Marketing Management Notes | Philip Kotler, 15th Edition

MARKETING MANAGEMENT
Comprehensive Study Notes

Based on Philip Kotler — Marketing Management, 15th Edition

Handwritten Notes Digitized & Expanded

TOPICS COVERED
1. Market Segmentation, Targeting & Positioning (STP)
2. Product Life Cycle (PLC) & New Product Development (NPD)
3. Advertisement
4. Sales Promotion
5. Marketing Concepts
6. Branding

Marketing Management 1 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

CHAPTER 1: MARKET SEGMENTATION,

TARGETING & POSITIONING
1.1 Introduction to Market Segmentation
Market Segmentation is a modern marketing concept based on the idea that markets are
heterogeneous, not homogeneous. Consumers differ in their needs, wants, buying power, buying
habits, and preferences.

Since it is impossible to serve the entire market effectively with a single strategy, firms divide the
market into smaller, homogeneous groups known as market segments, and design suitable marketing
strategies for each.

Segmentation Helps Firms:

• Understand customer diversity
• Serve customers efficiently
• Gain competitive advantage
• Allocate resources effectively

1.2 Meaning & Definitions of Market Segmentation

Philip Kotler: Market segmentation is the subdividing of a market into homogeneous sub-
sections of customers, where any sub-section may conceivably be selected as a market
target to be reached with a distinct marketing mix.

Stanton: Market Segmentation consists of taking the total heterogeneous market for a
product and dividing it into several sub-markets or segments, each of which tends to be
homogeneous in all significant aspects.

1.3 The STP Process

The STP (Segmentation–Targeting–Positioning) process consists of 3 interrelated decisions that
ultimately lead to designing the Marketing Mix.

Stage Key Activities Objective

① Segmentation (S) Identify variables for Divide market into meaningful
segmentation; Analyse emerging groups
segments; Validate segments
② Targeting (T) Decide which segment to serve; Select the most attractive
Decide how many segments to segment(s)
target

Marketing Management 2 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

③ Positioning (P) Understand customer Create a distinct brand image in

perception; Place the product the target customer's mind
distinctly in customers' minds

NOTE: This process finally leads to designing the Marketing Mix (4Ps: Product, Price, Place,
Promotion).

1.4 Criteria for Effective Market Segmentation

Six conditions must be satisfied for segmentation to be effective:

1. Identifiability — Segments must be clearly identifiable; members should share common

characteristics.
2. Accessibility — The firm must be able to reach the segment; product must be distributed at
reasonable cost.
3. Responsiveness — The segment must respond differently to changes in the marketing mix.
Example: Price-conscious customers react negatively to price rise.
4. Size (Substantiality) — The segment should be large and profitable enough. Depends on
number of buyers and purchasing power.
5. Nature of Demand — There must be meaningful differences in demand among segments.
6. Measurability — Size, purchasing power and characteristics of the segment should be
measurable.

1.5 Bases for Market Segmentation

Market Segmentation can be done on two broad bases:

Non-Behavioural Bases Behavioural Bases

A) Consumer Characteristics (Non-Behavioural) B) Consumer Responses (Behavioural)
Geographic Benefit Sought
Demographic User Status
Psychographic Usage Rate
Socio-Economic Loyalty Status
Attitude

A. Non-Behavioural Bases
i) Geographic Segmentation
The market is divided on the basis of geographical units such as: Countries, Cities, Regions (North,
South, East, West), States, Climate Zones.
EXAMPLE: Coca-Cola may treat Asia as one market and further divide it into South Asia, Middle
East, etc. National companies may design region-specific strategies.

Marketing Management 3 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

ii) Demographic Segmentation

Segmentation based on population characteristics. Includes: Age, Gender, Income, Occupation,
Education, Religion, Family Size, Nationality.

Importance: Most popular segmentation method — easy to measure and closely related to
buying behaviours. Consumer needs often vary with age, income, and education.

iii) Psychographic Segmentation

Consumers are grouped based on their Personality, Lifestyle, and Values. The VALS Framework
(Values, Attitudes, and Lifestyles) is commonly used, grouping consumers as: Innovators, Thinkers,
Achievers, Experiencers, Believers, Strivers, Makers, Survivors.
EXAMPLE: Conservative vs. modern lifestyles; Adventurous vs. cautious buyers. Used extensively in
automobiles, fashion, cosmetics, fast food.

iv) Socio-Economic Segmentation

Based on: Income, Education, Occupation, Religion, Social Class.
Application: Widely used for durable goods (automobiles, electronics, household appliances).

B. Behavioural Bases
v) Benefit Segmentation
Customers are grouped according to the benefits they seek from a product.

Benefit Sought Target Segment Example Brand

Quality Premium buyers Mercedes Benz, Skoda
Security Safety-conscious Ambassador (bulletproof)
Economy Budget-conscious Maruti 800
Specialty / Adventure Thrill-seekers Ferrari

vi) User Status

Classification based on usage:
• Heavy Users — Frequent users (e.g., celebrities, professionals)
• Medium Users — Moderate usage (e.g., teenagers)
• Light Users — Infrequent users (e.g., average housewife using cosmetics)
NOTE: Firms usually focus on Heavy Users, as they generate maximum sales volume. The 80/20 rule
(Pareto Principle) often applies: 80% of business comes from 20% of customers.

vii) Usage Rate Segmentation

Based on frequency of usage:
7. Light Users — Infrequent users (e.g., average housewife using cosmetics)

Marketing Management 4 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

8. Medium Users — Moderate users (e.g., teenagers)

9. Heavy Users — Frequent users (e.g., celebrities, professionals)

viii) Loyalty Status

Based on brand loyalty:
10. Hard-core Loyals — Buy one brand consistently (e.g., Colgate users)
11. Split / Soft-core Loyals — Loyal to two or more brands
12. Shifting Loyals — Frequently change brands
13. Switchers — No brand loyalty at all

ix) Attitude Segmentation

Based on customer attitude toward a product:
• Enthusiastic
• Positive
• Indifferent
• Negative
• Hostile

1.6 Benefits of Market Segmentation

Segmentation helps in:
14. Sharp focus on target customers
15. Understanding demand patterns
16. Satisfying diverse customer needs
17. Specialisation in marketing efforts
18. Adopting different strategies for different markets
19. Attracting new customers
20. Developing niche markets
21. Achieving competitive advantage
22. Identifying market gaps
23. Efficient resource allocation
24. Better positioning of brands

1.7 Philosophies / Levels of Market Segmentation

Markets can be segmented at 4 levels:

Level Approach Description

1. Mass Marketing No segmentation One product for all. Example:
Commodities like sugar, salt.
2. Segment Marketing Large identifiable segments Different offers for each
segment.
3. Niche Marketing Narrowly defined group Higher margins, lower
competition.

Marketing Management 5 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

4. Micromarketing Local or individual level Local marketing & one-to-one

marketing.

Mass Marketing — Details

• Same product, Same price, Same promotion, Same distribution
EXAMPLE: Coca-Cola initially followed undifferentiated marketing strategy. Suitable for: Fruits,
Vegetables, Bakery items, Stationery, Basic Consumer goods.

Niche Marketing — Features

Niche marketing focuses on small, well-defined customer groups whose needs are not fully served by
mainstream players.
• Clear customer identity
• Specialised offerings
• Strong customer loyalty
• High profitability
EXAMPLE: Luxury cosmetics, Organic food brands, Premium fashion labels.

Local Marketing — Details

Local marketing tailors products and promotions to cities, neighbourhoods, and local communities.
Advantages Limitations
Advantages Limitations
Better customer relevance Higher costs
Stronger local connection Complex logistics

Individual Marketing (One-to-One Marketing)

Also called Customised Marketing or Personalised Marketing.
Characteristics Enabled By
Characteristics Enabled By
Individual customer focus CRM Systems
Data-driven Digital Platforms
Relationship-oriented E-Commerce

1.8 Effective Segmentation Requirements (MADAS)

For segmentation to be effective, segments must be:
25. Measurable — Size and purchasing power must be identifiable
26. Substantial — Large and profitable enough
27. Accessible — Reachable through distribution and communication
28. Differentiable — Distinct response to marketing mix

Marketing Management 6 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

29. Actionable — Can be effectively targeted

1.9 Bases for Segmenting Consumer Markets (Summary)

Segmentation Type Key Variables Example
Geographic Country, State, City, Region, Coca-Cola varies formula by
Climate region
Demographic Age, Gender, Income, Johnson's Baby vs. Head &
Education, Occupation Shoulders
Psychographic (VALS) Personality, Lifestyle, Values Innovators buy Tesla; Survivors
buy generic
Behavioural Occasion, Benefit, User Status, Airlines segment by frequent
Usage Rate, Loyalty flyer loyalty

Behavioural Variables — Strategic Importance:

• Heavy users often generate major share of sales
• Loyal customers reduce marketing costs
• Benefit segmentation helps in product positioning

1.10 Market Targeting

After segmenting the market, the firm evaluates and selects segments to serve.

Evaluation Criteria for Targeting:

30. Segment Size & Growth — Is the segment large enough and growing?
31. Structural Attractiveness — Are there many competitors, powerful buyers/suppliers, or substitutes?
32. Company Objectives & Resources — Does the segment match the company's goals and
capabilities?

Target Market Selection Strategies:

Strategy Description When to Use
Undifferentiated Marketing One offer for the entire market Homogeneous markets (e.g.,
commodities)
Differentiated Marketing Separate offers for multiple When segments have distinct
segments needs
Concentrated Marketing Focus on one or few segments Niche players, limited resources
Micromarketing Local / individual-level targeting CRM-enabled businesses,
luxury goods

Ethical Issues in Targeting:

Firms must avoid:
• Targeting vulnerable groups unethically

Marketing Management 7 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

• Misleading promotions
• Exploitative pricing
Social responsibility is critical in: Children's products, Financial services, Healthcare.

Marketing Management 8 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

CHAPTER 2: PRODUCT LIFE CYCLE (PLC) & NEW

PRODUCT DEVELOPMENT
2.1 Introduction — Product Life Cycle
Every product introduced in the market passes through a series of stages from its birth to its decline.
This entire span is called the Product Life Cycle (PLC).

Stage Features Marketing Strategies

① Introduction • Newly launched product • Low • Heavy promotional efforts •
sales • Low/negative profit • High Product awareness creation •
promotion & advertising cost • Limited competition • Skimming
Limited distribution • Low or Penetration pricing
customer awareness
② Growth • Rapid increase in sales • • Improve product quality • Enter
Growing acceptance of product • new market segments • Increase
Entry of competitors • Profit rises promotional activities •
sharply • Improved distribution Strengthen distribution channels
③ Maturity • Sales reach peak • Market • Product Modification • Market
becomes saturated • Intense Modification • Marketing Mix
competition • Profits stabilise or Modification • Brand
start to decline • Price differentiation
competition increases
④ Saturation • No new buyers available • • Focus on loyal customers •
Sales plateau • Heavy price Reduce costs • Selective
competition distribution
⑤ Decline • Sales and profit fall • • Harvesting • Divestment •
Technological changes • Merger / Acquisition • Joint
Change in consumer Venture • Amalgamation /
preferences • Entry of substitute Liquidation / Bankruptcy
products

2.2 Introduction Stage — Pricing Strategies

Two key pricing strategies are used at the introduction stage:

Skimming Strategy Penetration Strategy

① Skimming Pricing ② Penetration Pricing
Rapid Skimming: High Price + High Promotion Rapid Penetration: Low Price + High Promotion
Slow Skimming: High Price + Low Promotion Slow Penetration: Low Price + Low Promotion
Best for innovative, high-demand products Best for mass market, price-sensitive segments

2.3 Maturity Stage — Strategies in Detail

① Product Modification
Changing physical aspects of the product: Shape, Size, Colour, Fragrance, Labelling, Packaging.

Marketing Management 9 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

② Marketing Modification
Sales Volume = Number of Users (N) × Purchase Rate (P).
Methods to increase users:
• Converting competitor's customers
• Converting non-users
• Self display / in-store promotions
• Identifying potential users

③ Channel Modification (Distribution)

Switching between distribution approaches:
• Exclusive distribution
• Selective distribution
• Intensive / Exhaustive distribution

2.4 Decline Stage — Strategic Options

Strategy Description
Harvesting Reduce costs & milk the product for remaining
profits
Divestment Sell off the product/brand
Merger Combine with another company
Acquisition Buy another company or be bought
Takeover — Benign/Benevolent Friendly takeover
Takeover — Malignant/Hostility Hostile takeover
Joint Venture Partnership with another firm
Amalgamation / Liquidation Merge entities or wind up
Bankruptcy Legal proceedings to settle debts

2.5 PLC Curve Patterns

The classic PLC curve is a bell-shaped curve (Sales vs. Time). However, there are 4 alternative PLC
patterns:

Pattern Description Example

Growth–Slump–Maturity Maturity maintained due to late Kitchen appliances, basic FMCG
Pattern adopters & exit barriers
Fad / Rapid Growth – Sharp Fashion or short-term products Fidget spinners, fashion items
Decline (short term)
Fasted / Fad Pattern Very rapid rise, very sharp Specific toy trends
decline (a Fad)

Marketing Management 10 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

Scalloped Pattern Multiple growth spurts due to Niche products re-launched with
advertising push & celebrity campaigns
endorsements

2.6 Growth Stage — Expansion Strategy

① Expansion Strategy (Concentric)
• Market-related → Same product → New Markets
• Product-related → New Product → Same Markets
• Penetration → More Promotion → Same Market

② Integration Strategy
• Backward Integration — When making raw material is cheaper than buying (e.g., company starts
its own raw material production)
• Forward Integration — Moving closer to the customer (e.g., company opens its own retail stores)

2.7 Ansoff's Matrix (Product/Market Expansion Grid)

Ansoff's Matrix is a strategic framework and market development strategy that helps businesses
identify growth opportunity by considering existing and new products or services in new or existing
markets.

Existing Product New Product

Existing Market Market Penetration — Increase Product Modification — New
share with existing product in product in existing market
existing market
New Market Market Modification — Existing Diversification — New product in
product in new market new market

Diversification Types:
• Concentric — Related to same business (e.g., a food company adding a new food product line)
• Conglomerate — Related to unrelated business. Example: ITC — one company, many types of
business (food, clothing, etc.)

Product Line Extension vs. Contraction:

Product Line Extension — 1 company, many products (e.g., Colgate with multiple variants).
Product Line Contraction — When 1 product of the company is bought more than the others, the
company either stops or lessens the production of other products. This is also called Product
Cannibalisation.

Marketing Management 11 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

CHAPTER 3: ADVERTISEMENT
3.1 Introduction & Meaning
The word 'Advertisement' came from the Latin word 'Advertere', meaning 'to turn toward'.

Meaning: Advertising is an activity of attracting public attention to a product, activity, service,

or business as by paid announcement like print, broadcast, or electronic media.

American Marketing Association (AMA): Advertising is a paid form of non-personal

presentation and promotion of ideas, goods, or services by an identified sponsor.

3.2 Elements of Advertising

33. Matter of Record — Documented, recordable communication
34. Non-personal Communication — No face-to-face interaction
35. Persuasion of Buyer — Influences buying behaviour / relations
36. Paid Form of Publicity — Requires cost to the advertiser
37. Identifiable with the Sponsor — Advertiser is known to the public

3.3 Features of Advertisement

Key Features Promotion Tools
Feature Tools for Market Promotion Include:
Publicity — Powerful reach Personal Selling
Tool for Market Promotion Advertisement
Popular element of Promotional Mix Sales Promotion
Expensive — significant cost involved Public Relations (PR)

3.4 Key Objectives of Advertising (The 3 Ps)

• Persuade — Convincing the audience that one brand is better than others
• Promote — Sharing information about a product, service, or social cause
• Praise — Building a positive brand image as a long-term policy

3.5 The 5 Ms of Advertising

M Stands For Description
Mission Advertising Objective Main idea or selling proposition
— what the ad must achieve
Message Advertising Message Tagline, key message, or
campaign theme

Marketing Management 12 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

Money Advertising Budget Budget allocation for an

advertisement
Media Advertising Medium Mode of communication, reach,
and impact
Measurement Advertising Effectiveness Impact of advertisement on
sales and brand recall

3.6 Other Objectives of Advertising

General Objectives Function-Based Objectives
General Objectives Function-Based Objectives
Brand Building Expand Market
Increase Sales Create Awareness
Creating Goodwill Increase Demand
Facing Competition Educate Consumers
Educating Consumers Support Salesmanship
Build Brand Loyalty

3.7 Types of Advertising

1) Based on Purpose:
• Informative Advertising — Introduce new products
• Persuasive Advertising — Creates preference (e.g., Pepsi vs. Coke comparisons)
• Reminder Advertising — Maintains demand for established products

2) Based on Media:
• Print Media — Newspapers, magazines
• Electronic Media — TV, radio
• Digital Media — Social media, websites, apps
• Outdoor Media — Hoardings, banners, transit advertising

3) Based on Audience:
• Consumer Advertising — Directed at end consumers
• Industrial Advertising — Targeted at business buyers

3.8 Theoretical Frameworks of Advertising

① AIDA Model — 'Hierarchy of Effects' Model
The AIDA model describes the stages a consumer goes through when exposed to advertising:

Stage Description Execution

Marketing Management 13 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

A — Attention Capturing the viewer's eye Bold colours, loud sounds,

striking visuals
I — Interest Highlighting benefits to keep Build curiosity about your
them engaged product
D — Desire Creating an emotional Show your product fulfils their
connection or a felt need needs or solves their problems
A — Action The call-to-action Encourages audience to buy,
sign up, or contact business
(e.g., 'Buy Now', 'Sign Up')

NOTE: The AIDA funnel shows the narrowing of audience: many see the ad → fewer develop interest
→ fewer still desire it → fewest take action.

② Elaboration Likelihood Model (ELM)

Explains how people process advertising data through two routes:

Central Route Peripheral Route

Central Route Peripheral Route
The viewer thinks deeply about the product's The viewer is swayed by 'cues' like celebrity
features endorsement or catchy music
Best for high-ticket items like cars, electronics Best for low-involvement products
Requires high involvement Uses emotional triggers

③ Other Advertising Theories

• AIDS Model (Awareness → Interest → Desire → Sales)
• Five Stage Model
• Six Stage Model
• DAGMAR Model (Defining Advertising Goals for Measured Advertising Results)

3.9 Advantages & Disadvantages of Advertising

Advantages:
To Producers:
• Increases sales
• Builds brand image
• Helps in mass production
To Consumers:
• Provides information
• Saves time
• Improves standard of living
To Society:

Marketing Management 14 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

• Generates employment
• Promotes competition
• Supports media (TV, newspapers)

Disadvantages:
• Increases product cost to consumer
• Misleading advertisements
• Creates unnecessary wants
• Promotes materialism
• Can lead to monopoly

3.10 Ethics in Advertising

• Should not be misleading or deceptive
• Must be truthful in all claims
• Avoid offensive content
• Protect consumer interest

Marketing Management 15 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

CHAPTER 4: SALES PROMOTION

4.1 Introduction
The word 'Promotion' comes from the Latin word 'Promovere', meaning 'to move forward'. The aim of
sales promotion is to increase sales — it is a marketing tool that helps increase sales.

Simple Definition: Sales Promotion = Any activity that encourages customers to buy more.

American Marketing Association (AMA): Sales Promotion consists of Activities (other than
advertising, personal selling, publicity) that stimulate buying using tools like displays,
exhibitions, and demonstrations.

George W. Hopkins: Sales Promotion is an organised effort to increase the effectiveness of

selling.

4.2 Sales Promotion as a Marketing Tool

Sales Promotion Helps In Purpose of Sales Promotion
Helps In: Purpose:
Making customers aware To provide info to customers
Influencing customers to buy To attract new customers to try new products
Act as a link between advertising & personal To get faster sales results
selling
Final element of marketing mix To accelerate sales
Supports and coordinates marketing mix — To convert brand switchers into loyal customers
advertising & personal selling
To fight competition

4.3 Importance of Sales Promotion

• Essential for business survival in competitive markets
• Helps in creating demand, promoting sales growth, and expanding market
• Its importance is increasing due to market condition changes
• Removes customer hesitation and improves buying decision

4.4 Objectives of Sales Promotion

• Increase customer buying response
• Attract new customers
• Inform about new products
• Increase demand

Marketing Management 16 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

• Build brand image

• Clear extra stock
• Build Goodwill
• Increase off-season sales
• Help salesperson in selling
• Recover customer loss

4.5 Advantages & Limitations of Sales Promotion

Advantages Limitations
Advantages Limitations
Stimulates a positive consumer attitude Non-recurring in use
Creates a better incentive to purchase Temporary and short-lived
Removes customer hesitation Does not build long-term brand equity
Improves buying decision High cost if overused

4.6 Reasons for Growth of Sales Promotion

1) Internal Factors:
• Accepted by top management as an effective tool
• Product managers use it effectively
• Helps in increasing sales volume

2) External Factors:
• Branding is declining in effectiveness for some categories
• High competition in markets
• Customers are deal-oriented
• Dealers demand more benefits

3) Other Factors:
• Intense competition across categories
• Product proliferation in the market
• Growing power of resellers / retailers

Marketing Management 17 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

CHAPTER 5: MARKETING CONCEPTS

5.1 Definition of Marketing
Philip Kotler: Marketing is a social and managerial process by which individuals and groups
obtain what they need and want through creating and exchanging products and values with
others.

AMA Definition: Marketing is the process of planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, services to create exchanges that satisfy
individual and organizational goals.

Marketing is about identifying and meeting human and social needs.

5.2 Core Concepts of Marketing

The core concepts are interconnected in a cycle:

Core Concept Definition / Role

Needs Basic human requirements that are needed to
survive (Physical, Social, Individual)
Wants The desire for products or services that are not
necessary but which the consumer wishes for
Demands When a customer is willing and able to buy what
they need or want, it becomes a demand for the
org.
Product Anything that can be offered to a market for
attention, acquisition, use, or consumption that
might satisfy a want or need. Includes physical
objects, services, persons, places, organisations,
and ideas.
Value & Satisfaction Customer Value = Difference between value
gained from owning & using a product and the
cost of obtaining the product
Quality (TQM) Total Quality Management — programmes
designed to constantly improve the quality of
products, services, and marketing processes
Exchange The act of obtaining a desired product from
someone by offering something in return
Transactions These are basic units of exchange — a
transaction consists of a trade of values between
two parties
Market All potential consumers sharing a particular need
or want who might be willing and able to engage
in exchange to satisfy that need or want

Marketing Management 18 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

Marketing Working with markets to actualise potential

exchanges for the purpose of satisfying human
needs and wants

5.3 Conditions of Exchange

38. At least 2 parties
39. Each party has something that might be of value to the other party
40. Capable of communication and delivery
41. Is free to accept or reject the offer
42. Each party believes it is appropriate or desirable to deal with the other party

5.4 Transactions vs. Transfers

Transactions involve a trade of values between two parties. The process of trying to arrive at mutually
agreeable terms is called Negotiation.

Types of marketing based on relationships:

• Transaction Marketing — Focus on individual sales
• Relationship Marketing — Focus on long-term customer relationships
• Marketing Network — Building a network of stakeholders

5.5 Dimensions of Transactions

• At least 2 things of value
• Agreed upon conditions
• A time of agreement
• A place of agreement

5.6 A Simple Marketing System

The simple marketing system flows as:

Flow Direction Description

Communication Industry → Market Messages, promotions,
advertising sent to buyers
Goods & Services Industry → Market Products delivered to buyers
Money Market → Industry Payments from buyers to sellers
Information Market → Industry Feedback, market research from
buyers to sellers

NOTE: Industry = A collection of sellers. Market = A collection of buyers.

Marketing Management 19 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

5.7 Marketing Channels

43. Communication Channels — Deliver and receive messages from target buyers. Include:
newspapers, magazines, radio, TV, digital.
44. Distribution Channels — Used to display, sell, or deliver the physical product or services to the
buyer or user.
45. Service Channels — Used to carry out transactions with potential buyers.

5.8 Marketing Management Philosophies

Philosophy Core Idea Orientation Focus → Means →
End
1. Production Concept Consumers prefer Production Factory → Output →
products that are widely Production quality &
available and efficiency → Profits
inexpensive through volume & low
production costs
2. Product Concept Consumers will favour Product Product → Product
products that offer the quality → Improvement
most quality, & innovation → Profit
performance, or through better product
innovative features features
3. Selling Concept Consumers and Selling Factory → Existing
businesses will products → Selling &
ordinarily not buy promoting → Profits
enough of the org's through sales volumes
products. The org must
undertake aggressive
selling & promotion
effort.
4. Marketing Concept The key to achieving Customer Target market →
organisational goals is Customer needs →
the company being Integrated marketing →
more effective than Profits through
competitors in creating, customer satisfaction
delivering, and
communicating
customer value to its
chosen target markets.
5. Societal Marketing Involves the marketer Society + Customer Society's well-being +
Concept paying attention not Customer needs →
only to the needs of Long-term sustainability
customers but also to
the wider natural and
social environment.

5.9 Marketing Environment

1) The Task Environment:
Includes the immediate actors involved in producing, distributing, and promoting the offering. These
are: the company, suppliers, distributors/dealers, and target customers.

Marketing Management 20 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

2) The Broad Environment:

Consists of 6 components which contain forces that can have a major impact on actors in the task
environment:
46. Demographic Environment
47. Economic Environment
48. Social-Cultural Environment
49. Technological Environment
50. Political-Legal Environment
51. Natural/Ecological Environment

5.10 Value Chain Analysis (VCA)

Value Chain Analysis: A process where a firm identifies its primary and support activities
that add value to its final product and then analyses these activities to reduce cost or
increase differentiation.

Value chain represents the internal activities a firm engages in when transforming inputs into outputs.

Primary Activities Support Activities

Primary Activities (Where most customer value is Support Activities (That facilitate performance of
created) the primary activities)
1) Inbound Logistics — Material handling & Firm Infrastructure — Planning, finance,
warehousing accounting, legal
2) Operations — Transforming inputs into the final Human Resource Management — Recruiting,
product training, development
3) Outbound Logistics — Order processing & Technology Development — R&D,
distribution product/process design
4) Marketing & Sales — Communication, pricing Procurement — Purchasing inputs (raw materials,
& channel management equipment)
5) Service — Installation, repair & parts

Marketing Management 21 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

CHAPTER 6: BRANDING
6.1 Brand & Branding
Brand: A name, logo, or symbol that evokes in customers a perception of added value for
which they will pay a premium price.

Branding: A combined effort of the company (Marketing + Company + Design) which is

projected to the consumer. It is endowing products and services with the power of the brand.

6.2 Brand Loyalty

Brand Loyalty: The degree of consumer attachment to a brand.

Level Description
Recognition Awareness of name, benefit, and package
Preference Consumer will buy if available; brand is useful and
occasionally sought
Insistence Will search for it; must have — not substitutable

6.3 Role of Brands

For Company For Consumer
Role of Brands (For Company) Role of Brands (For Consumer)
Identify the maker/seller Signal of product quality
Simplify product handling Reduces search cost
Organise accounting Risk reduction
Signify quality Creates trust and reliability
Create barriers to entry Status symbol
Serve as a competitive advantage Consistent experience
Secure price premium

6.4 Brand Equity

Brand Equity: The added value endowed on products and services, which may be reflected
in the way consumers think, feel, and act with respect to the brand.

Advantages of Strong Brand Equity:

Marketing Management 22 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

• Improved perceptions of products

• Greater loyalty
• Less vulnerability to competitive marketing actions
• Less vulnerability to crises
• Larger margins
• More inelastic consumer response to price increases
• Greater trade cooperation
• Increased marketing communications effectiveness
• Possible licensing opportunities

6.5 Brand Promise

Brand Promise: A brand promise is the marketer's vision of what the brand must be and do
for consumers — the single most important thing the organisation promises to deliver every
time.

6.6 Integrity of Brand

Brand integrity is maintained through consistent touchpoints: Website, Logo, Product Packaging,
Product A, Product B, Advertisements, and other communications all flowing through and strengthening
the core Company brand.

6.7 Brand Identity

Brand Identity: A unique and consistent look, feel, tone, and voice for all communications. It
creates a personality and a life for the product and service.

6.8 Key Elements of Brand Equity

Element Category Components
Brand Elements Brand Name — Name, tagline, logo Brand
Promise — The single most important thing the
org promises to deliver every time Brand
Personality — What the org wants the brand to be
known for Brand Association — Colour, tagline,
image, fonts, uniform, equipment, etc.
Marketing Activities All activities that build the brand — advertising,
sponsorship, events, PR, etc.
Meaning Transference How brand meaning is transferred to consumers
through associations, images, feelings

Marketing Management 23 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

CHAPTER 7: NEW PRODUCT & NEW PRODUCT

DEVELOPMENT PROCESS
7.1 What is a New Product?
A new product is:
• A product that opens an entirely new market
• Or one that adapts or replaces an existing product
• Or one which also significantly broadens the market for an existing product
• Or an old product introduced to a new market, or packaged in a different way, or marketed in a
different way

7.2 Types of New Products

52. New product lines — to allow the firm to enter an existing market
53. Additions to product lines — to supplement the firm's existing product line
54. Improvements & revisions of existing products
55. Repositioned products — existing products re-targeted at new markets
56. Cost reduction new project — that provides similar performance at lower cost

7.3 New Product Can Be Used To:

• Increase/defend market share by offering more choice or updating older products
• Appeal to new segments
• Diversify into new markets
• Improve relations with distributors
• Maintain the firm's reputation of leading-edge company
• Even out peaks and troughs in demand
• Make better use of the organisation's resources

7.4 Need for New Product

• To replace declining products
• To take advantage of new technology
• To defeat / keep up with rivals
• To maintain / increase market share
• To maintain competitive advantage
• To fill gaps in the market

7.5 New Product Planning

New product planning is a strategic stage where:
• The firm assesses its current product portfolio
• Analyses opportunities and threats
• The firm then determines the type of product which would best fit in its corporate strategy

Marketing Management 24 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

7.6 New Product Development (NPD)

NPD Definition: A process which is designed to develop, test, and consider the viability of
products which are new to the market in order to ensure growth or survival of the
organisation.

7.7 Stages in New Product Development (NPD)

Stage Description Tools / Outputs
1. Idea Generation Continuous, systematic search Internal: Old patents, Top
for new product opportunities management, R&D External:
Customer views, Competition,
Govt. agencies Techniques:
SWOT analysis, Brain Storming,
Focus Groups, Delphi
Technique, Corporate spies
2. Idea Screening Helps filter out poor ideas Criteria: Market size, profitability,
quickly to avoid wasting fit with company goals, technical
resources feasibility Tools: Checklist /
Scoring model to drop bad ideas
early Two Errors: α-error (Type
1) — dropping good idea; β-error
(Type 2) — keeping bad idea
Methods: Categorisation,
Scanning, Diagnosis
3. Concept Development & Turn shortlisted ideas into Prototype / concept testing can
Testing detailed concepts; present to help avoid costly mistakes
consumer to measure attitudes
and intentions at early stage
4. Market Strategy Includes 3-part strategy plan: ① 3-part strategy plan document
Development Describe market's size,
structure, behaviours; planned
product positioning, sales,
market share & profit goals for
first few years ② Outline
planned price, distribution
strategy and marketing budget
for the first year ③ Describe the
long-run sales & profit goals and
marketing-mix strategy over time
5. Business & Financial Estimate likely selling price Financial viability report
Analysis based on competition and
customer feedback; Estimate
sales volumes based on size of
market; Estimate profitability and
break-even point
6. Test Marketing Placing a product for sale in one Market test results
or more selected areas and
observing its actual performance

Marketing Management 25 / 26
Marketing Management Notes | Philip Kotler, 15th Edition

under the proposed marketing

plan
7. Commercialisation Commercialisation means Full market launch
implementing the total marketing
plan and full production: •
Launch the product • Produce
and place advertisements • Final
rollout to all markets

NOTE: Two key errors in Idea Screening: α-error (Type 1) = Dropping a potentially good idea. β-error
(Type 2) = Taking forward a bad idea — this is more costly!

Chapter Summary — Key Topics at a Glance

Chapter Key Topic Key Takeaway
1 Market Segmentation, STP Segment → Target → Position; 6
criteria; 4 Levels (Mass, Segment,
Niche, Micro)
2 Product Life Cycle 5 Stages (Intro, Growth, Maturity,
Saturation, Decline); Ansoff Matrix;
PLC curves
3 Advertisement AMA Definition; AIDA Model; 5Ms;
Types by Purpose/Media/Audience
4 Sales Promotion Any activity that encourages customers
to buy more; Internal & External growth
factors
5 Marketing Concepts 5 Philosophies (Production, Product,
Selling, Marketing, Societal); Core
Concepts; VCA
6 Branding Brand Equity; Brand Loyalty
(Recognition→Preference→Insistence);
Brand Elements
7 New Product Development 7 Stages: Idea Gen → Screening →
Concept → Strategy → Business
Analysis → Test → Commercialise

Marketing Management 26 / 26