KnowThis: Marketing Basics – Chapter Summary

Chapter 1 – What is Marketing?

In this first chapter, we lay the groundwork for our study of the field of marketing with a look at marketing’s key concepts and the important tasks marketers perform.  Coverage includes a close examination of the definition of marketing.  A dissection of the key terms in the definition will show that marketing’s primary focus is to identify and satisfy customers in a way that helps build a solid and, hopefully, sustained relationship that encourages customers to continue doing business with the marketer.  We also show how the field of marketing has evolved from a process centered on simply getting as many people as possible to purchase a product to today’s highly complex efforts designed to build long-term sustainable customer relationships.  Additionally, we will see marketing is not only necessary for individual organizations, but it also carries both positive and negative influences at a broader societal level.  Finally, we look at the key characteristics that define successful marketers.

Key Issues

  • Marketing Defined
  • The Marketer’s Toolkit
  • Marketing’s Role
  • Criticisms of Marketing
  • Ethical and Social Concerns
  • The Successful Marketer

Chapter 2 – Marketing Research

In this chapter, we look at the importance of research in marketing.  We explore what marketing research is and see why it is considered the foundation of marketing.  Our examination includes a detailed look at the key methods marketers utilize to gather relevant information.  Finally, we look at the important trends shaping marketing research.

Key Issues

  • The Foundation of Marketing
  • Research in Marketing
  • Secondary Research
  • Primary Research
  • Trends in Marketing Research

Chapter 3 – Managing Customers

In this chapter, we explore the techniques marketers use to manage customers.  We begin by defining what a customer is and why they are important to an organization.  We then look at what tools and strategies must be in place to manage customers skillfully, including the crucial requirement that marketers work hard to build relationships with their customers.  Finally, we conclude with a discussion of how servicing customers after a relationship is established (e.g., after a purchase) is often just as critical as the marketing efforts that were needed to begin the relationship.

Key Issues

  • What is a Customer?
  • Customers and the Organization
  • Challenge of Managing Customers
  • Customer Relationship Management
  • Customer Service and Marketing
  • Trends in Customer Service
  • Customer Service Technologies

Chapter 4 – Understanding Customers

In this chapter, we look at how customers make purchase decisions.  We begin with a discussion of customer needs and why understanding this is fundamental to understanding why customers make purchases.  The perspective we take in this chapter is to touch on just the basic concepts that appear to be commonly accepted as influencing customer behavior.  We look at the buying behavior of consumers (i.e., when people buy for personal reasons) and examine factors that influence buyers’ decisions in the business market.

Key Issues

  • Why Customers Buy
  • What Influences Purchasing
  • Internal Influences
  • External Influences
  • How Customers Buy
  • Consumer Purchase Decisions
  • Business Purchase Decisions

Chapter 5 – Targeting Markets

In this chapter, we examine decisions affecting the selection of target markets.  This is a critical point in marketing planning since all additional marketing decisions are going to be directed toward satisfying customers in the markets selected.  We explore what constitutes a market and look at basic characteristics of consumer and business markets.  We will see not all markets are worth pursuing, and marketers are often better served developing a plan identifying specific markets to target.  In particular, we look at the process of market segmentation where larger markets are carved into smaller segments offering more potential.  Our discussion includes methods used to identify markets holding the best potential.  Finally, we discuss the concept of product positioning and see how this is used as part of a target marketing strategy.

Key Issues

  • What is a Market?
  • Consumer and Business Markets
  • The Need for Target Markets
  • Targeting Markets through Segmentation
  • Positioning Products and Services

Chapter 6 – Product Decisions

In this chapter, we define what a product is and look at how products are categorized.  We also take a close look at the key decisions marketers face as they formulate their product offerings.  These decisions may involve what features to include in a product, how a product’s identity is established through branding, important issues in packaging design, and what to consider when labeling products.  We discuss each in detail and see how these impact product strategy.

Key Issues

  • What is a Product?
  • Categories of Consumer Products
  • Categories of Business Products
  • Components of a Product
  • Key Product Decisions
  • Consumable Product Features
  • Branding
  • Packaging
  • Labeling

Chapter 7 – Managing Products

In this chapter, we extend the coverage of product decisions by exploring additional product issues facing the marketer.  First, we look at how companies structure their product offerings and identify the scope of a marketing manager’s responsibilities within this structure.  Second, we spend a large part of this chapter covering the importance of new product development, including an analysis of the steps organizations may follow to bring new products to market.  Finally, we show that once new products have been established in the market numerous factors force the marketer to adjust its product decisions.  As part of this, we examine the concept of the Product Life Cycle and see how it offers valuable insight and guidance for new product decisions.

Key Issues

  • Structure of Product Management
  • Managing New Products
  • Categories of New Products
  • New Product Development Process
  • Managing Existing Products
  • The Product Life Cycle

Chapter 8 – Distribution Decisions

In this chapter, we cover the basics of distribution, including defining what channels of distribution are, examining the key functions and parties within a distribution system, and evaluating the role distribution serves within the overall marketing strategy.  Also, we look at the major types of channel arrangements and the factors affecting the creation of effective distribution channels.  We conclude with a discussion of different distribution design options and look at the issues global marketers face when distributing beyond their home country.

Key Issues

  • Importance of Distribution
  • Distribution Activities
  • Type of Channel Members
  • Why Distribution Help is Needed
  • Channel Arrangements
  • Factors in Creating Distribution Channels
  • Overall Distribution Design
  • Distribution in Global Markets

Chapter 9 – Retailing

In this chapter, we begin our discussion of resellers by examining the role retailers serve in reselling a marketer’s products.  We begin by setting out reasons why selecting resellers is an important decision that should not be taken lightly.  We then turn our attention to a detailed look at retailing, which in terms of sales volume and number of employees is one of the largest sectors of most economies.  We show that retailing is quite diverse, and marketers, who want to distribute through retailers, must be familiar with the differences that exist among different retail options.  The chapter concludes with a look at the key concerns facing today’s retailers.

Key Issues

  • Importance of Resellers
  • What is Retailing?
  • Benefits of Retailers
  • Ways to Categorize Retailers
  • Retail Formats
  • Concerns of Retailers

Chapter 10 – Wholesaling and Product Movement

In this chapter, we first examine another reselling group – wholesalers – and see how they come into play when a marketer attempts to reach the final customer.  We show wholesalers exist in many formats, affect a wide range of industries, and offer different sets of features and benefits depending on the markets they serve.  In the second half of the chapter, we examine the tasks that must be carried out in order to deliver products to customers.  In some cases, the marketer will take on the responsibility of carrying out some functions, while other tasks may be assigned to distribution service providers.  Whether handled by the marketer or contracted to others, these functions are crucial to having a cost-effective and efficient distribution system.  It is worth noting that while most product movement is concerned with moving tangible products, some of the issues covered here also apply to intangible products, such as services, and to digital products.

Key Issues

  • What is Wholesaling?
  • Benefits of Wholesalers
  • Ways to Categorize Wholesalers
  • Wholesale Formats
  • Managing Product Movement
  • Ordering and Inventory Management
  • Transportation
  • Product Storage

Chapter 11 – Promotion Decisions

In this chapter, we begin our discussion of the promotion component of the Marketer’s Toolkit.  We start by defining promotion, and we show how promotion is used to meet different objectives.  Because communication is a key element of promotion, we take an extended look at the communication process.  Next, we explore different characteristics of promotion and how different promotional methods stack up to these characteristics.  Finally, we discuss factors affecting the choice of promotional methods.

Key Issues

  • What is Promotion?
  • Objectives of Marketing Promotions
  • Types of Promotion Objectives
  • The Communication Process
  • Characteristics of Promotions
  • The Promotion Mix
  • Factors Affecting Promotion Choice

Chapter 12 – Advertising

In this chapter, we present the first of a two-part examination of advertising with a discussion of advertising basics.  We begin by covering several fundamental issues in advertising including examining what advertising is and why it is important to the marketing organization.  We also look at managing the advertising effort by comparing in-house management to that offered by advertising professionals, such as advertising agencies.  Finally, we identify different types of advertising and address trends facing the advertising industry.

Key Issues

  • What is Advertising?
  • Objectives of Advertising
  • Managing Advertising Decisions
  • Types of Advertising
  • Trends in Advertising

Chapter 13 – Managing the Advertising Campaign

In this chapter, we continue our discussion of advertising by taking a closer look at the decisions involved in creating an advertising campaign.  Whether a marketing organization employs a professional advertising agency to handle its advertising campaign or chooses to undertake all advertising tasks on its own, a successful campaign requires a number of critical decisions including: 1) setting the advertising objective, 2) setting the advertising budget, 3) selecting media for message delivery, 4) creating a message, and 5) evaluating campaign results.  For leading consumer products companies, that spend large sums to promote their products, each of these decisions is intensely evaluated.  Smaller companies with limited budgets may focus what little money they have on fewer decisions, such as message development and selecting media, and give less attention to other areas.  No matter the organization’s size, knowledge of all advertising campaign decisions is crucial and should be well understood by all marketers.

Key Issues

  • Setting the Advertising Objective
  • Setting the Advertising Budget
  • Selecting Media Outlets
  • Characteristics of Media Outlets
  • Type of Media Outlets
  • Creating a Message
  • Evaluating Campaign Results

Chapter 14 – Sales Promotion

In this chapter, we continue our discussion of promotion decisions by looking at a second promotional mix item: sales promotion.  Sales promotions are used widely in many industries, especially by marketers selling to consumers.  We show that the objectives of sales promotion are quite different than advertising and are specifically designed to encourage customer response.  Coverage includes a detailed look at promotions aimed at consumers, channel partners, and business-to-business markets.  Finally, we will look at the trends shaping the sales promotion field.

Key Issues

  • What is Sales Promotion?
  • Objectives of Sales Promotion
  • Classification of Sales Promotion
  • Consumer Sales Promotions
  • Trade Sales Promotions
  • Business-to-Business Sales Promotions
  • Trends in Sales Promotion

Chapter 15 – Public Relations

In this chapter, we investigate how public relations is growing in importance as a marketing tool and is now a critical element in helping marketers reach their objectives.  We look at both the advantages and disadvantages of using PR for promotion.  We see that PR uses a variety of tools to enhance the relationship between an organization and its target audience.  And we show how, when handled correctly, PR can allow a marketer’s message to stand out compared to other promotional methods.

Key Issues

  • What is Public Relations?
  • Advantages and Disadvantages of PR
  • Objectives of Public Relations
  • Public Relations Tools
  • Additional Public Relations Activities
  • Trends in Public Relations

Chapter 16 – Personal Selling

In this chapter, we define personal selling, look at the advantages and disadvantages, and see how it fits within an organization’s promotional strategy.  We also see there is a variety of different selling roles available to the marketing organization, including some whose objectives are not tied to getting customers to buy.  Finally, we examine several trends facing the personal selling field.

Key Issues

  • What is Personal Selling?
  • Advantages and Disadvantages of Personal Selling
  • Objectives of Personal Selling
  • Classifying Selling Roles
  • Trends in Personal Selling

Chapter 17 – Pricing Decisions

In this chapter, we begin a two-part discussion of the pricing component of the Marketer’s Toolkit.  We start by defining price and see how it has a different meaning for different parties to a transaction.  We next look at why price is essential to marketing and to the organization.  Finally, considerable attention is given to the internal and external factors that influence pricing decisions.

Key Issues

  • What is Price?
  • Importance of Pricing
  • Internal Factors Affecting Pricing Decisions
  • External Market Factors Affecting Pricing Decisions

Chapter 18 – Setting Price

In this chapter, our primary emphasis is to look at pricing as a five-step process.  The process takes into consideration many different decisions before the marketer arrives at a final selling price.  We will examine this process by first assessing how price fits into the organization’s overall marketing objectives.  Next, we look at several approaches for setting the initial product price.  For many marketers, the initial price is not the final price and adjustments must be made.  In the next step, we consider situations where marketers must make changes to their initial price and the various methods that are available for doing this.  We conclude the five-step process by looking at payment options marketers can choose when selling their product.  We complete the discussion of pricing by examining two additional methods, bid and auction pricing, and see how these fit within pricing strategy.

Key Issues

  • Steps in the Price Setting Process
  • Step 1: Examine Objectives
  • Step 2: Determine an Initial Price
  • Step 3: Set Standard Price Adjustments
  • Step 4: Determine Promotional Pricing
  • Step 5: State Payment Options
  • Other Pricing Methods

Chapter 19 – Managing External Forces

In this chapter, we explore factors outside of marketers’ control but that play a vital role in shaping an organization’s marketing strategies and tactics.  As we will see, external forces present both opportunities and threats.  Each force holds the potential to alter how an industry conducts its business and how individual marketing organizations make decisions.  Our coverage includes in-depth evaluation of seven key external forces: demographics, economic conditions, governmental environment, influential stakeholders, cultural and societal change, innovation, and competitors.

Key Issues:

  • What are External Forces?
  • The External Forces Facing Marketing
  • Demographics
  • Economic Conditions
  • Governmental Environment
  • Influential Stakeholders
  • Cultural and Societal Change
  • Innovation
  • Competitors

Chapter 20 – Marketing Planning and Strategy

In our final chapter, we see that the key for ensuring the marketing components work together is to have a full understanding of the marketing planning process.  We begin with a discussion of the importance of planning and show why the development of a Marketing Plan is a necessary undertaking for nearly all marketers.  As part of this discussion, we distinguish between strategies and tactics, and examine the role these play in the planning process.  Next, to aid in our understanding of planning, we explore how the Product Life Cycle (PLC) offers valuable guidance for marketing decisions.  We cover in detail the circumstances marketers face as their products move through the PLC and why marketing decisions must be continually fine-tuned to adjust to these changes.  Throughout this discussion, we see how the PLC can offer insight into what challenges marketers may face as the market for their product continues to evolve.

Key Issues

  • Importance of Planning
  • The Marketing Plan
  • Planning and Strategy with the PLC
  • Development Stage
  • Introduction Stage
  • Growth Stage
  • Maturity Stage
  • Decline Stage

Marketing Case Studies

To apply the information learned in this book, we offer 10 Marketing Case Studies. These cases cover a wide-range of issues facing today’s marketing organizations.