Philip Kotler's Marketing Theory. 1. Basic Concepts. Marketing is a social & managerial process by which individuals & groups obtain what they need & want through creating, offering & exchanging products of value with others. Needs: A human need is a state of deprivation of some basic satisfaction.
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People require food, clothing, shelter, safety, belonging & esteem. These are not created by society or marketers.
They exist in the very texture of human biology & condition. Desires for specific satisfiers of needs. Although needs are few, wants are many & are continually shaped & reshaped by social forces & institutions. Wants for specific products that are backed by an ability & willingness to buy them.
Wants become demand when supported by purchasing power. Goods Services Ideas “A product is anything that can be offered to satisfy a need or a want” A marketer’s job is to sell the benefits or services built into physical products. Consist of all the potential customers sharing a particular need or want who might be willing & able to engage in exchange to satisfy the need or want. Is a social & managerial process by which individuals & groups obtain what they need & want through creating, offering, & exchanging products of value with others. Marketing Management is the process of planning & executing the conception, pricing, promotion & distribution of ideas, goods, & services to create exchanges that satisfy individual & organizational goals. The practice of building long-term satisfying relations with key parties – customers, suppliers, distributors – in order to retain their long-term preference & business.
Holds that the key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities toward determining & satisfying the needs & wants of target markets. Selling focuses on the needs of the seller, marketing on the needs of the buyer. Selling is preoccupied with the seller’s need to convert his product into cash, marketing with the idea of satisfying the needs of the customer by means of the product & the whole cluster of things associated with creating, delivering & finally consuming it. Selling is “push”, Marketing is “pull”. Societal Marketing Concept holds that the organization’s task is to determine the needs, wants & interests of target markets & to deliver the desired satisfactions more effectively & efficiently than competitors in a way that preserves or enhances the consumer’s & society’s well-being. Set of marketing tools that the firm uses to pursue its marketing objectives in the target market: 1.
Place Also known as the 4 P’s of Marketing. Variety Quality Design Features Brand name Packaging Sizes Warranties. List price Discounts Allowances Payment period Credit terms. Sales promotion Advertising Sales force PR DM. Channels Coverage Assortments Locations Inventory Transport.
Product – Customer needs/wants Price – Cost to customer Place – Convenience Promotion - Communication. It is a single business or collection of related businesses that can be planned separately from the rest of the company. It has its own set of competitors. It has a manger who is responsible for strategic planning & profit performance & who controls most of the factors affecting profit. Growth-share matrix Market growth rate on the vertical axis indicates the annual growth rate of the market in which the business operates. Relative market share (horizontal axis) refers to the SBU’s market share relative to that of its largest competitor. Growth-share matrix is divided into 4 cells, each indicating a different type of business.
Question marks: Businesses that operate in high-growth markets but have low relative market shares. Most businesses start off as question marks as the company tries to enter a high-growth market in which there is already a market leader. A question mark requires a lot of cash because a company has to spend a lot of money on overtaking the leader (& has to think hard before doing so). Stars: If the question mark business is successful, it becomes a star. A star is the market leader in a high- growth market. A star does not necessarily produce a positive cash flow for the company. The company must spend substantial funds to keep up with the high market growth & fight off competitors’ attacks.
Cash cows: When a market’s annual growth rate falls to less than 10%, the star becomes a cash cow if it still has the largest relative market share. A cash cow produces a lot of cash for the company.
The company does not have to finance a lot of capacity expansion because the market’s growth rate has slowed down. Since the business is the market leader, it enjoys economy of scale & higher profit margins. Company uses cash cows to pay bills & support other businesses. Dogs: Businesses that have weak market shares in low- growth markets. They typically generate low profits or losses, although they may generate some cash. Dogs often consume more management time than they are worth & need to be phased down or out.
Build: Objective is to increase the SBU’s market share, even forgoing short-term earnings. Appropriate for question marks whose market shares must grow if they are to become stars. Hold: Objective is to preserve SBU’s market share. Appropriate for strong cash cows if they are to continue yielding a large positive cash flow.
Harvest: Objective is to increase the SBU’s short-term cash flow regardless of long-term effect. Involves a decision to eventually withdraw from a business by implementing a program of continuous cost retrenchment.
Company plans to milk its business. Hope is to reduce costs at a faster rate than any potential drop in sales thus increasing company’s cash flow. Appropriate for weak cash cows.
Divest: Here the objective is to sell or liquidate the business because resources can be better used elsewhere. Appropriate for dogs & question marks that are dragging down company’s profits. SBUs start as question marks, become stars, then cash cows & finally dogs. Each business is rated in terms of market attractiveness & business strength.
Companies are successful to the extent that they enter attractive markets & possess the required business strengths to succeed in those markets. If 1 of the factors is missing, the business will not produce outstanding results (strong company in unattractive market or weak company in attractive market will not do well). S – Strength W – Weakness O – Opportunities T – Threats Remember - SW are internal, OT are external. Marketing: 1. Company reputation 2. Market share 3.
Product/service quality 4. Pricing/distribution/promotion/sales force effectiveness 5. Geographical coverage “Core competencies”. 1.
Deep pockets 2. Financial stability Manufacturing: 1. Economies of scale 2. Latest technology 3. Dedicated work force.
1. Visionary capable leadership 2. Dedicated employees 3. Entrepreneurial orientation 4. Flexible/responsive.
A marketing opportunity is an area of buyer need in which a company can perform profitably. Opportunities can be classified according to attractiveness & success probability. Company’s success probability depends on whether its business strengths not only match key success requirements for operating in target market but also exceed those of competitors. A challenge posed by an unfavorable trend or development that would lead, in the absence of defensive marketing action, to deterioration in sales or profit.
Threats should be classified according to their seriousness & probability of occurrence. 3 game plans.
1. Overall cost leadership – business works hard to achieve lowest production & distribution costs so that it can price lower than competition & win a large market share. Firms pursuing this strategy must be good at engineering, purchasing, manufacturing & physical distribution (they need less marketing skills). Problem is competition operating with even lower costs (e.g. The Chinese Dragon!). Differentiation – business concentrates on achieving superior performance in an important customer benefit area valued by a large part of the market. So the firm seeking quality leadership must make products with best components, put them together expertly etc.
(It’s a Sony!). Intel inside, idiot outside! Focus – business focuses on 1 or more narrow market segments, gets to know these segments intimately & pursues either cost leadership or differentiation within the target segment (niche marketing).
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Select a School. Parent Organizations play an important role in supporting schools and advocating for students. The Family and Community Engagement Department has written out easy-to-follow guidelines below to help parents complete the first steps to starting a welcoming and productive parent organization on campus. Please note that all parent organizations are considered separate entities from HISD. These guidelines are suggestions and do not constitute legal advice. HISD is not liable for the proceedings and actions of parent organizations.
Actions:. Identify active parents on campus. Organize a Brainstorming Session with active parents and school staff using the Determining Objectives for Your Parent Organization Worksheet. Express your desire to start a parent organization on your campus to school leadership. Identify possible spaces to meet (if needed) and how to recruit interested parents and staff to become members. Discuss organization objectives. Take notes to inform your decision on which type of parent organization to establish.
Every school community must decide which parent organization structure is best suited for its specific needs. There are two types of parent organizations to choose from: a Parent Teacher Association (PTA) or a Parent Teacher Organization (PTO). You will need to host a meeting for all interested parents and staff to vote on which type of parent organization to adopt. Be sure to market the meeting to the entire school community, as everyone should be involved in the voting process to select a school-wide organization.
Actions:. Organize a public school community meeting using the School Meeting Marketing Checklist. During the meeting, review information on Determining the Most Effective Parent Organization for Your Campus PowerPoint, and explore resources on. We encourage you to invite current PTA and PTO presidents from other schools to share their experiences and best practices.
End the meeting with a vote on what type of organization would be best for your campus using the Parent Organization Voting Process and Ballots. If PTO is the best parent organization for your school community, you must build a solid foundation so that your organization is permanent and productive. A strong parent organization begins with committed leadership and respected bylaws. Host an Organizing/Voting Meeting and complete the actions below.
Actions:. Vote on Officers and Bylaws. Discuss the various leadership positions that your PTO will have using the Suggested PTO Leadership Roles handout. Members can also complete My Role in the PTO to help them determine how active they would like to be in the organization.
Agree upon which leadership roles will be included in the bylaws. Next, draft Bylaws using the Bylaws Worksheet and Example. The draft bylaws should include the leadership roles that were agreed upon. Members should approve the draft bylaws. Review the Voting Procedures for Leadership Roles and Bylaws. N ominate and vote for leadership positions. This may occur at the same organizing meeting, or it may occur at a later Voting Meeting, preferably held within 2 weeks.
Hosting a separate Voting Meeting allows parents to review roles and responsibilities and determine whether or not they want to hold a leadership role. Also, holding a separate voting meeting will ensure that all parents that would like to hold a leadership role or wish to vote will be present. Be sure to advertise the Voting Meeting to all parents and staff at your school. Now that leadership roles are filled, organization members may vote for bylaws completed by leadership. Create the articles of incorporation document using the Articles of Incorporation Step-by-Step. Complete the process to incorporate your parent organization following the State of Texas Certificate of Formation of a Nonprofit Corporation document.
Complete application for Employee Identification Number (EIN) using the How to Apply for an EIN document. Apply for Federal Tax-Exempt Status using the instructions to file form 1023 in the PTO Today Startup Toolkit Section 5: Applying for Tax Exempt Status (p. 17-28). By becoming a Tax-Exempt organization, you will be exempt from paying federal taxes to the government (though you still have to file your taxes). Download Form 1023 at. Your PTO should open a bank account and keep detailed financial records.
In addition, the organization must determine whether or not it needs to file for a sales permit, and may also want to apply for insurance to cover its activities. Here are some ground rules for finances:. Two officers should be authorized to open the bank account and sign checks (typically the president and treasurer) for accountability purposes. Use your PTO’s EIN on all accounts. NEVER allow funds to be deposited in personal accounts, even temporarily.
Use school’s address to open accounts. Have someone other than the treasurer review bank statements. Keep all receipts and a detailed paper trail. Reconcile accounts every month. Form a committee or hire an accountant to reconcile books at the end of the year and file your tax return.
Note: We do not recommend that school staff serve as treasurer due to a possible conflict of interest. Whether or not school staff can serve as PTO officers is decided by the PTO body. Actions:. Open a Bank Account and create a financial bookkeeping system using the PTO Today Startup Toolkit Section 6: Financial First Steps (p. You must complete the Texas Application for Exemption to exempt your PTO from collecting and paying state sales tax on qualifying activities. For detailed information on qualifying tax-exempt sales activities read Sales and Use Tax Bulletin.
As a tax-exempt non-profit organization, you must file an annual tax return. Please visit the IRS website at for determine which form your PTO should file. Learn about the benefits of purchasing insurance for your PTO and shop around for the best local rates. Read the PTO Startup Toolkit Appendix A: Are You Covered? 32-33) to learn more. Check that every step of your organization has been completed with the PTO Checklist. Annually review your schedule, meeting protocol, action plan, and legal and financial status by incorporating procedures into bylaws that ensure accountability.
PTOs are most successful when they have clear objectives that all members agree upon and can work towards. Use the Determining Objectives for Your Parent Organization to create clear, concise objectives for your organization. PTOs should create an annual plan for their organization to complete targeted objectives. Refer to the PTO Action Plan Template for ideas on how to structure your action plan.
Check in with your principal and school regularly to gather ideas on how you can assist teachers and staff to accomplish school goals. Take on at least one of your school’s academic goals as an objective. Recruit, recruit, and recruit! Accept new members and make sure that your organization’s body is representative of your school’s population and demographics. Provide regular financial updates on parent organization and funds.
All finances should be public. Establish processes for collecting dues and reporting on administrative functions of the organization. For example, after every meeting, the PTO secretary should type up and send out meeting minutes and action items within 24 hours. Determine the standards of participation. Set ground rules for membership and attendance at meetings. Organization officers should seek professional development in meeting facilitation and mediation. Maintain open lines of communication to handle any concern that may arise during or after the organizational process.
These concerns may turn into conflicts - when this is the case, please refer to the Conflict Resolution Protocols resource. You can also refer to the Robert’s Rules of Order to better manage your meetings.