Marketing Management by Phillip Kotler and Kevinlane Keller - Book Report/Review Example

Chapter In what ways, the role of a traditional marketing manager changed ? The first chapter is prologue to the entire book. It explains the various concepts of marketing management to acquaint the readers with what they can expect in the books. In the first chapter, he states that the purpose and definition of marketing has changed in the 21st century due to the impact of globalization. He states that the purpose of marketing is planning, producing, pricing, promoting and in the end delivering the right product to the consumers. Why is globalization a threat to local businesses ? The market managers are susceptible to more competition due to globalization and therefore they have managed a wide array of problems which were not part of their job, prior to globalization. For example, marketing manager, nowadays have keep a close eye on international competition which was unheard of before. In the recent years many business suffered from the intense competition provided by Chinese products. So, intelligent market managers do not count out the impact of international dimension on them. What do marketing managers do to survive in the political, social and legal environment of a country, in which the business has just entered? However, according to him, globalization has added a new dimension to the word marketing by increasing the size of target market and increasing competition and giving more awareness to the term holistic marketing. Holistic marketing is about designing your product plan in a way that it does not conflict with any of the social factors or the private aims. Holistic marketing also recognizes the link between the actions of the firm and their interdependencies with the outside environment. As a result, more and more firm are now relying less on production concept and product concept and are giving all their energy and effort into making a better holistic marketing program to achieve success. In this chapter, the book identifies marketer as the person who is able to influence the demand and timing of demand of consumers through various marketing techniques. This chapter also tells us about how in the recent years more and more companies have come to know that it is marketing that is going to be decisive factor between the failure and success of the business. As a result they are focusing on marketing excellence to secure a coveted position in the market. What are the functions of a successful marketing manager? After talking about the 21st century economy, this chapter also talks about the duties and functions of the contemporary marketing management. It states that the function of marketing management is not confined to the Four Ps discussed above only but it is also about developing new strategies and gaining insight into the market to connect with customer better. It is also about building strong brand names, shaping the marketing offering and delivering value both to the company and to the consumers. Many businesses in order to remain competitive in the 21st Century economy have reduced their operation or downsized. For example, General motor tried to rescue the business by downsizing its operation and to escape from inevitable bankruptcy. This chapter rightly points out that marketing manager should be flexible enough and brave enough to take seemingly hard and difficult decision to bring the business out of crisis Give an example of a brave manager, who rescued the company from an inevitable disaster? In the end, it states that it is imperative for a good marketing manager to have strong communication and interpersonal skills and to have a broad vision for him and the product in charge. For example, Lee Iacocca saved Chrysler from bankruptcy by taking some tough decision like introducing new products and approving a government-backed loan. All marketing manager, therefore, should take a leaf out of Lee Iacocca’s feat and should never back down from any challenge. Chapter 2: How is the job of new marketing managers different from the conventional post occupiers? In the second chapter, the author explains that the modern marketing is not just about making and selling the goods. There are much more dimension to it then just manufacturing and selling the goods. One dimension to modern marketing is creating value to the brand name under which the goods are sold. According to the author, there is a whole cycle of a value delivery process. It involves selecting in which type of market to operate in and to segment the consumers according to their needs. The existence of value delivery process can be seen in the brands from which consumers are prepared to pay extra such as Nike, Rolex etc. These brands have completed the value delivery process and have achieved excellence in marketing. Why is necessary for firms to focus on their core competencies? The chapter also talks about that the modern firms have started focusing on their competencies and are outsourcing other tasks which hinder their focus on core competencies. For example, nowadays, many businesses are outsourcing their call centers to India to save cost and to free up their labor to do what they do best. The chapter also talks about the various stages in which the value is finally delivered to the customer. The process works in the following stages. In the first step, value is explored, it is then created and in the last step it is delivered to the customer. We can apply this theory to the modern day operations of various businesses. For example, Wal-Mart discovered the value that they can be the cheapest retailer, after which it created this value through advertising and finally it delivered this value to customers by giving them low price products. How is the good strategic planning linked with the success of any business ? In the chapter two of this, the writer has given great importance to the strategic planning of the business in order to be successful. According to Kotler, It is mandatory for all the businesses to indulge in strategic planning so that a proper business plan could be created which fits the business objective with the resources and competencies that it has. If we analyze this argument by looking at the example of real world, we will see that companies like Intel formulated a proper strategic plan by stating that “They want a computer at every desk” and then go about fulfilling it. There are several tools for strategic planning such SWOT analysis which helps the businesses to find out their internal and external environment and it also helps them in the strategy and goals formulation. Explain various facets, in which corporate level strategy is different from business-level strategy ? This books also talks about how the corporate level strategy is different from the business level strategy. In the business level strategy each separate product line or division is given separate mission statement and goals as they have separate competitors and markets to operate in. For example, Nestle produces thousands of daily-use products, but each product is different from other and faces different competitors and markets and targets different consumers, as a result, each division within Nestle has different strategic management team with different goals and strategy plans. CHAPTER 5: What are the factors that rational consumer consider before going to a certain company or business ? This chapter is about creating customer value, satisfaction and loyalty. It also talks about how these aspects of CRM (Customer Relationship Management) can be enhanced by using proper techniques of marketing management. In this chapter, the writer states that almost all customers act rationally and buy goods and services which they consider are going to give them maximum amount of delivered value. They arrive at the highest delivered value by estimating the benefits or usefulness of these goods and then by comparing it with what they have paid for the goods. This can be seen in the mobile industry that some consumers prefer Sony Ericcson Phones as they think that these phones give them more value in terms of features than the costs that they pay for them, while other think, Nokia gives them more value, as it is durable. If a product is perceived is give to high level of satisfaction then people become addicted to such brand and keeps on buying the products of this brand rather than choosing other brands. Describe a situation where bad value-delivery process resulted in a loss of customers ? The books further states that it is not just the product that gives the consumer, a good level of satisfaction, but proper brand image and advertising also contributes to the satisfaction those consumers get from the product. However, it must also be noted that if the company is unable to provide its customer with high level of satisfaction, the customers shift to other brands and the brand suffers badly. Here an example of American Automobile Companies can be taken who lose a large amount of market, when Japanese Car Manufacturers enter the market, as they were lost costly and were giving the same amount of value to the customers as the American Manufacturers. As a result, the satisfaction provided by Japanese firms was much greater than the American firms and customers shifted to Japanese brands. Why do CRM focuses more on retention of old customer than attracting new ones ? The books also talks about how total quality management has evolved as one of the most important parts in retaining old customer and keeping the companies profitable. Many firms, including big brands like Nike, Nokia, Sony have standardized their production line with ISO or other international standards and are trying to move toward six-sigma production to keep their old customers as attracting new customers is a costly and difficult task. What factors, other than high quality, are necessary for attracting and retaining customers ? However, the book also states that only quality management could not win over and retain old customer, but their must be excellent marketing skills that have to be adopted for the firms to meet all the requirements of the customers. For example, Nike does not only produce high quality products, but it also associates its products to top celebrities and sportsman to give its products unique character and brand name. What is the future of CRM, give examples of how modern firms are making use of it ? In the end, the author states that CRM (Customer Relationship Management) only thrives if the needs of each customer are met individually and fulfilled. Many cellular operators give the customers an option to lodge their complaint on the database and they will be attended soon. Similarly, many companies like DELL allow their customer to design their own customized product which will be delivered to their door-steps. All of this just re-iterates the importance of CRM and how has it evolved over the years to retain, attract and satisfy the customers. Chapter 6: Why is there a need to develop different marketing techniques when operating in different markets? This chapter talks about analyzing the various markets according to the type of people that are present in that market. Since, this world is full of diverse people; there are many factors that businesses need to consider before starting their operations in a particular market or a country. According to the book, there are three main factors: cultural, social and personal have to be taken into account before the business can decide what to produce and how to advertise its products. Cultural factors are norms and traditions of the country. For example, certain countries prohibit selling of alcohol and advertising such products, so businesses cannot produce these products. Social factors involve the demographics of a country. For example, if the business is targeting young people, then advertisement should be made in such a way that they tempt the target market to buy the product. Personal factors are factors such as lifestyle that is followed in the country. These factors can help businesses to analyze the market and then formulate their strategies accordingly. How do people decide that they have to make a purchase ? The book also recognizes the series of psychological factors that lead the people into taking certain decisions. These factors include motivation, perception, learning and memory. These factors show that sometimes customer have to be motivated to buy a certain products. This motivation comes from the various gift schemes that are offered by the companies like Shell, Caltex etc. It is also sometimes imperative for the company to improve customer’s perception about the product in order to tempt them into buying the product. In order to improve the perception about the product, it is packaged in a expensive boxes and other techniques are used to give snob-appeal to the product. For example, Jewelers pack their products in expensive looking boxes. Similarly, other techniques such as memory and learning are used to tempt consumer into making a purchase. What are the different stages involved in making purchases ? In the end, the author talks about the series of events that occur before rational consumers make a purchase. In the first, stage consumers recognize a problem that needs to be solved. For overcoming this problem, they need to make a purchase and as a result they enter the market. The first thing that rational consumers do is that they collect the information about the products that could solve their problem and then they go about looking for various alternatives, After analyzing these alternative, the final purchase is made. It is important for intelligent marketers to keep in mind that the process of making a purchase does not end here. It is imperative for successful companies to provide after sales services and warranty to consumer to make them confident of what they are buying. Give some real-world examples of the concept “after-sales services”: This is evident from that fact that various successful firms like Apple Inc in California have opened up their outlets to provide after sale services and repairing services to the customers. Similarly, many computer firms such as ACER also provide 3-years warranty to consumers on their laptops. These were some of the points that were discussed in the chapter. The main aim of this chapter was to analyze the different markets, in order to create efficient marketing strategies for different markets. The need to develop different marketing strategies arises from the fact that there are diverse people in these markets, in terms of cultural, social and personal factors. So, one market strategy cannot be used for all the markets and hence marketing strategies are molded in a way to suit the requirement of a particular market. CHAPTER 7 Why do different firms take different buying decisions? This chapter talks about the different buying decision and actions that are taken by the organizations in order to fulfill their needs of raw material and other component that are used in the production process. The mechanism that is chosen to make these purchases depends upon the needs, frequency and the size of the organization. How is business buying different from consumer buying? This chapter distinguishes the business buying from consumer buying by stating that in business market there are only few large buyers, close customer relationship, professional buying, derived demand and inelastic demand for the product, All the features discussed features are hardly found in consumer markets. What are the different situations that exist in business buying process? There are also several types of buying situation that exist in organization buying. These are straight rebuy, modified rebuy or a new task. Straight rebuy are routine orders, modified rebuy are changed orders, and new task is a buying which is done first time. This chapter also describes the various key characteristics of buying centers and how they influence the buying decisions. Many companies have innovated to make organization buying safer and more rewarding for the customers. For example, certain companies give point if their goods are purchased and later these points can be converted into discounts. Similarly, ICI now ships the chemical it produces in Vessels which are safe and specially designed for the transportation of chemicals and explosive material. As discussed above, all the organizations formulate their buying decisions on the basis of their own policies and include those elements in their decision which are going to benefit them most such as making use of credit period or discount given by the seller. Some businesses use Buying Orientation which is buying for a limited period of time, other times procurement orientation is used which is used to improve the products which are bought and the third process is Supply Chain Management. What are differences between routine products, leverage products and bottleneck products? There are certain types of products which are purchased by the businesses, such as : routine products, leverage Products (scarce products), strategic Products (risky), and bottle neck products (low cost and low value to the customers). The books also suggest that many businesses use specialist buyer to do their buying. These businesses usually recognize what is needed and then go about searching for the right supplier and deliver these products to the firm they are working for. One such example for this kind of buying is Fed-Ex buys for Wal-mart and helps them remain cost competitive. Many firms also check the performance of their suppliers on the routine order and change their suppliers if the performance is not up to the mark. Why is it necessary from business to have good relationship with their suppliers ? This chapter also talks about the business-to-business relationship between the buyer and the seller which results in creating more value for the both parties. The chapter also recognizes various opportunities and risks that are associated with this kind of relationship. For example, Many Oil Suppliers usually have good relationship with oil refineries so that they are not undersupplied and not overcharged for the product they buy. A good relationship between the buyer and seller ensures that no party indulges in fraud against the other party. What is institutional purchasing? In the end, this chapter talks about various institutional markets such as prisons, hospitals etc, that have to provide goods and services to people under their care. The book also explains that it is a very tedious job for the buyers of these organizations as they have to carry out a lot of paperwork. For example, many governmental buying agencies advertise tenders which have to be filled by the supplier. This is how institutional buying is done and supplier have to be flexible to meet the requirements of these organizations. Chapter 8: Why is there a need to segment a market? This chapter talks about identifying the various market segments that exist in an ordinary market and how should firms formulate their strategies to reach out to them. The writer rightly recognizes the need to segment the market, if each unit of the product is different from other. It is imperative for the firms to segment their market, so that proper advertising and marketing decisions could be formulated. For example, It is easier for BlackBerry to segment their market and then price their product and devise pricing policies for their products, rather than advertising randomly. What is the difference between general and discretionary segmentation? It also talks about how flexible market offering contains a general option and a discretionary option. For example, South-West Airlines do not offer the food on local flights. However, passengers can purchase the food from the canteen in the air plane. This shows that there are two market segments that are being served. All the passengers want to supply and second market segment is of people who want to eat food during the flight. The writer correctly classifies the two market segments into homogenous preferences (flying) and diffused preferences (food during the flight). The chapter also talks about the concept of Niche marketing. What is a niche-segment in the market? Niche marketing is a small market segments whose demands have not yet been fulfilled. For example, Diet Coke was introduced for people in the niches who had diabetes or were weight conscious. How is globalization different from local marketing? The advent of globalization has fulfilled the demand of more and more niche segments and has resulted in increased profits for small and medium sized business. Despite this, there are still some businesses that only cater to the local market. For example, French New channel usually present news in French and are thus targeting the local market only. Another contemporary concept that is discussed in this chapter is customerization. This concept empowers the customers into designing their own product and then marketing it for people who have the same needs. It is up to the business to decide whether it wants to cater the needs of individuals or the segments. However, there are various ways in which the target markets are classified into different groups. What are the modern techniques used by the business to segment the market? These segmentation can be on the either on the basis of different characteristics of the people such as: Geographic, Demographics, Income Group etc. It can also be on the basis of attitudes and influences of the people. For example, modern internet technology usually segments the market on the basis of certain characteristics, such as type of use (home or office), age etc. On the other hand, MTV has segmented the market on the basis of attitude of people, such as modern, generation etc. However, many businesses, nowadays, are segmenting marketing using the new method known as psychographics. This method uses both the psychology and demographics as a mean to segment the market. One such example of this is recent advertising campaign of AXE deodorant. This campaign is targeted towards the young people who want girls as psychological factors. In the end, we can conclude that there are various strategies that are used by the modern business to segment the market and to enhance the four Ps of their marketing mix. According to many market experts, segmenting the market correctly is the foundation stage for any marketer, which makes or breaks his marketing plan and is a fine line between success and failure of any business. References: Phillip Kotler and Kevinlane Keller. Marketing Management. 13th Edition. Prentice Hall (March 6, 2008) Read More