Republic of the Philippines

Department of Education
National Capital Region
Schools Division Office of Las Piñas City

NAME: __________________________________________ Score: ______________________

GRADE & SECTION ____________________________ Teacher: ___________________

MODULE IN ABM 12
Principles of Marketing
First Quarter
Week 5-Day 1-4

What I Need to Know

The module is divided into two lessons, namely:
• Lesson 1 – Managing Customer Service Quality and Managing Customer Differentiation
• Lesson 2 – Customer Relationship Management
• Lesson 3 – Strategic Marketing Process
• Lesson 4 – Market Strategy Development: Strategy Alternatives
After going through this module, you are expected to:
1. Identify and describe “Relationship Development Strategies”
2. Illustrate successful customer service strategy in the Philippine business enterprise
3. Identify the different steps in strategic marketing process.
4. Propose a marketing strategy for a particular business.
LESSON 1: Managing Customer Service Quality and Customer Differentiation
What I Know
Instructions: Write True if the statement is correct and write “False” if the statement is incorrect. Use
a separate sheet for your answers.
___1. Customer-Centered business is similar to Marketing-Centered business.
___2. Ryan contacts MJ’s Tailoring to ask if they sell pajamas for women. The customer service
representative who speaks with Ryan offers him options. This is an example of customer profiling.
___3. Online interactions are very important for customers to communicate their concerns on the
products they have purchased.
___4. Feedbacks are very important in the creation of customer database because past buying
behavior may indicate future buying behavior.
___5. International companies often face difficult problems in creating data about their customers.
What’s In
To maintain a high quality of service to customers is very challenging to a business. To ensure
consistent customer service quality, companies conduct training to its employees and monitor if their
services are delivered well. This activity may result into an assessment that can serve as the basis to
identify customer service problems, the need for improvement, and customer satisfaction.
What Is It
Customer Service Quality is very important. Dissatisfied customers can spread bad rumor through
word of mouth with a bad customer service experience. This can affect the company’s image and can
result to a decrease in the number of customers.
Companies can best manage customer service quality by:
• Establishing objectives that are specific and measurable
• Having sufficient resources to reach the objectives
• Regular collection of customer feedback on service quality
• Assess accomplished goals
• Identify the need for improvement in terms of service quality
Companies must always remember to give services that would lead to customer satisfaction rather than
offering it for the sake of fulfilling it alone.
Managing Customer Service Differentiation
As a business how can you make the quality of your customer service stand out? How can you
protect you company from being imitated by competitors? Physical products can be differentiated
through patents while services are different, depending on the customer experience. According to So
et. al. (Principles of Marketing), Customer-centered companies can differentiate their customer service
through:
1. Development and training of their employees to become competent customer contact personnel
2. Designing and implementing a state-of-the-art service delivery environment and system.
Sunnies Specs Optical stores have coffee lounge where customers could chat and stay while waiting.
 OKADA Hotel provide shuttle bus that offers free transportation to customers back and forth the
ports and terminals.
Companies should always improve their customer service. Understanding customer’s needs and
wants is an effective way to achieve long-term customer relationship
What I Have Learned
➢ Customer Service Quality is very important. Dissatisfied customers can spread bad rumor
through word of mouth with a bad customer service experience.
➢ Companies must always remember to give services that would lead to customer satisfaction.
➢ Companies should always improve their customer service. Understanding customer’s need
and wants is an effective way to achieve long - term customer relationship.

LESSON 2: Customer Relationship Management

What’s In
Customer Relationship Management is a system of managing the company’s present and future
customers. The goal of Customer Relationship Management (CRM) is to sustain their profit and
maintain their relationship with loyal customers.
What is It
Companies collect customers’ information and store it in a customer database with the following: name
of customer, birthdate, contact number, and email address. These data help them to track customer’s
buying history and preferences. Most customers are not willing to share personal information, but
companies make some strategies to encourage customer’s involvement such as: promoting
membership clubs, where customers are given a membership card that in every swipe, they will give
points, discounts, and rebates and the type of customer, purchase history, and preferences can already
be monitored. Customer database is also important in segmenting customers. Through this, the
company will know the geographical area where their customers live, the age, the income etc. It will
help the company to identify the products and services they need to market.
Customer Lifetime Value (CLV) is the predicted sales or profit that a company can acquire throughout
the years of establishing a relationship with a particular customer.
The Purpose of CLV is the following:
• It considers establishing long – term relationship with the customer rather than short-term
• It calculates the cost of acquiring new customers which is called acquisition cost and the cost of
maintaining existing customers which is called retention cost
• It gives importance to the identification of the target markets
According to Real C. So et. al. (Principles of Marketing), Customer Lifetime Value (CLV) can be measured
with the formula:
CLV = (PV)(RP)(RT)

Where: PV is the average currency value of a sale

RP is the repeat purchase in a year
RT is the retention time (months/years)
For example, a celebrity who visits a salon and spends Php3,000.00 twice a month for an
expected period of two (2) years would have a CLV calculated as: Let PV = Php3,000.00

RP = 24 (twice a month for a year)

RT = 2 Remember: Knowing the value of a customer
CLV =? enable company to focus on attracting the right
= (PV)(RP)(RT) type of customers that will help them develop their
= (3000) (24)(2) CRM efforts for future.
= Php 144,000.00

Effective Strategies in the Implementation of Customer Relationship Management

• Focus on customer service. If improved product features are not attracting customers, the
company should turn to providing better customer service.
• Purchase or develop a Customer Relationship Management Software. The company should
develop or purchase available software that can manage their customer database.
• Calculate customer acquisition and retention costs. Determining the Customer Lifetime Value of
a customer can guide the company in terms of product pricing and discounts.
• Develop and implement a customer service training program. The goal of the company is
customer satisfaction. They must ensure that their employees have the right customer service skills.
• Empower the assigned contact person to make decisions. The salesperson is the one responsible
for closing the deal with a customer. They must be skilled to address customer problems that would
result to a long-term customer relationship.
• Establish interaction lines between your customer and contact person employee.
Communication with the customer is very important. Ensure that the assigned salesperson is
friendly and accommodating for the customer to be encouraged to make a second purchase.
• Observe your competitors. Observe what your competitors are doing in terms of customer service.
Adopt their good practices and stay ahead.
• Keep on developing your customer service. Keep on improving around customer service.
Discover new ways on how customers can be more satisfied. Observe your strengths and weaknesses
as a company.
• Promote genuine customer service with empathy. Be sincere in assisting customers. Ensure to
give customer service with utmost dedication.
LESSON 3: Strategic Marketing Process
What I Know
Instructions: Write the letter of the best answer. Use a separate sheet for your answers.
1. It refers to the process of establishing a clear and concerted direction for all marketing activities of
an organization. What is it?
A. Marketing Mix C. Strategic Marketing Process
B. Marketing Process D. Tactical Planning
2. How many steps are there in a strategic marketing process?
A. 2 B. 4 C. 5 D. 10
3. What is the first step in a strategic marketing process?
A. Objective Setting C. Mission identification
B. Market Strategy Development D. Situation Analysis
4. What could be the best tool in situation analysis?
A. Gantt Chart C. Perceptual map
B. Marketing Mix Tool D. SWOT Analysis
5. Which of the following employs a differentiation strategy?
A. Apple Inc. C. Novu Hair
B. CDR King D. Sensodyne Toothpaste
What Is It
According to Benjamin Franklin, “If you fail to plan, you are planning to fail.” This means that
success is bounded on careful planning. If one wishes to win in any area of his life, he must have
a clear direction and a strategy to achieve what he wants to accomplish. This is also the same
reason why most successful companies and organization undergo Strategic Marketing Process.
Strategic Marketing Process seeks to establish a clear and concerted direction for all marketing
activities of an organization. It includes plans to reach specific goals or objectives (So, et. al, 2016,
27). This process entails the following:
Mission Market Strategy Strategy Evaluation
Situation Analysis Objective Setting
Identification Development and Control

Figure 1. The Strategic Marketing Process

Step 1: Mission Identification
Companies must first identify what is its purpose in the society through its mission statement. A
mission statement is a description of the organization's function in society, often identifying its
customers, markets, products, and technology (Kerin, Theng, Hartley, and Rudelius, 2013, 22).
However, keep in mind that though it is about stating the company’s purpose, a good mission
statement should not be product oriented but market oriented. For example, Procter and Gamble
is well-known for its different products in the market. Its market-oriented mission statement goes
“We will provide branded products and services of superior quality and value that improve the lives
of the world’s consumers, now and for the generations to come.”
Step 2: Situation Analysis
In this step, marketers assess and evaluate the current market, customers, competitors and the
company’s internal and external environment. In doing so, the company can conduct SWOT
Analysis in which the company identify its internal strengths (S), and weaknesses (W) as well as
the available opportunities (O) and threats (T). Aside from SWOT Analysis, there are some tools that
can be used in analyzing the environment and stakeholders of the business. Among them are
PESTLE (Political, Economic, Social, Technological, Legal and Environment) Analysis and 5C
(Company, Collaborators, Customers, Competitors and Climate) Analysis.
Step 3: Objective Setting
To provide a consistent focus on all marketing functions and activities, the company must set
objectives that are specific, measurable, attainable, realistic and time bounded (SMART). Objectives
can include the following:
1. Profit 4. Quality 7. Social Responsibility
2. Sales 5. Customer satisfaction
3. Market share 6. Employee welfare
Step 4: Market Strategy Development
This step answers the question, “How will we accomplish our marketing objectives?” It involves the
identification of who is our target market, and selection of strategies or competitive advantage that
attract them. Competitive advantage is defined as a set of unique features of a company and its
products that are perceived by the target market as significant and superior to the competition
(Lamb, Hair, and McDaniel, 2013). It is the factor or factors that cause customers to patronize a
firm and not the competition. It can be classified into three broad categories: cost leadership,
differentiation and focused.
a. Cost leadership - used when firm wants to become the lowest cost producer, competing on the
price with every industry and earn higher unit profits. Companies employing this are Puregold and
Cebu Pacific Airlines.
b. Differentiation - if the company wants to offer a product that is unique, or is different and better
than their rivals, then differentiation strategy is to be employed. Firms usually charge a higher price
for their product or service. Examples are Apple Inc. and Starbucks Corporation.
c. Focused - efforts of the company are focused only within just one or on a small number of market
segments. These customers have specialized needs that are not commonly addressed by big
companies. Examples of this are products like Sensodyne, Novu Hair or organic coffee.
 Step 5: Strategy Evaluation and Control
After the strategy is developed, periodic monitoring and evaluations are necessary to identify any
deviations and make adjustments and corrections.
LESSON 4: Strategic Alternatives
What I Need to Know
Instructions: Write the letter of the best answer. Use a separate sheet.
1. It refers to strategic alternatives used when firms want to sell their existing products to
their existing market. What is it?
A. Diversification C. Market Penetration
B. Market Development D. Product Development
2. Ansoff's Strategic Matrix is useful for what?
A. Hiring new employee and staff
B. Creating products and services
C. Understanding customer behavior
D. Identifying strategic decisions for companies
3. Which strategy entails creation of new products to existing market?
A. Diversification C. Market Penetration
B. Market Development D. Product Development
4. Which refers to a strategy of offering new products to new markets that are either related
or completely unrelated to a company’s existing offering?
A. Diversification C. Market Penetration
B. Market Development D. Product Development
5. If the company wants to launch a new product alongside with its existing product, it employs
what strategy?
A. Diversification C. Market Penetration
B. Market Development D. Product Development
What’s In
As companies and organization grow, new customers and new competitors will also emerge. For this
reason, marketers must find ways on how they will cope to the changing demands of markets and
increasing competition. To do this, successful marketers look for strategic alternatives to identify
marketing opportunities for the business to grow.
Instructions: Identify what type of competitive advantage the following brands employ. Write CL for
Cost Leadership, DF for Differentiation, and FC for Focused.
______ 1. Louis Vuitton ______ 4. iPhone
______ 2. Novu Hair ______ 5. Anmum Materna
______ 3. Puregold ______ 6. Angel’s Burger

What is It
In the strategic market planning, step four talks about the
development of market strategy. In addition to the competitive
advantage, there are also four options or strategic alternatives
where marketers can choose to discover marketing opportunities.
This is discussed though Ansoff’s Strategic Matrix, which is
shown on the right:
Figure 2. Ansoff’s Growth Matrix
A. Market Penetration
Market Penetration is used when firms want to sell their existing products to their existing market. The
aim of the companies employing this is to “penetrate the market” by increasing the volume of their
sales. This is done through offering lowered product prices, improving distribution networks, or the
use of intensive marketing promotions. Jollibee is one good example of companies using this strategy.
Who would have forgotten the viral videos of #Kwentong Jollibee on social media? This is one of the
marketing campaigns of Jollibee that boosted their sales to up to 3x higher than their usual. Jollibee
is also famous for other promotions such as the use of coupons, mascots and tv commercial ads.
B. Market Development
Market Development is about selling the company’s existing products to new markets. New markets
may mean selling internationally or in new geographical markets or targeting new customer segments.
For example, Jollibee is now entering European countries and Nivea which previously caters to women,
is now offering Nivea products for men.
C. Product Development
Product Development entails creation of new products to existing market. Companies can make some
modifications (new variants or flavors, or new packaging) to the existing products, develop or launch
new products alongside with the existing products. Companies employing this strategy invests heavily
to Research and Development. An example includes Jollibee offering Iced Coffee and Brown Sugar Milk
Tea with pearl when the milk tea fad arises among millennials in 2020.
D. Diversification
Diversification is a strategy of offering new products to new markets that are either related or completely
unrelated to a company’s existing offering. Jollibee utilize this strategy when they offered toys, dolls,
and other merchandise to the market. Another example, SM Holdings also has conglomerate businesses
such as BDO, SMDC and 2Go Express.