Principles of

Marketing
(Quarter 3)
Second
Semester
 Lesson Introduction to Marketing:
1
Definitions, Goal and
Approaches
Type Organizations Earn Revenues and generate profits through supplying
services and products to each person customers and organizations. The profits
generated pay for the expenses and fees of their enterprise. These protected
manufacturing facility and office leases, salaries of employees, and utilities, among
others. Profits are generated while the products offered by the organization are
bought and paid for by means of the client. Money is the everyday mode of payment.

Offering products and services to customers and ensuring that there are
purchased are most of the important capabilities of advertising and marketing.
Without advertising, maximum groups may also give up existing and may not be able
to preserve their operations. Profit is one of the diving forces, if not the principle of
motivation, of an enterprise operation. For this cause, marketing is frequently
referred to as the “lifeblood” of each business.

Defining Marketing

▪ Marketing is defined by the American Marketing Association as “the activity,

set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and
society at large.” If you read the definition closely, you see that there are four
activities, or components, of marketing:
1. Creating. The process of collaborating with suppliers and customers to
create offerings that have value.
2. Communicating. Broadly, describing those offerings, as well as learning
from customers.
3. Delivering. Getting those offerings to the consumer in a way that optimizes
value.
4. Exchanging. Trading value for those offerings.

The Role of Marketing

1. Identify customers. The business or organization must understand
customer wants, demands, and needs. They also need to identify the target
market (to whom they would sell their products and services) and how to
reach them.

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 2. Satisfy customers. Make the right products or services available to the right
people at the right time. Make everyone feel better off from the exchange.
3. Retain customers. Give customers a reason to keep coming back. Find new
opportunities to win them.
4. Creation of products and services. Anything the company offers for sale to
the buyers to satisfy their demands, wants, and needs.
5. Distribution. It entails how a company is going to deliver its products and
services to their respective customers.
6. Pricing. Make sure you’re not losing any profits by selling too low. However,

you don’t want to overcharge and then not see any return because
customers found a cheaper alternative.
7. Promotion. It involves confirming an advertisement is seen in the right

places by the right people.

8. Selling. The selling process begins once you’ve completed market research
and determined what your prospects want and need.

▪ Goal of Marketing
The goals of marketing can be summarized as follows:

1. Understand the market and its consumers and satisfy their changing
needs and wants.
2. Introduce and innovative products and services that improve human
condition and the quality of life.
3. Design and implement effective customer -driven marketing strategies.
4. Develop marketing programs that deliver superior value to consumers.
5. Build and maintain mutually beneficial and profitable customer
relationships.
6. Capture customers value to create profits
7. Promote value transactions with full regard to the well -being of societies.

According to use: consumer and industrial goods

When classified according to use, products / goods can be consumer goods or

industrial goods.

▪ Consumer goods are goods that are purchased for consumption. Examples
of these are soft drinks, hamburgers, candies, cigarettes, and other similar
items.
▪ Industrial goods are purchased to make other goods, to serve as a raw
material or input in the production of other goods. Typical example is
aluminum, which is used to manufacture kitchen equipment and cans, or
electronic cables and wires.

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Marketing Approaches

The study of marketing has been approached in more than one way. To some, it has
meant to sell something at a shop or marketplace; to some, it has meant the study
of individual product and its movement in the market; to some, it has meant the
study of persons-wholesalers, retailers, agents, etc., who move the products and to
some, it has meant the study of the behavior of commodity movement and the way
the persons involved to move them. The approach to the study of marketing has
passed through several stages before reaching the present stage. There is a process
of evolution in the development of these approaches.

1. Traditional Approaches

A. The Production Concept. This concept is the oldest of the concepts in business.
It holds that consumers will prefer products that are widely available and
inexpensive. Managers focusing on this concept concentrate on achieving high
production efficiency, low costs, and mass distribution. They assume that consumers
are primarily interested in product availability and low prices. This orientation makes
sense in developing countries, where consumers are more interested in obtaining the
product than in its features.

B. The Product Concept. This orientation holds that consumers will favor those
products that offer the most quality, performance, or innovative features. Managers
focusing on this concept concentrate on making superior products and improving
them over time. They assume that buyers admire well-made products and can
appraise quality and performance. However, these managers are sometimes caught
up in a love affair with their product and do not realize their market needs.
Management might commit the “better-mousetrap” fallacy, believing that a better
mousetrap will lead people to beat a path to its door.

C. The Selling Concept. This is another standard business orientation. If left alone,
it holds that consumers and businesses will ordinarily not buy enough of the selling
company’s products. The organization must, therefore, undertake an aggressive
selling and promotion effort. This concept assumes that consumers typically show
buying inertia or resistance and must be coaxed into buying. It also assumes that
the company has a whole battery of effective selling and promotional tools to
stimulate more buying. Most firms practice the selling concept when they have
overcapacity. They aim to sell what they make rather than make what the market
wants.

Contemporary Approaches

A. The Marketing Concept. This is a business philosophy that challenges the above
three business orientations. Its central tenets crystallized in the 1950s. It holds that
the key to achieving its organizational goals (the selling company) consists of the
company being more effective than competitors in creating, delivering, and
communicating customer value to its selected target customers. The marketing

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concept rests on four pillars: target market, customer needs, integrated marketing,
and profitability.

B. Relationship Marketing Concept. It is believed that all marketing activities are to

establish, maintain, and strengthen meaningful long-term relationships with
customers. Extensive customer databases are created, maintained, and updated.
Customer profiles, purchase habits, and preferences are tracked and monitored. This
is to ensure that customer’s needs are fulfilled, and the relationship with them is
maintained.

C. The Societal Marketing Concept. This concept holds that the organization’s task
is to determine the needs, wants, and interests of target markets and deliver the
desired satisfactions more effectively and efficiently than competitors (this is the
original Marketing Concept). Additionally, it holds that this all must be done in a way
that preserves or enhances the consumer’s and the society’s well-being.

According to differentiation: Undifferentiated and differentiated Goods

▪ Undifferentiated goods are products whose physical characteristics are so

identical, that it would be difficult, if not impossible, to distinguish one
purchased from one vendor or another. Most undifferentiated goods are
products that are sourced from nature. Typical example of an undifferentiated
good is rock salt.
▪ Differentiated goods are varied in their characteristics and features that they
are readily distinguishable from one another. If one were to park white colored
vehicles of each model from all local car manufacturers side-by -side, Toyota
Corolla would still be readily distinguishable from the Mazda 3, the Nissan
Sentra, and The Honda Civic. This ability of manufacturers to successfully
distinguish their products from other competitors is called Branding.

According to Durability: Consumables, Semi – Durable and Durable Goods

Based on durability, products are either consumables, semi -durable, or durable

goods. Durability refers to the length of time a consumer can derive benefits from the
product or good purchase.

▪ Consumable is a product whose benefit can only be used by a consumer for

only a short period of time, sometimes only a few minutes. For this reason,
many misinterpret consumables to exclusively include food, drinks, and other
edible items. Although these are consumables, nonedible items such as
detergents and toiletries are also considered consumables.
▪ Semi-durables provide benefits to the consumer for a longer period, usually
spanning several months. Semi-durables are manufactured for a longer term
by the consumers. Examples of semi-durables are clothes, shoes, belts, and
jackets.

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According to Type: Convenience, Shopping, Specialty, and Unsought
Goods

▪ Convenience goods are products that are purchased frequently, are

usually inexpensive, and do not require much purchase effort and evaluation.
Examples are newspapers, gum, and candies. The key to the successful
marketing of convenience goods is its availability in as many retail outlets as
possible, catering to consumer needs where and when it arises.
▪ Shopping goods are purchased less frequently than convenience goods,
relatively more expensive, and require some amount of information search
and evaluation prior to purchase. Examples of shopping are clothes, shoes
and handbags.
▪ Specialty goods are goods that require unusually large effort on the part of
consumers to require. Example of Branded luxury merchandise, work of art,
and homes.
▪ Unsought goods are goods that consumers seldom actively look for, and
are usually purchased for extraordinary reasons, such as fear or adversity
rather than desire. Examples are investments, memorial plans etc.

Emerging Types of Marketing and their Applications:

Based on a 2017 report by Kleiner Perkins Caulfield and Byers, an internet

trend investment firm, 3.4 billion people use the internet. Therefore, the internet has
become an easy and quick way to research, reach and engage customers.

1. Search engine optimization is majorly concerned with increasing a business’

visibility and rankings on search engine result pages. It is a simple way of attracting
organic traffic of potential customers to a website. SEO can be maximized with paid
adverts (Google AdWords), strategic content marketing and social media networks.

2. Pay per Click advertising: This is advertising presented on search engine result
pages or web pages where the advertiser is only charged based on the number of
times someone clicks on the ads to go to the advertiser's targeted website.

3. Email marketing is a type of marketing based on the distribution of messages

through emails. Email marketing provides direct contact with customers and allows

businesses to create relationships with their customers. Updates, exciting news, and
call to actions can be sent directly to customers.

4. Referral marketing: is a type of marketing where an individual or customer pleased

with the results gotten from a product refers the product to another person. It's a
very subtle form of marketing that can provide great results especially when the
person referring is an Influencer in that industry.

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5. Affiliate marketing: is a prominent type of internet marketing where a third party
promotes a product and earns commission, or a piece of the profit gotten from every
sale made through that referral.

6. Video marketing: Videos act as one of the most interactive types of online
marketing and can prove to be a great way to raise awareness about a business or
product. In fact, according to Mushroom networks, YouTube is the second biggest
search engine. Therefore, video marketing can prove to be a great way to pass
messages to target customers.

7. Inbound marketing is a very powerful contemporary marketing strategy that

focuses on different tactics to draw consumers in and convince them to buy goods.
It is one the result-oriented types of marketing that uses content to drive results. A
key subset of Inbound marketing is Content marketing which the Content Marketing
Institute refers to as "a strategic marketing approach focused on creating and
distributing valuable, relevant, and consistent content to attract and retain a clearly
defined audience."

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Lesson Customer Relationship
2 Management and its Marketing
strategies

The relationship involves marketing communications, sales support, technical

assistance, and customer service. The relationship is measured by the degree of
customer satisfaction through the buying cycle and following receipt of goods or
services. See also customer relationship management. Customer satisfaction has
always been a key element in the pursuit of corporate goals and objectives. However,
the current competitive environment fostered by liberalization and globalization of
the economy, and the rising customer expectations for quality; service and value
have prompted many companies to organize their business around customers they
serve, rather than around product lines or geographic business units.

Five (5) Tips to Learn off Skilled Customer Service Representative:

1. Make your customers feel appreciated.

One of the first customer service tips is to make sure your customers feel
appreciated and valued. It is one of the most successful ways to earn
customer loyalty and differentiate yourself from your competitors. Fun and
inexpensive reward programs, raffles, or contests can all help your
customers feel like a part of the family.
2. Develop a bespoke service for your individual customer segments.
Anticipate their needs and tailor your service accordingly. Customers all have
slightly different needs and taking a one-size-fits-all approach will cause some
of them to fall through the cracks. Instead, identify the reasons why they are
seeking out your business, and make sure you fulfill those needs.
3. Welcome customer service complaints – And really listen to what
problems are out there.
Listen, listen, listen! One of the most common customer service complaints
is that the sales staff did not listen to them. Avoid this by making sure that
you and your employees are skilled listeners. Take the time to really hear
the customer, without letting yourself get distracted.
4. Always focus on positive forward-looking solutions – Not negative blame-
ridden dialog. Stay positive. When you are dealing with a difficult customer,
it is easy to become flustered or focus on the negative aspects of the situation.

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 In those cases, be sure you are focusing on what you can do to fix the problem
rather than focusing on what went wrong. It is okay and even necessary for
you to let an irate customer vent for a bit but try not to let it run on too long.
5. You can always improve customer service skills simply by being honest
and upfront. Be humble. When you make a mistake, do not be afraid to own
up to it and apologize. Most customers realize that you are only human, and
while they might get frustrated, most will be reasonable. A sincere apology
goes a long way.

The following are some of the more popular customer service practices
in the Philippines.
Customer Service Practice Practicing Organizations
Free delivery Most department and fast-food chains
Automated in-home ordering Most department stores and drug stores
system
Gift wrapping /plastic book Most department stores and bookstores
jacket
Merchandise/ document pick-up Select courier services

Free parking Some churches and religious organizations

Valet Parking Some hotels and resorts

Reservation, installment plans Some large department stores, bookstores

Drive – Thru Most fast-food outlets

Characteristics of Relationship Marketing:

1. It focuses on the long-term rather than the short-term.
2. It focuses on partners and customers rather than on the company’s products.
3. It puts more emphasis on customer retention and growth than on customer
acquisition.
4. It relies on cross-functional teams rather than on departmental-level work.
5. It relies more on listening and learning than on talking.

Benefits in developing and implementing customer relationship

1. Consistent customer experience
2. Customer Feedback
3. Customer Profitability
4. Customer advocate
5. Innovation

Four Brand Benefits

To establish a long-term relationship with their customers, firms must create
value based on several benefits since customers’ needs are multi-faceted. Contrary
to popular belief, offering lowest price may not exactly be the correct route to attain
loyal customers as there are four (4) benefits that customers look for.

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1. Functional benefit
▪ product/service attribute that provides the customer with functional utility or that
which satisfies the customer’s practical needs
▪ answers the question “Why should I buy your product or service?”
Examples:
a. Pilot Pen Company created G-TEC pens for customers like students
who prefer extremely fine writing.
Congratulations! You’ve earned a badge! Time to unlock new concept!
b. From sling laptop bags, laptop manufacturers introduced laptop
backpacks for students’ convenience.
2. Emotional benefit
▪ product/service attribute that provides the customer with a positive
feeling when they purchase or use it
▪ answers the question “How will I feel when I own or use the product or
the service?”
Examples:
a. A product wrapped with a Hallmark wrapper tends to give a feeling of
“importance” to the receiver of gift, compared to the same product
wrapped in an ordinary, low-cost wrapper.
b. A wooden toothbrush labeled as eco-friendly gives the customer an
“eco-warrior” feeling or a sense of “responsible human being”.
3. Social benefit
▪ product/service attribute that considers how the customer wants to be
perceived by others when they purchase or use it
▪ answers the question “How will others perceive me when I use your
product or service?”
Examples:
a) Holding a cup of Starbucks coffee offers the consumers a sophisticated
self-image than holding a cup of low-cost coffee.
b) A student wearing an original Nike shoe is perceived to be from a wealthy family
than a student wearing Class A shoes.
4. Economic benefit
▪ product/service attribute that considers how much a consumer can
save using the product/service
▪ answers the question “Why is your offer priced the way it is?”
Examples:
a. A Bluetooth speaker that can be used as power bank can costs higher
than a regular Bluetooth speaker. However, customers can consider it
more economic than buying a Bluetooth speaker and a power bank
individually.
b. A 3-in-1 hair tool that can be used to blow dry, straighten, and curl
your hair in one cost higher than a hair drier, hair straightening iron,
or curling iron. However, customers can consider it more economic
than buying those hair tools individually.
Customer Service
• the process of ensuring customer satisfaction with a product or service
• can take on many forms – salesperson assistance, product delivery, technical
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 advice, help desks, or other means

Examples of Customer Service Practices in the Philippines

Customer Service Practice Practicing Organization(s)

free delivery most restaurants and fast-food chains
free gift wrapping/plastic book jacket most department stores and bookstores
free appliance installation most appliance centers
drive-through most fast-food outlets
valet parking some hotels and resorts
reservations, installment plans some large department stores, bookstores
free parking some churches and religious organizations
complimentary refreshments, waiting most car dealerships
lounge
help desks, touch phone access, 24- most utility firms and telecommunication
hour customer hotline firms

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 Strategic Marketing vs. Tactical
Lesson Marketing, Marketing
3 Environment and Marketing
research
▪ In business, marketing is the action a company takes to create brand awareness
and place product in front of prospects. When creating your marketing plan,
strategic marketing comes first because it deals with the direction of your
business growth in relation to your competitors. It is a long-term goal that is
broad. Next, comes tactical planning which consists of the actual process
involved in improving your competitive position.
▪ A strategic plan is a document that establishes the direction of an organization.
It can be a single page or fill up a binder, depending on the size and complexity
of the business and work.

MARKETING ENVIRONMENT

Marketing Microenvironment

The microenvironment in marketing includes all those micro factors that affect
business strategy, decision making and performance. It is vital for business success
to conduct macro environment and microenvironment analysis before decision-
making. Macro environment factors include political, economic, social, technological,
and legal factors. On the other hand, company microenvironment factors include
customers, suppliers, competitors, employees, shareholders and media.

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 1. Organization itself /The company
Marketing may be the “lifeblood of an organization, but it cannot exist
independently of other organizational functions.
2. Suppliers
Suppliers provide raw materials, utilities, labor, capital and equipment. The
availability and prices of these supplies should be monitored.
3. Market intermediaries
Intermediaries are channels that link the organization to its customers. Most
products are delivered and distributed to customers through intermediates.
4. Customers
Customers create the demand for products and services. They can either be
customers or end-users, businesses, or organizations.
5. Competition
The demand for a company’s products and services is affected by the nature
and intensity of competition.
6. Publics
Publics may include any individual or entity with an actual or potential
interest in the company and its products or services.
Marketing Macro – environment
The organization along with its other forces carries its functions in the larger area of
the macro environment. There are certain factors and forces of the macro
environment that are responsible for the provision of opportunities & threats to the
organization. Six types of forces are present in the macro environment of the
organization, which are as below:

1. Demographic - A company’s demographic macroenvironment consists of

changes in population characteristics.
2. Economic- The economic macro environment represents economic factors
that can directly affect an organization. Examples of these are inflation rate,
foreign exchange rates, consumer spending shifts, and consumer price index
among others.
3. Natural- The natural macro environment refers to natural resource inputs
and environment concerns. The uncontrolled use of finite natural resources
including fossil fuel in organizational activities has heightened concern for the
sustainability of the natural environment.
4. Technological- is composed of current and impending technological change.
This is sometimes the single factor that can cause the rapid acceleration or
bring about the untimely demise of products, services, or companies.
5. Political-legal – A highly uncertain political situation, such as an impending
national election, may affect the stability of businesses.. A new administration
may have different economic and monetary priorities and may favor a
divergent legislative agenda.

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 6. Socio - Cultural – Each geographical area has a specific culture that dictates
how business is conducted. Culture is defined as the beliefs, customs, arts ,
etc. of a particular society, group, place or time.

The Purpose and Importance of Marketing Research

1. Identify viable new products and services

2. Enable risk reduction
3. Identify market opportunities and threats
4. Determine the level of customer satisfaction
5. Pinpoint and anticipate market trends or changes
6. Decide on the best advertising medium
7. Pre-test and post -test advertising and promotional campaigns
8. Evaluate the results of test marketing
9. Evaluate the results of packaging, brand name, and label testing
10. Determine consumer price awareness and sensitivity
11. Undertake location studies

Step in the Marketing Research Process

Establishmen
Research need Problem/Opport
determination t of Research
unity definition
Objectives

Determination Information Research

Data collection Sources/Type Design
forms design of Data Access
Methods s Determinatio
Identification n

Sample size Report

and sampling Data preparation
plan Data Analysis
Collection and
determination presentation

Figure 4. Marketing research process

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 The Consumer Buying Process

The consumer buying process outlines the steps a consumer goes through
when buying a product/service. It is important for marketers to know this
process to understand how consumers buy.

Need/problem Information Alternatives

recognition search evaluation

Post-purchase Purchase
behavior decision

Figure 5. The consumers Buying Process

1. Problem /need recognition

- This initial step in the consumer buying process is the most
important of all because the failure of a consumer to recognize
a need for a problem will not result in any sale.
2. Information search
- After having recognized the need or problem, the consumer will
search for ways to address the need or solve the problem.
3. Alternative evaluation
- The consumers compare the attributes, features, and selling
prices of the various brands of products or services capable of
addressing his/her recognized need or solving his/her problem.
4. Purchase decision
- After evaluating the brands of products/service that will best
address his/her need to solve his/her problem and provide the
highest value, the consumer shall process to make the
purchase.
5. Post- purchase behavior
- The consumer shall make a judgment of the product/service's
ability to satisfy his /her recognized need or problem.

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Bonus: 5 Customer Value Creation Ideas
➢ Make the value/price ratio seem bigger than it is. Go extra mile, give them a gift,
extra service. Make them feel that they’re appreciated.
➢ Make your service or products easy to buy. Offering different ways to pay
for it, delivery, etc.
➢ Create areal Unique Value Proposition. This holds especially true if you’re
dealing with B2B. Communicate with your costumer, why they should buy
your product over competition.
➢ Work on your brand. Your business name itself should be synonymous with
value. Develop a unique method to treat your customers, handle complaints
with care, etc.
➢ Provide stellar customer service. Treating them as such can be extremely
rewarding for both parties.

STRATEGIC PLANNING VERSUS TACTICAL PLANNING

STRATEGIC PLANNING

Marketing Guru, Philip Kotler (2003), defined strategic planning as a process of

developing and maintaining a strategic fit between the organization’s goals and
capabilities and its changing marketing opportunities.

STRATEGIC MARKETING VS. TACTICAL MARKETING

Strategic Planning is a broad process that can address the entire business, or a
portion of the business such as marketing while Marketing planning is written
based from strategic plans.

STRATEGIC PLANNING

1. Strategy is a plan from reaching a specific goal.

2. In business, a strategy is a broad goal, such as increasing sales or market share
or creating an image for the business.
3. When creating marketing plans start with broad strategies and support it with
specific tactics.
4. Planning is the process of predicting future events and conditions and of
determining the best way to attain the goals and objectives of the organization

5. Strategic Planning is a management process of creating and maintaining fit

between the objectives and resources of the organization and the changing market
opportunities.

Marketing Strategy - Shaped by your business strategy, your marketing strategy is

your purpose; it's the offering you deliver, how you will deliver it and why your
marketing efforts will help you achieve your company’s mission and strategic goals.
Once you have your strategy, only then will you be able to develop an effective
marketing plan according to The Laire Group Team published at
www.lairedigital.com

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MARKETING PLAN
A marketing plan is a business document written for the purpose of describing
the current market position of a business and its marketing strategy for the period
covered by the marketing plan. Marketing plans usually cover a period of one to
five years.
A marketing plan is a comprehensive document or blueprint that outlines a
company's advertising and marketing efforts for the coming year. It describes
business activities involved in accomplishing specific marketing objectives within
a set time frame.

Marketing Strategy Marketing Plan

The “Why” Behind your Marketing The Road Map the Execution
Efforts “Plan”
Its purpose is to describe how your Its purpose is to lay out your
marketing goals will help you achieve marketing campaign efforts on a
your business goals tactical level
What offering you will deliver, who What you will do, where you will do it,
you will deliver, who you will deliver it when you will implement and how
to, how you will deliver it and who you will track success.
your competitors are.
It helps you make the most of your It supports your strategy and is the
investment, keep your marketing action plan you’ll uses to implement
focused, and measure your sales your marketing efforts.
results.
Source: The Laire Group Team | April 23, 2018 lairegroup.com

Parts of Marketing Plan

1. Executive Summary – presents the highlight of the plan. It is the overview of

the proposed plan.
2. Current Marketing Situation - provides data on the present product, its market,
and how products are distributed and promoted.
3. Environment Analysis - discusses the various external factors that affect the
marketability of the product. This defines the product’s strength and weaknesses,
as well as the various threats and opportunities facing the product.
4. Objectives - consist of marketing goals in sales, target market, positioning,
market share, and profit.
5. Marketing Strategies - consist of the company’s game plan, indicating how
objectives will be achieved.
6. Action Programs - indicate the steps that the company would undertake to
ensure that marketing strategies would achieve. It includes identifying the
persons involved, the timeframe, and the budget.
7. Budget – is an important component that puts into details the cost of
implementing the marketing plan.
8. Controls – indicate how progress will be monitored and reviewed by the
Management.

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 Consumer Behavior: How People Make
Lesson Buying Decisions
4

Consumer behavior is influenced by many things, including environmental and

marketing factors, the situation, personal and psychological factors, family, and
culture. Businesses try to figure out trends so they can reach the people most likely
to buy their products in the most cost-effective way possible. Businesses often try to
influence a consumer’s behavior with things they can control such as the layout of a
store, music, grouping and availability of products, pricing, and advertising. While
some influences may be temporary and others are long lasting, different factors can
affect how buyers behave—whether they influence you to make a purchase, buy
additional products, or buy nothing at all. Let’s now look at some of the influences
on consumer behavior in more detail.

Consumers are of different gender and ages. They have varying income levels, live in
different regions of the country, and have various personalities and psychological
profiles. This makes developing a single way to sell to consumers difficult as they are
influenced by different factors when buying goods and services. Consumer purchases
are initiated by marketing stimuli. Marketing stimuli refer to the elements of the
marketing mix, oftentimes referred to as the four P’s: product, price, place, and
promotion. Consumers are influenced by the products /services that they see, hear
from mass media, the internet, and through word of mouth.

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Consumer Market and buying behavior

The consumer buying process outlines the steps a consumer goes through when
buying a product /service. It is important for marketers to know this process to
understand how consumers buy.

Product choice
Marketing Inputs

Psychological Inputs

Purchase Decision
Brand Choice
Culture Location Choice
Attitude Purchase
Products timing
learning
Price Purchase
Perception
Place amount
Promotion Purchase
frequency

Figure 2. The Consumer Behavior Model

▪ Characteristics influencing purchase behavior (Source: Stock photo)

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Factors That Affect Consumer Behavior:
1. Culture – This refers to the general or overall culture of a group. This includes
customs, arts, social institutions and achievements of a particular nation, people
of another social group.
2. Social Factors – This is all about the norms of behavior, among smaller groups
where a consumer belongs to. These are reference groups, family, roles and status,
norms
3. Personal Factors- These are the demographics of the individual that affect the
manner by which products or services are viewed and treated. Examples: Age, life
cycle, stage occupation and economic circumstances.
5. Psychological Factor- This is how individual behaves and it is the result of how
we are raised, who we interact with or what our histories are. Examples:
Motivation, perception, learning, beliefs, and attitudes.
Three Major Types of Buying Situations

1. Straight Rebuy – This is a business buying situation wherein the buyer routinely
re-order products or services without any modification
2. Modified Rebuy – This is a business buying situation wherein the buyer wants to
modify product specifications, prices, terms, or suppliers.

3. New Task – A business buying situation in which a buyer purchases a product or

a service for the first time.

People differ in their innovativeness if readiness to try new products.

Five different adoption categories can be identified as:

1. Innovators are risk taking customers who seek changes. They usually try the new
product in the introduction phase of the product life cycle.
2. Early adopters are guided by respect. They are opinion leaders in their
communities and adopt new idea early about carefully.

3. The early majority are deliberate. Although rarely leaders, they adopt new ideas
before the average person.

4. The late majority are skeptical. They adopt an innovation only after most people
have tried it.

5. Laggards are tradition bound. They are suspicious of changes and adopt the
innovation only when it has become something of a tradition itself.

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 Lesson Marketing Segmentation, Targeting and
5 Positioning

The development of a successful marketing strategy begins with an

understanding of the market for the good or service. A market is composed of people
or institutions with need, enough purchasing power and willingness to buy. The
marketplace is heterogeneous with differing wants and varying purchase power. The
heterogeneous marketplace can be divided into many homogeneous customer
segments along several segmentation variables. The division of the total market into
smaller relatively homogeneous groups is called market segmentation. Products
seldom succeed by appealing to everybody. The reasons are simple: not every
customer is profitable nor worth retaining, not every product appeal to every
customer. Hence the organizations look for a fit between their competencies and the
segments’ profitability. The identified segments are then targeted with clear
marketing communications. Such communications are referred to as positioning the
product or service in the mind of the customer to occupy a unique place. This
involves identifying different points of differentiation and formulating a unique selling
proposition (USP). In today’s marketplace, differentiation holds the key to marketing
success. This lesson is about marketing strategy formulation which consists of
market segmentation, targeting and positioning.

Segmenting the Consumer Markets

Consumer markets are those where the products are purchased by ultimate
consumers for personal use. Industrial markets are those where the goods and
services are purchased for use either directly or indirectly in the production of other
goods and services for resale. Market segmentation of these markets uses different
variables.

The consumer market segmentation variables appear to fall into two broad classes:
consumers’ background characteristics and consumers’ market history. The
following tables illustrate the most important factors and variables that have been
found useful for market segmentation.

21
Well known ways to segment your audience include:

1. Demographics

Breakdown by any combination: age, gender, income, education, ethnicity,

marital status, education, household (or business), size, length of residence,
type of residence or even profession/Occupation. An example is Firefox who
sell 'coolest things', aimed at a younger male audience. Moshi Monsters,
however, is targeted to parents with fun, safe and educational space for
younger audiences.

2. Psychographics

This refers to 'personality and emotions' based on behavior, linked to

purchase choices, including attitudes, lifestyle, hobbies, risk aversion,
personality, and leadership traits. magazines read and TV. While
demographics explain 'who' your buyer is, psychographics inform you 'why'
your customer buys.

There are a few different ways you can gather data to help form psychographic
profiles for your typical customers.
a. Interviews: Talk to a few people that are broadly representative of your target
audience. In-depth interviews let you gather useful qualitative data to really
understand what makes your customers tick. The problem is they can be
expensive and difficult to conduct, and the small sample size means they may not
always be representative of the people you are trying to target.
b. Surveys: Surveys let you reach more people than interviews, but it can be
harder to get as insightful answers.
c. Customer data: You may have data on what your customers tend to purchase
from you, such as data coming from loyalty cards if an FMCG brand or from
online purchase history if you are an ecommerce business. You can use this
data to generate insights into what kind of products your customers are
interested in and what is likely to make them purchase. For example, does
discounting vastly increase their propensity to purchase? In which case they
might be quite spontaneous.

3. Belief and values

Refers to Religious, political, nationalistic, and cultural beliefs and values. The
Islamic Bank of Britain offers Sharia-compliant banking which meets specific
religious requirements. A strange but interesting example of religious
demographics influencing marketing that you might not have guessed is that
Mormons are really into 'multi-level marketing'. They're far more likely to be
engaged in the practice than any other US group. Going the extra mile with
demographic research can lead to discovering new marketing opportunities
and thinking outside the box. For example, did you know 55-64-year-olds are
the most likely age group to buy a new car? But you don't tend to see them in
the car ads. An opportunity waiting to be seized!

22
4. Life Stages
Life Stages is the Chronological benchmarking of people’s lives at different
stages. An example is Saga holidays which are only available for people aged
50+. They claim a large enough segment to focus on this life stage
5. Geography

Drill down by Country, region, area, metropolitan or rural location, population

density or even climate. An example is Neiman Marcus, the upmarket
department store chain in the NCR now delivering to Mindanao.

6. Lifestyle

This refers to Hobbies, recreational pursuits, entertainment, vacations, and

other non-work time pursuits. Companies such as on and off-line magazine
will target those with specific hobbies i.e. FourFourTwo for football fans. Some
hobbies are large and well established, and thus relatively easy to target, such
as the football fan example. However, some businesses have found great
success targeting very small niches very effectively. A great example is the
explosion in 'prepping' related businesses, which has gone from a little heard
of fringe activity to a billion-dollar industry in recent years.

7. Behavior

Refers to the nature of the purchase, brand loyalty, usage level, benefits
sought, distribution channels used, reaction to marketing factors. In the
environment, the benefits sought are often about ‘how soon can it be
delivered?’ which includes the ‘last minute’ segment - the planning in advance
segment. An example is Parcelmonkey.co.uk who offer same day, next day and
international parcel deliveries.

8. Benefit

Benefit is the use and satisfaction gained by the consumer. Stationery offers
similar products to other stationery companies, but their clients want the
benefit of their signature packaging: tissue-lined Nile Blue boxes and tied with
navy ribb

23
 Market Segmentation - Meaning, Basis and Types of
Segmentation
What is Segmentation?
Segmentation refers to a process of bifurcating or dividing a large unit
into various small units which have similar or related characteristics.

Market Segmentation
Market segmentation is a marketing concept which divides the complete market set
up into smaller subsets of consumers with a similar taste, demand, and preference.
A market segment is a small unit within a large market comprising like-minded
individuals. One market segment is totally distinct from the other segment. A market
segment comprises individuals who think on the same lines and have similar
interests. The individuals from the same segment respond in a similar way to the
fluctuations in the market.

Basis of Market Segmentation

1. Gender
The marketers divide the market into smaller segments based on gender. Both
men and women have different interests and preferences, and thus the need
for segmentation. Organizations need to have different marketing strategies
for men which would obviously not work in case of females. A woman would
not purchase a product meant for males and vice versa. The segmentation of
the market as per the gender is important in many industries like cosmetics,
footwear, jewelry, and apparel industries.

2. Age Group
Division based on the age group of the target audience is also one of the ways
of market segmentation. The products and marketing strategies for teenagers
would obviously be different than kids.
Age group (0 - 10 years) - Toys, Nappies, Baby Food, Prams
Age Group (10 - 20 years) - Toys, Apparels, Books, School Bags
Age group (20 years and above) - Cosmetics, Anti-Ageing Products,
Magazines, apparels and so on.
3. Income
Marketers divide the consumers into small segments as per their income.
Individuals are classified into segments according to their monthly earnings.
The three categories are:

High income Group

Mid Income Group
Low Income Group
Stores catering to the higher income group would have a different range of
products and strategies as compared to stores which target the lower income
24
 group. Pantaloon, Carrefour, Shoppers stop targets the high-income group as
compared to Vishal Retail, Reliance Retail or Big bazaar who cater to the
individuals belonging to the lower income segment.
4. Marital Status
Market segmentation can also be as per the marital status of the individuals.
Travel agencies would not have similar holiday packages for bachelors and
married couples.

5. Occupation
Office goers would have different needs as compared to school / college
students. A beach house shirt or a funky T Shirt would have no takers in a
Zodiac Store as it caters specifically to the professionals.

Types of Market Segmentation

1. Psychographic segmentation
The basis of such segmentation is the lifestyle of the individuals. The
individual’s attitude, interest, value help the marketers to classify them into
small groups.
2. Behaviouristic Segmentation
The loyalties of the customers towards a brand help the marketers to
classify them into smaller groups, each group composed of individuals loyal
towards a brand.
3. Geographic Segmentation
Geographic segmentation refers to the classification of markets into various
geographical areas. A marketer can’t have similar strategies for individuals
living at different places.

Nestle promotes Nescafe all through the year in cold states of the country
as compared to places which have well defined summer and winter seasons.
McDonald’s in Philippines does not sell beef products as it is strictly against
the religious beliefs of the countrymen, whereas McDonald’s in US freely
sells and promotes beef products

How to select the Target Market?

Is it essential for the organizations or marketers to identify the set of people

whom they want to target? Marketers must understand the needs and
expectations of the individuals to create its target market. The target audience
must have similar needs, interests, and expectations. Similar products and
brands should entice the individuals comprising the target market. Same
taglines and advertisements attract the attention of the target audience and
prompt them to buy.

25
Types of Positioning Strategies

There are several types of positioning strategies. A few examples are positioning

by:

1. Product attributes and benefits: Associating your brand/product with

certain characteristics or with certain beneficial value.
2. Product price: Associating your brand/product with competitive pricing.
3. Product quality: Associating your brand/product with high quality.
4. Product use and application: Associating your brand/product with a specific
use.
5. Competitors: Making consumers think that your brand/product is better than
that of your competitors.

26
Marketing
(Quarter 4)
Second
Semester

27
 Lesson The Four (4) P’s of Marketing
1

Who invented the 4 Ps of marketing?

It was Neil Borden who first popularized the idea of the marketing mix in the
1950s. Borden defined a marketing executive as somebody who fuses ingredients to
make the right recipe for marketing a product. Later, it was Jerome McCarthy who
sublimated the concept of 4Ps of marketing from Borden's ideas of a marketing
mix.

McCarthy had highlighted that the 4Ps viz. Product, price, promotion, and place
are the initial control elements that are available to shape a marketing plan. He also
articulated the changing of the balances of these variables in long term perspective
with the product remaining the hardest to change.

What factors determine the marketing mix?

Any company which intends to find the right pitch for their product needs to consider
an array of factors before setting out to do it. The marketing mix for any product
will be determined by two factors viz.

Internal Factors

It includes the factors which lie within the organization or is concerned with the
inner atmosphere of the firm. The internal factors are primarily:

● Nature of products
● Product stages in its overall life cycle
● Availability of funds
● Company objectives

External Factors

External Factors concerned with the factors outside the organization. They include
the following aspects:

● Degree of competition
● Efficiency of channel
● The buying behavior of a consumer
● Control from the government side
28
Importance of 4Ps Marketing

▪ It creates synergy
The four Ps of Marketing: Product, Price, Promotion, Place when blended
properly creates coordination that gives a right pitch to the product. It follows the
principle:” the whole is greater than the sum of its parts.”
▪ Brand loyalty and value
Since the approach focuses on the needs of the customers and their
satisfaction the product consequently earns consumer loyalty and esteem.
▪ Serves as a link
The product features, pricing, and place strives to factor in the expectations of
a customer. The promotional aspects give to the customer what your company
proposes to offer and thus position the products better. Thus, a link is being forged
between the consumer and the organization.
▪ Enables proper integration
The designing of the 4 Ps needs critical thinking and perceptiveness. If they are
merged correctly, then your product will find a unique space in the customer’s mind.
▪ Guides decision
The interdependence and the overarching nature of one element over another
guide you in decision making. For example: if your product pricing is high, then in
your promotional activity, you will have to target well off customers, and your product
design must be quality based. The channels of distribution and location etc. will also
be guided by this decision.
▪ Higher sales volume
The result of all the efforts is higher customer satisfaction and greater market
share which is compounded by an increase in the sale of the products.

Place

Intermediate provides access and convenience for the products consumers. The
following are other key functions of intermediaries:
● Information collection and dissemination – marketing intermediaries,
particularly retailers, provide product manufactures with viral marketing
reach information on consumer profiles and product movements.
● Product storage and movement – manufactures warehousing facilities are
relieved of large amounts of merchandise.
● Operational Financing – distribution channels that take care of storage
and transport assume the costs of these activities.
● Product promotion – intermediates, particularly retailers, help in the
development and implementation of communication programs to enhance
product sales.
● Risk taking – most marketing intermediates eventually pay for merchandise
they carry. They assume financial risk if the product does not sell as
expected.

29
Promotion

Promotion as used in the 4 P’s is a general term which includes the following:
advertising, promotions, personal selling, publicity, and public relations.
Advertising pertains to any paid and public presentation of products, services,
or ideas, by an identified sponsor through medium and defined as any paid and
public presentation of products, services. Or ideas, by an identified sponsor
through medium. The most common objectives of advertising are:
● To build awareness . To persuade
● To inform . To remind
Brand awareness is the extent to which consumers are familiar with the
distinctive qualities or image of a brand of goods or services. Achieving a high
level of awareness provides the brand the following advantages.
● Learning advantages – which heavily influence the formation and strength
of associations that comprise the brand's image.
● Consideration advantages – which increase the likelihood that the brand
will be included in the consumer's consideration set, or the set of brands
that receive serious consideration for purchase.
● Choice advantages – which can affect choices among brands included in
the consideration set.

Price

The Meaning of Price

Price is the money, good, or service exchanged for the ownership or use of a
good or service. When one hundred pesos in paid for a sack of corn, that amount is
the price of the corn. When a boy is asked to carry a sack of corn from the parking
area to the store and is paid a kilo of corn, the price of the service is one kilo of corn.
When a bundle of sweet potato tops is exchanged for a bundle of string beans,
each is the price of the other.

Pricing Defined

Pricing may be defined as those activities involved in the determination of the

price at which products that will be offered for sale considering the various objectives
of the firm.

Pricing Objectives
Before setting prices, the firm’s pricing objectives must first be determined. Pricing
objectives may consist of any of the following:

1. Profit-oriented objectives
2. Sales-oriented objectives
3. Status quo-oriented objectives

30
Profit-Oriented Objectives

Profit-oriented objectives call for profit generation. This may either be:

1. To achieve the target return on investment or on net sales; or

2. To maximize profit

The Target Return Objective. This refers to the pricing objective requiring a certain
level of profit. Most often, it is stated in terms of percentage of sales or on capital
investment. An example is the 21 percent return on investment required by a
companies, or the 2 percent return on sales required by another firm.

The Profit Maximization Objective. This refers to the pricing objective of seeking
as much profit is possible. This may be achieved by increasing the quantity sold or
increasing the profit margin. However, even if the firm succeeds in the attempt, it
will not be for long because the situation will invite competition and will ultimately
result to a decrease in profits in the long run.

31
 Managing Retailing, Wholesaling
Lesson
and Pricing Strategies
2

Retailing includes all the activities involved in selling goods or services directly to
the final consumer for their personal, non-business use. Retailers are businesses
whose sales come primarily from retailing. Retailing connects brands to consumers
in the final steps (“last mile” of buying process). Shopper marketing means using in-
store promotions and advertising to extend brand equity to the “last mile” and
encourage favorable hi-store purchase decisions. There are different types of
retailers. Self-service retailers serve customers who are willing to perform part of the
service. Limited-service retailers provide some assistance in the service process,
while full-service retailers assist customers in every step of the buying process.

Wholesaling and Retailing

1. Wholesaling- is the sale of goods for resale. Wholesaling is an important product

distribution function. Without wholesalers, product manufacturers would have
to deliver goods directly to retailers.
2. Retailing- Is defined as the sale of goods/services to the final customer for his
personal consumption. Typical examples of retailing establishments are drug
stores, sari-sari stores, restaurants, movie houses, convenience stores and
supermarkets.

Retailers can also be classified by the length and breadth of their product line.

1. Specialty store - a retail store that carries a narrow product line with a deep
assortment within that line.
2. Department store - a retail organization that carries a wide variety of product
lines. Each line is operated as a separate department managed by specialist
buyers or merchandisers.
3. Supermarkets are large, low-cost, low-margin, high-volume and self-service
stores that carry a wide variety of grocery and household products.
32
 4. Convenience stores are Mall stores, located near residential areas and that
carry a limited line of high-turnover convenience goods.
5. Superstore- a store much larger than a regular supermarket that offers a
large assortment of routinely purchased food products, non-food items and
services.
6. Category killer- a giant specialty store that carries a very deep assortment of
a line and is staffed by knowledgeable employees.
7. Service retailers- a retailer whose product line is a service.
Wholesaling

Wholesaling includes all the activities involved in selling goods and services to
those buying for resale or business use. A wholesaler is a firm engaged primarily in
wholesaling activities. Wholesalers add value by performing one or multiple of the
following channel functions:

▪ Selling and promoting and thereby reaching many small customers.

▪ Buying an assortment of buildings. Bulk breaking by buying in large
quantities.
▪ Warehousing and holding stock.
▪ Transportation.
▪ Financing of customers and suppliers.
▪ Risk bearing.
▪ Providing market information.
▪ The management of services and giving advice.

Wholesalers fall into three major groups.

1. Merchant wholesalers are independently owned wholesale businesses that

take title to the merchandise it handles. They include full-service wholesalers,
who provide a full set of services and limited-service wholesalers who offer less
services to their customers. Industrial distributors sell to manufacturers, while
wholesale merchants sell primarily to retailers. Cash-and-carry wholesalers
carry a limited line of fast-moving goods. Drop shippers never carry stock but
select manufacturers who ship the product upon order.
2. Brokers and agents. A broker is a wholesaler who does not take title to goods
and whose function is to bring buyers and sellers together and assist in
negotiation. An agent is a wholesaler who represents buyers or sellers on a
relatively permanent basis, performs only a few functions and does not take
title to goods. Selling agents have contractual authority to sell a manufacturer’s
entire output. Purchasing agents often have long-term relationships with
buyers and make purchases for them.
3. Manufacturers’ sales branches and offices. wholesaling by seller or buyers
themselves rather than through independent wholesalers.

33
Pricing Strategies

▪ Markup pricing – is a pricing strategy that allows the seller a fixed markup
every time the product is sold.
▪ Odd pricing or psychological pricing – a pricing method premised on the
theory that consumers will perceive products with odd price ending as lower
in price than they are.
▪ Loss leader pricing – a pricing strategy frequently utilized by supermarkets.
▪ Price lining – a pricing strategy designed to simplify a consumer buying
decision.
▪ Prestige pricing – a pricing strategy that disregards the unit cost of a product
or service.
▪ Marginal pricing – where business organizations price its product at a range
below its unit costs but higher than its unit variable cost.
▪ Predatory pricing – a pricing strategy is where the firm prices its product
lower than unit variable cost, initially resulting in short term losses.
▪ Going rate pricing – a pricing strategy where a company price its product at
the same level as or very close to its competitors’ prices.

▪ Promotional pricing - a pricing strategy involving a temporary reduction in

the selling price of a product and service to indicate induce trial or to
encourage repeat purchase. Almost all companies, especially those involved
in fast-moving consumer goods (FMCGs), implement promotional pricing at
one time or another.

Price reductions take the form of any of the following:

a. Sale- this is the form where the prices of the products of the firm are
reduced for a limited time.
b. Special event pricing- Under this form, special prices in certain seasons
are made to draw in more customers.
c. Cash rebates- these are offered to customers to encourage them to make
purchases within a specified time.
d. Low-interest financing- this involves low-interest financing to customers.
e. Warranties and service contracts- these involves adding free warranty offer
or service contract.

When new products are introduced into the market, one of the two following pricing
strategies can be used:

1. Price skimming- where the product’s selling price is way above its unit cost.
This allows the company to recover its research and development costs and
expenses. This is usually accompanied by intense expensive advertising and
promotional campaigns.
2. Penetration pricing- a pricing strategy where the new products is priced
only marginally above its unit cost. The objective of this strategy is to

34
 capture a larger part of the market at an early stage by making the product
affordable to the greatest number of people.

Pricing Under Various Market Conditions

Knowing the price of the competitor’s products is important but anticipating his
pricing behavior may even be more important. The kinds of competitive situations
are the following:

a. Pure Monopoly.
This is a competitive situation where there is only one seller in a market. The
monopolist enjoys a very high degree of control over the price of his products.
b. Oligopoly
Only a few firms compete in the sale of a commodity.
c. Pure Competition
There are great number of buyers and sellers in the market. Products sold are
regarded as homogenous and the buyers will be motivated to switch from one
seller to another because of price.
d. Oligopsony
Only a few buyers compete in the purchase of a commodity. The sellers are
helpless in controlling the prices of their products.
e. Monopsony
It is characterized by the presence of only one buyer. The monopolist has a very
high degree of control over the price of the commodity he is buying.

Below the Computation of Markup Price of a Product

𝐹𝐶
UC =VC/U +
𝑈𝑆

Where:
UC = Unit Cost
VC/U = Variable cost per unit
FC = Fixed cost
US = Unit sales
Given:
VC/U = Php10
FC = Php300,000
US = 50,000 units
DMU (Desired Markup )

UC = VC/U + 𝐹𝐶
𝑈𝑆 MUP = 𝑈𝐶
(1−𝐷𝑀𝑈)
𝑃ℎ𝑝300,000 𝑃ℎ𝑝16
= Php10 + =
50,000 (1−0.20)

35
 = Php16 = Php20

Markup price (MUP) is Php20

Below is the products target return price:

𝐷𝑅 𝑥 𝐼𝐶
TRP = UC +
𝑈𝑆

Where :

TRP = target return price

UC = Unit cost
DR = desired return
IC = invested capital
US = unit sales

Given:
UC = Ph16
𝐷𝑅 𝑥 𝐼𝐶 0.25 𝑥 𝑃ℎ𝑝1,000,000
DR TRP= 25%= UC + = 16 + = 21
IC = Php1,000,000 𝑈𝑆 50,000
US = 50,000 units

Target return price (TRP) is Php 21.

36
Lesson The Marketing Process, Analyzing
3 Marketing and Designing
Marketing Strategies
Marketing process is a process that involves the customer’s satisfaction
towards their requirements created in terms of value is called the marketing process.
It is a string of actions and their reactions performed by the companies and the
customers to satisfy the customers.

A marketing analysis is a study of the dynamism of the market. It is the

attractiveness of a special market in a specific industry. Marketing analysis is
basically a business plan that presents information regarding the market in which
you are operating in. It deals with various factors and should not be confused with
market analysis.

Steps of Marketing Process

The first step is to analyze the condition to identify the problems or needs of the
customer. Then a basic strategy is made upon those identifications to propose a
value. As a result of this step, a tactical decision is made to handle the value. After
that, a plan is executed and lastly, the results are gathered.

Here are the five major steps of the marketing process:

1. Understand the customer needs

Understanding is the key to a successful business. To understand the needs

of the customer, you must have an insight into a few things. You should:

● Understand the local area

● Understand the country you are targeting
● Know the interest of your customers
● Know how much they can spend on that

37
 You must also keep in mind the budget of both company and customer. You
cannot just bring out a product with extremely high prices and expect your
customers to buy it. Keep variations in your products and their prices

2. Develop a basic strategy

To start a business, you must know:

● What is trending in your area?

● What do they really want to buy?
● Who is your targeted customer?
● What is the level of need for that product?

To get the answers to these queries, you may perform a survey in that area. You
cannot satisfy everyone, there is NO such way. But you can satisfy a great number
of people if they have the same perception towards a product.

3. Decision Making

Once you know who you are targeting, now you can make a marketing plan. At this
point, you must decide by drafting:

● Budget
● Product specifications
● Product development (in future)
● Ways and mediums for promoting your product
● The expected date for launching the product

When you draft everything, now you exactly know what you must do. This is
important because elaborated tactical decisions are made for the controllable
parameters of the marketing mix. As a result, this will give you a clear view of what
you want to develop. Moreover, delivering superior quality, what your customer
wants is worth striving for mostly in saturated markets, which are successfully
developed for a while now.

4. Execute a plan

Execute your plan now. You have a draft of your plan, now work on it. To execute
the best plan, focus on three things:

● Sharpen your interest

● Create your competence
● Light up your passion

However, you need to keep your plans simple and easy to execute. Identify what you
are doing and focus on bringing the best out of it. Execution literally depends upon
the process of development. Trust your talents, be confident about what you want to
develop.

38
5. Deliver the results

Your product is ready to be launched. Now you can successfully deliver it in the
market and wait for the feedback. Do not expect to have 100% positive reviews about
your product. Let the critics tell you what you are lacking. Also, let yourself get
excited by the positive reviews. Once you deliver the results in the market you should
be prepared for every type of response. But do not get disheartened by the negative
reviews, they can also help you improve your product in the future.

The Marketing processes

Analyzing Designing
Selecting target
marketing marketing
markets
opportunity strategies

Organizing,
Planning marketing implementing , and
programs controlling the
marketing effort

Figure 1. Marketing process

What is Market Opportunity Analysis?

A tool to identify and access the attractiveness of a business opportunity. It is
a part of the business planning or strategy processes wherein before undertaking a
new product or service, you analyze the market for it to determine probable profit
and revenue from it. One of the most important factors considered and analyzed in
market opportunity analysis is the forecasted demand for the product or the service.

Five steps that can be followed to analyze market opportunity analysis

1. Identify the business environmental forces – The factors to consider while

analyzing the business environmental factors are - Economic conditions and
trends, Legal and regulatory situations and trends, Technological positioning,
and trends (state of the art; related R&D), Relevant social changes and Natural
environment.

39
2. Describe the industry and its outlook – The factors to be considered while
performing industry analysis are - Type of industry, Size -now and in 3-5 years,
Types of marketing practices, Major trends, and Implications for opportunity.
3. Analyze the key competitors – The factors considered here are - Product
description, Market positioning (relative strength and weaknesses, as seen by
customers), Market practices: channels, pricing, promotion, service, Estimated
market share (if relevant) and Reactions to competition.
4. Create a target market profile – The factors to be considered are - Levels:
generic needs, product type, specific brands, End-user focus; also channel
members, Targeted customer profiles, Who are my potential customers, What are
they like as consumers/businesspeople, How do they decide to buy / not buy ,
Importance of different product attributes and What outside influences affect
buying decisions.
5. Set Sales Projections – As many formal or intuitive approaches as possible for
determining this should be used and then the results obtained should be
compared and then a decision should be taken on go or no go for the
product/service in question.

Designing Marketing Strategies

What is a Marketing Strategy?
A marketing strategy refers to a business's overall game plan for reaching prospective
consumers and turning them into customers of the products or services the business
provides. A marketing strategy contains the company’s value proposition, key brand
messaging, data on target customer demographics, and other high-level elements.

Marketing Strategies vs. Marketing Plans

The marketing strategy informs the marketing plan, which is a document that
details the specific types of marketing activities a company conducts and contains
timetables for rolling out various marketing initiatives.

Marketing strategies should ideally have longer lifespans than individual

marketing plans because they contain value propositions and other key elements of
a company’s brand, which generally hold consistent over the long haul. In other
words, marketing strategies cover big-picture messaging, while marketing plans
delineate the logistical details of specific campaigns.

40
 Market
Analysis
Review and Competitive
Reassess

Document the Customer

marketing analysis
plan

Define Value
Marketing Proposition
Mix

Define Set
Markting Marketing
Strategies Goals

Figure 2. Designing Marketing Strategies

41
Lesson Workshop and Preparation of a
4 Marketing Plan
At this point, you are now ready to combine all the knowledge and learning
that you have acquired on the basic principles of marketing. There is no better way
to demonstrate this than through a mini-marketing plan that you will prepare on
your own. A marketing plan’s executive summary should include a summary of the
market, the product to be offered, the strategy behind the plan, and the budget, as
well as any other important information. In this section of the plan, the planner
describes the offering and a brief rationale for why the company should invest in it.
The market section of the plan should describe a firm’s customers, competitors, any
other organizations with which it will collaborate, and the climate of the market. The
strategy section details the tactics the organization will use to develop, market, and
sell the offering. When readers complete the strategy section, they should conclude
that the proposed strategy is the best one available. The budget section of the
marketing plan covers all the resources, such as new personnel, new equipment,
new locations, and so forth, needed to successfully launch the product, as well as
details about the product’s costs and sales forecasts.

Marketing vs. Marketing Concepts

1. Marketing is the promotion of business products or services to a target audience.

It is, in short, an action taken to bring attention to a business' offerings; they can
be physical goods for sale or services offered. Common examples of marketing at
work include television commercials, billboards on the side of the road, and
magazine advertisements. But not all businesses approach the need to market
their goods and services the same way. In fact, there are a few different
approaches to how marketing can be successful for an organization. These
approaches are called marketing concepts, or a philosophy that determines what
type of marketing tools are used by a company.
2. Marketing concepts are driven by a clear objective that considers cost efficiency,
social responsibilities, and effectiveness within a particular market.

The Five Marketing Concepts:

1. The Production Concept. The idea of production concept – “Consumers will favor
products that are available and highly affordable.” This concept is one of the
oldest Marketing management orientations that guide sellers. Companies

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 adopting this orientation run a major risk of focusing too narrowly on their
operations and losing sight of the real objective.
Examples of Production Concept
Following are the examples of production concept in marketing management
a. XYZ Motor Company – XYZ’s Model-T
The whole philosophy of the XYZ company was to perfect the production process
of XYZ’s Model-T. The initial cost of the XYZ’s Model-T vehicle was roundabout
800 US dollars, and it was high at the beginning of the 20th century. The
company followed the production concept and developed its assembly line and
other manufacturing processes. The price jumped from ₱ 70,000 to ₱55,000 and
₱55,000 was an affordable price to many Filipinos at that time.
b. Chinese Smartphone Brands. The best example of the production concept
nowadays. Their phones are available in almost every corner of the Asian
market. You can walk into any phone shop in Asia and can walk out with the
latest and greatest smartphones.

2. Product Concept. The product concept holds that consumers will favor products
that offer the most quality, performance, and innovative features. Here, Marketing
strategies are focused on making continuous product improvements. Product quality
and improvement are important parts of marketing strategies, sometimes the only
part. Targeting only on the company’s products could also lead to marketing myopia
(a stage when the companies are only busy in creating product quality and not
understanding the real needs of customers).

2. Selling Concept. The selling concept holds the idea- “consumers will not buy
enough of the firm’s products unless it undertakes a large-scale selling and
promotion effort.” Therefore, businesses and companies should carry out
promotional and marketing activities to accelerate their product in the market.
Customers have inner needs, and your job is to convert their inner needs into
buying your product through motivation and persuasion. The selling concept is
very useful for selling unsought goods i.e., insurance. Where you find your target
segment of the market first, and then you persuade them by explaining the
benefits of the product. The final goal is to sell many products, to increase the
net profit.
3. Marketing Concept. The marketing concept holds- “achieving organizational goals
depends on knowing the needs and wants of target markets and delivering the
desired satisfactions better than competitors do.” Here marketing management
takes a “customer first” approach. Under the marketing concept, customer focus
and value are the routes to achieve sales and profits. The marketing concept is a
customer-centered “sense and responds” philosophy. The job is not to find the
right customers for your product but to find your customers’ right products. The
marketing concept and the selling concepts are two extreme concepts and
different from each other. According to Philip Kotler, the marketing concept holds
that the key to achieving organizational goals consists of being more effective than
competitors in integrating marketing activities toward determining and satisfying
the needs and wants of target markets, or determining the needs and wants of

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 target markets and delivering the desired satisfaction more effectively and
efficiently than competitors.
4. Societal Marketing Concept. The societal marketing concept holds “marketing
strategy should deliver value to customers in a way that maintains or improves
both the consumer’s and society’s well-being.” The purpose of the societal
marketing concept is also to satisfy the needs and requirements of customers
before making any profit. But the emphasis of this concept is to make the
company fulfill social responsibilities for a sustainable future in the long term.

Below is the brief outline of a mini-marketing plan:

I. Executive summary

A marketing plan starts with an executive summary. An executive summary

should provide all the information your company’s executives need to decide without
reading the rest of the plan. The summary should include a brief description of the
market, the product to be offered, the strategy behind the plan, and the budget. Any
other important information, such as how your competitors and channel partners
will respond to the actions your firm takes, should also be summarized. Because
most executives will be reading the plan to make budgeting decisions, the budgeting
information you include in the summary is very important.

II. Study Background

A. Brief history of the company

As the starting point of your papers, select the product brand.
B. Mission and vision
Research on the company’s mission and vision through the internet. These
statements. These statements give you vital information on its philosophy and
long term-direction.
C. Product/service offering
List down the company’s current product offerings, classifying them by type
and indicate their suggested retail prices (SRP).

III. Macroenvironmental Analysis

Assess each of the company’s six macroenvironments. Get the latest data
possible. A marketing plan of a product is a plan of action for the future and is
intended to be implemented in the coming year.

A. Economic
Latest economic data is projected. Inflation rate and peso-dollar exchange rates
are usually critical in determining future cost, price and consumer purchasing
power.

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 B. Political -Legal
The political macro environment is assessed. Unless there is obvious political
instability, there is no need to project the political environment.
C. Sociocultural
Identify relevant sociocultural factors that may affect the manner of how the
selected brand will be marketed.
D. Demographic
Based on the target market, cite current and relevant figures that may affect
the marketability of the product.
E. Technological
Depending on the industry, identify relevant technological developments that
may favorably or unfavorably affect the chosen brand.
F. Natural
A thorough analysis of the natural macroenvironment is undertaken in this
section pollution, global warming, and ‘act of God,” among others.

IV. Opportunities and Threats

Enumerate the identified opportunities and threats from the

macroenvironmental analysis. Arrange them chronologically. Related them directly
to a specific macroenvironmental factor and justify why they are classified as
opportunities or threats.

V. Microenvironmental analysis
The six microenvironmental factors are assessed and evaluated. Because the
microenvironment is not expressed to change dramatically over short-term.

A. The company
The company is evaluated in terms of its organizational ability to implement
marketing strategies.
B. Suppliers
In this section, the relationship between the company and its suppliers is
assessed.
C. Marketing intermediates
The company distribution network is illustrated and explained in this section.
D. Customers
In this section of the marketing plan, identification of the geographic,
demographic, and psychographic profile of the brand's typical customer is
expected.
E. Competition
This is where the brand competitors and the companies that manufacture
them are identified.
F. Publics
Evaluate the company’s relationship with its publics, corporate stockholders,
the community, and financial institution.

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VI. Strength and Weaknesses

Enumerate the identified strengths and weaknesses from the

microenvironmental analysis. Arrange them chronologically. Relate them directly
to a specific microenvironment factor and justify why they are classified as
strengths or weaknesses.

VII. The Market

A. Market size

Show the size of your market. The total market is the sum of the group of
individual or organization consumers who have both the willingness and
financial capability to purchase a particular or service.

B. Market needs

Know your market intimately to be able to serve its needs. Understand and
express what exactly the market is looking for in the product that you are
offering.

C. Market trends

Based on the historical trend, the segment or subsegments growth rate is

projected over the plan period.

VIII. Marketing Objectives

Arrange the objectives in sequence. Marketing objectives may include brand

awareness targets and sales revenue objectives.

IX. Marketing strategies

A. Product/service strategy

Product and service strategy should be fully explained. Indicate any innovations
you plan to implement in your product or service.

B. Pricing strategy

Based on the marketing objectives formulated, decide on a general pricing strategy

for the brand.

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 C. Distribution strategy

Review the brand's current distribution strategy to determine if it is still applicable

for the marketing plans implementation period.

D. Advertising and promotional strategy

Propose your advertising and promotions strategy. Based on the advertising and
promotional objectives and target audience profile, decide on the message, creative
style, vehicles, and media you will utilize.

X. Tactical Implementation

Develop tactics for each strategy. Some strategies may only require as little as two
tactical plans, while others may need to be supported by five or more tactics.

XI. Marketing budget

Indicate the total cost involved in the implementation of the proposed marketing
plan. Only third-party expenditures are to be included in the marketing budget.

XII. Feedback and Control

The purpose of this section is to ensure that each of the tactics are carried out as
planned. There should be feedback and control write-up for each of your tactics.

XIII. Financial Projections

The latest available incoming statement of your company can be used. Begin by
calculating the expected revenues to be generated by your marketing plan.

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