Mktg. 1PRINCIPLES OF

MARKETING

It sells products and services to

consumers at a profit to understand

consumer behavior and market trends.

IMPORTANCE OF MARKETING TO

BUSINESS

The process of continuously and profitably satisfying the

target consumer needs, wants and expectations superior to

competition.

Social and managerial process by which individuals and

groups obtain what they need and want through creating and

exchanging products and value with other.

WHAT IS MARKETING

Customer

Company Competition

STRATEGIC 3C ’s of MARKETING PLUS the

INPUT AND OUTPUT of MARKETING

INPUT OUTPUT

Customer Sales

Company Profit

Competition Market Share

INPUTS AND OUTPUTS OF MARKETING

Needs – it is the state of self deprivation. It is the basic reason/s or quality dimensions in a purchase.

Wants – It is the form taken from by human needs as they are shaped by culture and individual personality.

Demands – Human wants that are backed by buying power. It is also called expectation.

Product – It is anything that can be offered to a market to satisfy a need or want.

Exchange – It is an act of obtaining a desired object from someone by offering something in return.

Value/customer Value – It is the consumer’s assessment of the overall capacity of the product or service in order to satisfy his total needs.

Customer satisfaction – It refers to the extent to which customer are happy with the product offered.

Market – It is the set of actual and potential buyers of a product.

DIFFERENT TERMS USED IN THE

DEFINITION OF MARKETING

Production Era/ Production Concept – This Era focused on the mass production of goods by companies in order to satisfy the needs of other people.

Product Era/ Product Concept – It holds that consumers will favor products that offer the most quality, performance and innovative features.

Sales Era / Concept – The company emphasized sell ing because of increased competition.

Marketing Department Era – Progressive companies adapted the idea that all marketing activities within the firm must be under a control of a single department.

Marketing Company Era – Marketing was recognized as the concern not only of a single department but of the whole company.

Marketing Company with Social concern Era – company begun to consider social issues as a factor in the formulation of marketing strategies.

DEVELOPMENT OF MARKETING

fdfhfdMARKETING

BUSINESS FUNCTION DIAGRAM

(Peter Drucker)

HUMAN RESOURCE

Maximize Consumption

Maximize Consumer Satisfaction

Maximize Choice

Maximize Life Quality

Maximize Relationships

GOAL OF THE MARKETING SYSTEM

Globalization

Digital Age or information Age

Call for more Ethics and Social

Responsibility

Growth of not for Profit Marketing

TRENDS MARKETERS WILL FACE IN THE

21ST CENTURY

– it is the process of developing and

maintaining strategic fit between the

organizations goal and capabilities and it’s

changing marketing opportunities.

STRATEGIC PLANNING

1. Define the company’s Mission and

Vision

2. Set company’s objective or Goals

3. Design the business portfolio

4. Planning Marketing and other

functional strategies.

STEPS IN STRATEGIC PLANNING

Vision – explains the company’s future and what it intends to be and how it can benefit to society.

Mission – It is a statement of the organization’s purpose and what to accomplish in the larger environment.

Objective – defines what you want to accomplished depending on its business activities. Guide in writing an objective is SMARTC: Specific, measurable, relevant, time bound, and challenging.

Business Portfolio – it is the collection of businesses and products that make up the company.

Portfolio Analysis – the process by which the management evaluates the products and business that make up the company.

Strategic business unit (SBU) – it is the unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses.

TERMINOLOGIES

Boston Consulting Group Approach – company classifies all

it’s SBU’s according to the growth -share matrix.

GE Strategic Business planning Grid/ Approach – it is also

called as the strategic business -planning grid. It uses

business strength and industry attractiveness.

Product/ Market Expansion Grid ( Ansoff Matrix) – It involves

finding businesses and products the company should

consider in the future.

TYPES OF PORTFOLIO PLANNING

METHODS

BOSTON CONSULTING GROUP (BCG)

GROWTH SHARE MATRIX

STAR – High Market Share and High

Market Growth.

Doing well, great opportunities.

CASH COW – High Market Share and

Low Market Growth

Doing well in no growth marketwith limited opportunities.

QUESTION MARK – Low Market

Share And High MarketGrowth

Don’t know what to do withopportunities Decided whether toincrease investment

DOGS - Low Market Share and Low

Market Growth

Weak on market, difficult to makeprofit

Invest / GrowInvest / Grow

Selective

Investment

Invest / Grow Selective

InvestmentHarvest/ Divest

Selective

InvestmentHarvest/ Divest Harvest/ Divest

GENERAL ELECTRIC (GE)

STRATEGIC BUSINESS PLANNING GRID

Business StrengthStrong Average Weak

In

du

stry A

ttra

ctive

ne

ss

High

Average

Low

Market Penetration Product Development

Market Development Diversification

PRODUCT/ MARKET EXPANSION GRID

( Ansoff Model)

New ProductsExisting Products

Existing Market

New Market

1. Strategic Marketing Management

2. Marketing Strategy

3. Marketing Tactics

THREE LEVELS OF MARKETING

MARKETING PROCESS MODEL

(Kotler)

Customer

Value and

Relationship

Price

Product

Promotion

Place

Marketing Analysis

Ma

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Marketing Implementation

Marketing

Intermediaries

Competitors

Suppliers Publics

Marketing Strategy – the marketing logic by which the business unit hopes to create customer value and achieve profitable customer relationship.

Customer Value – it is the total worth of the customer to the firm.

Customer Relationship Management – it is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

Market Segmentation – dividing the market into distinct groups of buyers who have dif ferent needs, characteristics, or behavior and who management require separate products on marketing program.

Market Targeting – the process of evaluating each segment’s attractiveness and selecting one or more segments to enter.

TERMINOLOGIES RELATED TO THE

MARKETING PROCESS METHOD

■ Market Positioning – arranging for a product to occupy a clear, distinctive

and desirable place relative to competing products in the minds of

target consumer.

■ Market Differentiation – actually differentiating the market offering to

create superior customer value.

■ Marketing Mix – set of controllable tactical marketing tools (4P’s) that

the firm blends to produce the response it wants to the target

market.

■ 4P’s – This is the concept that was develop by Prof. Jerome E. McCarthy.

It includes the following:

■ Product – goods, services or ideas, or combination the company

offers to the target market.

■ Price – the amount of money customers must pay to obtain the

product.

■ Place – company activities that make the product available to

target customers.

■ Promotion – communicate the merits of the product and

persuade target customer to buy it.

THE 4C’s RELATED TO 4P’s OF

MARKETING

Product = Customer Solution

Price = Customer Cost

Place = Convenience

Promotion = Communication

People – it is maintaining and developing the employees of

the company in order to offer superior service quality to its

customers.

Physical Environment – these are all visible cues that provide

tangible evidence of the firm’s service quality.

Process – it is the method and sequence of actions in the

service performance.

Profitability – the amount of sales or income generated from

the operations of the business.

ADDITIONAL P’s IN THE MARKETING

– it is the process of conceptualizing,

analyzing, planning, implementing,

and controlling marketing activities to

achieve the organization’s desired

result areas.

MARKETING MANAGEMENT

1. Marketing Planning – involves in deciding on marketing

strategies that will help the company attain its overall

strategic objectives.

2. Marketing Analysis – Understanding the strengths,

weaknesses, opportunities and threats a company it will

encounter in the market.

3. Marketing Implementation - the process that turns

marketing strategies and plans into marketing actions in

order to accomplish strategic marketing objectives.

4. Marketing Control – this is the management of marketing

activities and ensuring marketing objectives are met.

FOUR FUNCTIONS OF MARKETING

MANAGEMENT

– it is the actions and forces outside

marketing that affect marketing

management ability to build and

maintain successful relationships

with customers .

MARKETING ENVIRONMENT

1. Microenvironment

2. Macroenvironment

TWO TYPES OF ENVIRONMENT:

– this is the actors or parties close to

the company that affect it’s ability to

serve the customers. The company

has a degree of control to this parties.

MICROENVIRONMENT

Publics – these are the groups that has an actual or potential interest

that has an impact on an org. ability to achieve it’s objectives .

Marketing Intermediaries – firms that help the company to promote,

sell, and distribute it’s goods to the final buyers .

Supplier – these are businesses that provide the necessary materials,

services, labor, or combination to a firm.

Customer – the reasons why the competition exist.

Competitors – these are the companies that offer the same products

and services vs. another firm.

TYPES OF MICROENVIRONMENT

1. Direct Competitor– competitors that are closely related to

the offered products/ services by the company.

2. Indirect Competitors – competitors that are distant to the

offered products/ services by the company.

TYPES OF COMPETITORS

Monopolistic Competition – The price of the product is

determined by the market and not by the buyer or seller.

Pure Competition – there are many sellers that compete with

each other.

Oligopoly – There are only few firms that compete in a given

industry. Prices are set in collusion with one another.

Monopoly – it exist when there is only one single seller in a

particular market and there is no close substitute for it.

COMPETITIVE FORCES

– these are the larger societal forces

that affect the microenvironment.

MICROENVIRONMENT

Demographic Environment – includes human population in

terms of age, size, density, location, religion, gender, etc.

Factors involve in Demographics Environment

1. Changing age structure and population

2. Changing Filipino Family

3. Geographic shifts in population

4. Better Educated society

5. Interest in Minority groups/ regional groups

TYPES OF MICROENVIRONMENT:

Economic Environment – factors that affect consumer buying power and

purchasing patterns.

Factors involved in Economic Environment:

1. Changes in Income

2. Changing Consumer Spending Patterns

Engels Law – pertains on how people shifts their

spending across food, housing, transportation, healthcare

and other goods/ services.

Natural Environment – Natural resources that are needed as inputs by

marketers or that are affected by marketing activities.

Factors involved in Natural Environment:

1. Environmental Sustainability

2. Global Warming

3. Efficient use of resources

Technological Environment – forces that create new technologies,

creating new products and marketing opportunities.

Factors involved in Technological Environment:

1. Increase research and development

2. Speed of technological Innovation

3. Strict quality Standards

4. Growth of E-commerce, the internet and social networking

sites.

Political Environment – laws, government agencies and pressure groups

that influences limits various organizations and individuals in a

given society.

Factors involved in Political Environment:

1. Legislation Regulating business

2. Increase emphasis on business ethics

Cultural Environment – Institutions and other forces that affects

society’s basic values perceptions, preferences and behavior.

Factors involved in Cultural Environment:

1. Persistent of cultural Values

2. Shifts in Secondary Values

3. Peoples views or opinion

MARKETING MIX: THE SERVICE PRODUCT

Service Product – It typically

consists of a core product bundled

with a variety of supplementary

products.

1. Statement of Objectives

2. Market and Competitive Analysis and Resource allocation Analysis

3. Marketing Assets Statement – includes the details of the firm's existing

customer portfolio, marketing Knowledge, product line, etc.

4. Service Marketing Concept – it clarifies the benefits offered to

customers and the cost they will incur in return

5. Service Operations Concept – It stipulates the nature of the processes

involved and how and when the various types of operating assets should

be deployed

6. Service Delivery Process

KEY STEPS IN PLANNING AND CREATING

SERVICES

Core Service – it responds to the customers need for a basic

benefit.

Supplementary Services – Facilitate and enhance the use,

value and appeal of core services.

Delivery Process – it deals with the procedures used to deliver

both the core product and each of the supplementary services

Documenting the Delivery Services over Time

DEFINING THE NATURE OF THE SERVICE

OFFERING

FLOWER OF SERVICES

core

Info

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Billing Order Taking

Sa

fe K

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Facilitating Services

Information

Order Taking

Billing

Payment

Enhancing Services

Consultation

Hospitality

Safekeeping

Exception

IDENTIFYING AND CLASSIFYING

SUPPLEMENTARY SERVICES

It is the group of products that are closely related

because they function in a similar manner, are sold

to the same customer groups, are marketers to the

same types of outlets or fall within given price

ranges.

PRODUCT LINE

It is a name, term, sign, symbol, or design or a

combination of these intended to identity the

goods or services of one seller or group of

sellers from those of competitors.

BRAND

Major Services Innovations – are new core products for markets that have not been previously defined.

Major Process Innovations – consists of using new processes to deliver existing core products in new ways with additional benefits.

Product line Extensions – Additions by existing products as to offer more convenience or a different experience to customers.

Process line extensions – delivers new ways to existing products as to offer more convenience or a different experience to customers.

Supplementary services innovations – take the form of adding new facil itation or enhancing service elements to the core services

Service Improvements – involve modest change of performance of current products

Style Changes – it is the simplest type of innovation that is highly visible, create excitement and motivate employees.

CATEGORIES OF NEW SERVICES

• Drive own Car

• Type on own word

processor

• Rent a car and drive it

• Rent a word processor and

type on it

• Hire a Chauffeur to drive a

car

• Hire a typist to se word

processor

• Hire a taxi or limousine

• Send work out to a secretarial

service

SERVICES AS SUBSTITUTES FOR OWNING

AND/OR USING GOODS

Own a Physical Good Rent the Use of Physical good

Perform the

work oneself

Hire someone

To do the work

1. Market Synergy – services fits well with the image of the

firm

2. Organization Factors – strong inter-functional cooperation

and coordination

3. Market Research Factors – it must have a clear idea of the

type of information to be obtained

USING RESEARCH TO DESIGN NEW

SERVICES

Price – amount of money charged

for a product or service sum of the

values that consumers exchange for

the benefits of having or using the

product or service.

PRICING APPROACHES IN SERVICES

PARTICULARS NAME OF PRICE

• School TUITION FEE

• Transportation FARE

• Apartment RENT

• Hotels CHANGE or BILL

• Bank RATES/CHANGES/INTEREST/BONDS

• Insurance INTEREST/PREMIUM/DIVIDEND

• Restaurant BILL/COST/CHIT/TIP

• Movie Houses or Theater TICKETS

• Consultancy Firms CHARGES/HONORARIUM

• Government Assistance SUBSIDY/ALLOWANCES

THE MANY NAMES OF PRICE