PRINCIPLES OF MARKETING 1

St. Ignatius Technical Institute of Business and Arts

PRINCIPLES
OF
MARKETING 1
(Grade 11)

Prepared by Arnaldo D. Bernabe

Note: “Reproduction of any part of the learning module in any form such as photographing and
photocopying among others is strictly prohibited without the permission or consent of the St.
Ignatius Faculty and Administration. You are also advised to refrain from posting any
photographed part of this module on social media. Any correction, concerns and clarifications
should be addressed directly to your adviser and /or subject teacher.”

1
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts
Overview:
Senior High School Specialized Subject: Principles of Marketing
Principles of Marketing are one of the specialized subjects under the Academic career track and
ABM learning strand. Some examples of the things that you will learn from taking this subject
include:
Marketing Principles and Strategies
• Marketing and its traditional • Contemporary approaches to marketing
approaches
• Goals of marketing
Customer Relationship
• Customer service
Market Opportunity Analysis and Consumer Analysis
• Strategic marketing versus and • Consumer and business markets
Consumer Analysis • Marketing segmentation, market
• The Marketing Environment
• Marketing research
• targeting, and market positioning (STP)
Developing the marketing mix
Managing the Marketing Effort
• Market Analysis • Marketing implementation
- SWOT Analysis • Marketing control
• Marketing planning
Workshop and Presentation of Marketing Plan
While studying, you will also be asked to demonstrate what you have learned by participating in
class activities that may include the following:
• Identifying and explain contemporary marketing approaches
• Explaining the value of customers
• Identifying and describe “relationship development strategies”
• Distinguishing between strategic and marketing planning
• Analyzing the elements of macro-and-micro- environment
• Analyzing their influence on marketing planning
• Identifying and segment market for a product or service
• Selecting the appropriate target market segment and its positioning
• Identifying the factors to consider when setting prices
• Defining and identifying relevant promotional tools
• Analyzing the company’s situation, markets, and environment
• Preparing a marketing plan
• Presenting a mini-marketing plan orally and in writing.

2
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

FIRST QUARTER 1ST SEMESTER

Lesson 01: Marketing Principles and Strategies
Introduction

Marketing is about customers. Customers are an essential component of a marketing system,

more than any other business function, deals with customers. Creating customer value and
satisfaction are at the very heart of modern marketing thinking and practice perhaps the
simplest definition is this one: Marketing is the delivery of customer satisfaction at a profit. The
goal of marketing is to attract new customers by promising superior value, and to keep current
customers by delivering satisfaction.

History of Marketing
The study of the history of marketing, as a discipline, is meaningful because it
helps to define the baselines upon which change can be recognized and
understand how the discipline evolves in response to those changes. The practice
of marketing has been known for millennia, but the term "marketing" used to describe
commercial activities buying and selling a products or services came into popular use in the late
nineteenth century. The study of the history of marketing as an academic field emerged in the
early twentieth century.
What Is Marketing?
Marketing is a set of activities related to creating, communicating, delivering, and exchanging
offerings that have value for others. In business, the function of marketing is to bring value to
customers, whom the business seeks to identify, satisfy, and retain. A social and managerial
process by which individuals and groups obtain what they need and want, through creating
exchanging products and value with others. If you read the definition closely, you see that there
are four (4) 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 Art of the Exchange - In marketing, the act of obtaining a desired object from someone by
offering something of value in return is called the exchange process. The exchange involves:
the customer (or buyer): a person or organization with a want or need who is willing to give
money or some other personal resource to address this need
the product: a physical good, a service, experience or idea designed to fill the customer’s want
or need.
the provider (or seller): the company or organization offering a need-satisfying thing, which
may be a product, service, experience, or idea

3
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

the transaction: the terms around which both parties agree to trade value-for-value (most
often, money for product).
The Roles of Marketing

Components of marketing is via the four (4) Ps:

1. Product. Goods and services (creating offerings).
2. Promotion. Communication.
3. Place. Getting the product to a point at which the customer can purchase it (delivering).
4. Price. The monetary amount charged for the product (exchanging).
Value - is at the centre of everything marketing does. What does value mean?
The personal value equation is value = benefits received – [price + hassle]
Hassle - is the time and effort the consumer puts into the shopping process. The equation is a
personal one because how each consumer judges the benefits of a product will vary, as will the
time and effort he or she puts into shopping. Value, then, varies for each consumer.
Marketing Concept - A central aim of marketing is to help organizations understand and
respond to customer needs and expectations, while keeping the customer informed about how
the organization can address those needs. Core concepts are sometimes called “big ideas.” As
such, each core concept is built up from a set of component ideas. Thus, understanding a core
concept—being able to use it to solve a problem—requires an understanding of each of these
smaller components.
Exchange concept - The exchange concept of marketing, as the very name indicates, holds that
the exchange of a product between the seller and the buyer is the central idea of marketing.
The Product Concept - The product concept holds that consumers will favor those products
that offer quality or performance.
(SEE ACTIVITY TASK ON PAGE 48)

The Sales Concept - The selling concept holds that consumers, if left alone, will ordinarily not
buy enough of the organization’s products.

4
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

The Marketing Concept - The marketing concept holds that the key to achieving organizational
goals consists in determining the needs and wants of target markets and delivering the desired
satisfactions more effectively and efficiently than competitors.
Customer orientation: A company can define its market carefully and still fail at customer-
oriented thinking. Customer-oriented thinking requires the company to define customer needs
from the customer point of view, not from its own point of view.
Coordinated marketing: Unfortunately, not all the employees in a company are trained or
motivated to pull together for the customer. Profitability: The purpose of the marketing
concept is to help organizations achieve their goals. In the case of private firms, the major goal
is profit; in the case of non-profit and public organizations, it is surviving and attracting enough
funds to perform their work.
The Production Concept - It is one of the oldest concepts guiding sellers. The production
concept holds that customers will favor those products that are widely available and low in
cost.
The Societal Marketing Concept - In, recent years, some people have questioned whether the
marketing concept is appropriate organizational philosophy in an age of environmental
deterioration, resource shortages, explosive population growth, world hunger and poverty, and
neglected social services.
The goals of marketing can be broken down into five (5) main areas:
➢ to raise brand awareness,
➢ to generate high-quality leads,
➢ to grow and maintain thought leadership,
➢ to increase customer value, and
➢ to empower your colleagues to become brand ambassador.

Lesson 1.1: Marketing Principles and Strategies

Needs, Wants, and Demands
Human needs are states of felt deprivation. When a need is not satisfied, a person will do one
of two things: 1. look for an object that will satisfy it; or 2. try to reduce the need
Wants are the form human needs take as they are shaped by culture and individual
personality. When backed by an ability to pay – that is, buying power – wants become
demands.
Product and Services - The value proposition is fulfilled through a marketing offer – some
combination of products, services, information, or experiences offered to a market to satisfy a
need or want.
(SEE ACTIVITY TASK ON PAGE 48)

5
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Exchange, Transaction, and Relationship - Marketing occurs when people decide to satisfy
needs and wants through exchange. In simple sense, the market tries to bring about a response
to some offer.
Market - The set of all actual and potential buyers of a product or service.
A simple marketing system
Traditional marketing - Traditional marketing is a rather broad category that incorporates many
forms of advertising and marketing.
Examples of Traditional Marketing
Direct Mail - Direct-mail marketing creates awareness of a product through postcards,
brochures, letters, and fliers sent through mail
Print - Print marketing includes advertising products and services through newspapers and
magazines.
Broadcast - Television and radio are traditional avenues still widely used.
Referral - Referral marketing, also known as word of mouth, relies on customers to spread
information about products or services.
Telephone Marketing, or Telemarketing - The practice of delivering sales messages over the
phone to convince consumers to buy a product or service.
Contemporary Marketing - Refers to theories that stress the importance of customer
orientation versus the traditional market orientation.
Marketing is all about understanding the needs and preferences of your audience rather than
serving them what the company has to offer.
Contemporary approaches to Marketing include the following:
• Relationship marketing
• Industrial marketing
• Social marketing
Relationship marketing - is a strategy that helps the brand develops a strong connection with
their customers. It helps the brands in forming long-term bonds with their loyal customers.
Industrial marketing, also known as B2B or business-to-business marketing is a branch of
marketing which involves one business dealing or marketing their goods and services to
another business.
Social marketing- is an approach of marketing which seeks to bring any social change. It
integrates marketing theories and tactics with other plans to achieve social change.
Contemporary approaches followed by organizations:
Cause Marketing – It is the type of marketing in which a company and charity team up together
and spread awareness for a good cause.
(SEE ACTIVITY TASK ON PAGE 48)

6
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Event marketing – It is the type of marketing in which marketers conduct promotional events
and promote their products and services in those events.
Green marketing – It is the practice of marketing in which the services and goods are marketed
from their environmental benefits.

Lesson 1.2: Customer Relationship

Customer Relationship Management: A Strategic Imperative - We have stated that the central
purpose of marketing is to help organizations identify, satisfy, and retain their customers.
Maximizing Customer Lifetime Value - Central to these developments is the concept of
customer lifetime value.
Customer Relationship As, Competitive Advantage As the global marketplace provides more
and more choices for consumers; relationships can become a primary driver of why a customer
chooses one company over others (or chooses none).
When Customers Become Your Best Marketing Tool - Customer testimonials and
recommendations have always been powerful marketing tools. They often work to persuade
new customers to give something a try.
Engagement Marketing: Making Customers Part of the Brand - A further step beyond
customer evangelism is engagement marketing, the practice of reaching out to customers and
encouraging them to become full participants in marketing activity and the growth of a brand.
Sometimes called “live marketing,” this approach is becoming more common as media and
technology provide more interactive, visible, and sharable ways for consumers to connect with
brands and companies.

Lesson 1.3: Market Opportunity Analysis and Consumer Analysis

Marketing Opportunity Analysis – A marketing

opportunity analysis takes into consideration the financial
capabilities, available technology, and your competitive
readiness to act.
Market opportunity analysis - is a tool to determine and
access the desirability of a business opportunity.
Market Opportunity Analysis Framework
1. Identify Unmet and/or Understand customer need
2. Identify specific customers company will pursue
3. Assess firm’s advantage relative to competition
4. Assess market readiness of technology
5. Specify opportunity in concrete terms (SEE ACTIVITY TASK ON PAGE 49)
6. Assess opportunity attractiveness

7
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Five (5) Steps Properly Perform a Market Opportunity Analysis

1. Identify what’s currently happening in the
business environment.
2. Define the industry and determine the
outlook.
3. Dive into the details of your competitors.
4. Describe your target market.
5. Create your projections.
External Factors Should be Consider that
Might Impact this Opportunity
* Think STEEP analysis: social, technological,
economic, ecological, political/legal

Consumer Analysis - A customer analysis (or customer profile) is a critical section of a

company's business plan or marketing plan. ... Customer profiles are a collection of information
about customers that help determine why people buy or don't buy a product.

The Customer First! Why Customer Analysis is Important - Customer satisfaction is the focus of
market-oriented firms.
Understanding Consumer’s Behavior - buying behavior is determined by consumers’ own
characteristics as well as by external factors. Consumer’s characteristics encompass cultural,
social, personal, and psychological traits.
Consumer Characteristic Traits
Cultural traits - Culture, subculture, and social class have a particularly marked influence on
consumer behavior.
Social traits - Reference groups, family and social roles and status also have a marked influence
on consumers’ behavior.
Personal traits - Personal traits encompass age, stage in the life cycle, occupation, economic
circumstances, lifestyle, personality, and self-concept.
Psychological traits - The psychological traits that most heavily influence consumer buying
choices include motivation, perception, learning and beliefs and attitudes.
Consumer Buying Decision Process - The buying decision process is the decision-making
process used by consumers regarding the market transactions before, during, and after the
purchase of a good or service.
Market segmentation - is the research that determines how your organization
divides its customers or cohort into smaller groups based on characteristics such as, age,
income, personality traits or behavior. (SEE ACTIVITY TASK ON PAGE 49)

8
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

The basis of the segmentation is age, sex, education, income, occupation, marital status, family
size, family life cycle, religion, nationality, and social class.
Basis for Segmentation Process
1. Demographic Segmentation 4. Psychographic Segmentation
2. Geographic Segmentation 5. Behavioral Segmentation.
3. Geodemographic Segmentation
Demographics Segmentation - are the statistical description of population characteristics in
terms of age, gender, income, education, family size and so on.
Geographic Segmentation - Depending on their area of location, consumers are often found to
have differences in their consumption behavior
Psychographic/Lifestyle Segmentation - Information about consumers’ psychographics or
lifestyle factors adds richness to the demographic information because it attempts to explain
that why demographically alike people buy different products or require different message
appeals to approach them.
Behavioral Segmentation is the observation of each customer's actions for marketers to then
send their tailored messaging.
Short explanation on four classifications of bases of segmentation.
1. Geographic segmentation (i.e., region, city size, density of population, and climate)
2. Demographic segmentation (i.e., age, gender, marital status, income, education, and
income)
3. Psychographic segmentation (i.e., motivation, personality, perception, attitude, and lifestyle)
4. Behavioral segmentation (i.e., benefit, usage rate, loyalty, and awareness state)

Lesson 2: Strategic Marketing versus Tactical Marketing

Let’s Start at The Beginning: Definitions

“Strategy” is: “The art of a commander-in-chief; the art of projecting and directing … Usually
distinguished from tactics, which is the art of handling forces in battle…” Strategists sit at the
top of the command chain. They determine overall what needs to be achieved and then direct
teams, who must make it happen through a series of actions. Tactics are used in action; they
are in the thick of it. They don’t make “big” decisions, which take time and knowledge of the
bigger picture. They continually survey what’s happening and adapt what is done according to
the immediate situation. “Strategy is about thinking and planning, tactics are about taking
action to make the plan happen”.
Three steps to build our understanding
1) Company Strategic Planning: Explore what goes into a company Strategic Plan
2) Strategic Marketing: Understand the two areas of strategic marketing
3) Tactical Marketing: Define what marketing tactics are
9
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Step 1. Company Strategic Planning “The company’s strategic plan establishes what kinds of
business the company will be in and its objectives for each.”
Here are the key elements of the company Strategic Plan:
1) The mission statement - This statement clearly tells the world why the organization exists.
2) Strategic objectives - These are normally around turnover, profit, market share; every
department in the organization must work towards achieving them.
3) The Strategic Audit - A clear picture, based on data, information, and research which shows
the organization where they are now and how well they have achieved their mission and
strategic objectives to date.
4) SWOT analysis, portfolio analysis - This analysis can be widened to a Macro and Micro-
Environment Analysis.
5.) departmental objectives. These feed down to the Departments.
6.) Strategies - are the adopted general approaches to make the company objectives happen.
Step 2: Strategic Marketing
Strategic Marketing has two clear elements:
1) Contributing to the development of the company’s Strategic Plan
2) Setting out the strategies the Marketing Department are going to use to achieve their
objectives
The STP model can help determine the Marketing Strategy:
• Segments – determine the basis for segmentation and criteria for identifying viable
segments
• Targeting – choose the segments to focus on
• Positioning – develop the marketing mix (7Ps) for each selected segment and the
product positioning you wish to attain (ensuring it’s in line with the mission statement).
Step 3. Tactical Marketing
Let’s get practical. We must determine how we’ll make it all happen.
We’ll expand of the tactics for some of our example: As you can see, your marketing tactics
should be the last thing that are chosen.
Strategic planning - is the process of documenting and establishing a direction of your small
business - by assessing both where you are and where you're going.
The strategic plan - gives you a place to record your mission, vision, and values, as well as your
long-term goals and the action plan you'll use to reach them.
The Value Proposition - Individual buyers and organizational buyers both evaluate products
and services to see if they provide desired benefits. (SEE ACTIVITY TASK ON PAGE 49)
A value proposition is a thirty-second “elevator speech” stating the specific benefits a product
or service offering provides a buyer. It shows why the product or service is superior to
competing offers.

10
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Lesson 2.1: The Marketing Environment

“It is useless to tell a river to stop running; the best thing is to learn swimming in the direction it
is flowing” – Anonymous
Marketing Environment - The marketing firm operates within a complex and dynamic external
environment. “A company’s marketing environment consists of the actors and forces outside
marketing that affect marketing management’s ability to build and maintain successful
relationships with target customers.
Components of Marketing Environment - The marketing environment is made up of the
internal and external environment of the business.
Internal Environment - The internal environment of the business includes all the forces and
factors inside the organization which affect its marketing operations. These components can be
grouped under the Five M’s of the business, which are:
1) Men 4) Materials
2) Money 5) Markets
3) Machinery
The internal environment is under the control of the marketer and can be changed with the
changing external environment. This environment includes the
• sales department, • the manufacturing unit,
• marketing department, • the human resource department, etc.
External Environment - The external environment constitutes factors and forces which are
external to the business and on which the marketer has little or no control. The external
environment is of two types:
Microenvironment - The micro-component of the external environment is also known as the
task environment. It comprises of external forces and factors that are directly related to the
business.

Actors in the Microenvironment

The Company - In designing marketing

strategies, marketing division must take other company’s divisions into account.
(SEE ACTIVITY TASK ON PAGE 50)
Suppliers - Suppliers are other business organizations and individuals who provide the
organization with raw materials, parts, components, supplies, or services required to produce
and supply products to customers.
Intermediaries - Marketing intermediaries help the company to promote, sell, and distribute its
products to final buyers.

11
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Competition - The marketing concept states that to be successful, an organization must provide
greater customer value and satisfaction than its competitors.
Publics - A public is any group that has an actual or potential impact on an organization’s ability
to achieve its objectives. The range of public is as follows:

• Financial publics - influence the company’s ability to obtain funds.

• Media publics - carry news, features, and editorial opinion.
• Government publics - Management must take government developments into account.
• Citizen-action publics - A company’s marketing decisions may be questioned by consumer
organizations, environmental groups, etc.
• Local publics - include neighbourhood residents and community organizations.
• General public - The general public’s image of the company affects its buying.
• Internal publics - include workers, managers, volunteers, and the board of directors.
Customers - Customers are crucial and most important actors in the organization’s
microenvironment.
Macro Environment - The macro environment includes the major societal forces that affect not
only the organization, but also on its competitors and on elements in the micro-environment.
The macro environment tends to be harder to influence than the microenvironment, but this
does not mean that organizations must simply remain passive; the inability to control does not
imply the inability to influence. It is commonly denoted by the mnemonic PESTEEL forces.
• Political Environment • Ecological Environment
• Economic Environment • Ethical Environment
• Social and Cultural Environment • Legal Environment
• Technological Environment

Macroeconomic Forces

Political Environment - The political environment can be one of the less predictable elements in
an organization’s marketing environment.
Economic Environment -The economic environment consists of factors that affect consumer
purchasing power and spending patterns and is basically about the level of demand in the
economy and is the most visible aspect in the macro environment.
Social and Cultural Environment - Of all the elements making up the macro environment,
perhaps socio-cultural factors are the most difficult to evaluate, and hence pose the greatest
challenge to the marketing organization

12
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Technological Environment - The technological environment is perhaps the most dramatic

forces that create new technologies, creating new product and market opportunities.
Ecological Environment - Ecological Environment is concerned of issues as to how the
organization interacts with and affects the natural environment or the ecology.
Ethical Environment - Marketing Ethics are moral philosophies/principles that define right or
wrong behavior in marketing.
Legal Environment - Changes in the political environment often lead to changes in legal environment and in
the existing laws enforce.

Lesson 2.2: The Marketing Research

Marketing research is a systematic process for identifying marketing opportunities and solving
marketing problems, using customer insights that come out of collecting and analyzing
marketing information. A marketing information system is a combination of people,
technologies, and processes for managing marketing information, overseeing market research
activities, and using customer insights to guide marketing decisions and broader management
and strategy decisions.
Knowledge Is Power Against the Competition - The business environment is increasingly
competitive.
Types of Marketing Information
Internal Data - consists of the information companies collect about their customers and
prospective customers, typically as part of their internal operations.
Competitive Intelligence - Competitive intelligence is marketing information that helps
marketers and other members of an organization better understand their competitors and
competitive market dynamics.
The Marketing Research Process
Step 1: Identify the Problem - The first step for any marketing research activity is to clearly
identify and define the problem you are trying to solve.

(SEE ACTIVITY TASK ON PAGE 51)

Step 2: Develop a Research Plan - Once you have a problem definition, research objectives, and
a preliminary set of research questions, the next step is to develop a research plan.
Step 3: Conduct the Research - Conducting research can be a fun and exciting part of the
marketing research process.
Step 4: Analyze and Report Findings - Analyzing the data obtained in a market survey involves
transforming the primary and/or secondary data into useful information and insights that
answer the research questions.

13
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Step 5: Take-Action - Once the report is complete, the presentation is delivered, and the
recommendations are made, the marketing research project is over, right? Wrong.
Secondary Marketing Research
Internal Data - A company’s internal data, such as sales and marketing records, customer
account information, product purchasing, and usage data are typical secondary data sources.
Commercial Marketing Research Data - Several commercial marketing research companies
offer syndicated marketing research.
Search Engine Results - Whether you are familiar with secondary data sources pertinent to
your marketing research project, it is smart to conduct an Internet search (using a reputable
search engine) to see what sources surface.
Analyzing Secondary Data - With secondary research in hand, the next step is to review your
source materials to pull out the insights that are most pertinent to your marketing problem.
Quantitative vs. Qualitative Research
Qualitative research - explores ideas, perceptions, and behaviors in depth with a relatively
small number of research participants
Quantitative research - collects information that can easily be counted, tabulated, and
statistically analyzed.
Qualitative Research Methods - Typical qualitative methods include behavioral observation, in-
depth interviews, focus groups, and social listening. Each of these methods is described below.
Observation - Observation may be the oldest method of primary research. Since the beginning
of commerce, merchants have been watching their customers and non-customers engage in a
variety of behaviors.
In-Depth Interviews - In-depth interviews give marketing researchers the opportunity to delve
deeply into topics of interest with the individuals they want to understand better.
Focus Groups - Focus groups are much like in-depth interviews, except that they involve small
groups (usually 6–12 individuals) rather than one person at a time.
Social Listening - With the proliferation of social media comes a tremendous opportunity to
learn exactly what key individuals are saying regarding marketing-related messages.
Quantitative Research Methods - The most common quantitative marketing research methods
are surveys and experimental research. Each is explained below.
Survey Research - Survey research is a very popular method for collecting primary data. Surveys
ask individual consumers to give responses to a questionnaire.
Experimental Research - Another quantitative research method is to conduct experiments in
which some factor or set of factors is varied to yield comparative results.
Analyzing Primary Data - Once primary data collection is complete, these projects proceed with
the process described previously for analyzing data: interpreting what it means, generating
recommendations, and reporting results to the appropriate stakeholders within an
organization.

14
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Lesson 2.3: Consumer and Business Markets

Consumer Behavior - Marketers expect that by understanding what causes the consumers to
buy particular goods and services, they will be able to determine - which products are needed
in the marketplace, which are obsolete, and how best to present the goods to the consumers.
Starting from the information provider, from the user to the payer and to the disposer,
consumers play these roles in the decision process.
Why It Matters: Consumer Behavior
Why learn about consumer behavior?
Please welcome a new arrival:

You Are the Target and the Hunter - Setting aside the ethics of marketing to children, the fact
remains that you are a consumer living in a highly commercialized, modern society
Customers versus Consumers - The term customer is specific in terms of brand, company, or
shop. It refers to person who customarily or regularly purchases brand, Purchases Company’s
product, or purchases from shop.
Consumer Motives Consumer has a motive for purchasing a product. Motive is a strong feeling,
urge, instinct, desire, or emotion that makes the buyer to decide to buy.
Organizational Buyer versus Individual Buyer - The obvious difference between industrial or
institutional markets and consumer markets is that, instead of purchases being made for
individual consumption industrial markets are made for business use. The key factors of
differentiation are:
1) Market Structure and Demand - The distinguishing factors of market structure and demand
(SEE ACTIVITY TASK ON PAGE 51)

2) Buyer Characteristic’s - The distinguishing factors of buyer characteristics.

3) Decision Process and Buying Patterns - In
organizational buying lot of formalities like
proposals, quotations, and procedures are to be
followed unlike consumer buying. Decision
process is much complex with high financial risk,
technical aspects, multiple influencing factors etc.

Maslow’s Hierarchy of Needs

Lesson 3: Buying Behavior

Buying Behavior

15
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Buyer behavior is the actions people take regarding buying and using products.
Stages in Buying Decision Making
Stage 1: Need Recognition - Perhaps you’re planning to backpack around the country after you
graduate, but you don’t have a particularly good backpack.
Stage 2: Information Search - Maybe you have owned several backpacks and know what you
like and don’t like about them.
Stage 3: Product Evaluation - Obviously, there are hundreds of different backpacks and cars
available. It’s not possible for you to examine all of them. Evaluative criteria - are certain
characteristics that are important to you such as the price of the backpack, the size, the number
of compartments, and color.
Stage 4: Product Choice and Purchase - With low-involvement purchases, consumers may go
from recognizing a need to purchasing the product
Stage 5: Post purchase Use and Evaluation - At this point in the process you decide whether
the backpack you purchased is everything it was cracked up to be.
Stage 6. Disposal of the Product - There was a time when neither manufacturers nor
consumers thought much about how products got disposed of, so long as people bought them.
(SEE ACTIVITY TASK ON PAGE 51)

Lesson 3.1 Buying Behavior

Organizational Buyer Behavior - Individual consumers are not the only buyers in a market.
Companies and other organizations also need goods and services to operate, run their
businesses, and produce the offerings they provide to one another and to consumers. B2B
markets have their own patterns of behavior and decision-making dynamics that are important
to understand for two major reasons.
Who Are the Organizational Buyers - A purchasing agent or procurement team (also called
a buying center) may also be involved to help move the decision through the organization’s
decision process and to negotiate advantageous terms of sales? Organizations define and
enforce rules for making buying decisions with purchasing policies, processes, and systems
designed to ensure the right people have oversight and final approval of these decisions.
Characteristics of Organizational Buying - B2B purchasing decisions include levels of complexity
that are unique to organizations and the environments in which they operate.
Timing Complexity - The organizational decision process frequently spans a long period of time,
which creates a significant lag between the marketer’s initial contact with the customer and the
purchasing decision. In some situations, organizational buying can move very quickly, but it is
more likely to be slow.
Technical Complexity - Organizational buying decisions frequently involve a range of complex
technical dimensions.

16
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Organizational Complexity - Because every organization is unique, it is nearly impossible to

group them into precise categories regarding dynamics of buying decisions.
Unique Factors Influencing B2B Buying Behavior - Because organizations are made up of
individual people, many of the same influencing factors discussed earlier in this module apply in
B2B setting.
Individual Factors - B2B decisions are influenced by characteristics of the individuals involved in
the selection process. A person’s job position, tenure, and level in the organization may all play
a role influencing a purchasing decision.
Organizational Factors - Purchasing decisions, especially big-ticket expenditures, may be
influenced by the organization’s strategies, priorities, and performance
Business Environment - B2B purchasing is also influenced by factors in the external business
environment. The health of the economy and the company’s industry may determine whether
an organization chooses to move ahead with a significant purchase or hold off until economic
indicators improve.
Complexities of a B2B Solution Sale - With the rise in mobile communications, Air Canada
found itself in a situation where its technology just wasn’t keeping up with what its passengers
and employees needed.
Making B2B Buying Decisions - The organizational buying process contains eight stages.
The organization buying process stages are described below.
Problem Recognition - The process begins when someone in the organization recognizes a
problem or need that can be met by acquiring a good or service
General Need Description - Once they recognize that a need exists, the buyers must describe it
thoroughly to make sure that everyone understands both the need and the nature of solution
the organization should seek.
Product Specification - Technical specifications come next in the process
Supplier Search - The buyer now tries to identify the most appropriate supplier (also called the
vendor). The buyer conducts a standard search to identify which providers offer what they
need, and which ones have a reputation for good quality, good partnership, and good value for
the money.
Proposal Solicitation - During the next stage of the process, qualified suppliers are invited to
submit proposals.
Supplier Selection - At this stage, the buyer screens the proposals and makes a choice. A
significant part of this selection involves evaluating the vendors under consideration.
Order-Routine Specification - The buyer now writes the final order with the chosen supplier,
listing the technical specifications, the quantity needed, the warranty, and so on.
Performance Review - In this final stage, the buyer reviews the supplier’s performance and
provides feedback.

17
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Procurement Processes for Routine Purchases - As noted above, the complete eight-stage
buying process describe here applies to new tasks, which typically require more complex,
involved purchasing decisions. Organizations may also use e-procurement processes, in
which an approved supplier has been selected to provide a variety of standard goods at pre-
negotiated prices. (SEE ACTIVITY TASK ON PAGE 52)

Lesson 3.2: Marketing Segmentation, Market Targeting, and Market Positioning

(STP)
Marketing Segmentation
Positioning for Competitive Advantage
Market Segmenting, Targeting, and Positioning
Targeted Marketing versus Mass Marketing
The segment(s) or group(s) of people and organizations you decide to sell to is called a target
market.
Mass marketing, or undifferentiated marketing, came first. It evolved along with mass
production and involves selling the same product to everybody.
Benefits of Segmenting and Targeting Markets - it can help you enlarge your customer base by
giving you information with which to successfully adjust some component of your offering—the
offering itself, its price, the way you service and market it. More specifically, the process can
help you do the following:
• Avoid head-on competition with other firms trying to capture the same customers.
• Develop new offerings and expand profitable brands and products lines.
• Remarket older, less-profitable products and brands.
• Identify early adopters.
• Redistribute money and sales efforts to focus on your most profitable customers.
• Retain “at-risk” customers in danger of defecting to your competitors.
Segmenting and Targeting a Firm’s Current Customers - Finding and attracting new customers
is generally far more difficult than retaining your current customers.
Steps in One-to-One Marketing
• Establish short-term measures to evaluate your efforts. Determine how you will measure
your effort.
• Identify your customers. Gather all the information you can about your current customers,
including their buying patterns, likes, and dislikes.
• Differentiate among your customers. Determine who your best customers are in terms of
what they spend and will spend in the future (their customer lifetime value), and how easy
or difficult they are to serve.

18
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

• Interact with your customers, targeting your best ones. Find ways and media in which to
talk to customers about topics they’re interested in and enjoy.
• Customize your products and marketing messages to meet their needs. Try to customize
your marketing messages and products to give your customers exactly what they want—
whether it’s the product itself, its packaging, delivery, or the services associated with it.
How Markets Are Segmented - Sellers can choose to pursue consumer markets, business-to-
business (B2B) markets, or both. Consequently, one obvious way to begin the segmentation
process is to segment markets into these two types of groups.
Types of Segmentation Bases - Notice that the characteristics fall into one of four
segmentation categories: behavioral, demographic, geographic, or psychographic. For now, you
can get a rough idea of what the categories consist of by looking at them in terms of how
marketing professionals might answer the following questions:
• Behavioral segmentation. What benefits do customers want, and how do they use our
product?
• Demographic segmentation. How do the ages, races, and ethnic backgrounds of our
customers affect what they buy?
• Geographic segmentation. Where are our customers located, and how can we reach them?
What products do they buy based on their locations?
• Psychographic segmentation. What do our customers think about and value? How do they
live their lives?
Segmenting by Behavior - Behavioral segmentation divides people and organization into groups
according to how they behave with or act toward products.
Segmenting by Demographics - Segmenting buyers by personal characteristics such as age,
income, ethnicity and nationality, education, occupation, religion, social class, and family size is
called demographic segmentation.
Segmenting by Geography - Suppose your great new product or service idea involves opening a
local store.
Geographic segmentation - divides the market into areas based on location and explains why
the checkout clerks at stores sometimes ask for your zip code. Geocoding is a process that
takes data such as this and plots it on a map.
Proximity marketing - is an interesting new technology firms are using to segment and target
buyers geographically within a few hundred feet of their businesses using wireless technology.
Segmenting by Psychographics - If your offering fulfills the needs of a specific demographic
group, then the demographic can be an important basis for identifying groups of consumers
interested in your product.
Psychographic segmentation - can help fill in some of the blanks. Psychographic information is
frequently gathered via extensive surveys that ask people about their activities, interests,
opinion, attitudes, values, and lifestyles.

19
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Based on their responses to different questions, consumers were divided up into the following
categories, each characterized by certain buying behaviors.
• Innovators. Innovators are successful, sophisticated, take-charge people with high self-
esteem.
• Thinkers. Thinkers are motivated by ideals.
• Achievers. Motivated by the desire for achievement, Achievers have goal-oriented lifestyles
and a deep commitment to career and family.
• Experiencers. Experiencers are motivated by self-expression. As young, enthusiastic, and
impulsive consumers, Experiencers quickly become enthusiastic about new possibilities but
are equally quick to cool.
• Believers. Like Thinkers, Believers are motivated by ideals.
• Strivers. Strivers are trendy and fun loving.
• Makers. Like Experiencers, Makers are motivated by self-expression.
• Survivors. Survivors live narrowly focused lives.
Segmentation in B2B Markets - Segmenting by behavior is common as well. B2B sellers
frequently divide their customers based on their product usage rates.
The Behavioral, or Needs- Based, Segments in B2B Markets include the following:
A price-focused segment - is composed of small companies that have low profit margins and
regard the good or service being sold as not being strategically important to their operations.
(SEE ACTIVITY TASK ON PAGE 52)

• A quality and brand-focused segment - is composed of firms that want the best possible
products and are prepared to pay for them.
• A service-focused segment - is composed of firms that demand high-quality products and
have top-notch delivery and service requirements.
• A partnership-focused segment - is composed of firms that seek trust and reliability on the
part of their suppliers and see them as strategic partners.
Selecting Target Markets and Target-Market Strategies
Selecting Target Markets - After you segment buyers and develop a measure of consumer
insight about them, you can begin to see those that have more potential. An attractive market
has the following characteristics:
• It is sizeable (large) enough to be profitable given your operating cost. Only a tiny fraction
of the consumers in China can afford to buy cars
• It is growing. The middle class of India is growing rapidly, making it a very attractive market
for consumer products companies.
• It is not already swamped by competitors, or you have found a way to stand out in a
crowd. IBM used to make PCs.

20
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

• Either it is accessible, or you can find a way to reach it. Accessibility, or the lack of it, could
include geographic accessibility, political and legal barriers, technological barriers, or social
barriers
• The company has the resources to compete in it. You might have a great idea to compete
in the wind-power market.
• It “fits in” with your firm’s mission and objectives. Consider Terra Cycle, which has made
its mark by selling organic products in recycled packages. Fertilizer made from worm
excrement and sold in discarded plastic beverage bottles is just one of its products.
Multisegmented - A multisegmented marketing strategy can allow firms to respond to
demographic changes and other trends in markets. A multisegmented strategy can also help
companies weather an economic downturn by allowing customers to trade up or down among
brands and products. A multisegmented strategy can also help companies deal with the
product life cycle issues. If one brand or product is “dying out,” the company has others to
compete.
Concentrated Marketing - Concentrated marketing involves targeting a very select group of
customers. Concentrated marketing can be a risky strategy because companies really do have
all their eggs in one basket.
Niche marketing involves targeting an even more select group of consumers.
Microtargeting, or narrowcasting, is a new effort to isolate markets and target them.
Microtargeting involves gathering all kinds of data available on people—everything from their
tax and phone records to the catalogs they receive.
Targeting Global Markets - Firms that compete in the global marketplace can use any
combination of the segmenting strategies or none.
A perceptual map is a two-dimensional graph that visually shows where your product stands,
or should stand, relative to your competitors, based on criteria important to buyers.
A tagline is a catchphrase designed to sum up the essence of a product.
Repositioning is an effort to “move” a product to a different place in the minds of consumers.
(SEE ACTIVITY TASK ON PAGE 52)

SECOND 2ND QUARTER SECOND 2ND SEMESTER

DEVELOPING THE MARKETING MIX
Content Standard: - The learners demonstrate an understanding of… the essence of the new
product development, pricing, placing (distribution), and promoting a product or service.
Performance Standard: - The learners shall be able to… design a new product or service, decide
types of pricing approach, and choose distribution methods and promotion tools that respond
to market trends.

21
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Objectives:
• Define a product and differentiates the product, services, and experiences.
• Identify and describe the factors to consider when setting prices and new product pricing
and its general pricing approaches.
• Discuss the structure of distribution channels, its functions, and the nature of supply chain
management.
• Define and identify relevant promotional tools, namely, advertising, sales promotion,
personal selling, public relations, and direct marketing to create awareness and persuade
the target market to buy the product or patronize the service.

Lesson 1: What is the Marketing Mix?

The term 'marketing mix' is a foundation model for businesses, historically centred on product,
price, place, and promotion. The marketing mix has been defined as the "set of marketing tools
that the firm uses to pursue its marketing objectives in the target market".
There are two (2) basic steps you must take before developing the marketing mix.
1. The first is to identify your overall goal or marketing strategy.
2. The second is to identify your target audience. Then you can proceed to develop the
marketing mix.
What Makes a Good Marketing Mix?
A typical marketing mix is based on the four (4) Ps:
• Product – the product or service you are selling
• Price – what it will cost the customer
• Place – where you will sell it or how the customer will receive it
• Promotion – what communication techniques you will use to inform the public about
your business.
Other factors you must consider when developing your marketing mix will increase the number
of Ps to eight, and add one S. The next P is:
• Positioning – the unique place you hold in customers' minds.
To position your business, ask yourself what is different or unique about you, compared with
your competitors. Do you provide better quality, more product and value for the price, or do
you simply fill an underserved need in the community? These are some of the ways to position
your business. This can also be considered as part of your differential.
The next P is:
• People – those who will work for you, sell your product, or deliver your service, and the
vendors who will supply you.
The last two Ps + 1 (one) are:
• Profits – what you plan to make, and

22
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

• Politics – those laws and regulations that will govern the way you do business.
• Physical Evidence
Simply existing as a business isn’t enough for brands today. Consumers want to build
authentic relationships. One way to achieve this is through physical evidence. It could take
the form of products, brochures, information pages, or even PDFs, with the main goal of
supplementing the psychological evidence that the brand exists with something tangible.
The more relevant, personal, and exciting the better.
The S is probably the most important area for continued business with your customers,
sometimes categorized as repeat business, but many companies seem to forget about it. It is.
• Service.
You cannot and certainly will not succeed today without providing excellent customer service. It
is even suggested that your customer service should not necessarily be planned just for the
customer "complaint", but that you should have a plan for customer service to be commenced
at the first point of contact with the customer before they actually purchase.
Decide your Performance Goals
Before you finalize the marketing mix for your business, you must first specify the performance
goals for your business so that the marketing mix can help you achieve them. You should
already know who your target market is and what niche you want to service; you can prepare
the marketing mix to meet those needs. Then develop the marketing mix with these goals and
objectives in mind.
To ascertain these goals before setting your marketing mix, answer the following nine
questions.
1. What does the business want to achieve this year?
2. How much money do we want to make? What profit margin do we want to achieve?
3. Where is the product life cycle and what plans are necessary to compete in this cycle?
4. Who is our target market and where do we fit into their thinking?
5. What time frame have we set for achieving our business and financial goals?
6. What resources do we have to use to develop the marketing mix?
7. Are there any legal ramifications or requirements related to our product or service?
8. Do we have all the required license’s, patents, trademarks and registrations for our product
or service?
9. Does our product or service infringe any currently trademarked or registered product or
service? If so, what plans are in place to overcome this obstacle?
Considerations for Developing your Marketing Mix
Consider the following questions for each product or service you offer:
1. Target market selection/market segmentation characteristics
2. Products/program’s/services offered
3. Distribution channels (accessibility and availability)

23
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

4. Price (including discounts, incentives, and payment terms)

5. Promotions:
• Types of communication
• Techniques:
Advertising personal selling
Publicity telemarketing
Public relations networking
Business publications – brochures, flyers speeches
direct mail community service
Every product/service, or every different market you serve, should have its own marketing mix.
(SEE ACTIVITY TASK ON PAGE 53)

Lesson 1.1: Marketing Action Plans

Another easy method you may want to use to help you develop both your marketing mix and
your promotional mix is the marketing action plan, or MAP. It is a map of what you want to
achieve and how you plan to do it.
The headings below will help you develop your MAP. Design one MAP for each goal or strategy.
• Goal: Your goal is a non-specific statement about what you want to achieve.
• Objective: Your objective is a very specific, action-oriented, and measured statement of
what you will achieve in a certain time frame.
• Actions: Your actions are the tactics you will use.
• Leader: The leader is the person responsible.
You will notice that the first letters of the above headings also spell out "goal" – just a reminder
to keep you focused.
The Promotional Mix
The next thing to consider is the promotional mix – the methods you will use to bring your
marketing mix into being.
The Promotional Mix Consists of Four (4) Elements:
1) Advertising: This means paid media placements – the element people are most familiar
with.
2) Public relations: This includes all publicity efforts. It is sometimes thought that PR is free,
but there are costs in staff time, program development time, and meeting the media.
3) Selling: This includes both face-to-face visits and telephone sales.
4) Sales promotion: This has to do with all the ways and means to move your product or
service into the chosen marketplace.
1. Advertising

24
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Advertising is paid media space – in print, on radio or on television. The question you need to
ask yourself is whether nor you don’t have the money to advertise. Media people will tell you
that if you don't advertise, you will not succeed. This is not quite true. Advertising is just one
method of communicating about your business to the public
Prepare a Media Schedule
Once you have your ads developed, it is advisable to prepare a monthly, quarterly, and annual
media schedule. These are the arrangements for advertising you will make with the media.
Measure the Effectiveness of your Ads
Whatever and however you advertise, code your ads in such a way that you can measure their
effectiveness. Having ads that do not bring in business is not very effective. If you are running
multiple ads or using more than one media channel at a time, you need to know which ads are
bringing in the business.
Be Marketing SMART
Like everything else we do in business, we must set goals when we set about marketing. The
best goals are SMART ones: (SEE ACTIVITY TASK ON PAGE 53)
✓ Specific: Exactly what do you want to achieve?
✓ Measurable: How will you measure the result?
✓ Achievable: Can you take the necessary actions to make it happen?
✓ Realistic: Don't make a wish list. You must be able to commit to it.
✓ Time bound: What are your deadlines or milestones?
Effective Advertising and Brand Management
The whole organization must be "attuned" to its marketing messages.
• Many talks about this, few do it.
• Be noticed. Because if you aren't, nothing else matters.
• Recognize changes in your brand's progress because a brand is never still. Its position in the
market changes constantly.
• Market inconsistencies on a brand are sometimes beyond an advertiser's control. So, you
need to constantly make changes when needed.
• Be different – not a "me-too" company. All companies – even market leaders – should
consider their difference if they seek dramatic and continued long-term business.
• Great brand management can create massive business growth. It adds (or saves) jobs,
grows real wealth, offers better consumer choice. You should aim for nothing less!
And finally:
• Excite the market. It doesn't deserve to be bored by your messages.
• Be honest with yourself. Remember: if the ads aren't working, it's nobody's fault but yours.
Why? Well, if you're getting great work from your ad agency, and you're turning it down,
that's your fault. And if you're getting inadequate work, and you're still employing them,
then that's your fault too.
So, remember this acronym:
25
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

• A - Attuned
• B - Be noticed
• R - Recognize
• I - Inconsistencies
• D - Different
• G - Growth
• E – Excite
Develop the Brand, Develop the Business
First, it doesn't need to cost a lot of money to produce a consistent and well managed brand. It
will, however, involve an amount of time, and planning what is important to the business.
What are the Core Values of your Business?
Try to find what makes the business special. What is the unique selling point (USP)? If possible,
incorporate this into the business name, logo, and branding. The key is to have something that
is representative and informative.
Do you have too Many Logos?
Some companies use three or more logos. In real terms this means extra costs when it comes to
printing, clothing, and website. Also, if the logo differs heavily, people may not recognize the
company as a distinct brand. Reduce the number of logos to save money and give the brand a
consistent image.
Your House Styles
Keep records of what fonts, graphics and even copy (words) you use. If a business uses one font
in print and another on the web, it can appear that it is not bothered about its branding. With
printing, use a consistent color scheme; it helps with the brand recognition. Stick to a consistent
brand, then reap the benefits.
Your Corporate Image
It is becoming ever more necessary to have a properly designed corporate image. This image is
fundamental in tying together all the different aspects of a company's marketing strategy. A
corporate image enables the company to build recognition and loyalty with its clients and
employees. The benefit of being recognized through your corporate logo is paramount for
increasing your business bottom line. Customers feel comfortable dealing with an organization
that shows a structure in its marketing, and the logo is a major key to the recognition of the
company.
Copywriting
Step into the mind and the shoes of the person reading your copy. Everything you write should
be designed to meet their needs, wishes, desires, hopes, fears and dreams. Keep it simple.
Don't use language or sentence structure any more complicated than you would use in
conversation with someone over dinner.
Benefits, benefits, benefits

26
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

You must focus on the benefits of what you are offering, rather than the product or service.
When you buy a new hi-fi, you're probably not interested in how it was made or how many
wires it has (the product); you're interested in how it will sound (the benefit).
AIDA
Follow this classic rule of copywriting and you can't go far wrong. AIDA stands for:
• Attention
• Interest
• Desire
• Action
All your copy, whether it's a letter, brochure. or email, should follow this simple process. First
you need to get their attention – normally in a headline.
2. Public Relations - PR is probably the most misunderstood part of the promotional mix. Many
people think PR is free, or at least very inexpensive. This is a mistake. Whenever you see a story
about someone or some company, you can be sure that a great deal of time and effort went
into getting that placement.
Structuring Your Press Release
Keep the release to two pages at the most. Make sure you identify it as a press release, either
across the top or in the upper right-hand corner.
3. Selling - This part of the promotional mix is the sales effort. It can refer to you personally or
to your sales staff. You should plan the number of calls you want your salespeople to make on a
daily, weekly, or monthly basis. Telemarketing or tele sales and direct mail are other forms of
direct selling. If you are going to use these methods, make sure what you are doing will not turn
the customer off your sales pitch.
Sales Training
If your staff are not trained in all aspects of the selling process, you should consider getting
them trained. It has been said that good salespeople are born.
Anchoring
Anchoring means building a strong foundation to help your prospect to change a situation.
You'll find out what motivates that prospective buyer to work with you.
The basis of this technique is: "Today's problems affect performance."
• Today means that you understand the prospect's current situation, and what is happening
to them today. Ask them questions to find out what they are working on.
• The second step is identifying problems surrounding their products or services. This isn't
always easy: sometimes we don't acknowledge the problems we have and can't articulate
them.
• The third step is to find out what effect these problems are having on the prospect's
business. Are they affecting the company?

27
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

• If so, what are the negative impacts on performance because of these problems – and the
consequences?
Have a Look at the Following Example?
• Today, a uniform retailer has 23 salespeople using Outlook or paper-based contact
management.
• The problems related to this are that there's no sharing of sales data, there are no sales
reports, and management can't predict sales volume. Salespeople aren't focusing on selling.
• The way it is affecting the business is that revenues fluctuate and there have been no pay
increases for two years.
• Poor performance is the result: salespeople aren't learning, new tools to help the selling
process are not being developed, and there's animosity between sales and management.
By anchoring a prospective client, you are more likely to close the sale. You create rapport
with the prospect – it's a good way to get to know them, and a great topic of conversation.

4. Sales Promotions - Sales promotions are the special program you will offer the public to sell
more of your product or service. They are usually time constrained – for example, a coupon
that must be used by a certain date. Sales promotions are also used to move products that tend
to be slow sellers, are going out of reason, or are temporarily overstocked. Service providers
often use sales promotions to create new business or entice former clients back into the
business.
Choosing the Right Sales Promotion
Sales promotions take many forms, and you must decide which is best for your business. The
most popular promotions are a discount coupon for your service or a special offer for a time. If
you use either one, make sure the promotion expires at a certain date so that you can track its
effectiveness.
Consider which type of sales promotion you can use in your business. You will need to think
about your budget and your target market, and ask: "Can I afford it, and is this going to reach
the people I want to reach?"

Lesson 1.2: Five + (5+) P’s Strategy

A strategy must be constructed for each of the 5Ps, and all strategies must be blended with the
strategies of the other elements.
1. Product Strategy 4. Promotion Strategy
2. Pricing Strategy 5. Not-for-Profit Marketing
3. Place (Distribution) Strategy
Product Strategy - A product strategy outlines a company's strategic vision for
its product offerings by stating where the products are going, how they will get there and why

28
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

they will succeed. The product strategy enables you to focus on a specific target market and
feature set, instead of trying to be everything to everyone.
List of Product Strategies
Leader - A market leader develops new and innovative products to grow a larger market. A
market leader invests heavily in research and development to create new products that stand
apart from competitors. This can be an expensive strategy, making it difficult for a small
business to implement, but the payoffs can be substantial.
Challenger - The challenger strategy is like the market leader strategy. Like the market leader,
a challenger invests heavily in research and development to create products that are
innovative and that can distinguish it from the competitors. The main difference between the
challenger and the market leader is that the market leader is the number one company in the
market, and the challenger is seeking to take that spot.
Follower - Companies using a follower strategy do not invest heavily in research and
development. Instead, they use the innovations developed by other companies. As a result,
their products are derivative, rather than original, and they therefore command lower prices.
Niche - The niche product strategy involves developing a product for a smaller segment of the
population. For example, a software producer might focus on the educational niche, or even
narrower, the junior high school niche. This strategy can be beneficial for smaller firms with
limited resources, as these resources can be deployed efficiently to focus on the needs of the
niche market.
Pricing Strategy - A pricing strategy considers segments, ability to pay, market conditions,
competitor actions, trade margins and input costs, amongst others. It is targeted at the defined
customers and against competitors. ... Penetration pricing: price is set artificially low to gain
market share quickly.
The Seven (7) Following Pricing Tips
(raised by Leigh Cauldwell, behavioral economist, and pricing expert, in the book The Psychology
of Price)
1) Pricing should be based on the value to the customer, not the cost to you.
2) Pricing should be tangible, so your customers can see what they get for what they pay.
3) Prices should be comparable – on terms that you control.
4) If you want to change your prices, you must reframe the product or service.
5) Price differentiation is the key enabler of profit.
6) Pricing communication shapes the customer’s perception of value.
7) You must be prepared to lose some sales to increase profits.
The Seven (7) Pricing Strategies?
These are the top pricing strategies you should consider for your new business:
1) Market penetration pricing. 3) Economy pricing.
2) Premium pricing. 4) Price skimming.

29
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

5) Price anchoring. 7) Bundle pricing.

6) Psychology pricing.
Market Penetration Pricing - a pricing strategy where the price of a product is initially set low
to rapidly reach a wide fraction of the market and initiate word of mouth. The strategy works
on the expectation that customers will switch to the new brand because of the lower price.
Premium Pricing - (also called image pricing or prestige pricing) is the practice of keeping
the price of one of the products or service artificially high to encourage favorable perceptions
among buyers, based solely on the price.
Economy Pricing - is a method of pricing in which a low price is assigned to a product with
decreased production costs and is a volume-based pricing strategy wherein you price goods low
and gain revenue based on the number of customers who purchase your product. It's typically
used for commodity goods, like generic-brand groceries or medications, that don't have the
marketing and advertising costs of their name-brand counterparts.
Price Skimming - is a pricing strategy in which a marketer sets a relatively high initial price for a
product or service at first, then lowers the price over time. It is a temporal version of price
discrimination/yield management.
Price Anchoring - refers to the practice of establishing a price point which customers can refer
to when making decisions. Every time you see a discount with “Php 100, Php 75”, the Php 100 is
the price anchor for the Php 75 sales price. Anchoring or focalism is a cognitive bias where an
individual depends too heavily on an initial piece of information offered to make subsequent
judgments during decision making.
Psychological Pricing - the business practices of setting prices lower than a whole number. The
idea behind psychological pricing is that customers will read the slightly lowered price and
treat it lower than the price is. Psychological pricing is a pricing and marketing strategy based
on the theory that certain prices have a psychological impact. Retail prices are often expressed
as just-below numbers: numbers that are just a little less than a round number, e.g. Php 19.99
or Php 2.98.
Bundle Pricing - entails retailers selling a set of products for a lower price than each of these
products separately. Bundle pricing is the practice of selling a set of items as a package for a
price lower than what the items would cost if sold separately. The concept is to make
purchases easier for consumers by including associated items together, and by giving them
one price that represents some type of discount.
Place (Distribution) Strategy - A distribution strategy is a method of disseminating goods or
services to end-users. Implementing the most efficient distribution method for your business is
key to obtaining revenue and retaining customer loyalty. Some companies opt to use
multiple distribution methods to adhere to different consumer bases.
Key Points

30
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

• The channel is composed of different institutions that facilitate the transaction and the
physical exchange.
• A channel performs three important functions: transactional, logistical, and facilitating.
• Service marketers also face the problem of delivering their product in the form and at the
place and time their customer demands.

(SEE ACTIVITY TASK ON PAGE 54)

Key Terms
• Wholesale: The sale of products, often in large quantities, to retailers or other merchants.
• Distribution Channels - include wholesalers, retailers, distributors, and the Internet. In a
direct distribution channel, the manufacturer sells directly to the consumer.
Indirect channels involve multiple intermediaries before the product ends up in the hands
of the consumer.
• There are Basically Four (4) Types of Marketing Channels:
1) Direct selling. 3) Dual distribution; and
2) Selling through intermediaries. 4) Reverse channels.
Direct Selling - Direct selling is the marketing and selling of products directly to consumers
away from a fixed retail location. Peddling is the oldest form of direct selling. Modern direct
selling includes sales made through the party plan, one-on-one demonstrations, personal
contact arrangements as well as internet sales. A textbook definition is:
Selling through Intermediaries or Distribution Intermediaries - help a firm to promote, sell,
and make-available a good or service through contractual arrangements or purchase and resale
of the item. Each intermediary receives the item at one pricing point and moves it to the next
higher pricing point until the item reaches the final buyer.
Typical intermediaries involved in distribution include:
• Wholesaler: A merchant intermediary who sells chiefly to retailers, other merchants, or
industrial, institutional, and commercial users mainly for resale or business use. The
transactions are B2B (Business to Business). Wholesalers typically sell in large quantities.
(Wholesalers, by definition, do not deal directly with the public).
• Retailer: A merchant intermediary who sells direct to the public. There are many different
types of retail outlet - from hyper marts and supermarkets to small, independent stores.
The transactions in this case are B2C (Business to Customer).
• Agent: An intermediary who is authorized to act for a principal to facilitate exchange.
Unlike merchant wholesalers and retailers, agents do not take title to goods, but simply put
buyers and sellers together. Agents are typically paid via commissions by the principal. For
example, travel agents are paid a commission of around 15% for each booking made with
an airline or hotel operator.

31
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

• Jobber: A special type of wholesaler, typically one who operates on a small scale and sells
only to retailers or institutions. For example, rack jobbers are small independent
wholesalers who operate from a truck, supplying convenience stores with snack foods and
drinks on a regular basis.
Prior to designing a distribution system, the planner needs to determine what the distribution
channel is to achieve in broad terms. The overall approach to distributing products or services
depends on several factors including the type of product, especially perishability; the market
served; the geographic scope of operations and the firm's overall mission and vision. The
process of setting out a broad statement of the aims and objectives of a distribution channel is
a strategic level decision.
Strategically, there are Three (3) Approaches to Distribution:
1) Mass Distribution (also known as intensive distribution): When products are destined for a
mass market, the marketer will seek out intermediaries that appeal to a broad market base.
The choice of distribution outlet is skewed towards those than can deliver mass markets in
a cost-efficient manner.
2) Selective Distribution: A manufacturer may choose to restrict the number of outlets
handling a product. For example, a manufacturer of premium electrical goods may choose
to deal with department stores and independent outlets that can provide added value
service level required to support the product.
3) Exclusive Distribution: In an exclusive distribution approach, a manufacturer chooses to
deal with one intermediary or one type of intermediary. The advantage of an exclusive
approach is that the manufacturer retains greater control over the distribution process.
Another definition of exclusive arrangement is an agreement between a supplier and a
retailer granting the retailer exclusive rights within a specific geographic area to carry the
supplier's product.
Dual distribution is the practice of simultaneously distributing products or services through
two or more marketing channels that may or may not compete for similar buyers. Dual
distribution a system of marketing channel organization in which a manufacturer uses two
approaches simultaneously to get products to end-users; commonly, one approach is to use
marketing intermediaries, while the other is to sell direct to end-users.
Multi-channel Marketing - It is Dual Distribution as this strategy can also result in competing
for similar customers. However, Multi-channel marketing involves a traditional marketing
reach, which includes a traditional marketing channel such as a brick-&- mortar location or
multiple retail stores and an electronic channel such as a website that reinforces acquisition,
retention, and customer relationships.
Reverse Marketing Channel - This term describes the backward flow or process by which used
goods, which will be used in the recycling and repurposing of those goods as raw materials,
come from the consumer. This is also known as marketing channel reverse reciprocity. Reverse

32
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

marketing - is the concept of marketing in which the customer seeks the firm rather
than marketers seeking the customer. Usually, this is done through traditional means of
advertising, such as television advertisements, print magazine advertisements and online
media.
Promotion Strategy - A promotional strategy is designed to inform, persuade, or remind target
audiences about those products. ... The unique combination of advertising, personal selling,
sales promotion, public relations, social media, and e-commerce used to promote a product is
called the promotional mix.
Word of Mouth - To promote and manage word-of-mouth communications, marketers use
publicity techniques to achieve desired behavioral response.
There are Five (5) (sometimes six) Main Aspects of a Promotional Mix. These are:

1) Advertising: Presentation and promotion of ideas, goods, or services by an identified

sponsor. Examples: Print ads, radio, television, billboard, direct mail, brochures and
catalogues, signs, in-store displays, posters, motion pictures, Web pages, banner ads, and
emails. (Always in Paid Form non personal)
2) Personal Selling: A process of helping and persuading one or more prospects to purchase a
good or service or to act on any idea using an oral presentation. Examples: Sales
presentations, sales meetings, sales training and incentive programs for intermediary
salespeople, samples, and telemarketing. Can be face-to-face or via telephone.
3) Sales Promotion: Media and non-media marketing communication are employed for a pre-
determined, limited time to increase consumer demand, stimulate market demand, or
improve product availability. Examples: Coupons, sweepstakes, contests, product samples,
rebates, tie-ins, self-liquidating premiums, trade shows, trade-ins, and exhibitions.
4) Public Relations: Paid intimate stimulation of supply for a product, service, or business unit
by planting significant news about it or a favorable presentation of it in the media.
Examples: Newspaper and magazine articles/reports, TVs and radio presentations,
charitable contributions, speeches, issue advertising, and seminars.
5) Direct Marketing is a channel-agnostic form of advertising that allows businesses and non-
profit’s to communicate straight to the customer, with advertising techniques such as

33
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

mobile messaging, email, interactive consumer websites, online display ads, fliers,
catalogue distribution, promotional letters, and outdoor advertising.
Corporate image may be considered as a sixth aspect of promotion mix. The Image of an
organization is a crucial point in marketing. If the reputation of a company is bad, consumers
are less willing to buy a product from this company as they would have been, if the company
had a good image. Sponsorship is sometimes added as a seventh aspect.
New Media is also sometimes considered an element of the promotion mix.
Not-for-Profit Marketing
A Non-profit marketing involves the creation of logos, slogans, and copy, as well as the
development of a media campaign to expose the organization to an outside audience. The goal
of non-profit marketing is to promote the organization's ideals and causes to get the attention
of potential volunteers and donors.
Key Takeaways
• Non-profit marketing refers to the tactics and strategies non-profit organizations use to
raise donations and spread their message.
• Non-profit marketing includes a wide range of activities, such as direct mail marketing,
mobile marketing, content marketing, and social media marketing.
• A point-of-sale campaign relies on asking for a donation at the same time the potential
donor is making a purchase.
• In a message-focused campaign, the non-profit ties its fundraising efforts to a high-profile
current event that has already captured the public's attention.
• In a transactional campaign, the non-profit organization partners with a corporate sponsor
to encourage consumers to use their purchases to assist in funding the non-profit’s mission.
Glossary
Distribution Strategy - Creating the means, by which products flow from the producer to the
consumer.
Marketing Mix - The blend of product offering, pricing, promotional methods, distribution
system, and strategies for utilizing people that creates an offering that brings a specific group of
consumer’s superior value.
Pricing Strategy - Setting a price based upon the demand for and cost of a good or service.
Product Strategy - Taking the good or service and selecting a brand name, packaging, colours, a
warranty, accessories, and a service program.
Promotion Strategy –
The unique combination of a personal selling, traditional advertising, publicity, sales promotion,
social media, and e-commerce is to stimulate the target market to buy a product. Sometimes it
referred to as the promotion mix.

(SEE ACTIVITY TASK ON PAGE 54)

34
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

CHAPTER 5
MANAGING THE MARKETING EFFORT
(THE MARKETING PROCESS)
Content Standard - The learners demonstrate an understanding of… the necessity of a
marketing plan in business
Performance Standard - The learners shall be able to… create a new product or service design
and pricing, and promotion and distribution strategies
Objectives
• Explain the relationship between market analysis, planning, implementation, and
• Analyze the company’s situation, markets, and environment (the marketing audit and
SWOT analysis)
• Identify target market and positioning
• Explain the significance of the marketing mix to motivate the potential market to buy
the product or service (the marketing plan)

Lesson 1: Market Analysis

In today’s Fast face business world, the ability to effectively manage the marketing
process from beginning to end has become an extremely important competitive advantage.
Successful companies know how to adapt to a continuously marketplace through market
analysis and planning and careful management of the marketing process.
The Marketing Process
Once the strategic plan has defined the company's overall mission and objectives,
marketing plays a role in carrying out these objectives. The marketing process is the process of
analyzing, market opportunities, and selecting target markets, developing the marketing mix,
and managing the marketing effort. Target customers stand at the center
of the marketing process. There are following steps in Marketing Process:
5. Analyzing marketing opportunities
6. Selecting target markets
7. Developing the marketing Mix
8. Managing the marketing effort
A. Analyzing marketing opportunities - First step of the marketing process is analyzing
market opportunities and availing these opportunities to satisfy the customer's requirements
to have competitive advantage. Any marketing manager must analyses the long-
run opportunities in the market to improve the business unit's performance.
To evaluate its opportunities firms needs to operate a reliable marketing information system.

35
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Marketing research –
is an indispensable marketing tool for this purpose. Researching the market
Allows the company to gather information about their customers, competitors, and any
Environmental changes to determine the market opportunities.
B. Selecting the target Market:
To succeed in today's competitive marketplace, companies must be
customer centred. They must
win customers from competitors and keep them by delivering greater value.
▪ Sound marketing requires a careful, deliberate analysis of consumers.
▪ Since companies cannot satisfy all consumers in each market, they must divide up the
total market (market segmentation), choose the best segments (market targeting), and
– Design strategies for profitably serving chosen segments better than the competi
tion (market positioning).
Market segmentation is the process of dividing a market into distinct groups of
buyers with different
needs, characteristics, or behavior who might require separate products or marketing mixes.
Market targeting is the process of
evaluating each market segment's attractiveness and selecting one
or more segments to enter.
Market positioning is arranging for a product to occupy a clear distinctive and desirable place r
elative
to competing products in the minds of target consumers. In positioning a product, a company
First needs to identify possible competitive advantages upon which to build the position. To gai
n
Competitive advantage, the company must offer greater competitive advantage to the target
Segment.
C. Developing the Marketing Mix
Once the company has decided on its overall competitive marketing strategy, it is ready to
begin planning the details of the marketing mix. The marketing mix is the set of controllable
Marketing variables that the firm blends to produce the response it wants
in the target market. The (SEE ACTIVITY TASK ON PAGE 55)
Marketing mix consists of everything that the firm can do
to influence the demand for its product.
These variables are often referred to as the "four (4) Ps.
1). Product stands for the "goods-and-service" combination the company offers to the target-
Market.
2). Price stands to the amount of money customers need to pay to obtain the product.
3). Place stands for company activities that make the product available to target consumers.
36
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

4). Promotion stands for activities that communicate the merits of the product and persuade
target consumers to buy it.
An effective marketing program blends all the marketing mix elements into a
coordinated
program designed to achieve the company's marketing objectives by delivering value to
consumers.
Some critics feel that the four (4) P’s omit or underestimate certain important activities.
– "Where are services?" they ask.
– "Where is packaging?"
– The 4 Ps seems to take the seller's view rather than the buyer's view.
– Perhaps a better classification would be the four (4) Cs:
1) Product = Customer Solution.
2) Price = Customer Cost.
3) Place = Convenience.
4) Promotion = Communication
D. Managing the Marketing Effort
The company wants to design and put into action the marketing mix that will best achieve its
objectives in target markets. This involves four marketing management functions. The four
functions are analysis, planning, implementation, and control.

Lesson 1.2: The Marketing Process

Marketing is an ongoing business process that consists of four distinct stages which are analysis,
planning, implementation, and control.

1. Analysis – entails the gathering qualitative and quantitative date the company’s
products and possible markets
2. Planning – involves constructing strategies that put into action to attain results in the
target market.
3. Implementation – the success of failure depends on the work prepares in the analysis
and planning stages.
4. Control - company needs to be responsive of changing market conditions, competitors
and customers and fine-tune the marketing strategies for that reason.
a. Marketing Analysis:
Marketing analysis involves a
complete analysis of the company's situation. The company performs

37
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

analysis by Identifying environmental opportunities and threats. Analyzing company strengths a

nd weaknesses to
determine which opportunities the company can best pursue. Feeding information
and other inputs to each of the other marketing management functions.
b. Marketing Planning:
Within each business unit, functional plans must be prepared, including marketing plans.
Such plans include marketing plans which are aggregate plans consisting
of plans for product lines, brands, and markets.
Marketing planning involves deciding on marketing strategies that will help the company to
attain
its overall strategic objectives. A detailed plan is needed for each business, product, or brand. A
product or brand plan should contain the following sections:
• executive summary, • marketing strategies,
• current marketing situation, • action programs,
• threats and opportunity analysis, • budgets, and
• objectives and issues, • controls

Contents of Marketing
1. Executive Controls summary – The opening section
of the marketing plan that presents a short summary of the main goals and recommendations
to be presented in the plan.
2. Current marketing situation – The section of a marketing plan that describes the
target market and the company's position in it. The current marketing situation is the section of
a marketing plan that describes the target market and the company's position in it.
(SEE ACTIVITY TASK ON PAGE 55)

Important sections include:

1). A market description.
2). A product reviews.
3). Analysis of the competition.
4). A section on distribution.
3. Opportunities and Issues Analysis- This section requires the marketing manager to
look ahead for threats and opportunities that the product(s) might face. A company
marketing opportunity would be an attractive arena for marketing action in which the
company would enjoy a competitive advantage. In the threats and opportunities
section, managers are forced to anticipate important developments that can have an
impact, either positive or negative, on the firm.
4. Objectives - Objectives should be stated as goals the company would like to reach

38
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

during the plan's term.

5. Marketing strategy - The marketing logic by which the business unit hopes to achieve
its marketing objectives. Marketing strategy consists of specific strategies for target
markets, marketing mix and marketing expenditure level.
6. Action programs - This section sets out what will be done, when, by whom and how
much will be spent doing it.
7. Projected profit-and-loss statement - The marketing budget section of the plan
shows projected revenues, costs, and profits/surpluses.
8. Controls - This last section outlines the control measures that will be used to monitor
progress. Goals may be set out weekly, monthly, quarterly, annually or for all such
periods. Following evaluation of results, actions are recommended and implemented in
the next period.
c. Marketing Implementation:
Marketing Implementation is the process that turns marketing plans into marketing actions in
order to accomplish strategic marketing
objectives. Whereas marketing planning addresses the and
"why" of marketing
activities, implementation addresses the "who", "where", "when", and "how".
One firm can have essentially the same strategy as another, yet win in the market-
place through
faster or better execution.
Marketing Department Organization
The company must design a
marketing department that can carry out marketing analysis, planning,
implementation, and control. Formats for organizing the department include:
1). The functional organization where different marketing activities are headed by a
functional specialist (such as a sales manager, advertising manager, etc.).
2). The geographic organization where sales and marketing people are assigned to
specific countries, regions, or districts.
3). A product management organization where a product manager develops a complete
strategy for a product or brand. Today, many firms are shifting to customer equity
management
where customer profitability is important.
4). A market or customer management organization where a specific market plan is
developed for each specific market or customer.
5). A combination plan where large companies many times combine elements of any of the
Above.
d. Marketing Control

39
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Marketing control is the process of measuring and evaluating the results of marketing
strategies and pans, and taking corrective action to ensure that marketing objectives are
attained implementation requires four (4) steps:
1. Set specific goals (What do we want to achieve?)
2. Measure performance (What is happening?)
3. Evaluate performance (Why is happening?)
4. Take corrective action (What should we do about it?)
Two (2) broad forms of control are important:
1). Operating control involves checking ongoing performance against the annual plan and
taking corrective action when necessary.
2). Strategic control involves looking at whether the company's basic strategies are wellmatche
d to its opportunities.
The major tool for accomplishing this form of control is the marketing audit.
The marketing audit is a comprehensive, systematic, independent, and periodic examination of
a company's environment, objectives, strategies, and activities to determine
problem areas and opportunities. The purpose is to recommend a plan of action to improve the
company's marketing performance.
1) The marketing plan covers all major marketing areas of a business, and not just trouble
spots.
2) If done correctly, the audit is normally conducted by an objective and
experienced outside party who is independent of the marketing department.

(SEE ACTIVITY TASK ON PAGE 55)

Lesson 1.3: SWOT Analysis

The SWOT Analysis is a toll used in strategic planning to identify and ultimately prioritize the
organization’s strength, weaknesses, opportunities, and strength. The process involves a
brainstorming session where participants create a list for each of these areas based on
previously gathered data and information. SWOT is an analytical framework that can help a
company face its greatest challenges and find its most promising new markets.
1. Strength represent those specific characteristics of the business that offer an advantage
over its competitors.
2. Weaknesses are characteristics that limit performance and could represent an obstacle
in achieving objectives,
3. Opportunities include external conditions that could help improve performance of that
takes capitalized upon be of exploited

40
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

4. Threats indicate external conditions and situations that could hinder performance, so
ways of defending against than
5. Then be explored.
A SWOT analysis can offer helpful perspectives at any stage of an effort. You might use it to:
• Explore possibilities for new efforts or solutions to problems.
• Make decisions about the best path for your initiative. Identifying your opportunities for
success in context of threats to success can clarify directions and choices.
• Determine where change is possible. If you are at a juncture or turning point, an
inventory of your strengths and weaknesses can reveal priorities as well as possibilities.
• Adjust and refine plans mid-course. A new opportunity might open wider avenues, while
a new threat could close a path that once existed.
SWOT also offers a simple way of communicating about your initiative or program and an
excellent way to organize information you've gathered from studies or surveys.
A SWOT analysis focuses on Strengths, Weaknesses, Opportunities, and Threats.
Remember that the purpose of performing a SWOT is to reveal positive forces that work
together and potential problems that need to be recognized and possibly addressed.
SWOT analysis, which may be appropriate for a larger initiative that requires detailed planning.
This "TOWS Matrix" is adapted from Fred David's Strategic Management text.

(SEE ACTIVITY TASK ON PAGE 55)

This example also illustrates how

threats can become opportunities (and
vice versa). There are several formats
you can use to do a SWOT
analysis, including a basic SWOT
form that you can use to prompt
analysis, but whatever format you use,
don't be surprised if your strengths and
weaknesses don't precisely match up to
your opportunities and threats.

41
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

LISTING YOUR INTERNAL FACTORS: STRENGTHS AND WEAKNESSES (S, W)

Internal factors include your resources and experiences. General areas to consider:
• Human resources - staff, volunteers, board members, target population
• Physical resources - your location, building, equipment
• Financial - grants, funding agencies, other sources of income
• Activities and processes - programs you run, systems you employ
• Past experiences - building blocks for learning and success, your reputation in the community

Don't be too modest when listing your strengths. If you're having difficulty naming them, start by simply
listing your characteristics (e.g.., we're small, we're connected to the neighbourhood). Some of these will
probably be strengths.

Although the strengths and weakness of your organization are your internal qualities, don't
overlook the perspective of people outside your group. Identify strengths and weaknesses from
both your own point of view and that of others, including those you serve or deal with. Do others
see problems--or assets--that you don't?

How do you get information about how outsiders perceive your strengths and weaknesses? You
may know already if you've listened to those you serve. If not, this might be the time to gather
that type of information.

LISTING EXTERNAL FACTORS: OPPORTUNITIES AND THREATS (O, T)

Cast a wide net for the external part of the assessment. No organization, group, program, or
neighborhood is immune to outside events and forces. Consider your connectedness, for better
and worse, as you compile this part of your SWOT list.
Forces and facts that your group does not control include:
• Future trends in your field or the culture
• The economy - local, national, or international
• Funding sources - foundations, donors, legislatures
• Demographics - changes in the age, race, gender, culture of those you serve or in your area
• The physical environment (Is your building in a growing part of town? Is the bus company
cutting routes?)
• Legislation (Do new federal requirements make your job harder...or easier?)
• Local, national, or international events
The most common users of a SWOT analysis are team members and project managers who are
responsible for decision-making and strategic planning. But don't overlook anyone in the creation stage!
An individual or small group can develop a SWOT analysis,
A SWOT analysis is often created during a retreat or planning session that allows several hours
for brainstorming and analysis. The best results come when the process is collaborative and
inclusive.

42
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

I N S U M M A R Y - A realistic recognition of the weaknesses and threats that exist for your
effort is the first step to countering them with a robust set of strategies that build upon
strengths and opportunities. A SWOT analysis identifies your strengths, weaknesses,
opportunities, and threats to assist you in making strategic plans and decisions.

Lesson 2: MARKETING PLAN

The Marketing Plan
• For your summative you and a group of 4 will be building a marketing plan
– The summative is worth 15 % of your mark
– The written exam will also be worth 15%
• The summative will be “hands on” marketing
– The exam will be marketing theory
• You will be marked on:
– Creativity & Realistic Ideas
– Supporting your ideas to the class material
– The individual contribution that you have brought to your group.
The Marketing Plan
• The Marketing Plan is a written report on your group’s marketing objectives for your
product/service
• This report will show the reader, step-by-step, what you feel needs to be done to make your
product/service successful.
The Marketing Plan
The report will be broken up into several sections
1) Executive Summary
2) Company Description
3) Vision, Mission, and objectives Market Overview
4) Market Analysis (SWOT)
5) Marketing Strategies (4P’s)
6) Matrix of marketing activities
Format: Objectives Strategies Person/s Involved Time Frame Key Performance Indicator
7) Appendices
The Executive Summary
• This will be the first page of your report, but....
• .... This will be the last part you will complete
• The executive summary will be a “Cole’s Notes” version of your entire report
– It will include highlights from the entire report
• A one-page summary of your marketing plan

43
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

• Includes your vision, mission & goals for your product/service.

Business Description
• This will be the section of the marketing plan that will introduce your product/service and
explain what you are selling
• You will introduce your
– Company & Brand Name
– Your Team Members
• Titles & Responsibilities
• A full description of your product/service and what needs/wants are being satisfied
• A brief introduction to you target market.
Market Overview
• This section can also be titled “Competitor Analysis”
• Your group will analyze the market that you are about to enter
– Who are your competitors (indirect/direct)?
• You will analyze each competitor (weaknesses & Strengths)
• Explain how you are going to position your product/service compared to your competition.
Market Analysis
• This section will include a lot of information from your market research.
• You will have collected primary and secondary research on your idea, as well as your entire
market.
• What demographics were considered and ultimately, what segment of the population did
you chose for your target market.
• Include the strength and weaknesses of your product/services and organization plus
strength and weaknesses.
Marketing Strategies (4P’s)
• You will take the reader through the 4 P’s for your product/service completely that
corresponds to the Product Life cycle
• This will be the longest section of your report by far
Price
• How are you choosing to price your product/service?
• What strategies are you implementing?
– Market Skimming, Psychological Pricing, etc.
• What do you expect your Break-Even # to be?
Place (Distribution)
• Where will your product/service be available to your consumers?
• What distribution strategy will you employ?
– Direct, Online, Wholesale, etc.
• Are there any distribution concerns that your group must consider?

44
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Product
• A description of the product/service that your group has created
• Details on the product design, package, contents, etc.
• How is your product/service unique?
– What is your Competitive Advantage over the competition?
Advertising and Promotional Campaign
• You are required to come up with an advertising campaign (not just one advertisement)
– This will include a print advertisement and possible other advertisements (TV and
radio commercials, billboards, etc.)
What promotions will you employ? (SEE ACTIVITY TASK ON PAGE 56)
– Free Samples, sales, coupons, etc.
• How will you manage your PR?
– Sponsorships, charities, events, etc.
• What trends will you take advantage of?
– Green, Social Networking, Brand Engagement
• What will be your logo and slogan?
– Why do you feel these are good for your marketing communications?
Appendices
• The last section of the marketing plan will be the appendices
• This section will include any pictures/objects that are not in text form for you to refer to in
the actual written report
• Things like:
– Charts, Graphs, Position Maps, Logos, Advertisements, Story Boards, Surveys,
Product Designs, Packaging Specs, Mathematical Calculations, etc.
Matrix of Marketing Activities
Follow the given format in a matrix form and provide objectives that will serves as your
• Take the reader through your choice of media
– Why specific media was chosen
• Explain the benefits of your advertising and promotional campaigns
• Explain the reasoning for the content of your advertisements
– Consumer Motivation, Buying Process
• Example
– Report: The Mustang Market will be targeting students that are new to BCI and are
involved in clubs and sports. The survey completed indicated that most of these
students would shop at the Mustang Market at least twice a month. Refer to
Appendix A for a breakdown of the different demographics.

45
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Appendix A
School Involvement
School Involvement

Grade 9
Grade 10
Grade 11

(SEE ACTIVITY TASK ON PAGE 56)

• Example
– Report: The choice for the Mustang Market’s logo will be two
horseshoes, both turned upside down, to make an M. The logo
will have a mustang decked out in spirit wear.
(See appendix B)
Appendix B:
• I expect you and your group to
– Type the report
– Double Space the Report
– Reference any material from books/internet
– Put every Section Under Headings
– Include a Title Page
– Include a Table of Contents

FIRST QUARTER 1ST SEMESTER

TEST YOURELF

Lesson 1 Activity: Marketing Principles and Strategies

1) What makes the business idea work?
2) Why are some products a huge success and similar products a dismal failure?
3) What can individuals do for themselves that would be considered marketing?
4) Why study marketing?
5) Explain the five (5) goals of marketing.
6) Explain the role of marketing plays in individual firms and in a society as a whole?
7) Value is at the center of everything marketing does, what does value mean? Eplain.

46
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Lesson 1.1 Activity: Marketing Principles and Strategies

1) “Marketing starts with consumers and ends with consumers.” Explain.
2) Assume you are about to graduate. How would you apply marketing principles to your
job search?
3) In what ways would you be able to create, communicate, and deliver value as a
potential employee?
4) What is the difference between a need and a want? How do marketers create wants?
Provide several examples.
5) One of your friends is contemplating opening a coffee shop near your college campus.
She seeks your advice about size of the prospective customer base and how to market
the business according to the four Ps.
6) What strategies can you share with your friend to assist in launching the business?
7) Think about the last time you ate at McDonald’s/Jollibee. Evaluate your experience
using the personal value equation.
8) The marketing concept emphasizes satisfying customer needs and wants. How does
marketing satisfy your needs as a college student?

Lesson 1.2 Activity: Customer Relationship

1) Define the concept of customer lifetime value.
2) Explain why customer relationship building is a central purpose of marketing.
3) Explain engagement marketing and how it alters a customer’s relationship with a brand.
4) Why Marketing strategy uses customer relationship management to help organizations?
5) Describe the role of marketing in building and managing customer relationships.

Lesson 1.3 Activity: Market Opportunity Analysis and Consumer Analysis

Answer the ff. in a clean piece of paper.

I. Answer the ff. Market Segments According

to Generation: Traits and Characteristics

II. Strategies use to Target the Different

Generational Segments

47
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Lesson 2 Review Exercise: Strategic Marketing versus Tactical Marketing

Answer the ff. in a clean piece of paper.
1. What is market opportunity analysis?
2. How to identify unmet and/or undeserved customer needs?
3. How to identify the most attractive customers?
4. How to assess your competitive advantage?
5. How to assess your resource needs?
6. How to assess the market readiness of technology?
7. How to craft an opportunity story?
8. How to assess the market opportunity’s attractiveness?

Lesson 2 Activity: Strategic Marketing versus Tactical Marketing

I. Answer the ff. questions.
1) You are interviewing for an internship. Create a value proposition for yourself that you may
use as your thirty-second “elevator speech” to get the company interested in hiring you or
talking to you more.
2) Give an example and explain how a corporation that wants to help protect the environment
can do so at its corporate, business, and functional levels.
3) Why a company may develop different value propositions for different target markets.
4) Marketing Strategy? 8) Target Market?
5) Marketing Tactics? 9) Buying Power?
6) Marketing? 10) Marketing Concept
7) Marketing Process?
______________________________________________________________________________

Lesson 2.1: Marketing Environment

Motivation Exercise: Create a video and enact the customer service representative (50 pts.).
➢ Tips: 7 steps to creating the ultimate customer service strategy. ...
1. Establish your vision for great customer service. ...
2. Ask your customers what they want and need. ...
3. Hire the right employees. ...
4. Set lots of goals. ...
5. Train your staff. ...
6. Make sure everyone is held accountable. ...
7. Reward exceptional customer service.

48
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Lesson 2.1 Activity: Marketing Environment

Student task:
1) The internal marketing environment refers to INSIDE the organization itself, to help design
an appropriate marketing strategy based upon the position and resources of the firm.
When analyzing the internal marketing environment, we would consider resources,
capabilities, corporate culture, management style and leadership, track record of success,
current strategy, and so on.
– However, it is often common that firms neglect an internal marketing environmental
analysis and instead focus on the microenvironment almost exclusively. The
microenvironment consists of consumers, competitors, suppliers, distributors – the players
that make up the industry in which the firm competes. Marketing strategies tend to be built
around consumer needs and competitors – but is this the right approach??? Explain your
answer.
2) In your opinion, to what extent does the firm’s marketing strategy need to be based upon
the firm’s internal environment?
3) Why do you think firms tend to focus more heavily on the microenvironment to structure
and design their marketing strategy?
4) If firms rely solely upon the microenvironment for their marketing strategy development,
with this mean that all firms would end up very similar marketing strategies?
5) How a company's customers influence its marketing strategy? Explain.

Lesson 2.2 Activity: The Marketing Research

Practice Application (50 pts.)
1.) Prepare 10 quantitative research method questions regarding to your business. (create a/or
use existing business you like, Example: bakery, clothing line, or milk tea shop etc.)
2.) Survey your prospective customer (ask) using your questionnaires. (minimum of 10
prospective customer) use the Likert Scale (research on this)
3.) Analyze and organize your data in a clean piece of paper. (How many answered in number 1
to 10 using the Likert Scale.)

Lesson 2.3 Activity: Consumer and Business Markets

1. You have collected data from the survey.
2. Conduct a simple research paper about the business you made, apply 4 P’s and the lesson
you have studied to your research.
Report format:
1) Title of the Business 4) Solution
2) Introduction of the business 5) Recommendation
3) Statement of the Problem 6) Conclusion
______________________________________________________________________________

Lesson 3 Activity: Buying Behaviour

49
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

1) How do low-involvement decisions differ from high-involvement decisions in terms of

relevance, price, frequency, and the risks their buyers face? Name some products in each
category that you’ve recently purchased.
2) What stages do people go through in the buying process for high-involvement decisions?
How do the stages vary for low-involvement decisions?
3) What is post purchase dissonance and what can companies do to reduce it?
4) Why do people’s culture and subcultures affect what they buy?
5) What purchasing decisions have you been able to influence in your family and why?
6) Is marketing to children a good idea? Why?
7) Using Maslow’s hierarchy of needs, identify a list of popular advertising slogans that appeal
to each of the five levels.
8) Identify how Jollibee targets both users (primarily children) and buyers (parents,
grandparents, etc.).
9) Provide specific examples of strategies used by the fast-food marketer to target groups.
10) Make it a point to incorporate Jolly Kiddie Meal and Jolly Super Meal/Value Meals into your
discussion.

Lesson 3.1 No Activity: Review your lessons for the upcoming exam. Relax for
the meantime.

Lesson 3.2 Activity: Marketing Segmentation, Market Targeting, and Market

Positioning (STP)
1) Think of a product or service that one of you purchased recently. How might you go about
developing a customer profile for the product? List the sources you would use.
2) Describe a product you like that you believe more people should use. As a marketer, how
would you reposition the product to increase its use? Outline your strategy.
3) Think of an idea for a new product or service. Who would be the target market(s) and how
would you position your offering?
4) What factors does a firm need to examine before deciding to target a market?
5) Which of the segmenting strategies discussed in this section is the broadest? Which is the
narrowest?
6) What buyer characteristics do companies look at when they segment markets?
7) Why do firms often use more than one segmentation base?
8) What two types of information do market researchers gather to develop consumer insight?
9) How is technology making it easier for firms to target potential customers?
10) Why marketers use some segmentation bases versus others.

50
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

SECOND 2ND QUARTER SECOND 2ND SEMESTER

TEST YOURSELF

Lesson 1 ACTIVITY: What is the Marketing Mix?

1. The two steps when developing a marketing strategy includes identifying a
_________________ ___________________ and developing a marketing mix.
2. A firm’s marketing mix consists of four elements including price, ______________,
promotion and product.
3. The product life cycle consists of the following stages:
• Introduction • ________________
• Growth • Decline
4. The three main roles of a promotional strategy involve informing the target market,
persuading them and __________________ the intended audience of the company’s
product/service/event.
5. _____________ is defined as determining the best methods to be used so customers are
easily able to locate, obtain, and use the products/services/events of an organization.
6. What features must the product have to meet the client’s needs?
7. What does the client want from the service or product?
8. What are the customers’ perceived product values?
9. Do you think that the slight price decrease could significantly increase the market share?, and
why?
10. What kind of stores do potential clients go to?

Lesson 1.1 ACTIVITY Marketing Action Plans

Questions Use When Anchoring a Sale, to anchor a prospective client such as the uniform
retailer, answer the following questions.
Today:
1. Tell about some of the processes are using. How do they work?
2. Why do have that number of salespeople?
3. What sort of things are doing to improve sales or turnover?
Problem:
4. What problems are having in the company (i.e. with the sales)?
5. What management problems are having personally?
6. What management problems are having as a team?

51
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

Affect:
7. How are people handling these problems?
8. What's the atmosphere like in the company/team?
9. How consistent company’s sales?
10. What's your turnover of people?
Performance:
11. How is the performance of the sales team, given these problems?
12. With sales being down, how are things affected?
13. What sorts of things are helping company sales team perform better?
14. Give an example of sales promotional and explain why?
15. Give an example of selling and explain why?

Lesson 1.2: Five + (5+) P’s Strategy

Activity/Task:
Possible Strategy A
1) Offer a unique range of high-quality pizzas
2) Use unusual ingredients (with choices such as oysters, kangaroo, avocado)
3) Create innovative and unique pizza tastes
4) Set new standards for pizza restaurants.
Possible Strategy B
1) Create a fun and exciting dining experience
2) The restaurant should look and feel like a café in Italy
3) Employ fun, outgoing, and energetic staff
4) Probably have a large outdoor dining area as well
Possible Strategy C
1) Offer a very convenient service
2) Aim to become the “McDonalds” of pizza by offering very fast service (pizzas ready in 5
minutes and home-delivered inside 20 minutes)
3) Mainly take-away and delivery options
Possible Strategy D
1) Become the discounters of pizza
2) Focus on operating a very lean and efficient business and compete mainly on price and
always undercut the competition
3) Have a ‘value’ based positioning focus.

Lesson 1.2: QUESTIONS:

1) Which of the four strategic options suggested would be the most effective in competing
in this market?
2) For the strategy that you selected in Q1, develop an appropriate marketing mix (for
example, what products should they offer, at what quality, with what ingredient
choices, and so on). You should either use the 4Ps or the 7Ps, whichever one you believe

52
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

is more suitable, (but ensure that your marketing mix will effectively deliver the
proposed strategy).
3) Do you think that this new pizza chain, as you have constructed it, will be successful?
Why?

CHAPTER 5
MANAGING THE MARKETING EFFORT
(THE MARKETING PROCESS)
Lesson 1: Market Analysis
ACTIVITY: Explain the 10 Reasons Why Marketing is Important and Why Business Really Do
Need It?
1) Marketing Is an Effective Way of Engaging Customers.
2) Marketing Helps to Build and Maintain the Company’s Reputation.
3) Marketing Helps to Build a Relationship Between a Business and Its Customers.
4) Marketing Is a Communication Channel Used to Inform Customers.
5) Marketing Helps to Boosts Sales.
6) Marketing Aids in Providing Insights about Your Business.
7) Marketing Helps Your Business to Maintain Relevance.
8) Marketing Creates Revenue Options.
9) Marketing Helps the Management Team to Make Informed Decisions.
10) Why Is Marketing Important in Beating Your Business Rivals?

Lesson 1.2: The Marketing Process

ACTIVITY: Fill each of the Four (4) P’s that need to be considered in detail.

Product Price Promotion Place

1.) 1.) 1.) 1.)
2.) 2.) 2.) 2.)
3.) 3.) 3.) 3.)
4.) 4.) 4.) 4.)
5.) 5.)
6.) 6.)
7.) (ex. discount)

Lesson 1.3: SWOT Analysis

53
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

ENRICHMENT AND ACTIVITY:

1. Answer the following SWOT analysis questions regarding a business or company.

2. Answer the ff. questions.

1) What is a SWOT Analysis?
2) Why should you use one?
3) When do you use SWOT?
4) What are the elements of a SWOT Analysis?
5) How do you create a SWOT Analysis?
6) How do you use your SWOT Analysis?

Lesson 2: MARKETING PLAN

ACTIVITY TASK:
FINAL OUTPUT: ORGANIZE YOUR OWN BUSINESS MARKETING PLAN.
1) Executive Summary
2) Company Description
3) Vision, Mission, and Objectives Market Overview
4) Market Analysis (SWOT)
5) Marketing Strategies (4P’s)
6) Matrix of marketing activities
Format: Objectives Strategies Person/s Involved Time Frame Key Performance Indicator
7) Appendices
8) Curriculum Vitae (CV)

^_^ GOOD LUCK!!! ^__6

TO GOD BE,
ALL THE GLORY,
HONOR,
AND PRAISE
FOREVERMORE!

54
 PRINCIPLES OF MARKETING 1
St. Ignatius Technical Institute of Business and Arts

55