Engineering Management

Marketing Management
Definition of Marketing

‘Marketing is the human activity directed at satisfying

human needs and wants through an exchange process’
Kotler, 1980

‘Marketing is a societal process by which individuals

and groups obtain what they need and want through
creating, offering and freely exchanging products and
services of value with others’
Kotler, 2013
Needs vs. Wants

Which of the below can be influenced by

marketers?

NEEDS WANTS

requirement desire
Value

What is the value for the seller?

– Monetary value (Selling price – cost)

What is the value for the customer?

– Fulfillment of want and need (Benefits – selling price)

When will both parties get satisfied?

– Customer: Performance > Expectations => Satisfaction
– Seller: Selling price > Cost => Satisfaction
 Simple Marketing System
Communication

Goods/services
Industry Market
(a collection (a collection
of sellers) of Buyers)
Money

Information
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Marketing Strategy

Business Marketing
Targeting
Analysis Mix

Select the customer or the mix first?

Marketing Activities

Marketing activities mainly can be divided into 4

elements (4Ps): Marketing Mix

1. Product
2. Price
People 5Ps
3. Promotion
4. Place
 The 4 Ps & 4Cs

Marketing Convenience
Mix

Place
Product

Customer
Solution Price Promotion

Customer Communication
Cost
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Product

Benefits of deliverables that are to be offered to

the market:
– Features
– Packaging
– Quality
– Warranties/Services
– Name (Branding)

If there are going to be different versions of the product,

each needs to be stated explicitly based on: size, color etc.
Product Items, Lines, and Mixes

A specific version of a product

Product Item that can be designated as a
distinct offering among an organization’s products.

A group of closely-related
Product Line
product items.

All products that an

Product Mix
organization sells.
 Product Mix

Width Length Depth Consistency

• Total • Total • Total • Functional

number of number of number of relation of
product products variations end
lines in a line of a products
product in of product
a line lines
Price

Monetary value of the deliverables:

– List price
– Discounts
– Payment options (installments, credits etc.)

Not just the selling price but the whole pricing

strategy
Promotion

How will the market be aware of your product:

– Advertising
– Public relations
– Media
– Sponsorships
– Trade associations, shows, magazines

Online promotion channels are one of the most

preferred methods of today
Place

Where and how the deliverable will be sold:

– Distribution channels
– Logistics
– Coverage
– Location (Local/Global)

It is essential for the products to be easily available

and accessible for the customer, service times should
not be long.
Product Life Cycle vs. Marketing Mix
 Market Segmentation

Homogeneous
group of buyers
who have the Segment
same Segment
preferences
Market
Segment
All the possible
customers of a product

Target segment/s
Customers you will serve
Types of Segmentation

Demographic Geographic

Behavioral Psychographic
Demographical Segmentation

Divides the market based on demographic variables:

– Age
– Gender
– Race
– Nationality
– Income
– Occupation
– Family size

One of the most common segmentation techniques, used mainly for

markets where demographics highly affect the buying behavior.
Geographical Segmentation

Divides the market based on geography:

– City
– Country
– Region
– Climate
– Population density

Used mainly for markets where the buying behavior is affected by

culture and natural resources depending on geographical variables.
Behavioral Segmentation

Divides the market based on behavior and decision

making principles:
– Life cycle stage
– Usage frequency
– Loyalty
– Benefit seeking
– Decision-making influence

Used mainly for markets where the knowledge of the product and
usage of the product determines the buying behavior.
Psychographic Segmentation

Divides the market based on psychological aspects:

– Personality
– Lifestyle
– Values

Used mainly for retail markets where the social standing and lifestyle
are the main contributing factors of the buying behavior.
What Changed in Marketing…
Old Economy
• Organize by product units
• Focus on profitable transactions
• Look primarily at financial
scorecard
• Focus on shareholders
• Marketing does the marketing
• Build brands through advertising
• Focus on customer acquisition
• No customer satisfaction
measurement
• Over-promise, under-deliver
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New Economy
• Organize by customer segments
• Focus on customer lifetime value
• Look also at marketing scorecard
• Focus on stakeholders
• Everyone does the marketing
• Build brands through performance
• Focus on customer retention
• Measure customer satisfaction and
retention rate
• Under-promise, over-deliver