MAR 101 Study Notes (Grewal & Levy) Chapters 1-6

Chapter 1: Overview of Marketing

- Marketing is the activity and processes for creating, capturing, communicating,

delivering and exchanging offerings that have value for customers, clients, partners, and
society at large (p. 4).

Understand Design Profitable Capture value

Marketing customer
customer customer from
program that relationships
needs and driven customer to
delivers value
wants strategy that delight create profits

- Marketing requires a good marketing mix or the 4 P’s: product (creating), price
(capturing), place (delivering) and promotion (communicating) (p. 6-10).

- Marketing can be done by both organizations (B2B) and individuals (C2C) (p. 11-12).

- Traditionally there have been three orientations to the market: production concept,
selling concept, and marketing concept. To be successful companies need to focus not
only on the marketing concept, but carry their plans even further to focus on value based
marketing so that they can build strong customer relationships to capture value (profits)
from customers in return (p. 13-14).

- Marketing is all about developing sustainable profitable customer relationships that

deliver value to the customer and create customer satisfaction. Value can be difficult for
marketers to determine and is that which is perceived by the customer based on their
evaluation of the benefits they will receive (p. 17-18).

- Customer Relationship Management (CRM) is one of the most important concepts of

modern marketing (p. 18).

- Marketing is important in our society. It expands our global presence; it is pervasive

across organizations and the supply chain; it makes our life easier and enriches society (p.
18-23).

Chapter 2: Developing Marketing Strategies and a Marketing Plan

- A marketing strategy identifies a firm’s target market, the 4 P’s and the bases upon
which to build a sustainable competitive advantage which is an advantage over the
competition that is not easy to copy (p. 32-33).

- The four basic strategies for competitive advantage are (p. 33-38):
- Customer excellence
- Operational excellence
- Product excellence

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 - Locational excellence

- In order to develop a value and market orientation, companies need to do strategic

planning and define a market oriented mission and marketing plan. They need to see
where they’ve been in order to see where they are going (p. 39-52).

Step 2 Step 4 Step 5

Step 1 Step 3
Situation Implement Evaluate
Mission & Identify
Analysis Marketing -Portfolio
Objectives Opportunities
SWOT Mix Analysis

- The company mission then needs to be turned into objectives and goals for each level of
management based and then marketing strategies are based to support the marketing
objectives and goals.

- SWOT Analysis (p. 56-57):

Strengths - Weaknesses –
Internal Internal Internal
capabilities limitations

Opportunities – Threats –
External External factors Current &
emerging external
factors
Positive Negative

- Portfolio Analysis has different methods – a widely used method is the Boston
Consulting Group’s (BCG) growth-share matrix (p. 51).

High Rising Star Question Mark

Market
Growth
Rate
Low Cash Cow Dog

High Low
Relative Market Share

- There are issues with matrix approaches to strategic planning. Often it is difficult to
define a Strategic Business Unit (SBU), and this method was traditionally in the hands of
senior managers. Much of today’s strategic planning has been decentralized where
individual business units create meaningful goals that match to the overall company’s
goals.

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- Based on the strategic analysis company’s develop strategies for growth or downsizing
(p. 52-55).
Existing Product New Products

Existing Market Product

Markets Penetration Development
New
Markets Market Diversification
Development

- Marketing Strategies should be customer centered with market segmentation, targeting,

positioning and the marketing mix (product/price/place/promotion) centered around the
customer (p. 56-59).

Chapter 3: Marketing Ethics

- Business ethics refers to the moral or ethical dilemmas that might arise in a business
setting. Marketing ethics, in contrast, examines those ethical problems that are specific to
the domain of marketing (p. 87).

- The process of creating a strong ethical climate within a marketing firm includes having
a set of values that guides decision making and behavior (p. 87).

- People act unethically for a variety of reasons; we are influenced by our culture, our
upbringing, and a host of other reasons (p. 90-91)

Ethical Decision Making Framework (p. 94-101):

Identify Gather Brainstorm and Choose

the information and evaluate a course of
Issues identify the alternatives action
stakeholders

- During this decision making process, there are some metrics that can be used to help
structure the information and determine the right course of action. The book uses two
different metrics:

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Chapter 4: Analyzing the Marketing Environment

- Companies operate within a microenvironment (company, competition, corporate

partners - suppliers, marketing intermediaries, customers) as well as a macroenvironment
(culture, political/legal, economic, demographics, social, technology). They have to
balance these forces within their planning (p. 125-134).

- Each of these environments has their own special issues that marketers have to be aware
of and sensitive to.

- Changing demographics is one of the largest areas of concern for marketers and has
created population groups within the market that have to be addressed individually based
on their particular wants and needs: Seniors, Baby Boomers, Generation X, Generation
Y (Millennials), and Tweens.

- Culture has also played an increasing factor in shaping beliefs and values within the
social macroenvironment.

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- Corporate Social Responsibility (CSR) refers to the voluntary actions taken by a
company to address the ethical, social, and environmental impacts of its business
operations and the concerns of its stakeholders (p. 134-140).

- More and more companies are using the CSR Framework to report their CSR activities
and companies are realizing that “doing good mean doing better.” (p. 138).

Chapter 5: Consumer Behavior

The Consumer Decision Process (p. 151):

Need Information Evaluation of Purchase Postpurchase

Recognition Search Alternatives Decision Behavior

- Needs can be both functional or psychological (p. 153).

- Whether someone has an internal locus of control or an external locus of control can
have an affect the research process (p. 154-155).

- When evaluating the alternatives there are several “rules” that consumer might use to
help them make a decision:
- Compensatory decision rule
- Non-compensatory decision rule
- Heuristics
- Elaboration Likelihood Method (ELM)

- Post Purchase stress or “buyers remorse” is often called postpurchase dissonance or

cognitive dissonance (p. 160-161). This is an area that marketers can a lot to relieve in
order to create customer value and sustainable customer relationships.

- There are four major factors that affect how consumers make a purchase decision (p.
162-172):
- The Marketing Mix or 4 P’s
- Social Factors or our family and reference groups
- Situational Factors or store atmosphere
- Psychological Factors or our motivations, attitudes, perceptions, and lifestyle
(how we spend out time and money)

- A marketer’s objective is to understand which factors may be relevant to his/her target

market and plan accordingly. Marketers can make a difference if they help the consumer
reduce dissonance (buyer’s remorse) by helping the consumer to feel good about the
purchase (follow-up letter, etc.)

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Chapter 6: Business-to-Business Marketing

The Business Decision Process (p. 187):

Need Product RFP Analyze Order Purchase

Recognition Specification Process proposal & Specification
select vendor

- Business markets differ from the consumer markets in that there are far fewer buyers
but far larger buyers. Buying decisions are much more complex and formal and involve
many more buyers. Long term relationships are important.

- Businesses go through a more detailed buying decision process than do consumers that
includes detailed product specifications, a proposal solicitation (RFP) and a supplier
selection based on the proposal evaluation. Key to a business purchase is the
implementation and performance review that analyzes what did or did not go as expected
(p. 188-190).

There are four major factors that affect how consumers make a purchase decision (p. 191-
199):
- The Buying Center – the roles different people play in the purchasing process:
- Gatekeepers – control the flow of information
- Influencers
- Users
- Deciders
- Buyers

- The organization culture – the set of values and traditions of the organization
and whether one person makes the decision or they seek opinions of others
- The buying situation – what type of a purchase is it:
- new buy
- straight rebuy
- modified rebuy
- The internet – and how it influences the buying process

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