Marketing Management - AMBAI Business Management Online Course

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Study Guide	This is a Study Guide. As the name implies, it guides the student in the reading of the textbook, The Virtual MBA. The textbook is divided into 12 Chapters and each chapter into several Sections. Sections are numbered consecutively from the beginning to the end of the textbook. We will refer you to the textbook by citing the Section number. This Subject is based on Chapter III of the textbook.
The Meaning of the Name	We must begin by clearly understanding the meaning of the word Marketing because it is used in different ways. Now please read Sections 29. and 30. of the textbook and return to this point of the Guide. Please answer the questions.
Self- evaluation questions	Question 1 According to the comprehensive definition, is the selling of a product part of Marketing? See Model Answer A1
Self- evaluation questions	Question 2 Which is the key objective of Marketing? See Model Answer A2
AMA's definition. The Total Marketing Process	Let's settle for the "official" definition. You will see it in Section 31. of the textbook. In the same Section you will see a listing of the stages of the Total Marketing Process that will be described in this Chapter III. Now please read Section 31. of the textbook and return to this point of the Guide. Please answer the questions.
Self- evaluation questions	Question 3 To whom does the "official" definition given in the textbook belong? See Model Answer A3
Self- evaluation questions	Question 4 A firm decides to develop a completely new product. The job is given to the Research and Development department. Does this mean that the project is not part of Marketing? See Model Answer A4
Product Development and Positioning	We need to have a product to sell, so we need to "develop" it. And we need to know the profile of the possible buyers, in order to define how to present it to them. Now please read Section 32. of the textbook and return to this point of the Guide. Please continue
Target Group	Few products, if any, can be sold to everyone. Even salt, possibly a product used by most people, can be presented in different packaging, sizes and with various additives. Thus, we have to define to what category of people we will aim each product and its different variations. Now please read Section 33. of the textbook and return to this point of the Guide. Please answer the questions
Self- evaluation questions	Question 5 We are developing a product and we have to decide to what group of customers we will try to sell it. How is this process called? See Model Answer A5
Self- evaluation questions	Question 6 Once we define the group of customers we will aim the product at, how do we call this group of potential customers? See Model Answer A6
Oily Inc. develops an "existing" product	Having the know-how and the production facilities to manufacture a good does not mean that it is not necessary to "develop" it in order to market it. Now please read Section 34. and 35. of the textbook and return to this point of the Guide. Please continue
Market Segmentation	Different tastes, different cultures and ages, very variable income levels are some of the reasons the markets are "segmented". Now please read Section 36. of the textbook and return to this point of the Guide. Please answer the questions
Self- evaluation questions	Question 7 McEla already knows how to manufacture soap, but still it does not have s product ready to be marketed. What is it they still have to do? See Model Answer A7
Self- evaluation questions	Question 8 McEla's Marketing team was discussing the size of the total market for toilet soap. All members agreed that it was a very large market. But in looking more closely, one of the members stated that the portion of the market consuming deodorant soap was not so large. Being a professional, this person did not say "portion of the market"; he used the technical name. Which name was it? See Model Answer A8
Marketers love it	It is a fact that market segmentation allows firms to "exploit" each segment as much as possible. Now please read Section 37. of the textbook and return to this point of the Guide. Please continue
Research and the Consumer Panels	Firms will try to anticipate the reaction of the market to a certain product by submitting it to "panels" representative of different possible target groups. Now please read Section 38. of the textbook and return to this point of the Guide. Please continue
Target, Position and Image	The research conducted is an important element for taking decisions, but not the only one. Now please read Section 39. of the textbook and return to this point of the Guide. Please continue
Important Information needed	McEla must look outside and see what's going on (at least in the soap market). Now please read Section 40. of the textbook and return to this point of the Guide. Please answer the questions
Self- evaluation questions	Question 9 Now, you are the marketing manager at McEla. You have been given by the production people a sample of soap. You want to find out how consumers are likely to perceive its quality as compared with competitive brands. You have selected a Consumer Panel to use yours and the competitive soaps and give an opinion. What type of test would you use? See Model Answer A9
Self- evaluation questions	Question 10 The marketing team decided to launch McEla's soap under one single brand name and two fragrances, each of which will come in three sizes. This makes a total of 6 "varieties". The team members did not use this word, but a three-letter acronym. What is the acronym? The initials of which words form the acronym? See Model Answer A10
How much will be sell?	That of course is a variable depending to a great extent on the price. Now please read Section 41. of the textbook and return to this point of the Guide. Please continue
The production cost and the production volume	To complicate things still more, while sales volume depends on price, production cost usually depends on production volume (which reflects sales, of course). Now please read Section 42. of the textbook and return to this point of the Guide. Please answer the questions
Self- evaluation questions	Question 11 The Marketing manager of McEla is presented with two alternative marketing plans for the first year. In #1 it is estimated that 30% of the total market will be captured, and the profit will be zero. In #2 only 10% of the market would be captured, but there would be a profit of $100,000. The difference is because in #2 the selling price is higher than in #1, and less money would be spent in promoting the soap. The Manager decided to implement #1. Why would he choose a plan resulting in no profit at all, over one delivering a profit of $100,000?? See Model Answer A11
Self- evaluation questions	Question 12 Let's consider the production cost part of plans #1 and #2 of question 11. There will be no profit in #1 and a profit in #2. Is it likely that one factor explaining this difference is a higher unit cost in #1? Or is it more likely that unit cost would be the same? Or is it more likely that unit cost would be lower in #1?? See Model Answer A12
To be continued...	There is still a lot to do at McEla regarding their Soap Project. But this story will continue in Subject Marketing II.
Here we say: So long!	This is the End of Subject Marketing 1. The Subject belongs to the Curriculum of the free Certificate Program in Management and Business Administration Online Program offered by AMBAI as a Public Service. The next Subject you should study is: Marketing Management 2
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A2 - To make the product (and the business) profitable. Back
A1 - Yes it is. Back
A4 - The creation of a product is part of Marketing, no matter which departments of a firm are actively participating in a given moment. Back
A3 - The American Marketing Association. Back
A6 - The Target Group Back
A5 - Positioning the product Back
A8 - Market segment Back
A7 - Develop the product. Back
A10 - SKU, for Stock Keeping Unit. In this case McEla will have to keep in stock for sale six SKU's, three different sizes of each of the two fragrances. Back
A9 - A Blind Test. The members of the panel would be given different soaps identified only by a number or code name. The panel members would not know the actual brands. This is to make sure that they will only judge the perceived quality and not be influenced by other factors, such as advertisement for specific brands. Back
A11 - Some people would say because the money is not his. But he probably has a very rational motive. By grabbing a large share of the market in the first year, he may be able to increase the price in following years, thus taking in a large profit in the future. Back
A12 - Probably the unit cost would be lower in plan #1 since normally (when production capacity is available) unit cost decreases as production volume increases. This is NOT always so; if an investment is needed for additional production capacity, unit cost may increase. Back

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