Unit I

LEARNING OUTCOMES: The learners are expected to

1. Define and understand and understand marketing
2. Describe the traditional approaches to marketing.
3. Discuss the goals of marketing.

Businesses in the 21st century is very much different thousand years ago. The
evolutions of business and the development of the economic activities led to
the adaptions of new ways to satisfy the needs and unending wants of
customers. Customers consumptions become the major concern of today’s
business. Satisfying needs and wants of customer, is now the corner of every
business. Considering that it is not easy to satisfy the costumers now a days. It
is becoming more complex than it was before.

Creating goods and services is one thing , making sure that they are bought is
another story. To facilitate the latter , a new concept in the 21 st century has
been develop and improved to fit the new trends of millennia’s and this is
called marketing.

There are many problems that the customers encountered in their daily
lives , If this are not properly address people will trapped and peoples lives
becomes boring. To properly address needs and wants of customers business
now a days should take and consider activities that is very much necessary to
satisfy the needs. Boone and Kurts in Principles of Marketing 2013
enumerate the following activities that a marketing specialist should look
into:

PRINCIPLES OF MARKETING 1
  Identifying customers needs;
 Designing products that meet those needs;
 Communicating information’s about those goods and services to
prospective buyers,
 Making the items available at times and places that meet customers
needs;
 Pricing merchandise and services to reflect costs , competition and
customer’s ability to buy; and
 Providing the necessary service and follow up to ensure customer
satisfactions after the purchase.

What is marketing

There are thousands of definition of what marketing is. If you have to ask five
person to define marketing , surely you will get five different answer. Simply
because you can define marketing in different ways. Marketing is applicable in
different forms of business organization be a profit organizations like , Jollibee
food Corps, SM Group of companies , Apple , Samsung and Microsoft . And even
for non profit organization marketing works. Boone and Kurts in Principles of
Marketing 2013 define Marketing as an organizational functions and set of
processes for creating , communicating and delivering value to customers and
for managing costumer relationship in ways it benefits the organizations and its
stake holders.

Marketing Concept

The goals of marketing is basically aligned with the goals of business,

which is earning profit on a short term and long term basis . Return on
investment in a short term possible is always what the company wants .
Research proves that this may always possible when costumers patronize
the firms product and services. Long term costumer commitment and
patronage is most preferred by the business owners but this can only

PRINCIPLES OF MARKETING 2
 possible if the product and or services surpass the standard of customer.
Meeting customers satisfactions means life time commitment to the brand.

- The marketing concept calls for identifying the needs of your target customer
first before any strategy being develop. When a company identified the
needs and wants of customers , the business has a good chance of
becoming successful in the market place. Because it is more wise for the
company to understand the needs of the customers before making any
product or services.

- There several concept used in marketing that in modern times company

adopted. But in todays business , the modern time businesses are
expected to adopt a single concept even if it is tried and tested. Various
concept are the following:

1. Product Concept – this concept used the in many business now a days.
Business in this concept believes that a company must look for interested
customer’s right after producing goods or services. This is applicable for many real
estate developer business today.

2. Selling Concept – this concept explain that company must first produce
product and later on create selling strategy that fit to convince target market.

3. Marketing Concept – the concept believe that its best to define first the
target market , identify their needs and wants , and create product that suits the
needs of the desired market.

The concept discuss above is actually a product of marketer mind , enhanced and
develop in order to provide quality goods and services to the cater the needs of the
target market. The five eras in the history of marketing are as follows

PRINCIPLES OF MARKETING 3
Figure 1.1 Five Eras of Marketing History

1. The Production Era - before 1925 , most firms in highly develop

countries the like of western Europe and Northern America focused on mass
production where this country produces a lot of goods and services in good
quality. The attitude of this era conquer that high quality product basically
sell itself. For example , High end brand like Louis Vuitton , Zara , Mango and
a lot more can send their product because of their known high standard
quality. This era covers the period of the Industrial Revolutions until 1928
when the firm was concentrated on creation of a few particular item for
consumption.

2. The Sales Era – As production techniques in the United State and

Europe become more sophisticated output grew from 1920s into early
1950’s . Companies with sales orientations assumes that customers will resist

PRINCIPLES OF MARKETING 4
 3. The Marketing Era – period covering 1950 to 1960 , this era believes

that marketing activities , actions and implementations should under one

department. This department is known as marketing department.

4. Relationship Era – this era established the importance of relationship

to customers. Customers relationship is the key to a better business

performance. This year , company consider relationship to customers in their
marketing strategy.

5. Social Era – around 1975 , companies are considering the importance

of giving back to the society. Social Responsibility begun to take part of
marketing strategies of the company.

Non Traditional Marketing

Person marketing

– Efforts to cultivate the attention, interest, and preferences of a target

market toward a person

Example: Celebrity endorsements , Many Pacquiao , Lea Salonga

PRINCIPLES OF MARKETING 5
 Place marketing

- Efforts to attract people and organizations to a particular geographic

area.

Example: Quiapo Church , Boracay , Luneta , Palawan ,Bohol

Hundred Island , Chocolate hill , Kalangaman Island in Leyte

Cause marketing

- Identification and marketing of a social issue, cause or idea to selected

target markets. Many profit-seeking firms link their products to social
causes

Event marketing

- Marketing of sporting, cultural, and charitable activities to selected target

markets .

Example: Celebrity Concert , Fun Run , Symposium , Trade Fair , Fashion

Show etc.

Organization marketing

- Intended to persuade others to.

THE MARKETING PROCESS:

 Situation Assessment – it involves comprehensive research into the market place

and customers to be served. To do this, the external aspects of the business
situation (customers and competitors) as well as the internal aspects of the situation
(your operation’s present and future capabilities) must be analyzed.

 Marketing Strategy – it involves determining how to approach the identified

customer needs and wants and how to produce products and services to satisfy
them. This includes two (2) important elements:
a. Selection of the target markets – people you intend to pursue as customers

PRINCIPLES OF MARKETING 6
 b. Value proposition to each target market – an unambiguous description of
the benefits the target market will receive by purchasing your
products/services.

 Marketing Mix Decisions – After getting the big picture and goals, this is the step
that would involve making detailed decisions about the marketing mix (4 Ps). It
would include formulating short-term decisions and marketing plan.

 Implementation and Control – As the world is always changing, one must see to it to
adjust or revise the plans as they are being implemented. By doing this, it involves
monitoring execution and making changes to promotions or perhaps to the
products and services, monitoring results and making better plans next time or
evaluating successes and failures

REVIEW LEARNING:

Name: Score:

Year/ Section:

Identification: (10 pts)

_________________1. Efforts to attract people and organizations to a particular

geographic area

_________________2. it involves comprehensive research into the market place and

customers to be served.

_______________ 3. Efforts to cultivate the attention, interest, and preferences of a

target market toward a person.

_________________4. This concept explain that company must first produce product and
later on create selling strategy that fit to convince target market.

_________________5. Period covering 1950 to 1960

_________________6. An organizational functions and set of processes for creating ,

communicating and delivering value to customers and for managing costumer relationship
in ways it benefits the organizations and its stake holders.

PRINCIPLES OF MARKETING 7
_________________7. Believe that its best to define first the target market , identify their
needs and wants , and create product that suits the needs of the
desired market.

_________________8. A concept used the in many business now a days.

_________________9. Era established the importance of relationship to customers

________________10. This concept believe that its best to define first the target market ,
identify their needs and wants , and create product that suits the
needs of the desired market.

II. Essay: Briefly answer the following questions.

1. Explain Production Era?

2. Explain Marketing Era.

III. Classroom Activities

1. Instruct the students to come up with a Role Playing about “ Non Traditional
Marketing”

2. Critique students presentation base on the rubrics .

PRINCIPLES OF MARKETING 8
References:

- Medina , Roberto 2015 “Principles of Marketing” REX bookstore

- Boone & Kurtz 2015 “ Principles of Marketing “ Philippine edition , Cengage
learning
- Kotler P ( 2015) “ Principles of Marketing “ 14th edition Pearson

PRINCIPLES OF MARKETING 9
 Unit II

LEARNING OUTCOMES: The learners are expected to:

1. Define “Relationship marketing”
2. Explain the Value of Customer,
3. Identify and describe :relationship development strategies,
4. Illustrate successful customer service strategy in the Philippine
business enterprise

Background

As marketing change through the 21st century several changes is taking place the way firms
inter act with one another. The traditional view of marketing as simply buyers and sellers
inter actions or simply known as transaction based marketing. Transaction based
marketing has been a long practice even during the time of earliest people in the
Philippines. Where people transact business one at a time. They sell product around the
area and later transfer to another place without even getting acquainted with their
customer no emphasis on the relationship of customer. Marketer strategies focus on
attracting customers and closed deals. Over the years , this practice becomes transpired to a
good relationship . Marketers are becoming more and more sophisticated. So more and
more strategies must be develop to meet the demand of the new generations. Relationship
marketing gives a company a new opportunities to gain edge to other competing company.
A good relationship means , from a new customer to purchaser to a loyal customers.

Relationship building starts the moment the company engage the customers by identifying
its needs and wants. Once identified, company will create high valued, affordable and good
quality products.

PRINCIPLES OF MARKETING 10
Transaction-Based Marketing to Relationship Marketing
Transaction based marketing - is a business tactic that emphases on lone, "point of
sale" trades. The importance is on get the most out of the adeptness and dimensions of
specific sales rather than mounting a cooperation with the buyer. Transaction based
marketing strategies focused on attracting consumers. The goal was to identify prospects,
convert them to customers, and complete sales transactions. But today’s marketers realize
that, although it remains important, attracting new customers is truly an intermediate step
in the marketing process. Marketing efforts must focus on establishing and maintaining
mutually beneficial relationships with existing customers. These efforts must expand to
include suppliers and employees, as well.

The concept, called relationship marketing, refers to the expansion, evolution, and
upkeep of long-term, cost-effective exchange relationships with individual customers,
suppliers, employees, and other partners for mutual benefits. It introduces the scope of
external marketing relationships to include suppliers, customers, and referral sources. In
relationship marketing, the term customer takes on a new meaning.

The employee of the organizations serves as the first customer within the
organizations. The people within the organizations are consider as the customers of the
organizations. They must observe the same high standard of customer satisfactions are
consider as external customers of the firms. Relationship marketing recognizes the critical
importance of internal marketing to the success of external marketing plans. Programs that
improve customer service inside a company also raise productivity and staff morale,
resulting in better customer relationships outside the firms.

Shift away from production-oriented marketing: and it give emphasis on the

following:

- Individual sales and transactions

- Limited communication

- No ongoing relationship

- Limited in some markets, such as residential real estate

PRINCIPLES OF MARKETING 11
This paradigm shift below discuss the buyer and seller interactions. The paradigm
established the relationship and inter action of buyer and seller in the market place.

Figure 2: Buyers and Sellers Relationship

Relationship Marketing – focus on long term relationship with customers , emphasizing on

retaining customers thru data based. It relies on data base that records customer records on
customers taste and preferences and life style. According to Boones and Kurtz (2013) there
are six basic elements of relationship marketing

Elements of Relationship Marketing:

Be relevant.

When possible, customize or even contextualize your communications to

personalize your audience experience. In a media world of infinite websites,
customized social media profiles, and 1,000+ TV channels, audiences expect
messaging tailored to their lives and interests. Think list segmentation, variable
content, web user profiles.

PRINCIPLES OF MARKETING 12
Provide value

Give away some of your secrets. Provide the answers to some of your audience’s
most pressing questions. By providing value, you can gain credibility, become the
authority, or go-to resource on the subject.

Welcome dialogue

Listen to your community members and respond to what was said. Dialogue helps
to establish relationships and engage your communities.

Be responsive

Respond to feedback (both negative and positive), even if you’re simply letting your
audience know that you’ve heard what they said. Often, you can turn a negative
experience into a positive one (ask me about my Sallie Mae website experience).

Be respectful

If someone opts out of your communications, make the request process easy and
transparent. And see #4. Respond respectfully to feedback.

Be authentic.

Authenticity resonates with your audiences, and authentic communications will

motivate stakeholders to become more engaged.
There are three levels of Relationship Marketing as stated below:

Characteristics Level 1 Level 2 Level 3

Primary bond Financial Social Structural

Degree of customization Low Medium Medium to
High
Potential for sustained Advantage Low Moderate High

PRINCIPLES OF MARKETING 13
First Level: Focus on Price –Marketers must consider focusing in price of product
that is offer for the chosen market. Price is the most superficial level, least likely to
lead to long-term relationships. Marketers rely on pricing to motivate customers
because competitors can easily duplicate pricing benefits.

Second Level: Social Interactions - Customer service and communication are key
factors . Example: A dress shop conduct a special fashion show.

Third Level: Interdependent Partnership - Affiliation changed into essential changes

that ensure partnership and interdependence between buyer and seller .

How to keep Customers

The task of marketer in the company is to keep the current list of customer. To be
able to maintain its market share company should keep the customer in their list.
The most painful part of the company is seeing your customers serving by your
competitors. Retaining customers is more profitable than losing them. Below are
the list of possible solution to keep your customers. To keep customer company
should practice the following:

- Customer churn - Customer turnover is expensive for a company that why

the firms should generate more profits with each additional year of a
relationship
- Frequency marketing – a marketing programs that entice customer do
repeat purchases. Example: Reward Programs , Contest , Raffle promos
- Affinity marketing - Solicits responses from individuals who share common
interests and activities

PRINCIPLES OF MARKETING 14
 Retrieving Lost Customers

Customers leave for a variety of reasons according to ( Kurts and Boone

2015):

• Boredom
• Move to a new location
• No longer have a need for the product
• Prefer competing products

Essential Components of an Excellent Customer Service

Customer will say time and again that they are willing to pay high price in exchange of
excellent quality service Megan Totka (2016).

1. Prioritize each customer

Customer is the life blood of the company and the very reason why businesses exist. It’s
the job of the business to make sure that the customers are happy with their
experience. The future of the business defend on the customers experience.

2. Strive to have a great reputation.

Reputations is one important factor of customers choice of their provider. More
customers began purchasing product and service due to company’s reputations of
customer service. In doing so , focus more on building good reputations to your client.

3. Apologize when needed

Customer service failure is an avoidable circumstances in the business operations
especially in the service business. However, business failure can be minimize if not
eradicated in some ways. It’s okay to make mistakes after all we are all human.
However, when the business messes up make sure to apologize for the rare event.

PRINCIPLES OF MARKETING 15
 Always remember to own the mistakes instead of blaming elsewhere, and make sure
not to do it again.

4. Be reachable
It is more important that the customers can easily reach you when they need your
product or services. Set up an email address , facebook account , twitter account ,24
hour help desk and on line support system. Empower your employee to engage
more on customer satisfactions.

5. Focus on delivering a consistent experience

Excellent customer service involves interactions that are dependent on employees
who can adjust themselves to the personality of their customers. The way you take
care of your customers will alter the perception they have towards a business. Place
a strong emphasis on making your customers happy from their first contact with
your business throughout their journey.

PRINCIPLES OF MARKETING 16
Review Learning
Name: Score
Year / Section:

Enumeration:
A. 5 Essential Components of an Excellent Customer Service

B. 6 Elements of Relationship Marketing

C. 4 Practices to Keep your Customers

PRINCIPLES OF MARKETING 17
Essay:
1. Differentiate Transaction Based Marketing from Relationship Marketing.

2. Do you believe in the saying: “Customer is always right”. Prove your answer.

Classroom Activities:
1. Cut out pictures of a company and explain the different customer service strategies
that the company is doing.

PRINCIPLES OF MARKETING 18
 2. Name at least one owner of a company that is based here in the Philippines and tell
to the class their success stories.

References:

- Medina , Roberto 2015 “Principles of Marketing” REX bookstore

- Boone & Kurtz 2015 “ Principles of Marketing “ Philippine edition , cengage
learning
- Kotler P ( 2015) “ Principles of Marketing “ 14th edition Pearson

PRINCIPLES OF MARKETING 19
 Unit III

LEARNING OUTCOMES: The learners are expected to

1. Distinguish between strategic and marketing planning in terms of
objectives and process.
2. Analyze the elements of macro and micro environment and their
influence to marketing planning
3. Describe the customer and business markets
4. Differentiate the buying behavior and decision making of individual/
household customer versus the business (organizational)customer
5. Identify and segment market for a product or service.
6. Select the appropriate target market segment and its positioning

In a layman’s term , a strategy is an action in order to meet the specific goals of the
company while a tactic is the worth you use to reach the goal. In business, a strategy is a
comprehensive goal, such as increasing sales or market share or creating a precise image for
your industry. Tactics for creating an image or brand might include using price to establish
you as affordable or high-end. When creating marketing plans, start with broad strategies
and support them with specific tactics.

Strategic Marketing

Strategic marketing consists of selling your product in such a way that you achieve a goal.
Goals can include increasing sales, revenues, market share, segmenting the market or

PRINCIPLES OF MARKETING 20
creating a new brand or position in the marketplace. An example of a marketing strategy
would be to maintain your existing revenues with less advertising or using fewer locations.
Even though strategic marketing goals might be conceptual, try to make them as specific as
possible. For example, instead of setting a goal of increasing sales, set a goal of increasing
sales by a certain percentage or among a specific market segment, such as women, seniors
or parents. Part of strategic marketing includes adjusting your price, position and actual
product or service to help you achieve your goals.

Tactical Marketing

Once you have goals, including specific strategies for achieving your goals, determine how
you will implement your strategies. If you want to increase your revenues, one tactic might
be to raise your prices in conjunction with rebranding a product or service as upscale. If you
want to increase market share among health-conscious consumers, you might start
sponsoring sporting events or advertising in health and fitness magazines.

The Marketing Environment

• The marketing environment consists of actors and forces outside the
organization that affect management’s ability to build and maintain
relationships with target customers.
• Environment offers both opportunities and threats.
• Marketing intelligence and research used to collect information about the
environment.
Includes:
• Microenvironment: actors close to the company that affect its ability
to serve its customers.
• Macroenvironment: larger societal forces that affect the
microenvironment.
• Considered to be beyond the control of the organization.

The Company’s Microenvironment

• Company’s Internal Environment:

– Areas inside a company.

PRINCIPLES OF MARKETING 21
 – Affects the marketing department’s planning strategies.

– All departments must “think consumer” and work together to provide

superior customer value and satisfaction.

Actors in Micro environment

Figure 3: Actors in Micro environment

The Company’s Microenvironment
• Suppliers

– Provide resources needed to produce goods and services.

– Important link in the “value delivery system.”

– Most marketers treat suppliers like partners.

• Marketing Intermediaries:

– Help the company to promote, sell, and distribute its goods to final
buyers
• Resellers
• Physical distribution firms

PRINCIPLES OF MARKETING 22
 • Marketing services agencies
• Financial intermediaries
• Customers:

– Five types of markets that purchase a company’s goods and services

• Competitors:

– Those who serve a target market with products and services that are
viewed by consumers as being reasonable substitutes

– Company must gain strategic advantage against these organizations

• Publics:

– Group that has an interest in or impact on an organization's ability to

achieve its objectives

The Macro environment

• The company and all of the other actors operate in a larger macro
environment of forces that shape opportunities and pose threats to the
company.

Companies Macro Environment

Figure 4: Macro Environment

PRINCIPLES OF MARKETING 23
The Company’s Macro environment:
• Demographic

– The study of human populations in terms of size, density, location,

age, gender, race, occupation, and other statistics.

– Marketers track changing age and family structures, geographic

population shifts, educational characteristics, and population
diversity.

 Economic Environment
Consists of factors that affect consumer purchasing power and spending
patterns. This will affect the company marketing strategy, performance and status.

Income Distribution
– Upper class
– Middle class
– Working class
– Underclass

 Natural Environment
- Involves the natural resources that are needed as inputs by marketers
or that are affected by marketing activities. This is also consider as one of the
factors to consider in marketing.
 Technological Environment
- Most dramatic force now shaping our destiny.
- Changes rapidly.
- Creates new markets and opportunities.
- Challenge is to make practical, affordable products.
- Safety regulations result in higher research costs and longer time
between conceptualization and introduction of product.
 Political Environment
- Includes Laws, Government Agencies, and Pressure Groups that
Influence or Limit Various Organizations and Individuals In a Given Society.

PRINCIPLES OF MARKETING 24
  Cultural Environment
- The institutions and other forces that affect a society’s basic values,
perceptions, preference, and behaviors.
- Core beliefs and values are passed on from parents to children and are
reinforced by schools, churches, business, and government.
- Secondary beliefs and values are more open to change.

Marketing Research
Marketing research –“ Is a Process that identifies and defines marketing
opportunities and problems, monitors and evaluates marketing actions and
performance, and communicates the findings and implications to management.”
Kurtz and Boone (2013)

Steps in Marketing Research

a. Defining the problem and the research objectives
b. Developing the research plan
c. Implementing the research plan
d. Interpreting and reporting the findings

Defining the problem and the research objectives

3 types of Objectives:
Exploratory- To gather preliminary information that will help define the problem and
suggest hypotheses.
Descriptive- To describe the size and composition of the market.

Casual- to test hypotheses about cause-and-effect relationships

Developing the research plan

Determining specific Information Needs it answer the WH , question
- What features should the product offer?
• How should the new product be priced?
• Where should the product be made available?

PRINCIPLES OF MARKETING 25
 • What are the probable sales and profits?

Gathering secondary Information

Secondary data- consist of information already in existence somewhere, having
been collected for another purpose.
- Researchers usually start by gathering secondary data because they are
usually obtained more quickly and at a lower cost than primary data.
Research approaches

- Observations
- Survey
- Experiment
Contact methods

- Mail
- Telephone
- Personal
- Online

Sampling plan

- Sample Size
- Sampling Procedure
Research Instruments
- Questionnaire
- Mechanical Instrument
Research Approaches
Observational Research- Gathering of primary data by observing relevant
people, actions, and situations.

Ex. Observing numerous customer buying inside the mall.

Ethnographic research- Involves sending trained observers to watch and interact

with consumers in their cultural habitat.

Survey Research- is the approach best suited to gathering descriptive information.

PRINCIPLES OF MARKETING 26
Structured surveys- Use formal lists of questions asked of all respondents in the
same way.

• Direct approach- Researcher ask direct questions about behavior or

thoughts.

Ex. Why don’t you eat at Jollibee?

• Indirect Approach-
Ex. What kind of people eat at Jollibee?
Unstructured surveys- Let the interviewer probe respondents and guide the
interview according to their answers.

Advantages of Survey Research:

- Flexibility – it can be used to obtain many different kinds of information in
many different marketing situations
- Provides Information more quickly and at a lower cost than can be obtained
by observational and experimental research.
Disadvantages:
- Limitations- some people are unable to answer questions.
- Questions asked by an Unknown interviewers about things they consider
private
- Respondents may answer survey questions even when they don’t know the
answer.
Experimental Research – Is the experiment that is well designed and executed.
Research and marketing managers can have confidence in the conclusions.

- Best suited for gathering casual information.

Consumer and Business Markets saw
Consumer market are individual customer who has purchasing power. Usually ,
purchase consumer good from their chosen channels for direct consumptions. On
the other hand business markets includes businesses who purchase product ( raw
materials) to produce another product.

Consumer Market Influence by the following:

PRINCIPLES OF MARKETING 27
 a. Social Factors
b. Cultural Factors
c. Personal Factor
- Culture is the fundamental determinant of a person’s wants and behaviors
acquired through socialization processes with family and other key institutions.
Characteristics of Social Classes
• Within a class, people tend to behave alike
• Social class conveys perceptions of inferior or superior position
• Class may be indicated by a cluster of variables (occupation,
income, wealth)
• Class designation is mobile over time

Figure 5: Social Factors

Social Roles – consumers choice of product or services depending on his/her status

in the society. What degree of status is associated with various occupational roles?

Family - influences for consumer market is high especially in our country wherein
we value family decisions.

PRINCIPLES OF MARKETING 28
Status – consumers purchase product base on his status in the society. Symbolic
product may bring a certain status to a consumer or even to the image of the
company.

Reference group – are certain group that consumer maybe base his/ her purchases
of what this group possess .

Personal Factors

Figure 6. Personal Factor

Consumer Market Decision Model

A step by step decision process of consumer upon buying product and or services.

Problem Recognition

Information Search

Evaluation

Purchase Decision

PRINCIPLES OF MARKETING 29
 Post Purchase Behavior
Figure 7 :Consumer Decision Model

Business Market

An organizations that buy goods and services for use in the production of other products
and services or for the purpose of reselling or renting them to others at a profit.

Characteristics of Business Markets

- Sales in the business market far exceed sales in consumer markets.

 Business markets differ from consumer markets in many ways.

 Marketing structure and demand

 Business markets

 have fewer but larger customers

 Business customers

 are more geographically concentrated

 Demand is different

 Demand is derived

 Demand is price inelastic

 Demand fluctuates more, and changes more quickly

 Nature of the buying unit

 Business purchases involve more buyers in the decision

process.

 Purchasing efforts are undertaken by professional buyers.

 Types of decisions and the decision process

 Business buyers face more complex buying decisions.

 The buying process is more formalized.

 Buyers and sellers work more closely together and

build long-term relationships.

Major Influences on Business Buyers

PRINCIPLES OF MARKETING 30
Business market consider several factors before the buyers has to decide on what to
purchase , how to purchase and when to purchase.
• Environmental
• Economic trends
• Supply conditions
• Technological change
• Regulatory and political environments
• Competitive developments
• Culture and customs

• Organizational
• Objectives
• Policies
• Procedures
• Organizational structure
• Systems
• Interpersonal
• Authority
• Status
• Empathy
• Persuasiveness
• Individual
• Authority
• Age
• Education
• Job position
• Personality
• Risk attitudes
Business Buying Process

PRINCIPLES OF MARKETING 31
  Stage 1: Problem Recognition
 Stage 2: General Need Description
 Stage 3: Product Specification
 Value analysis helps to reduce costs
 Stage 4: Supplier Search
 Supplier development
 Stage 5: Proposal Solicitation
 Stage 6: Supplier Selection
 Stage 7: Order-Routine Specification

 Blanket contracts are often used for maintenance, repair and

operating items.
 Stage 8: Performance Review

Institutional Markets
Consist of churches, schools, prisons, hospitals, nursing homes and other institutions
that provide goods and services to people in their care.

- Often characterized by low budgets and captive patrons.

- Marketers may develop separate divisions and marketing mixes to service
institutional markets.

Government Markets
Governmental units – Barangay , City and National – that purchase or rent goods
and services for carrying out the main functions of government.

- More than 82,000 buying units.

- Require suppliers to submit bids.
- Favor domestic suppliers.
- Extensive paperwork is required from suppliers.
- Most firms that sell to government buyers are not marketing oriented.
- Some companies have separate government marketing departments.

PRINCIPLES OF MARKETING 32
 - Much of government buying has migrated online.

Marketing Segmentation, Market Targeting, and Market Positioning (STP)

Target marketing requires marketers to take three major steps:
– Market segmentation: Identifying and profiling distinct groups of
buyers who differ in their needs and preferences.

– Market targeting: Selecting one or more market segments to enter.

– Market positioning: Establishing and communicating the key

distinctive benefit(s) of the company’s market offering to each target.

Bases for segmentation

Segmentations can be done in several ways. It can be
 Geographic
Includes : Nation or country , State or region , City or metro size , Density ,
Climate

 Demographic
Includes: Age, race, gender , Income, education , Family size , Family life
cycle , Occupation , Religion, nationality , Generation , Social class.

 Psychographic
Includes : Lifestyle
– Activities
– Interests
– Opinions
- Personality
- Core values

PRINCIPLES OF MARKETING 33
  Behavioral
Includes : Occasions , Benefits , User status , Usage rate , Loyalty status ,
Buyer-readiness , Attitude.

Market Targeting : Evaluating and selecting market segments requires assessing the
segment’s overall attractiveness in light of company’s objectives and resources.

Patterns of Target Market Selection:

 Single-segment concentration
 Selective specialization
 Product specialization
 Market specialization
 Full market coverage

PRINCIPLES OF MARKETING 34
Review Learning
Name: Score
Year/ Section
I. True or False. Encircle the number if the statement is True.
1. Government Markets consist of churches, schools, prisons, hospitals, nursing
homes and other institutions that provide goods and services to people in
their care.
2. Business Market is an organization that buys goods and services for use in the
production of other products and services or for the purpose of reselling or renting
them to others at a profit.

3. Market segmentation means identifying and profiling distinct groups of

buyers who differ in their needs and preferences.

4. Market positioning means selecting one or more market segments to enter.

5. Market Targeting means evaluating and selecting market segments requires
assessing the segment’s overall attractiveness in light of company’s
objectives and resources.
6. Strategic marketing consists of selling your product in such a way that you achieve a
goal.

7. Market segmentation can be done in five ways.

8. There are three major steps in target marketing.
9. Economic Environment consists of factors that affect consumer purchasing power
and spending patterns.

10. Reference group are certain group that consumer maybe base his/ her
purchases of what this group possesses.

PRINCIPLES OF MARKETING 35
 Identification
______________1. Identifying and profiling distinct groups of buyers who differ
in their needs and preferences.
______________2. Evaluating and selecting market segments requires assessing
the segment’s overall attractiveness in light of company’s objectives and
resources.
______________3. Selecting one or more market segments to enter.

______________4. Are certain group that consumer maybe base his/ her
purchases of what this group possess .

________________5. Influences for consumer market is high especially in our

country wherein we value family decisions.

_______________6. Best suited for gathering casual information.

_______________7. Let the interviewer probe respondents and guide the interview
according to their answers.

_______________8. Company and all of the other actors operate in a larger macro
environment of forces that shape opportunities and pose threats to the company.

______________9. Consist of information already in existence somewhere, having

been collected for another purpose.

_____________10. Research approach that is best suited in gathering descriptive

information.

References:
- Medina , Roberto 2015 “Principles of Marketing” REX bookstore

PRINCIPLES OF MARKETING 36
 - Boone & Kurtz 2015 “ Principles of Marketing “ Philippine edition , Cengage learning
- Kotler P ( 2015) “ Principles of Marketing “ 14 th edition Pearson

UNIT IV

LEARNING OUTCOMES: The learners are expected to

1. Define a product and differentiates the product , services and

experience.
2. Identify and describe the factors to consider when setting prices
and new product pricing and its general pricing approaches
3. Discuss the structure of distribution channels, its functions, and
the nature of supply chain management
4. define and identify relevant promotional tools, namely,
advertising, sales promotion, personal selling, public relations,
and direct marketing to create awareness and persuade the
target market to buy the product or patronize the service.

Before we go into the details of what marketing mix is let us first understand the variables
that really made up the marketing mix. Below is a complete mix of marketing that shapes
the business.

Many marketing students

really confused of what are the
components of marketing mix ?.
Is it the 4 p’s , 7p’s or even the
4C’S . If one really don’t
understand , then there is a
great chance that you missed
out on the key elements of
marketing mix.

PRINCIPLES OF MARKETING 37
It has been believed many, MANY times in industry that if you don’t know your
target market well enough and believed out what they exactly want, you’ll drag
entrepreneurial suicide and the business will inevitably fail.

On the other side if you have enough understanding of what marketing mix is , you
can be sure of to attract highest possible profit which your company will gain
endless promotions.

Sadly, for many existing marketers and aspiring marketers, this concept is glossed
over as “everyone seems to know what it is” and is disregarded as basic knowledge.
But do you really know what it is? Let’s find out.

Now, what is a Marketing Mix, exactly?

Marketing Mix Define:

It is about putting the right product or a
combination thereof in the place, at the
right time, and at the right price. The
difficult part is doing this well, as you
need to know every aspect of your
business plan. It’s a blend of four strategy
elements – product , distributions ,
promotions and pricing – to fit the need
and preferences of specific target market.
( kurts and Boones 2014)

A marketing expert named E. Jerome McCarthy created the Marketing 4Ps in the
1960s. His creation become the concept of the business around the globe. The
marketing 4Ps becomes the foundations of marketing mix.

PRODUCT - a product is an item that is produce in order to satisfy the need and
wants of the a certain target market for example a group of people , individual and

PRINCIPLES OF MARKETING 38
even organizations. The product can be tangible or intangible in nature as it can be
in a form of good or services.

Classifications of Products

Product can be categorized into two: (1) consumer goods and (2) industrial goods.

Consumer goods

Are product intended for customers final consumptions and can be classified
according to the following criteria’s: rate of consumptions and tangibility and
consumer shopping habits ( Medina 2008).

1. Rate of consumptions and Tangibility – consumer product that is base on the

rate of consumptions are further classified into : durables , nondurables , and
services

2. Durable products – are tangible product that can be used many periods.
Examples are: car , electric fan , washing machine , cabinets , flat iron , and
bikes.

3. Non – durable products – a type of tangible products that can be used and
consumed in one or few uses. Example are : Joy , beer , cigarettes , personal
product , fuel , footwear etc.

4. Services – are intangible goods or activities offered by a business to its target

market . Examples are: telecommunications , health services , entertainment , ,
financial , car rentals , and etc.

Consumer shopping habit – based on consumers shopping routine, consumer good

maybe classified as : convenience goods , shopping goods , specialty goods , and
unsought goods.

PRINCIPLES OF MARKETING 39
 1. Convenience goods – are goods that are purchased with a minimum effort. most of
this goods are available in sari sari - store , convenience store. Examples: bread, can
goods , soap , shampoo , noodles etc.

2. Specialty goods – goods that are not easy to find and that the consumer will seek to
buy and cannot be easily substitute. Examples medicine, designers cloths , designers
jewelry and exotic foods.

3. Shopping goods – are goods that are bought only after a thorough effort has been
established. A comparison has been made between competing brands before
deciding to buy. Example: mobile phones , apparels , bags , etc.

4. Unsought goods – are goods that are unknown and unwanted by the buyers .
Resulting to buyers are not interested to buy the product and no reason to seek
them.

Industrial goods

Industrial products are used are use in the creation of another goods ( Medina
2008). The categories are as follows:

1. Installations
2. Accessory equipment
3. Raw materials
4. Components parts and materials
5. Supplies
6. Services

1. Installations – refers to industrial product with long life , they form part of major
capital equipment of an industrial firms. Examples: elevator , computers , air
condition unit etc.

2. Accessory equipment – goods that are use as an aid in productions. Mostly shorter
usable life. Examples: tools in trucks , car pillow , etc.

PRINCIPLES OF MARKETING 40
 3. Raw materials - goods that are unprocessed and become part of another product.
Examples: fish , lumber , diamond , sliver etc.

4. Components parts and materials – processed industrial goods that will be used and
become part of other finished product. Examples are: string in a guitar , know on
radio and etc.

5. Supplies – items that are considered as an aid in operating process but not totally
part of the finished product. Examples are: Ball pen , Pencil , crayons , paper clips
etc.

6. Services – are company expense in the operations of the business . Example:

General services , HR services etc.

PRICE

The next variable in the marketing mix is the price. The profit of the firms depend on
the price set by the company. Company use several forms of pricing strategy.

Price define

The amount of money charge for a specific product or services over the counter. For
instance, twenty thousand pesos charge for tuition fee is a price.

Pricing Approaches

Price of product or services may be set based on different approaches that the
company has to arrive with ( Medina 2008)

1. Cost Based approach – a pricing strategy that is based on the cost of the
product. IN this particular approach total cost will be calculated and margin
of profit is added. There are two types of cost based pricing.
a. Cost plus pricing - this methods use by adding a certain percentage
of cost on top of the total cost.
Formula: Price = direct cost + overhead + profit margin
b. Target Rate of Return - a pricing approach enables the company to
set profit with a satisfactory return.

PRINCIPLES OF MARKETING 41
 Fomula: P= DVC + F/X + RK/X
WHERE P = Selling Price
DVC = direct unit variable cost
F= fixed cost
X= standard unit volume
R= desired rate of return; and
K= Capital ( total operating assets)
2. Buyer Based approach - a pricing approach deals with the perceptions of the
buyers or base on the behavior of the customers. Methods employ for this
approach are the following ( Medina 2008):
a. Perceived value Pricing – established pricing based on the
perceptions of the buyers. Cost has slight to do with retailing price.
b. Price Quality Relationship Pricing – a pricing practice hinges on the
observations of the customers that high price with high quality , low
price low quality.
c. Odd Numbered Pricing – a psychological pricing below a peso
amount. For instance , 99.75 rather than a flat 100.
d. Loss Leader Pricing – pricing practice where the company reduce the
price of some items which will generally result to low yield of return.
e. Pricing Lining Pricing – a practice of selling merchandise at a limited
number of pre – determined price level
3. Competition based approach- pricing set by the company based on the price
charge by the competitors. There are two kinds of competition based pricing
(Medina 2008).
a. Going rate – pricing strategy based on the competitors price. Price
maybe a little higher or a bit lower.
b. Sealed rate- the company set a price a little bit lower than that of
competitors.

PRINCIPLES OF MARKETING 42
Marketing Channels

After the product has been manufactured by the company the next step is looking
for a possible channels to be used on order to reach the ultimate target market.
Even the high end brand if placed in a wrong channels will have a small chance of
getting sold. A good location will be an advantage to your product. A place is a
location where your customer can access your product at a very convenient time.

What is Physical Distribution?

A marketing functions which facilitates the movement of product from

manufacturer down to the ultimate consumer. On the broader scope, physical
distribution facilitate the movements of raw materials , parts , supplies to the
business productions line. It also includes such important decision such as customer
service , inventory control , material handling ,protective packaging , order
processing and warehousing.

Types of marketing channels

Consumer Goods:

Producer--------------------------------------------------------------- Consumer

Producer------------------Retailer------------------------------------------ Customer

Producer -------Wholesaler ------------Retailer ----------------------- Customer

Producer------broker------wholesaler--------Retaile--------------------Customer

Business Good

Producer ----------------------------------------------------------------- Consumer

PRINCIPLES OF MARKETING 43
Producer -----------------------Broker---------------------------------------Customer

Producer ------------------------ Wholesaler ---------------------------- Customer

Producer -------Agent ------ Wholesaler----- Customer ----------Services

Service

Provider -------------------------------------Consumer or Business User

Service Provider ------------Broker ----------------- Consumer or Business User

A shorter marketing channels uses few intermediaries. This due to some reason like
demographics concentrations and small number of business purchasers. Examples
are Haircuts , dentals , massage , manicure and other short channel business.

Direct Selling - the simplest and shortest marketing channels. The seller carries
directly the product to the business purchaser or to the ultimate customer .This way
the marketers will create a direct contact with the prospect buyers. Examples are :
AVON , NATASHA , BOARDWALK , ROYALE , ETC.

CHANNELS USING MAKRETING INTERMEDIARIES ( Kurtz and Boon 2013):

Many companies all over the world are using marketing channels to reach their
potential customers around the globe. Below are the different forms of marketing
channels :

Producer to Wholesaler to Retailer to Consumer

Traditionally, producers produce product then pass on to the wholesaler to ultimate

retailer to the customers. Many producers hire representative to serve small time
retailer.

Producer to Wholesaler to Business User

PRINCIPLES OF MARKETING 44
This channel usually refers to industrial distributorship to take the ownership of the
merchandise.

Producer to Agent to Wholesaler to Retailer to Consumer

Small companies are using this type of marketing channels. An agent may or may not
take possession of the product but never the titles.

Producer to Agent to Wholesaler to Business User

Like agents and brokers they can also take the possession of goods but not the title.
The agent / broker may serves as representatives of the firms products

DUAL DISTRIBUTIONS

According to Kurtz and Boone in their book Principles of Marketing (2013) , “Dual
distribution refers to the movement of product through more than one channel to
reach the firms target market.” Business firms usually adopt two or more channels
to capture the entire market. This strategy is more applicable to medium and large
size of businesses where the company are able to pay corresponding channel
expenses.

REVERSE CHANNEL

While traditional channels involves arrangements of goods and services from one
place to another. Marketers should not ignore the reverse channel which intended
for return of good to the manufacturer.

FACTORS TO CONSIDER IN MARKETING CHANNEL STRATEGIES

1. MARKET FACTORS – marketers should consider markets capacity to

purchase, geographical locations and its normal order size.
2. PRODUCT FACTORS - marketers also consider the kind of product that the
company will offer. Perishable goods such as fresh fruits and vegetables, milk
and fruit’s juice usually move to a short channel.
3. ORGANIZATIONAL FACTORS – organizations ability to manage its channels,
broad product line, and channel control.

PRINCIPLES OF MARKETING 45
 4. COMPETITIVE FACTORS – companies with huge financial background ,
management and marketing need less of the help of intermediaries.
Company with strong finances will offer credit to small retailer , have their
own warehouses , and hire own sales force.

PROMOTION

The fourth marketing mix variable – promotion. Promotions is the function of

informing , persuading , and influencing the consumer’s purchase decision ( Kurtz
and Boone 2013). Elements of Promotional Mix:

a. Personal Selling
b. Advertising
c. Public Relation
d. Sales Promotions

ADVERTISING

Advertising according to Kurtz and Boone (2013) “is any paid , non-personal
communications through various media about a business firm , not – for- profit
organization , product , or idea by identified sponsor in a message intended to
inform , persuade , or remind members of particular audience.”

Advertising is maybe the first thing we see and hear in the morning. When we drive
along the high ways we see bill boards, when we read newspaper we see a lot of
advertisement. Customers exposure to this means that advertisement is
everywhere.

Advertising can be classified as:

1. PRODUCT – persuasive appeal about the product and services. It focus on

the benefits of the product and its components.
2. PIONEER – presents messages about a product class to motivate primary
claim, like those focused to cars in common.

PRINCIPLES OF MARKETING 46
 3. COMPARATIVE – promotional strategy that emphasizing messages with
direct or maybe indirect comparison with product and or service to its
closest competitors.
4. INSTITUTIONAL – an advertising campaign that promotes the ideas ,
concept , philosophy or good will of the firms or organizations. Often
related to public relation functions.
5. TRADE - strategy that design to stimulate resellers demand using trade
media.
6. COOPERATIVE – two or more parties sharing the cost of an
advertisement.

Types of Advertising Media

Advertising media are beneficial to the marketers in different ways. A

marketers must decide which of the media flat form to use to advertise
the company product or services.

Advertising Media can be classified into:

a. News Paper
b. Magazines
c. Radio
d. Television
e. Outdoor
f. Direct Mail
g. Cable TV
h. Yellow Pages
i. Transit Ads
j. Point – of - Purchase
k. Internet
l. Mobile Phones

PRINCIPLES OF MARKETING 47
PERSONAL SELLING

Personal Selling is the oldest from of promotion. It involves face to face

communication between buyers and sellers. It may also take , video conferencing ,
over the phone that links between buyers and sellers.

Four Sales Channels

a. Over the counter Selling – selling in retail store , mostly over the counter
sales are direct to customer.
b. Field Selling – a personal selling methods usually employs making sales
calls on prospective and even existing client at their offices and homes.
c. Telemarketing – a selling process which conducted by phone that serves
two general functions sales and service and serves two general markets –
business and direct customers.
d. Inside Selling – a combinations of field selling strategy applies for
inbound and outbound telemarketing channels with a strong customer
orientations.

Public Relations

Public Relation is a form of promotion activities of the company design to make

favorable impressions or image of the company to its stake holder. There are two
components of Public Relations : Publicity and Public Affairs

Publicity – generations of news pertaining to person, product or organizations that

appears in broadcast or electronic media.

Public Affairs

Public Affair is part of public dealings deals with civic groups. It consist of two kinds
(1) Lobbying; and (2) Community involvement.

PRINCIPLES OF MARKETING 48
Lobbying – according to Medina (2008) it is “an attempt to persuade a government
official to adopt policies , procedures or legislations in favor of the lobbying group or
organization.”

Community Involvement – a company initiative to create participations in

community like sponsoring community activities like sponsoring sport events , a
musical show or scholarship programs. Examples : SM Foundations , ABS – CBN
Foundations , GMA Kapuso Foundations etc.

Sales Promotion

Sales Promotion is a short term promotions offers reduce value of the product or
services to arouse interest to the buying public. Sales Methods includes consumer
sales promotions and trade sales promotions.

Promotion methods :

a. Retailer Coupons;
b. Product demonstrations
c. Trading stamps
d. Point of Purchase

Promotions techniques to encourage customers to buy new products;

a. Free samples
b. Price – off coupons
c. Money refunds

Sales Promotions devices

a. Premiums
b. Cents – off offers
c. Consumer contest
d. Consumer sweepstakes

PRINCIPLES OF MARKETING 49
Sales promotions methods for re - seller:

a. Buying allowances
b. Buy – back allowances
c. Count and re count
d. Free merchandise

PRINCIPLES OF MARKETING 50
Review Learning:

Name: Score:

Year / Sections

Identification

______________1. A company initiative to create participations in community like

sponsoring community activities like sponsoring sport events.

________________2. A short term promotions offers reduce value of the product or

services to arouse interest to the buying public.

______________3. Generations of news pertaining to person, product or

organizations that appears in broadcast or electronic media.

_____________4. Attempt to persuade a government official to adopt policies ,

procedures or legislations in favor of the lobbying group or organization.”

____________5. A selling process which conducted by phone that serves two

general functions sales and service and serves two general markets – business and
direct customers.

____________6. A personal selling methods usually employs making sales calls on

prospective and even existing client at their offices and homes

____________7. Is the oldest from of promotion

____________8. Selling in retail store , mostly over the counter sales are direct to
customer.
___________9. Strategy that design to stimulate resellers demand using trade
media.
___________10. Cost has slight to do with retailing price.

PRINCIPLES OF MARKETING 51
Essay:
1. Discuss the channel flow of consumer goods

2. Discuss the channel flow of consumer goods

References:
- Medina , Roberto 2015 “Principles of Marketing” REX bookstore
- Boone & Kurtz 2015 “ Principles of Marketing “ Philippine edition , cengage
learning
- Kotler P ( 2015) “ Principles of Marketing “ 14th edition pearson

PRINCIPLES OF MARKETING 52
 UNIT V

Learning Outcomes: The learners

1. Explain the relationship between market analysis, planning
2. Analyze the company’s situation, markets, and environment (the
marketing audit and SWOT analysis)
3. Identify target market and positioning
4. Explain the significance of the marketing mix to motivate the potential
market to buy the product or service (the marketing plan)

Market analysis – a process of identifying your target market based on the possible
market potentials. This includes analyzing customers’ needs and wants, market
trends , competitors , and the environment . Industry trends is also important
factors to consider in analyzing market . Marketing plans can’t but put together
without some form of analysis thru:

a. finding and measuring business opportunities

b. targeting and dividing market into niches
c. suggesting product placement and position in mind of consumer

In analyzing target market , marketers need to understand this fundamentals of

analyzing the target market:

PRINCIPLES OF MARKETING 53
 FIGURE 7: Market Analysis

Situation Analysis
The process of analyzing:
- Consumer characteristics & trends
- Resources of the Company
- Current and potential Competitors
- Current and potential Collaborators
- The Context or environmental factors

Another way to analyze potential market is through the use of PESTL analysis. A

PESTL analysis is composed of Political , Economic Factors , Environment , Societal

Trends , Technological Developments. This is also consider as external analysis of

the firms where marketer has to take advantage. In analyzing external environment

one has to consider the possible effect of this factors to your marketing strategy

once implemented. Marketing must be profound enough to the possible upshot of

your marketing strategy versus external analysis.

PRINCIPLES OF MARKETING 54
Figure 8: PESTL ( External forces)

Political
- Determines the extent to which the government may influence on certain
industry.
For instance: government impose new taxes , tax policies , Fiscal policy ,
trade tariff etc.

Economic
- Determines the economy’s performance that can directly affect the
performance of the industry. For instance , Inflation rate , foreign Direct
Investment , Inflation Rate , economic growth and etc.

Social

- These factors analyze the effect of social environment of the market . For example,
cultural trends , demographics, populations etc.

Technological

- These factors pertain to innovations in technology that may affect the operations of
the business. Examples are , automation , research and development , technological
awareness.
-

PRINCIPLES OF MARKETING 55
Legal

- This factors have both internal and external sides of the business. For example are
laws that affect the operations of the business. Examples; consumer laws , safety
standards , labor laws.

Environmental

- These factors include all those that influence by the surrounding environment.
Factors of business environment are climate , geographical locations , global
changes in climate etc.

CONDUCTING A SWOT ANALYSIS

In a SWOT analysis (or a situation assessment), you are going to identify your company’s
Strength, Weaknesses, Opportunities and Threats. Such an analysis is very important to the
preparation of your plan and to the success of your operation because it helps you focus on
key issues. A SWOT analysis is a good auditing tool to demonstrate whether a particular plan
is working and to gauge the current market environment.

STRENGTH – areas where the operation excels. Ex: well-trained staff, good location,
well-kept and clean facilities, strong marketing abilities, high food quality, and
service that exceeds customer’s expectations.

WEAKNESSES - barriers to success. Ex: boring menu, dirty premises, poor quality
products, poor service, high staff turnover, poor reputation, limited abilities or
resources for marketing.

OPPORTUNITIES – chances to increase revenue or decrease costs. Ex: ineffective

competitor, volume discount with a reputable supplier, a new business opening in
your area, an increased number of tourist attractions.

THREATS – Ex: increased number of competitors, a price war with a competitor,

increased taxes, poor economic conditions, or road construction that disrupts
current traffic patterns.

PRINCIPLES OF MARKETING 56
STRENGHT WEAKNESSES
Good Reputations Damage Reputations
Knowledge and experience New in the market
Quality Product Undifferentiated product
Affordable Price Brand Name
Good Locations Poor Quality

OPPORTUNITIES THREATS
Company Expansions Potential Entrants
Additional product line Competitors
Buy out competition Government Restrictions
More brand recognition Economic Situation
Products growing demand Inflation Rate
Expand new market Changing taste and preferences of
customer

Marketing Strategy
MARKETING STRATEGY – consists of the major decisions you must make about the
segments of a market, which one or ones you can profit by addressing, how to position your
products and services in that market, and why that market should buy your products and
services.

- Involves the allocation of resources to develop and sell products or services

that consumers will perceive to provide more value than competitive goods
- marketing requires a great deal of information about consumer needs
- marketing research gives the marketing manager data needed to make
decisions

PRINCIPLES OF MARKETING 57
 - required because managers are often hundreds or thousands of miles distant
from end users
- market analysis is the only way firms can stay in touch with customers and
their needs

DEVELOPING A MARKETING STRATEGY:

1. Select target market.

2. Determine product positioning.
3. Prepare value proposition.

ABOUT TARGET MARKETS:

 Avoiding Mass marketing, which means treating everyone in the market as having
the same needs and wants. This is good if what you sell truly appeals to everyone
the same way; then you can do mass production, mass distribution, and mass
communication, and reap the economies of scale that these things provide.
 Target Marketing – treats people as different from each other and tries to make a
focused appeal to a distinct portion of customers called “target customers or target
market.”

NARROWING THE FIELD:

1. Potential customers – those who may have an interest in your products and
services.
2. Customers who can afford your product. – The wealthy people, businesses, etc
3. Customers to target – the specific target market or markets you plan to address.

SELECTING TARGET MARKETS:

 When you select target markets, you must consider two factors: the potential
profitability of the target market and your ability to address their needs and wants.
 In terms of the market segment’s profitability, a segment makes a good target
market for you when it has most of the following characteristics:
1. Large enough

PRINCIPLES OF MARKETING 58
 2. Steady or growing in numbers, not declining
3. Not saturated with competitors
4. Able to be attracted with the promotion budget you can expend
5. Profitable enough, given the costs you must incur and the revenues you can
obtain.
 In terms of your capability, a market makes a good target market for you when it
has the most of the following characteristics:
1. You have the capability to offer more value than competitors can offer: better
food, better drink, or better service.
2. Addressing this market fits in with your operation’s image or brand identity.
3. You have the means to reach the market segment with promotions.
4. You have the capital and other resources to enter, serve, and survive in the
market segment

STRATEGIES FOR TARGET MARKETING:

1. CONCENTRATE ON ONE MARKET SEGMENT. – this strategy enables you to supply a

more limited set of products and services ( with the related limited facilities,
equipment, and production requirements) and use a limited variety of promotional
methods. This strategy is the one usually selected by individual or small chain
restaurants having more limited funds. Also, it is the strategy to select when first
entering a market. No national chain starts as a national chain; it starts as a single
restaurant.
2. SERVE MULTIPLE MARKETS WITH THE SAME PRODUCTS AND SERVICES. – This
strategy implies that you are supposed to provide the same things to different
target markets but use different promotional messages. National restaurant chains
use this strategy.
3. SPECIALIZE IN ONE THING. – This means that you must only pick one thing and do it
very well.
4. SERVE ONE MARKET SEGMENT WITH SEVERAL PRODUCTS – Using wealthy people
as an example target market serve more than just French haute cuisine; also serve
Russian and Italian cuisine of the very best quality.

PRINCIPLES OF MARKETING 59
POSITIONING PRODUCTS AND SERVICES IN THE MARKET

 Market positioning – refers to how you get your target market to notice your
products and services and consider them for purchase. You first simplify the
message so harried customers can notice it among the vast number of other
messages they are receiving. Then you craft the message to highlight the unique and
special qualities of your products and services.
 A major consideration in market positioning is the power of being first – being the
first to market or being the first in market position. Both of these positions are
stronger than all other positions. If you are first, you have the advantage. However,
how can you make your target market remain loyal to your product just because
you are in first place? This sounds weak. Rather, you should emphasize the qualities
that made you first.
 If you are not in first place with your product and cannot realistically attack the first-
place product, you must use a different tactic. Find your own niche; that is, find an
unoccupied position in the field of products that you can fill. Differentiate your
product from the competition. There are many ways to differentiate your product:
larger, faster, cheaper, higher quality, different features, bundled with something,
bundled with better things, time of day, age, location and convenience, to name a
few.
 Yet another tactic is to give your product a better name, especially one that
describes its salient qualities.
 Value Proposition – is a statement of the value your target customers will
experience when they purchase your products and services – how you expect target
customers to assess the product and its cost against the benefits they will receive.
Generally, “value” means receiving more than was put out to obtain the thing of
value. When customers buy your food, they do so because they expect to receive
more in benefits than they invested in cash, time, or convenience.
 The question that the value proposition must answer for your target market is, “Are
the benefits worth the cost?” In other words, what benefits does your product
provide that your target market considers worth purchasing? Preparing your value
proposition for each target market defines the way you are going to promote your
products and services to this market. It lays the foundation for many decisions,

PRINCIPLES OF MARKETING 60
 activities, and expenses. However, before you get to those, you should prepare a
marketing plan.

Marketing planning

MARKET – is the set of all actual and potential buyers of a product. In its’ original meaning,
market was a physical place where buyers and sellers gathered to exchange goods and
services. To an economist, a market is all the buyers and sellers who transact for a good or
service.
 .Sellers have not always practiced through this philosophy. Their thinking passed
through three (3) stages:
1. Mass Marketing – the seller mass produces, mass distributes, and mass
promotes one product to all buyers. At one time, McDonalds produced only
one size of hamburger for the entire market, hoping it would appeal to
everyone. The argument for mass marketing is that it should lead to the
lower costs and prices and create the largest potential market.
2. Product-variety Marketing – the seller produces two or more products that
have different features, styles, quality, sizes and so on. Today, McDonalds
offers regular hamburgers, Big Macs and quarter pounders. The product line
is designed to offer variety to buyers rather than to appeal to different
market segments. The argument for product-variety marketing is that
consumers have different tastes that vary over time. Consumers seek
variety and change.
Target Marketing – the seller identifies market segments, selects
one or more, and develops products and marketing mixes tailored to each
selected segment.
Ex: McDonalds developed salad line to meet the needs of diet-
conscious diners.
Target Marketing helps sellers to find better marketing opportunities and allows companies
to develop the right product for each target market. Companies can adjust their process,
distribution channels, and advertising to reach each market efficiently. Instead of scattering
their marketing efforts, they can focus on buyers who have the greatest purchase interest.

PRINCIPLES OF MARKETING 61
The Marketing Plan

A marketing plan is document or a blueprint of company’s marketing strategy for the next
years. It establish business activities that supports company’s marketing objectives within
the specified time frame.

- According to Philip Kotler (2003, pp. 115-116), marketing plans are developed for
individual products, lines, brands, channels, or customer groups. The marketing plan is one
of the most important outputs of the marketing process.

PURPOSE OF A MARKETING PLAN

1. Serves as a road map for all marketing activities of the firm for the next year.
2. Ensures that marketing activities are in agreement with the corporate strategic plan.
3. Forces marketing managers to review and think through objectively all steps in the
marketing process.
4. Assists in the budgeting process to match resources with marketing objectives.

ELEMENTS OF A MARKETING PLAN

 Executive Summary
- is a short document or segment of a paper, created for business
commitments, that reviews a longer report or proposal or a group of related
reports in such a way that prospective readers can rapidly become
accustomed with a huge body of material without having to read it all.

TIPS FOR WRITING THE EXECUTIVE SUMMARY

1. Write it for top executives.
2. Limit the number of pages to between two and four.
3. Use short sentences and short paragraphs.
4. Organize the summary as follows: Describe next year’s objectives in
quantitative terms; briefly describe marketing strategies to meet
goals and objectives; identify the costs necessary as well as key
resources needed.
5. Read and reread before final submission.

PRINCIPLES OF MARKETING 62
  Current Marketing Situation
In this section, you describe your existing and potential markets –
the people who are in your market area. Some considerations
include the number of existing customers, why they are in your
market area, a description of your returning customers, and a
description of new customers you hope to attract.
 Target markets – these are based upon the type of restaurant and
restaurant concept you have selected.
 Market trends – it refers to the long-term increases or decreases in
some factor outside your operation, for example an increase or
decrease in population, economy, competition, costs or prices,
wages or popularity of particular products. You must pay attention
to those trends that might affect your operation.
 Market growth – determine whether the target market is in a
growth mode or a decline mode. If a market is in a growth mode,
you can aggressively market to this population and try to increase
your customer base. If a market is in decline, you may want to
target your resources toward another area that has more potential.

 Opportunity and issue analysis

An overall analysis of the firms internal and external environment. This
section discuss the firm Strength , Weaknesses , Opportunities and Threats
commonly called as SWOT analysis .
 Objectives
Listing of what you want to attain in your marketing plan. Your marketing
plan objectives should deal with number of customers (probably by
segment), total revenue, percentage of market to capture, and average
check, to name a few. Your marketing objectives should be in writing
because written objectives enable you to focus your energies on specific
areas of your business. Your marketing objectives should be reasonable,
measurable and have a time frame.

PRINCIPLES OF MARKETING 63
  Marketing strategy
Shape and reshape the company's businesses and products so that they
yield target profits and growth
 Action programs
A detailed program design to make the marketing strategy become feasible.
It list down programs intended to meet the marketing objectives
 Financial projections
A detailed financial assumptions of the company using the recommended
strategy. Usually express in a five year comprehensive financial projections.

PRINCIPLES OF MARKETING 64
Review Learning:
Name: ____________________________ Score:
Year and Section: ___________________

Identification:
_______________1. This section discuss the firm Strength , Weaknesses , Opportunities and
Threats commonly called as SWOT analysis .

_____________2. The specific target market or markets you plan to address.

_____________3. A set of all actual and potential buyers of a product
_____________4. Statement of the value your target customers will experience when they
purchase your products and services
_____________5. A process of identifying your target market based on the possible
market potentials
_____________6. a short document or segment of a paper, created for business
commitments, that reviews a longer report or proposal.
______________ 7. Seller mass produces, mass distributes, and mass promotes one product
to all buyers.
______________8. Determines the extent to which the government may influence on

certain industry.
___________ 9. Areas where the operation excels.
___________ 10. These factors analyze the effect of social environment of the market .

PRINCIPLES OF MARKETING 65
Name:
Year / Section:

Instruction: Fill in the box: Sample SWOT Analysis of a Tea House.

Strength Weaknesses

Opportunities Threats

PRINCIPLES OF MARKETING 66
Essay:

1. Briefly Explain the components of PESTL

POLITICAL

ECONOMICS

SOCIAL

PRINCIPLES OF MARKETING 67
TECHNOLOGICAL

LEGAL

PRINCIPLES OF MARKETING 68
References:

- Medina , Roberto 2015 “Principles of Marketing” REX bookstore

- Boone & Kurtz 2015 “ Principles of Marketing “ Philippine edition , Cengage learning
- Kotler P ( 2015) “ Principles of Marketing “ 14 th edition Pearson

PRINCIPLES OF MARKETING 69
 UNIT VI

LEARNING OUTCOMES: The learners are expected to :

1. Integrate the marketing concepts and techniques learned by
preparing a marketing plan
2. Present a mini-marketing plan, orally and in writing

The final section give the student a chance to present their mini marketing plan inside the
classroom with identified panel members. Panel members must be an experienced in the
field of marketing.
The basic sections of this Marketing Plan presentation are: Introduction, Situation,
Objective, Strategy, Programs, Tactics, Budget and Reporting. Each section discusses the
most relevant information regarding your company's marketing plan (Key stats, SWOT,
Objectives, products, channels used, etc). In this resource you will find links to additional
Demand Metric tools & templates, which can be used to help you understand each
component of strategic marketing plans

The presentations aims to know if the students understand the course and to prepare the
students in the higher marketing subjects. Included is the rubrics for marketing plan
presentations to fill up by the panel member.

PRINCIPLES OF MARKETING 70
 OUR LADY OF FATIMA UNIVERSITY
COLLEGE OF BUSINESS AND ACCOUNTANCY
SHS – ABM
RUBRICS FOR MARKETING PLAN
___________________________________________

Name of Proponents :
Title of Marketing Plan
Excellent Good Fair Poor
Components Meets or exceed Above Meets Does not meet
Highest Expectations Expectations Expectations
Expectations
95- 100 90 - 94 85 - 89 84 - 75
Originality
Reflects unique marketing
plan that is competitive to
the market
Presentation
Shows careful
preparations and artistry
Ability to answer panel
questions
Shows knowledge and
alertness in answering
panels questions
Content
Exhibits complete and
comprehensive content of
the paper

Panel Signature ________________________________

Date :

PRINCIPLES OF MARKETING 71