Learning Module in Principles of Marketing 12-ABM

INTRODUCTION

About the Module

Any individual or organization that voluntarily decides to purchase goods and/or services
from other individuals or organizations is referred to as a customer. In these transactions,
money is oftentimes used as an exchange for the value that the customer receives through
the good and/or service acquired. Through these exchanges, business organizations are
able to cover operating expenses and generate profits. Multiple and repeat purchases keep
businesses operating profitably.

How to join the VSMART?

1) Install VSMART application or visit the website:

school.vsmart.ph
2) Log in your given username and password
3) Go to your scheduled lesson

Customer Relationship: Customer Service

Module Objectives

By the end of this module, learners are expected to:

 distinguish between strategic and marketing planning in terms of objectives and

processes (ABM PM1 1-le-i-9);

 analyze the elements of macro- and micro-environment and their influence to

marketing planning(ABM PM11-le-i-100);

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  define marketing research, its importance to a business enterprise and identify the
steps in marketing research (ABM PM11-le-i-11);

 describe the consumer and business markets (ABM PM11-le-i-12);

 differentiate the buying behavior and decision making of individual/ household

customer versus the business (organizational) customer (ABM PM11-le-i-13);

 identify and segment market for a product or service(ABM PM11-le-i-14); and

 select the appropriate target market segment and its positioning (ABM PM11-le-i-15).

Module1: The Strategic Marketing Process

The strategic marketing process includes plans to reach specific goals/objectives.

Step 1: Mission identification
Step 2: Situation analysis
Step 3: Objective setting
Step 4: Marketing strategy development
Step 5: Strategy evaluation and control

The tactical marketing process determines the

means or tactics to implement the strategies.

The Tactical Marketing Process

The tactical marketing process involves the identification of specific activities, timetables,
responsibilities, and budgets and their implementation.

The objective is to ensure that the strategies are implemented successfully.

Step 1: Marketing Strategies

Step 2: Action Plans/Tactics
Step 3: Marketing Activities
Step 4: Activity Timetables
Step 5: Responsibility/Accountability
Step 6: Activity Budgets
Step 7: Monitoring and Control

The Marketing Environment

The Marketing Microenvironment

The marketing microenvironment includes forces that are internal to the company or those
that are relevant to its operation. It is composed of the company itself, its suppliers, market
intermediaries, customers, competition, and its various publics. The consideration of these
is important as they affect the company’s ability to build and maintain sustainable
relationships with current and prospective customers.

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The Company
Marketing cannot function in a vacuum as
marketing decisions must always be
aligned with the organization’s goals and
strategies.

Marketing may be the “lifeblood” of an

organization, but it cannot exist
independently of other organizational
functions. These functions include
research and development, finance,
operations, and human resources.
Recognition of the importance of these
functions is essential for marketing.

Suppliers

Suppliers provide raw materials, utilities, labor, capital, and

equipment.

The availability and prices of supplies should be monitored.

Effective partnership or relationship management with
suppliers is essential. The of suppliers performance can
directly impact an organization’s ability to continuously
satisfy its consumers.

Customers

Customers can either be customers or end-users,

businesses, or organizations.

Customers create the demand for products and services.

Companies must attract and maintain customers through
products and services that meet and exceed customer
expectations.

Competition
The demand for company’s products and services is
affected by the nature and intensity of competition.

Knowing a competitor is critical to the success of

the firm. Monitoring the movements of competitors
essential because is competition is not static and is
very volatile. Competitors may introduce new
and/or improved products in the market.
Competitors actively implement price changes and
launch advertising and promotional campaigns.

Publics
Publics may include any individual or entity
with an actual or potential interest in the
company and its products or services. These
include the shareholders, community,
financial institutions, media, the
government, and society.

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An organization’s publics can affect the competitiveness of the company, and to some
extent, pose a threat to its survival.

The Marketing Macroenvironment

The marketing macroenvironment refers to the economic, po1itical-legal, socio-cultural,
demographic, technological, and natural environments that can directly affect an
organization.

Although there are many, only the factors that are directly relevant are considered. The
factors that indicate some level of uncertainty and may affect the organization (depending
on the business nature and product or service offering) are evaluated.

Economic Macroenvironment
The economic macroenvironment represents
economic factors that can directly affect an
organization.

The economic macroenvironment represents

economic factors that can directly affect an
organization. Examples of economic
macroenvironment are inflation rate, foreign
exchange rates, consumer spending shifts,
and consumer price index, among others.
Economic significant because factors are they
indicate the cost of doing business as well as
consumer buying power.

Political-legal Macroenvironment
The political-legal macroenvironment
includes both political and legal
factors.

A highly uncertain political situation,

such as an impending national
election, may affect the stability of
businesses. Anew administration may
have different economic and monetary
priorities and may favor a divergent
legislative agenda. Political unrest may
lead to government instability. This will
always cause economic business and
uncertainty.

Sociocultural Macroenvironment

Each geographical area has a specific culture

that dictates how business is conducted.

The most evident result of Philippine colonial

history is colonial mentality. All things being
equal, Filipinos tend to prefer products
manufactured by certain countries (such as
the United States, Japan, and some countries
of the European Union) over products
manufactured locally.
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There are a few sociocultural traits of Filipinos that have been monitored and exploited by
companies doing business in the Philippines. Fortunately, the sociocultural
macroenvironment is not as volatile as the economic and political –legal macroenvironment.
A country’s culture hardly changes over time, and may sometimes require several
generations to alter substantially.

Demographic Macroenvironment

A company’s demographic
macroenvironment consists of changes in
population characteristics.

Population characteristics include

population rate, gender, age, income
composition patterns, civil status, and
family size. Population increase rates can
be particularly beneficial for mass
marketing efforts.

Technological Macroenvironment

The technological macroenvironment is

composed of current and impending
technological change.

Technological macroenvironment is single factor

can cause the rapid acceleration or bring about
the untimely demise of products, services, or
companies.

Natural Macroenvironment
The natural macroenvironment refers to natural
resource inputs and environmental concerns.

The uncontrolled use of finite natural resources

including fossil fuel in organizational activities
has heightened concern for the sustainability of
the natural environment.

Other equally pressing are pollution, global

warming, and the rampant denudation of forests.
Although legislation is in place, the preservation
of the natural environment is a major factor to
consider in a company’s activities.

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 Market Research
Marketing research is a function under a business
organization’s Marketing Information (MkIS).

System MkIS is primarily responsible for the

gathering, analysis, and timely distribution of
information for the use of marketing decision
makers.

Marketing research is the function responsible for

acquiring and evaluating market and consumer-
based information for decision making and the
determination of marketing direction.

Some large companies maintain in-house marketing research, while others engage the
services of independent marketing research firms on a project basis. A number subscribes
to syndicated marketing research reports (such as reports prepared by IMS Health
Holdings, Inc. for the pharmaceutical industry).

The Purpose and Importance of Marketing Research

Although marketing research can be costly, it is indispensable. The following are some of
the issues that can be addressed by marketing research:
 Identify viable new products and services
 Enable risk reduction
 Identify market opportunities and threats
 Determine the level of customer satisfaction
 Pinpoint and anticipate market trends or changes
 Decideonthe best advertising medium
 Pre-test and post-test advertising and promotional campaigns
 Evaluate the results of test marketing
 Evaluate the results of packaging, brand name, and label testing
 Determine consumer price awareness sensitivity
 Undertake and location studies

Steps in the Marketing Research Process

Step 1: Research need determination
Step 2: Problem/opportunity definition
Step 3: Establishment of research objectives
Step 4: Research design determination
Step 5: Information source/type identification
Step 6: Determination of data access methods
Step 7: Data collection forms design
Step 8: Sample size and sampling plan determination
Step 9: Data collection
Step 10: Data analysis
Step 11: Report preparation and presentation

Consumer and Business Markets

Consumer Markets include individuals and/or
households who purchase products and services for
personal consumption.

Consumers normally make purchases in smaller

quantities, due to their tendency to consume products
gradually over a period of time. Moreover, consumers
tend to be more emotional about their purchases. The
purchases are at times impulsive or spontaneous.

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

Step 1: Problem/Need recognition

Step 2: Information search
Step 3: Alternatives evaluation
Step 4: Purchase decision
Step 5: Post-purchase behavior

Consumer Buying Roles

There are five roles individuals may portray in a consumer buying decision:

Initiator — person who initially suggests buying a particular product or service

Influencer – person who tries to convince others of the need for the product/service and
influences the purchase decision.

decider - the person who makes the final decision to purchase or makes the final decision
on any components such as what to buy, how to buy, where to buy, etc.

buyer — the person who makes the actual purchase.

user —the person who actually uses the product/service whether or not he/she was
involved in the buying decision

Organizational Markets

The organizational market is far less in number than

the consumer market, buy less frequently, but in
greater volume.

Organzatonal markets are also widely dispersed geographically. There are three types of
organizational markets:

 Industries are business organizations that purchase goods and services for the
purpose of producing other products and services or for use in their production and
operating processes.

 Resellers are entities that buy goods and services in order to resell them at a profit
(most commonly distributors, wholesalers, and retailers)

 Government comprises of agencies or government units at all levels that purchase

goods and services for the purpose of producing public services or to transfer them to
third parties that need them.

Types of Organizational
Buying Decisions:
 New task involves the purchase of products or services that the organization has
never bought before, or has not purchased for a long period of time
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  Straight rebuy pertains to organizational purchases which have exactly the same
specifications as previously purchased

 Modified rebuy can be a rebuy with some change in specifications

Organizational Buying Roles

 Users — usually initiate the organizational buying process after having identified a
specific need in their department; usually indicate needed specifications for the
supply requirement

 Influencers — individuals within the organization that influence the purchase

decision; their inputs are especially important in specification refinement and in
alternative supplier evaluation

 Deciders — parties who are empowered to make the purchase decision with regards
to product specifications or selection of suppliers

 Approvers — individuals in higher level management who oversee the purchase

decisions of the deciders and buyers and who grant final approval on the purchase.

 Buyers — responsible for the actual purchase; other than making the actual
purchase, buyers may be allowed to negotiate payment and/or credit terms, delivery
arrangements, and in some cases, even supplier selection

 Gatekeepers — are individuals whose positions allow them to screen and/or prevent
supplier representatives and vital product/service information from reaching
participants who perform roles in the organizational buying decision; in some
instances, they may actually implicitly favor one supplier over another

Organizational Buying Process

Step 1: Problem recognition
Step 2: Need description
Step 3: Product/service specification
Step 4: Supplier search
Step 5: Proposal solicitation
Step 6: Supplier selection
Step 7: Purchase order
Step 8: Performance audit

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

Market Segmentation

Market Segmentation is the process of

dividing the market into homogenous parts
or groups.

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Consumer Segmentation Variables

 Geographic pertains to where the population is located.

 Demographic refers to the general characteristics the population.

 Psychographic represent the psychological profile of consumers.

 Behaviorgraphic the segmentation variable most indicative of purchase behavior.

Target Market

After segmenting the market into various homogeneous

parts (or segments possessing similar marketer decides
which part(s)/segment(s) he/she wants to actively
pursue.

The target market of product or service is defined as its

most probable and most logical consumers, and may
likewise be its heaviest consumers.

A company may, for example, decide its product’s target market to be:
“Males and females residing in Metro Manila to income classes who belong to income
classes A, B, and C, single, are between the ages 21 to 30, who are sports-minded and are
looking sports drink that can provide relief after strenuous physical activities.

The target market should ideally be:

 financially capable — must have the financial means to afford the purchase price of
the product/service

 reachable — must be within physical reach to permit product distribution

 homogeneous — must react similarly to specific marketing stimuli

 positioning — the process of communicating the image of a brand into the minds of
stand out in comparison to its competitors

Elements of a Good Brand Position

Unique — A brand must select a position that is not currently occupied by another brand.

Beneficial — The selected position must be perceived by its customers as beneficial.

Credible — Once a brand position is selected, it must ensure that it performs and fulfills
the promise of its position.

Perceptual mapping — This involves the identification of a com petitive brand’s position
using two variables or axes.

Some of the elements to be considered in communicating brand positioning are:

 packaging
 labeling
 selling price
 advertising
 brand endorser
 tagline

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Assessment

Essay
1. In 100-150 words, explain the importance of marketing research to a business
enterprise.

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