% increase must be achieved within the next fiscal year.
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The marketing plan is an important part of the organization's strategic plan. It fundamentally leads the direction of the organization's strategic plan. For example, the firm, whether for-profit or not-for-profit, needs to know how much money it will be working with over the next year. Marketing is responsible for providing these revenue estimates.
The starting point for determining revenue is customer retention. Is the likely retention of customers 60%, 80%, or 90% from the previous year? This is fundamental to determining how much business and revenue will come into the organization. Maintaining satisfied customers is far less expensive than finding new customers, so the customer retention estimate also determines how much work will be required by marketing for the new year to develop new customers.
The components of the marketing plan consist of a review of the external environment and adapting the marketing mix (the 4 Ps) to changes or recent trends within the external environment. Marketers have no control over the external environment and therefore can only change or adapt the strategic marketing plan through changes in the management of the marketing mix.
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Developing and writing a marketing plan sets the direction of the marketing activity of the firm and channels the human, capital, and technological resources to execute the plan. So, it is one thing to say what you are going to do, and then another matter in doing it, or simply executing the plan.
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You have now completed the content of this course in Marketing Management. As a marketing student, you should have gained a comprehensive foundational knowledge of marketing and marketing management while taking this course.Marketing is an exciting and dynamic field to work in, and some students may find a career direction in marketing or some function within the realm or science of marketing.
For any employee or entrepreneur, whether a for-profit or not-for-profit organization, an understanding of marketing makes you a better manager, executive, or worker, as you understand the importance of marketing and how it impacts the organization, large, medium size, or small.
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This study guide will help you get ready for the final exam. It discusses the key topics in each unit, walks through the learning outcomes, and lists important vocabulary. It is not meant to replace the course materials!
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These case studies are an excellent way to review what you've learned so far and are presented by one of the professors who created the course. Review these materials before you take the final exam.
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Take this exam to prepare for the Proctored Final Exam. You can take this exam as many times as you wish; practice until you feel comfortable with the material.
You will not earn a certificate for this exam or be able to pass this course just by taking this exam. Any grade received on this exam will not count towards your course grade. This exam is only available to help you prepare for the proctored final exam.
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Take this Proctored Final Exam to complete this course.
The exam requires a proctor and a proctoring fee of $5. To pass this course, you will need to earn a grade of 80% or higher on the Proctored Final Exam. Your grade for this exam will be calculated as soon as you complete it.
If you do not pass the exam on your first try, you can take it again up to a maximum of 3 times, with a 30-day waiting period between each attempt. You may not create another account to exceed these limits. After your third failed attempt you will not be able to pass this course, so we recommend taking the Practice Final Exam as many times as you need to feel comfortable.
We are partnering with SmarterProctoring to help make the proctoring fee more affordable. We will be recording you, your screen, and the audio in your room during the exam. This is an automated proctoring service, but no decisions are automated; recordings are only viewed by our staff with the purpose of making sure it is you taking the exam and verifying any questions about exam integrity.
Requirements:
- Desktop Computer
- Chrome (v100+)
- Webcam + Microphone
- 1mbps+ Internet Connection
- Desktop Computer
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Please take a few minutes to give us feedback about this course. We appreciate your feedback, whether you completed the whole course or even just a few resources. Your feedback will help us make our courses better, and we use your feedback each time we make updates to our courses.If you come across any urgent problems, email degrees@saylor.org.