Republic of the Philippines

Department of Education
School Division Office of Quezon City
SAN FRANCISCO HIGH SCHOOL
Misamis St., Brgy. Sto. Cristo, Quezon City

WRITTEN REPORT IN
BUSINESS MARKETING

Submitted by:
Sarmiento, Jonas
Alden, Inna Josheil
Balibalos, Claire Marie
Bejoc, Angelica
Cayago, Farah Bianca
Cotic, Maila
Grageda, Lyrra Jorramie
Monte, Ma. Athena Karen
Shin, Na Vee
12 ABM-Aboitiz

Submitted to:
Mrs. Meg Labsan
Subject Teacher
 CHAPTER 2: CUSTOMER RELATIONSHIP
Relational Marketing

 In marketing, there must always be customer satisfaction, no buyer’s

remorse, and consistent repeat purchases.

 The concept of “suki” reflects customer loyalty, a reliable way of

evaluating customer’s satisfaction.

 From exhibit 2-1, as the trial goes up for a new product or service, a
decent level of repeat purchase of product or service can be expected.

 The repeat purchase level also assumes consistency in the marketing mix
elements.

 Relational marketing is not just about good marketing. It will not work if the
product or service is not relevant to the consumers, so product or service
concept needs updating periodically.
Customer Satisfaction and Loyalty

CUSTOMER SATISFACTION CUSTOMER

LOYALTY

 Comes after trial of the  Comes after the repeat

product/service purchase

 A good indicator aside from  A good indicator is the

repeat purchase, is their unwillingness to switch
willingness to buy again as brands when there is an out-
well as to recommend to of-stock situation.
others.
Customer Service: Treating Customers How They Expect To Be Treated

 Companies have often used “Customer Service” as their competitive advantage

in order to attain lifetime customer relationship.

 “We give better service.”

 “Service is our philosophy.”

 It may be better customer service when salespeople welcome customers
to their store and wait for them to ask for assistance.
 Training to change mindset, attitudes and behaviors can make the
difference.
 Companies must not be too eager to give customer service when it may
not be needed in the first place.
 United Airlines, for, instance, launched a highly successful, “Fly Your Wife
Free” campaign (The Misfortune 500,1988).
Barriers to Exit

 Continuous customer patronage however, may not necessarily reflect

customer satisfaction or loyalty.

 The switching cost may force customers to continue doing business with a
firm and temporarily prevent them from supporting competitive brands.
 Examples of Barriers to Exit:

 In the telecom industry, it may cost businesses more money and

effort (and even lost opportunities) just to inform its public of a
change in their telephone numbers.

 In the international trading, an exclusive contract to supply with

penalty clause in case competitive brands are carried, will prevent
a firm from even considering looking for another supplier even if
they are unhappy with the present relationship.

 It is imperative that a firm understands the costs associated with satisfying

needs and wants.

 Otherwise, simply satisfying all customers’ needs and wants without due
consideration to costs will result in a losing operation.
 Examples of Understanding Costs to Satisfy Needs and Wants:

 In the airline industry, tourists would always want bigger legroom,

meals and more luggage weight accommodation even if they
don’t always need them. Not many of them however, would be
willing to pay a higher price associated with upgraded features.
Cebu Pacific Air offers their passengers to pay only for additional
feature they would need.

 In the price-sensitive fast food industry, we see value meals being

offered for Php 49.00, Php 99.00, etc. for many years despite riding
expenses. Fast food companies have to either look for new sources
of supplies or negotiate with existing suppliers to lower their
acquisition cost.
 REMEMBER!

 MARKETING IS THE INTERFACE BETWEEN THE COMPANY AND ITS

CHOSEN MARKET, AND NOT ABOUT SATISFYING CUSTOMERS ALONE

 A company must balance between the need for market shares and their
profit equation.

 A firm can lose profit to gain market share in the short run, but it risks an
unknown profit potential in the future, especially in the highly
unpredictable environment we face today.
 Examples of Balancing Market Shares and Profit Equations:

 Amazon.com was unprofitable at a time. They then used the online

portal to expand from selling books to toys to consumer electronics.
It has innovated and expanded beyond targeting consumers by
allowing its platform to be used by other businesses.
 Most phone manufacturers surround the market with several phone
models to gain more market shares; they do this at the expense of
profitability. On the other hand, Apple’s iPhone has chosen to focus
on its few models with regular upgrades and this has enabled them
to produce their products efficiently and more profitably.
 Marketers must support strong profitable brands and products, and must
also make the hard decision to abandon weak ones which have no
potential to create a long-term relationship with consumers, except to
keep a few as a potential counter-attack defensive strategy.
Four Brand Benefits

 In order to establish a long-term relationship with their customers, firms

must create value based on several benefits since customers’ needs are
multi-faceted.

 The first three (3) benefits are also known collectively as Jobs-to-be-Done
(JTBD), a concept introduced by Harvard Professor Clayton Christensen.
1. Functional Benefit

: A good functional benefit offers a compelling reason to switch preference. This

is done by understanding and contextualizing pain points of customers and
creating features or attributes that remove those pain points.
 Examples:

 Omron launched an electronic blood pressure monitor and has

since sold millions of units even if it is more expensive than the
stethoscope. Omron targeted housewives and those with medical
conditions who want to be empowered to know their blood
pressure reading without depending on doctors, a de facto saving,
considering the cost of each visit to the doctor.

 San Miguel Beer has lemon and apple flavors to attract those who
do not like the bitter taste of beer to attract new category users.
2. Emotional Benefit

: Distinguishes a marketing company from a mere trading company because of

the effort to consider positive feeling provided to the customers, and to create
an emotional connection with the customers.
 Examples:

 In comparing the same product bought as a gift in two department

stores, the one with a Rustan’s gift wrapper imparts a meaning that
the gift recipient is important to the giver because of its premium
association, something that other department stores may not be
able to communicate as well.

 Adding fragrance to clothes make users perceive clothes were

whiter ever when they were not, hence, the manufacturing of a
detergent with added fragrance.
 3. Social Benefit

: The social benefit takes into consideration how customers want to be

perceived by others when using a product or service.
 Examples:

 Consider different brands of vehicles that can bring passengers

from Point A to Point B; using a luxury car like BMW can help the
driver or passenger be perceived to be successful than those riding
average car brands.

 Holding a cup of Starbucks coffee offers the consumers a

sophisticated self-image than holding a cup of low cost coffee.
4. Economic Benefit

: To the consumers, the right price is no more than the perceived value, with the
difference between customer value and customer cost known as surplus.

: Total customer value includes not just product and service, but also the brand
image and personal value.

: Total customer cost includes not jut the amount paid, but also the time and
energy spent.
 Examples:

 Buffet meals offered by restaurant chains now include cross-over

features among company-owned restaurants located beside each
other.

 Senior citizens may prefer smaller community-type malls like

Waltermart and City Malls for better convenience, as big-box stores
and large malls entail a lot of effort to them to exert before getting
to buy what they really need.
 Exhibit 2:2 Four Brand Benefits

Functional Benefit Why should I buy your product or

service?

Emotional Benefit How will I feel when I own and use

the product or service?

Social Benefit How will others perceive me when I

use your product or service?

Economic Benefit Why is your offer priced the way it

is?

Exhibit 2-3: Jobs to be Done of Waters PH

Benefit Jobs to be Done Company Strategies

Functional Make money for the Generous commission per unit. Prompt
Benefit family. commission release. Additional
incentives from sale of direct and
indirect recruits.

Emotional Feel good by being Regular recognition program. Regular

Benefit recognized. meeting/get together with sales
leaders.

Social Benefit Be perceived as Five-star travel that can be posted in

successful by friends social media. A car plan that can be
and families. emulated by both friends and
neighbors.

Economic Start a business with low Buy a start-up kit at Php 399. Attend
Benefit capital and high training. Focus on retailing and
management support. sponsoring, and the company is in
charge of the rest.
The Value of Customers

 The concept of Customer Lifetime Value (CLTV) allows firms to look at

customers not on transactional mode but on relationship mode.

 Looking at a customer from the CLTV lens can guide its customer service
and retention effort.

 This will also guide a firm in determining the Cost of Customer Acquisition
(COCA), or how much they will spend to acquire new customers.
Relationship Development Strategies
 Ways to Develop A Good Relationship with Customers

Customer relations describes the ways that a company will engage with its
customers to improve the customer experience. This includes providing answers
to short-term roadblocks as well as proactively creating a long-term solution that
are geared towards customer success. Customer relations aims to create a
mutually beneficial relationship with the customer that extends beyond the initial
purchase.
1. Technology
: Technology allows you to create unique ways to increase customer service.
Example: Microsoft HoloLens headset by Air New Zealand
2. Value Chain Excellence

: Employees in any company must realize that customer satisfaction is the job
of everybody, and that chain is as strong as its weakest link.
: Employees must know how to be a solution provider for the customers by
meeting or exceeding the customer’s expectations.

: However, having the willingness to serve customers, especially internal ones,

is the most difficult part.

: Departmental processes often reveal their ugly heads when the external
customers start complaining about lack of responsiveness or unacceptable
delays.

Example: A front liner might promise their response within 24 hours but
operations might not deliver the promise for several reasons such as lack of
manpower, inaccessible systems, or even lack of sense of urgency.
 : It is therefore important for marketers to match the buyer and seller process
for a better understanding of what truly delivers good customer satisfaction,
and make customers the center of their decision making.

Exhibit 2-4: Customer Satisfaction Guide Matching Buyer and Seller

Process

In the shown exhibit, the roles of each departments in delivering service is

clearly linked, and any delay or failure to perform the required task by one or
more departments will lead to customer dissatisfaction or worse, customer
loss.
Customer service can be expanded into 3 parts.

1. Pre-transaction- marketing, distribution points, demand forecasting.

2. Transaction- order processing, credit, billing, delivery, product
manual, installation.
3. Post-transaction- warranty, collection, inquiries, after sales service, parts
availability.
2.1 2Is and 5Cs

: There is a fundamental relationship between price and service- the higher the
price is paid; the higher levels of service are expected.

Example: Top hospitals often have higher prices because customers want to
have peace of mind knowing that the hospital has the image of safety,
technology advancement and the best medical doctor.
 Exhibit 2-5: Bad Service Delivery in a Top Hospital
Pre-Transaction:

1. The need for Josiah to follow-up to the hospital for information or a

checklist, like the different types of executive check-up or what to
bring and what to do during an overnight stay.
2. No schedule of procedures is given, and he only received a copy after
insisting on getting one.
Transaction:

3. Upon arrival, the patient was not informed ahead that executive
check-up clients, who pay much more, can go straight to the
admitting section.
4. He was also not given an identification hand tag admission, not even
after joking with one of the nurses that the Josiah might be somebody
else.
5. The same set of questions was asked-medical conditions and the
medicines being taken-when they already have been indicated in the
admission questionnaire (Josiah stopped counting after the 4th time
within 2 hours of admission.)
6. Conflicting instructions were given the previous night on whether he is
allowed to drink water or not for upcoming procedures the next day.
7. The technician for the blood test procedure came over an hour late
the next day. The technician apologized only after being reminded
that the patient had to wake up early for him. (And because of this,
everything else was delayed that day, including Josiah’s scheduled
release from the hospital by 3 hours, causing him to miss an important
meeting.)
Post-Transaction

8. Josiah was asked to return since the urologist who was supposed to visit
him was in a meeting and had 28 patients waiting for him at his clinic.
(This lack of coordination and prioritization can also be seen when a
cardiologist came in apologizing that he just knew of his assignment
moments ago.)
9. Receipts for the professional fees of the doctors have not been
received up to this day.

Like a person’s health, multiple service breakdowns, as in the hospital

case do not just happen overnight. It is usually a result of 2Is, namely Ignoring
and Ignorance. Good execution is about having at least 5Cs, namely: Choice,
Coordination, Commitment, Competition, and Communication.

The hospital’s management should be consistently getting feedbacks

directly from its patients if they wish to remain due to their brand promise.
3. Frontline Excellence

: Happy and empowered employees make happy customers, so there is a

need to look into internal people, processes, policies and practices while
formulating plans for external customers. After all, the internal customers
will be the ones delivering the service and executing the plan to external
customers.
: Service is an attitude.
: Doing a job is not the same as caring for people.
How will you have happy and caring employees?

1. Start from hiring the right people according to competencies and

behavior specified.
2. Reward and recognize them abundantly.
3. Empower them to decide, at least within defined authority level in
order to resolve customer’s dissatisfaction cases quickly and promote
customer’s loyalty and emotional connection.

Customers nowadays are like online activists who post their annoyance
on social media instead of writing complaint letter to the company.
Hence, there is urgency to resolve conflict to promote customer
satisfaction to encourage loyalty and prevent potential problem for the
brand image.

4. In a highly interactive services cape such as salons and restaurants,

members of the wait staff must have good listening skills, know how to
have fun, and have a genuine interest to be around people in the
friendliest and most sincere way.

Example: The human resource department of companies like the Bistro

Group.
 3.1 Underpromise-Overdeliver

: If there is one common rule on marketing, selling and customer service, it

is to never overpromise.

: It is better to under-promise and over-deliver than to over-promise and

under-deliver.
Significant Portions of Customer Service
Pre-Transaction: Marketing and Sales
• Firms must be structured in a way that is consistent with their strategy.
• Structure must come after the strategy and not the other way around.
• The firm’s policies must be marketing-oriented and not self-oriented.
Transaction: Order Processing

• The entry of an order must be accurate and prompt, considering the

firm’s many internal needs for data gathering and analysis.

• Product availability must always be assured, as there can be no

transaction without any product sold.
• Quality of available products must also be assured.

• With accurate projection of demand, production can be scheduled to

optimize inventory levels.

• Distribution points can be arranged and maintained in a way that

responds to the customer’s orders fast enough to meet deadlines.
Transaction: Delivery

• Questions such as “Are deliveries made on time?” and “Did the product
arrive in a satisfactory condition?” must be monitored.

• Consumer-durable product marketers on the other hand, must ask

questions such as “Was it set up or installed properly?” and “Are instruction
manuals readily understandable?”.
• Other areas to look into include appearance and demeanor of their
service crew, as well as knowledge and clarity of their explanation when
customers ask questions about the product.
Example of a promising free delivery: Pizza Hut pioneered the promise to give
the next pizza free delivery within 30 minutes is not achieved from the time
the order was taken. They called this their “Hate Late” insightful campaign.
Transaction: Billing and Collection

• A sale is not a sale until it is collected. Are billings accurate and prompt?
Are collectors courteous?

• Remember that customers are parting with their money and they want to
feel important having given business to the firm.

Example: Insurance companies are extremely efficient on their billing of

premium payments because they make more when the client keeps paying
and not when …
Post-Transaction: After Sales Service
• Customer service is often limited to after sales.

• Services during the pre-transaction stages are often over-looked but are
equally important.

• After sales service involves providing a sensible warranty, ensuring the

availability of parts and service, and maintaining communications with
customers case of injury, complaint or claim.
Example: Universal Robina Corporation’s Feed’s Division.
Exhibit 2-6: Customer Service Improvement Cycle
1. Describe and understand the customer’s need.
2. Identify specific barriers and room for improvement.
3. Prepare and test service standards.
4. Modify and adopt.
5. Monitor and improve.
Applying The 5-Step Cycle in An Actual Situation
SITUATION:

Cashier of a hospital once made a customer wait for 20 minutes to settle

their bills despite the customer giving a advanced notice that the billings be
prepared for fast check-out. This not only made the customer exasperated,
 but it became an even much worse experience for the next 2 people
standing in line.
Could have been done by the accounting or cashier office:
1. Describe and understand the customer’s need.

The hospital could make a simple telephone survey to ask the main
companion of their patients of their dislikes and wish list before focusing on
how many minutes they would be willing to spend in the cashier’s office
without feeling frustrated.

• Another way is to simply observe the number of minutes spent by

customers before they start to follow-up their billings, when they start
looking at their watches repeatedly or when they start raising their voice.
2. Identify specific barriers and room for improvement.

Since the complaint is about their long billing procedures, it was easy for
the hospital to know what to improve provided all employees are instructed
to give immediate feedback to the hospital administrator whenever
complaints occur. Otherwise, the employees might be afraid to report
complaints, as they are associated with “bad news”.

• A visible and ever-present supervisor on the lookout for such customer

irritants would be in the best position to address bottlenecks even before
complains come in.
3. Prepare and test service standards.

Having defined the customer’s need fro quick processing of payments,

systems must be reviewed and bottlenecks be identified. The following service
standards could be adopted:

a. Billings must always be updated at least an hour before standard

checkout time.
b. Customers must not wait for more than 2 minutes to see the final and
detailed amount of their bill.

c. In case the time will be over 2 minutes, the cashier must apologize to the
client, offer a seat in the office, and provide free coffee.

d. A standard greeting by the cashier after the receipt is given to the

customer should be, “Thank you for considering (name of the hospital)”
with a sincere smile.
 4. Modify and adopt.

It is possible that in the interim, a less ambitious goal such as 4 minutes be

used as transaction goal to the final 2-minute waiting time goal. Once
adopted, full compliance must be required as management leniency may
breed employee complacency.
5. Monitor and improve.

Periodic audit of standards must be done. Effort must also be done to

break the 2-minute barrier and improve this to 1 minute, for instance. Service
audit can be conducted not only for the payment waiting time but also for
all steps in pre-transactions, transactions and post-transactions.
Example of periodic auditing standards.

Fast food restaurants like Jollibee and McDonald’s conduct regular

service audits, one of which is to time the duration of each order from the time
an order is taken to the time the order is served. Audits are also done to check
the cleanliness of comfort rooms. They also have a mystery customer program
where the company hires a third party to test its service quality level.
Alternatively, they have a text campaign to report variance in service.
4. Account Segmentation

: Progressive companies segment their clients. The bigger the business, the
higher the support level.
Examples.
• In Shopwise, there is the Elite lane, while SM has their Prestige lane.
• Globe has Platinum customers, while Smart has Infinity customers.

• In business-to-business transactions, account segmentation defines

the service level.

• For instance, partnership marketing for top-tier clients may be

practiced where the engagement with customers is beyond
delivery of what they ordered, and is also focused on helping clients
grow their revenues and profit.
4.1. Partnering Marketing: Strategic Alliances

: Key trade customers and suppliers enter into a strategic alliance to attain some
long-term objectives and mutually improve their position in the industry.

: It implies the sharing of common objectives and the commitment of resources

by both parties.

: The salesperson used to be the only link between the buyer and the seller;
many companies have now added a team selling approach to a strategic
alliance with several members of their staff as links between the buyer and the
seller.
: Exhibit 2-7 shows the transition. The general thrust is “partnership” – whatever is
the partner’s problem is the problem of other party.

Exhibit 2-7: Strategic Alliance Framework

Example of partnering marketing

Unilab has redefined customer service by not only providing free store
design and layout services, but also free leadership training provided to officers
of medical associations. Medical directions of hospitals, which are not
administrators by training, are also provided with adequate business training as
part of their progressive concept of upgraded customer service beyond prompt
delivery. Unilab also helps educate beginning physicians how to increase their
number of patients.
 5. Co- Opetition: Alliances Among Competition

: A variation of strategic alliance is among competition to create value for

the customers. Known as Co-opetition, the aim is to increase the overall
satisfaction of each competitor’s customers, as well as for cost- efficiency.
Example.

Bank of the Philippine Islands (BPI) pioneered the use of ATMs in the
Philippines and has since established ExpressNet. BankNet and Megalink are
consortiums formed by many separate banks to match BPI’s advantage in
offering customer’s convenience through ATM.
Successful Customer Service Strategy in the Philippine Business Enterprise
What is Customer Service?

 Customer service is a provision of service to customer before, during and

after a purchase. A great customer service means that you have
provided good customer service and that service offered has met the
customer’s expectations. Customer service representatives help business
develop strong relationship with their clients and customers, they help
resolve problems and make suggestions regarding the purchase.
The Keys to Have Good Customer Service
 Building good relationships with customers.

 Thanking the customers and promote a positive, helpful and friendly

environment.
 Attentiveness.
 Clear and good conversational skills.
 Time management skills.
 Ability to ‘read’ customers.
 Rustan's Department Store

: They offer different strategies of shopping- before entering the store,

while shopping in the store, and after shopping in the store.
Before Shopping

: Location is always at the center of the city with ample parking and valet
service provided by malls. They provide merchandise deposit and rest rooms.
While Shopping

: Store hours are in accordance to the customer’s expectation of shopping

hours; aisles are wide and comfortable; they have thousands of items to choose
from; shoppers can buy one piece instead of bulk; fitting rooms are comfortable
and etc.
After Shopping

: Gift-wrapping services are provided, with the Rustans’s brand on it, sales returns
are accepted within acceptable norms and packages can be ordered online
and also delivered.
Moments-of-Truth

Rustan’s Department Store is a case of understanding moments of truth

(MOT). It describes the interaction between the customers and firm that allows
the consumer to form impression and good memories from outstanding
customer service they received.
 CHAPTER 3: MARKET OPPORTUNITY ANALYSIS AND CONSUMER ANALYSIS
 External Environment

Conditions, entities, events, and factors surrounding an organization that

influence its activities and choices, and determine its opportunities and risks. Also
called operating environment.

 Buying Behavior

Purchase decision making pattern that is a complex amalgam of needs and

desires, and is influenced by factors such as the consumer's societal role (parent,
spouse, worker, etc.), social and cultural environment and norms, and aspirations
and inhibitions.

 Market Segments

A market segment is a group of people who share one or more common

characteristics, lumped together for marketing purposes. Each market segment is
unique, and marketers use various criteria to create a target market for their
product or service.

Strategic Marketing vs. Tactical Marketing

 Marketing Strategy is commonly referred to as a core strategy. It is

composed of market segmentation, targeting, and brand positioning-
collectively known as STP.
 Marketing Tactics are more popular known as the 4Ps of marketing. They
are put together to influence consumer to buy the company’s brand rather
than the other competitions.
 Strategic Marketing Tactical Marketing

Concept Thought Process (Big Ideas- Taking Action near term (How
Big Picture) to)

Purpose To attain the company’s To execute the strategies

objectives

Activities Understanding the Promoting and selling to the

environment, the industry, consumers
the customers, the
competitions, and the brand

Key Concepts STP (Segmentation-Targeting- Marketing Mix (4Ps for product

Positioning) and/or 7Ps for services.

Timetable Timeless Time-bound

Absence of Too much talking-nothing Blind Action- Doing without

the Other Side gets done! having a plan

Marketing Process
 Marketing Strategy Formulation

It must begin by analyzing external factors of the business, focusing on

seeking opportunities first rather than on the marketing mix. This looks to
environmental analysis, assumptions and capability building that can help its
ability to serve its market.

 Process of Marketing

Marketing Marketing Marketing Marketing

Analysis Planning Implementation Control
  The Marketing Environment

Marketing environment includes the forces outside of marketing, consisting

of macro-environment and micro- environment. For macro-environment, 3
popular frameworks are PESTLE trends, Industry Analysis, as well as Key Factors for
Success. For the micro-environment, a popular framework is the 6Cs.
 Macro Analysis Tool 1
For the Organizational Factors in macro-environment is called PESTLE Trends:
P-olitical Factors
E-conomic Factors
S-ocial Factors
T-echnological Factors
L-egal Factors and
E-nvironmental Factors
 Political Factors

: It refers primarily on how and to what degree do government policies affect the
economy.
Examples
 Tax Policy
 Labor Law
 Environmental Law
 Trade Restrictions
 Tariffs
 Political Stability
 Health
 Education
 Infrastructure
4 Main Effects of These Political Factors on Business Organizations

1. Impact on economy
2. Changes in regulation
3. Political stability
4. Mitigation of risk
Impact on Economy

The political situation of a country affects its economic setting. The

economic environment affects the business performance.

For example, there are major differences in Democratic and Republican

policies in the US. This influences factors like taxes and government spending,
which ultimately affect the economy. A greater level of government spending
often stimulates the economy.
Changes in Regulation

Governments could alter their rules and regulations. This could in turn have
an effect on a business.

For example, After the accounting scandals of the early 21st century, the US
SEC became more attentive on corporate compliance. The government
introduced the Sarbanes-Oxley compliance regulations of 2002. This was a
reaction to the social environment. The social environment urged a change to
make public companies more liable.
Political Stability

Lack of political stability in a country effects business operation. This is

especially true for the companies which operate internationally.
For example, an aggressive takeover could overthrow a government. This
could lead to riots, looting and general disorder in the environment. These disrupt
business operations. Sri Lanka was in a similar state during a civil war. Egypt and
Syria faced disturbances too.
Mitigation of Risk

Buying political risk insurance is a way to manage political risk. Companies that
have international operations use such insurance to reduce their risk exposure.
The Importance of Observing the Political Environment

Firms should track their political environment. Change in the political factors can
affect business strategy because of the following reasons:

– The stability of a political system can affect the appeal of a particular local
market.
– The government is liable for protecting the public interest.
– Government actions influence the economic environment.
– Government is a major consumer of goods and services.
 Economic Factors
• Economic growth- A higher economic growth means more goods and
services expressed in gross national product (GNP) or gross domestic product
(GDP) in a country.

• Interest rates- a higher interest rate means more interest expense to be (?)
and higher cost of capital. This lowers the profitability of a firm and affects to
extent a business grows and expands

• Exchange rate- A higher foreign exchange rate has two meanings:

exporters get more peso when they ship out goods while imported products
become more expensive to buy due to more peso for every dollar.

• Inflation rate- Higher prices means higher inflation rate, affecting the
purchasing power, which will lead to, or warrant a wage increase.
 Social Factors
• Careers- The increasing number of nightshift workers form the business
process outsourcing (BPO) industry has given way to 24/7 convenience stores and
fast food catering to the millennial force.

• Culture- Attracted to earning in dollars and providing a better future for the
family, Filipinos have a culture of migration among the middle- and lower-income
working class.

• Education- Most of young educated career women prefers late marriages.

In fact, the number of marriages in the Philippines dropped from 492,666 in 2006
to 414,325 in 2015, a 16% drop in almost a decade.

• Ethics- the subject of genetically modified foods has been controversy as

some people do not agree with altering the genetic make-up organics such as
plants or animals inside a laboratory.
• Health – The malling trend has given rise to health clinics such as Healthwest
located inside malls since most visits to emergency room are for outpatient
services.

• Safety- The perceived safety of households has negatively affected the

popularity of knock-on-your-door type of direct sales form Lux Marketing selling
vacuum cleaners and floor polisher.

• Housing- Real estate companies like Megaworld are building communities

and one-stop solutions like Eastwood, where condominium living catering to
smaller families is complemented with shopping and dining environment within a
particular concept.

• Fashion and lifestyle- Popular bloggers are now the go-to source of
information for fashion and lifestyle.

• Immigration- The Philippines is a diverse country with a mixture of many

races and people from different countries

• Diversity- Companies are becoming more women executives in their

workforce and in the management team.
 Technological Factors

• R&D- A higher quality of patents indicates the extent of innovation of a

country patent also affects entry in particular industry. In entertainment, internet,
YouTube, remote controls, video players, and Netflix’s on demand movies have
affected not just the viewing an even more difficult task for advertisers and
advertising agencies

• Automation- An automated factory can increase production efficiency

and productivity, meaning more output in less time and less cost. ATM added by
banks to respond to the increasing mobility of people and the rising cost of
manpower while reducing cost of operation.

• Technology incentives- Having incentives affect investment decision, so the

frequency of upgrading technology may be sooner than later. Many countries
have given incentives for factories, buildings and car manufacturers to go green
or environmental-friendly, influencing their purchasing behavior.

• Rate of technological changes- each change in technology can affect

cost, innovation mindset, and product life cycle decisions, as well as influences
outsources decisions.
  Legal Factors

• Discrimination Law- An employer in the Philippines cannot discriminate an

employee on account of age, gender, marriage or joining a union.

• Consumer Law- “No return, no exchange” policies of stores are prohibited

in the Philippines

• Antitrust Law-The Philippine Competition Law passed 2015, promotes fair

playing field among competition.

• Employment Law- An employee is deemed regularized after 6 months of

service unless otherwise specified and agreed upon.

• Health and Safety Law-The Generic Drug Law of 1988 mandated doctors
write the generic name of their prescribed medicines.
 Environmental Factors

• Weather – The number of visitors of Enchanted Kingdom can go up with

good weather or drastically go down due to bad weather forecast as it affects
enjoyable experience.

• Climate and Climate change- According to the United Nations University

Institute for Environment and Human Security and the German Alliance
Development Works, the Philippines has been ranked 3rd in the list of counties that
are most vulnerable to climate change, with 24.32% disaster risk.
 Macro Analysis Tool 2

Exhibit 3A-4 Identifies the 5 interacting forces that affect the profitability of an
industry. These forces enable firms to identify competitive pressures (those with
high threat) as well as opportunities in the marketplace. The framework is unique
because profit is marketing affected not just by competitive activities but also by
the extent of bargaining power of suppliers and customers.
  Exhibit 3A-4: Industry Analysis
1. Threat of New Entrants

The Threat of New Entrants, one of the forces in Porter’s Five Forces industry
analysis framework, refers to the threat that new competitors pose to current
players within an industry. It is one of the forces that shape the competitive
landscape of an industry and helps determine the attractiveness of an industry.
The threat of New Entrants can be affected by the following factors:

 Economies of Scale – We can observe this in the market where some newer
entrants could not fare as well due to lack of volume to do marketing
campaigns. This can also be seen in the fashion industry, where neo–
fashion designers without a competitive and established supply chain,
would need to go against international brands like Uniqlo, Zara, and H&M.

 Product Differentiation – Competition in the beauty salon has market has

something changed since the likes of David’s Salon, and Ricky Reyes
opened their cha- store using the popularity of their names and positive
image, thus increasing the industry’s enter barrier.

 Capital requirements – In 2017, 7-Eleven launched an all-time low capital

of P300,000 for its convenience store franchising, previously priced at P1
million which was then originally P3.5 million. Of course, each of these
schemes has different risks-versus-rewards scheme as well. The lowering of
capital attract more people who may be interested to invest in a business.

 Switching costs – The ability to change suppliers from one to another affects
new entrants. In the telecom industry, customers are made to sign a 2-year
contract where penalties for pre-termination are defined to prevent them
from switching brands midway.

 Access to distribution – All chain stores are known to have a revenue model
not just based on margin of traded items but also based on “other income”
such as listing fee, product highlight, anniversary support, store opening
support and over two dozen similar opportunities to earn.

 Cost disadvantage independent of scale – National book store gets not just
preferential rental rate but preferential location as an anchor store of SM
Malls. This advantage is hard to replicate by competition.

 Government Policy – The Philippine government, for instance has allowed

new competition to enter several industries such as in telecommunications,
banking, and automotive. It has also required doctors to include generic
 names when prescribing medicines, leading to the mass acceptance of
generic drugs. While government policies may encourage new entrants.
2. Threat of Substitute

The threat of a substitute is the level of risk that a company faces from
replacement by its substitutes. For more generic, undifferentiated products the
threat is always higher that from more unique products. A company that has
several possible substitutes that can easily be switched to has little control over
the prices it sets or how it chooses to sell the product.
3. Rivalry among Existing Competition
It is described to be the most intense in a price war, followed by a promo
war, which can significantly lower profitability. Rivalry among existing competition
is considered high when prices are adjusted downward frequently.
Rivalry is affected by the following factors:

 Number of major or equally balanced competition – In the banking industry,

many players are perceived to be undifferentiated, and compete using
the same business model. The depositors who have no loyalty to a bank will
invest their excess fun based on which bank can offer them better returns.

 Industry growth – Solar energy is fast growing in the Philippines since it is

more environmental-friendly and offers lower price versus electricity. Many
companies are staring to emerge in this market with companies trying to
compete to be the dominant player. Solar Philippines appears to have the
edge with their high-profile installation of solar panels in SM Malls, with their
large solar farm utility models in Calatagan, Batangas, and Tarlac, to name
a few.

 Fixed Cost – Five-star hotels have expensive properties and operating costs;
thus, they do heavy promotions to increase consumer patronage and
lower their per unit fixed cost. Taken together, all of the promotion in an
industry will lead to fierce competition.

 Product Differentiation - Product differentiation is the process of

distinguishing a product or service from others. This involves detailing the
characteristics that are valued by customers that make it unique. When
utilized successfully, product differentiation creates a competitive
advantage as customers view your product as superior. You may also hear
it referred to as the unique selling proposition, which is the act of advertising
or communicating your product differentiation.
  Switching cost – The airline industry invented the Frequent Flyer Program
(FFP) to create a barrier to switching carriers. Instead of shopping for the
best price, customers added a new dimension in their purchase decision –
the benefits associated with a FFP, like a free upgrades, free flights and
other perks. In the case of Philippine Airlines, the benefit of loyal customers
includes check using the shorter business class line as well as use of lounge.

 Unused plant capacity or enlarged new capacity – In the telecom industry,

Sun cellular launched their popular unlimited calls in 2000, since they were
new and had mostly unused capacity. The PLDT-Smart group eventually
bought them in 2011.

 Diversity of competition – Firms will tend to protect their “cash cows” that
bring in positive cash flow and profit versus smaller companies without
much advantage to highlight tend to offer a lower price thus leading to
more rivalry.

 Strategic stakes - Strategic stakes are high when a firm is losing market
position or has potential for great gains. This intensifies rivalry. High exit
barriers place a high cost on abandoning the product.

 Exit barrier - Exit barriers (or barriers to exit) are obstacles that stop or prevent
the exit of a firm from a specific market. It is associated with firms that are
incurring in some form of losses, but cannot exit the market as a result of exit
barriers that would further increase their level of loss. In Michael Porter’s
model of competitive analysis, barriers are a fundamental element to
gauge the level of competition in a sector, and defines the market
structure in that industry.
4. Bargaining Power of Customers
 Chooks-to-go offered pricing that is a bit lower than Andok's and Baliwag.
This is because of two realities. They were the manufacturer and they had
the ability to choose chicken weight to their lower pricing Strategy. This
lower price offset the bargaining power of price-sensitive customers.
The bargaining power of customers are affected by the following factors:
 Volume purchase by customers

The strategy for the seller. Therefore, is to find more customers for the same
line or expand to a new product line to target new customers, to spread the risk
of possible purchase withdrawals while trying to form a good relationship and an
alliance with the volume customer.
  Buying price Vis-a-Vis product cost

With small margins, industrial buyers would have to constantly negotiate for
better deals, better terms and better concessions.
 Number of supplies in an industry

A look at the number of banks in the Philippines would make one easily
conclude that they would complete for the savings of the same customers.

Actual or perceived differentiation-Well-known brands enjoy a higher

stature than unknown brands, as they become simplifiers of choice. Take Coca-
Cola or Colgate as examples, higher brand stature or loyalty gives higher
bargaining power to brand owners.
 Switching Cost

When a business relationship is converted into a friendship, supplies make it

more difficult for their customers to change to other suppliers.
 Threat of backward integration

In the animal feeds market, some of the major customers are large poultry
farm owners. Attaining economies of scale would put manufacturers like San
Miguel's B-Meg at risk since they would be challenged by another brand that can
supply their own requirements at lower cost.
 Quality of the seller

In the same feeds industry, Purina pioneered an upscale feeds formulation

that is much more expensive but is more cost efficient, thus reducing the
bargaining power of their target customers until comparable quality could
emerge.
 Full information

Online stores give greater bargaining power to customers. They do not

have to visit brick-and-mortar stores, and are given access to customers
feedback as well.
5. Bargaining power of suppliers

 Chooks-to-Go buys their chicken from their mother unit Bounty fresh, and
thus has good bargaining power compared with their competitors who
have not interested in their own manufacturing plants nationwide. Bounty
fresh's bargaining power as a supplier even extends to negotiation with key
customers like Andoks because stopping purchase from bounty may
actually encourage bounty to put up a clock beside or near Andoks since
there is no need to protect them from sales cannibalization anymore.
The bargaining power of supplies is affected by the following factors:
 Industry Dominance

Ajinomoto, Mercury Drug, & Nescafe coffee are examples of dominant brands
with high bargaining powers. However, dominance as well as bargaining power
as a supplier can be compromised when strong challengers or substitutes
acceptance and market share.
 Availability Substitutes

Ajinomoto's dominance in the MSG market, as well as the dominance of Knorr

in the flavored cube market, are affected by the increasing popularity of another
category, Maggi Magic Sarap .
 Importance of Buyer to Seller

Beer is an important item in the sari-sari store with high purchase size (together
with "pulutan") as well as the frequency of usage. Highly advertised & promoted
brands like red horse can ask for better payment terms from their trade customers
as the brand gives these retailers very high store traffic and turn over.
 Importance of Input to Buyer
The soft drinks market uses a lot of sugar as its key ingredient.

However, availability of lower priced high fructose corn syrup as a sugar

substitute has compromised the standing of sugar as an ingredient.
 Product Differentiation

The apple brand is known to have a cult - like following new product
categories, each one better than the previous.
  Switching Costs

Strong direct selling companies have exclusive arrangements with many "foot
soldiers " are prohibited from selling competitive product or they risk being
dropped by the company's active dealers list, & suffer loss at earnings and/or
exclusive privileges as a result of their disloyalty.
 Threat of Forward Integration

Suppliers or lessons to tenants like SM malls have tremendous resources to

expand. Aside from selling clothes and fashion items in SM Department Stores,
they have forward integrated by having tie-ups with the likes of Uniqlo in Japan.
 Macro Analysis Tool 3: Key Factors for Success SWOT

Another important tool that can be use in marketing analysis is called key
factors for success, which is the source document of strength and weaknesses
(SW) analysis. One half of SWOT analysis with OT being acronym for opportunity
and threats.

Key factors for success (KFS) , also known as logic of industry (LOI) or
economic of business (EOB) , is simply a blueprint composed of controllable and
uncontrollable variables critical to success of a firm that must be managed well,
in order to attain its goals and outperform competition, some examples are shown
in exhibit 3A-5;

Controllable Variables Uncontrollable Variables

Football Team  Good players who  Injuries

are fast and quick  Breaks of the
 A coach who is game (like wrong
both inspiring and calls of referees)
competent
 A team of players
with high morale
(good incentives,
positive culture)
 Intent of winning
championships (as
opposed to
winning only
games)
 Direct Sales Companies  Large and  Foreign exchange
motivated sales  Self-motivation
force sellers
 Availability
 Payment plans
 Reward and
recognition
programs
Banks  Image  Government
 Resources policies
 Investment savvy  External crisis
Dressed Chicken  Brand Image  Weather
Manufacturing  Availability  Diseases
 Low Cost
 Logistics
Ice Cream  Logistics  Brownout (or
 Resources power
 Brand Image interruptions)
 Availability
 Efficient
Manufacturing

 When looking at KFS, it is important to include similar products that can

provide the same satisfaction to the consumers in considering a segment.
It all depends on how a consumer positions a product in relation to other
products in their minds. In simple terms, consider all possible alternatives.
Examples of KFS tackling alternatives:

 Books may provide the same reading satisfaction as magazines.

 Movies and video games may satisfy the consumer in the same way as
spending a 2-hour discretionary time in a spa.

Another important point to consider is that defining KFS by market segment,

what is true in one market segment may not be true in another.
Examples of KFS by market segment

 Cebu Pacific air is a low-cost carrier; hence, their LOI requires them to
achieve high load or seat capacity/factor, high frequency flights, high
aircraft utilization, low distribution cost, smaller seat pitch, and new and
simple fleet of aircraft or less maintenance and fuel efficiency.
  Philippine Airlines, on the other hand, has business class, and their LOI
includes important factors such as giving priority l time—conscious
passengers (separate check-in baggage allowance, bigger seat, meals,
amenities, exclusive toilet for business class) since they are not price-
conscious.

The industry the firm competes in must be defines well so that the KFS can be
distinguished thoroughly. The industry that a marketer defines will affect their
product’s positioning, success factors, marketing direction, and so on.
Examples of KFS questions:

 Is Avon in the direct selling industry or in satisfying women’s need or in the

beauty care business?
 Is potato corner in the potato market, in the kiosk market, in the flavor
business or in the franchising business?

The KFS must be reviewed periodically because not all rules will be the same in
their future. It is important for the marketers to understand and anticipate
changes especially in rapid transition industries.
Examples of KFS in term of lifestyle changes:

 T-shirts: before, people would be given incentives just to wear t0-shirts with
the manufacturer’s brand. Now branded t-shirts are in demand while
“designer labels” are now called “signature” clothes.
 Dance: in the past, women would have to wait for men to invite them to
dance. Now, women hire dance instructors to be their ballroom dance
partners.

While there are so-called KFS, a breakthrough idea can “reinvent” the rules in
an industry,, especially as firm approach non-customers or solve pain points of
existing customers by continuously asking what existing customer dislike about
what is currently offered, what non customers like about their existing alternative,
what made past consumers shift product category, what can be done and how
else to satisfy non-customers, and understanding the context to all these, a firm
can gain insights and avoid being trapped into a fixes LOI mindset. In reinvention
the rules, new market space may be gained. By following logic of strategy (LOS)
of being different than instead of just being better, it can make companies game-
charging innovators. The “what-and-how-else” questions involve removing or by
passing any traditional barriers or interference to growth.
Examples of game-changing innovations:

 Taxi: before, one needs to go to a taxi stand (or anywhere) and try to flag
do a taxi. Today; options such as grab, and uber are available for the
comfort the riding public.
 Jetbest animal nutrition taps new swine raisers by offering an entrepreneur
package composed of feeds on extended credit terms, free technical
advice and a recognition program, instead of just serving existed raisers.

In looking at the logic of strategy, never fear dominant players. If dominant

players have no weaknesses, competitors should find their major strengths and
covert that into a weakness.

In general, the strengths and weaknesses of a firm are measured against

the target competition. Strength of one, therefore, is actually a weakness of
another. A firm take advantage of their competitors’ weaknesses, it is obviously
this reason why firms must also correct their weaknesses or face the
consequences of them in action when the same is done to them. This means:

 If SM has strong financial resources and Puregold has equally strong

financial resources, there is no strength to talk about. The financial strength,
for all intend and purposes, is parity to each other (but superior when
compare to smaller companies).
 Megaworld can take advantage of their large number of real estate
projects to attain selling efficiency and better sales force retention.
 Bpi is an Ayala-owned company, which own malls like Glorietta. BPI can
leverage Glorietta as venue for their credit card sale events, such as
appliance madness sale, and travel sale. They can make the upscale
venue in Glorietta not accessible to competition so the venue becomes a
leveraging point. The same is true with BDO in SM malls.

An exception about strength of one being a weakness of another is when firms

make their weaknesses irrelevant by redefining rules of the industry.

In terms in relevance, if a company is very strong or very weak in an area, but

that strength or weakness is not a key factor for success in the industry, it cannot
be considered a corporate strength or weakness.

Marketers must try to establish a cluster of strength or differentiation to avoid

being easily matched by competition. This system or cluster of KFS must be
explored by focusing on the right target market and offering the right product.
  They own many import companies that have exclusive distribution
contracts to supply their products, thus giving them better margins.
 They built a complementary retail network and cross-sold relate products
by having Electroworld (office automation), home plus, sb furniture, and
Waltermart (home center and supermarket) as support to Abenson’s own
retailing strategy with all of these stores having a complete product line
that creates tangible differentiation and customer loyalty program.
 They own some of their store locations which help drive down cost in the
long—term, especially important in a low-margin industry.

Abenson’s cluster of strengths can still be built and enhanced further with
foresight and the urgency to counter or preempt competitive moves. It is, of
course, not hopeless for smaller retailers to compete with giant competitors
(sometimes called “category killers”) like Abenson. The smaller the competitor,
the more focused they should be to gain competitive advantage.

In formulating marketing strategies, firms must be able to exploit their

strength as well as take advantage of a competitor’s key weak points to satisfy
their customers better. In the same Abenson’s example, one of the weaknesses
of Abenson is not been present in many SM malls. This is, of course, not their own
doing as malls nowadays have been protecting their own store brand. Abenson
just need to address the weakness by choosing a good location outside SM just
like how Shakey’s choose good locations outside malls. Abenson can also enter
into a joint venture partnership with other malls. They have done this time with the
LCC chain in Bicol, among others. Another weakness of Abenson Realtive to SM
is that SM has already gone public. Therefore, SM’s fund sources are much
cheaper than that of Abenson, being a privately held company. SM can
therefore acquire properties and expand faster using cheaper funds sources.
Fortunately, SM and Waltermart (a company affiliated with Abenson ground
entered into an alliance in the supermarket and mall business starting 2013.
Micro-environment

- Deals with company issues.

Exhibit 3A-6: 6C’s of Micro-Environment

1. Company

2. Customers

3. Competition

4. Channel

5. Complementors

6. Communities

1. Company

– Think about a value chain within a company where one department

supplies another department materials, information, and relationships.

– weakness means improvements projects are needed which can learn from
some of the companies cited:

• R&D

– The first canned Corned Tuna in the Philippines, courtesy of the creativity of
their R&D.

• Sourcing

- Nestle Philippines does not just buy but teach farmers the correct way to
plant coffee.

• Collection

– Many large companies automatically deposit checks to the account of

their suppliers.

• Purchasing

– Jollibee’s negotiation for purchase price of key raw materials is handled

personally by senior executives,
• Production

– URC Manufactures Products is aware of the need to be disciplined in

coordination and capacity to ensure stock availability for all their clients.

• Finance

- Globe has a finance group that look into the business case of marketing
personnel

 Warehouse

- Phil Tao, and CSGT Group are two reputable logistics and distribution
companies in the Philippines that can help in storage, transport and making
products available in the retail trade.

• Service

– El Nido Resorts in Palawan anticipates customers’ needs even before

customers ask.

2. Customers

5 types of customers that have to be considered:

• Consumer markets – individual buyers who buy for their own use.

• Business markets – organizational buyers who buy as input to their own

products.

• International markets – buyers are from countries.

• Reseller markets – organizational or individual buyers who buy for resell at

a profit without adding anything to the product.

• Government markets – government agencies that buy to produce public

services.

3. Competition

2 types of competition that need to be considered:

• Direct competition – similar offerings from the perspective of customers.

• Indirect competition – offerings deemed as substitute to another product

or service.
4. Channel

- Individuals or companies who buy and resell the company’s products to

final buyers.

– Example: online retailers like Lazada and Zalora

5. Complementors

– Individuals or businesses who can help an organization understand,

promote and sell its products or services.

– Physical distribution – companies or individuals who store and transport the

company’s products to final buyers.

– Marketing agencies – help to understand and/or promote the company’s

products to final buyers.

– Financial intermediaries – help give credit for the company’s products to

final buyers.

6. Communities

- Public stakeholders where the organization needs to be sensitive to their

public opinions.

• Financial Public – organizations or individuals who can ease or hinder an

organization’s access to credit.

• Media Public – mass media or social media.

• National Government Public – government laws can be created that can

ease or restrict company’s actions

• Local Government Public – mayors or powerful councilors can create

problem for uncooperative businesses.

• General Public - attitude or change in attitude that can affect a

company’s sales volume.

• Local Volumes – neighborhood and community groups who can question

a company’s effect on the local area.
 • Citizen- action Publics – environmental or health groups can question the
action of a company publicly.

• Employees – individuals who are employed within an organization. Sexual

discrimination or sexual harassment by employers or bosses is an example.

• Suppliers – organizations or individuals who are employed to help an

organization produce products or get specific jobs done. For instance,
suppliers may reveal they were asked to deliver products with substantial
specifications.

Exhibit 3A7: Right to Win Analytical Sequence

PESTLE Trends

Industry Analysis

Key Factors for

Success

6Cs

As a summary, marketers must look outside of the firms to consider the

effect of PESTLE trends to their marketing matrix. They can look at the industry they
operate to understanding where profitability can be compromised or grown.
Diving deeper into why industry are winners and why industry losers are losers, key
factors for success are used to understand the existing winning variables of the
industry as well as using the LOI as basis to redesigning innovation of what to add
or what to abandon when new industry rules are created.

Finally, the 3Cs of marketing is expanded into 6Cs in order to analyze

opportunities, as well as what may affect the company’s operations if attention is
not given to one of the 6Cs. Strong sensemaking skills are required to analyze
these macro- and micro-environments.
Marketing Research

 To formulate the marketing mix, the marketer needs to have a strong

understanding of its target market. Unless the marketer is a seasoned
professional and industry expert, it would be dangerous to formulate a
marketing strategy without feedback from customers and consumers, as
personal opinions may either be wrong or no longer updated.
 Market research is therefore an indispensable tool for marketers to know
what needs to be done, albeit creativity will still be needed in terms of how
to communicate and execute the strategy.

A. Types of Market Research

 Marketing research can be broadly divided into qualitative and
quantitative methods. Typically, qualitative market researches are
conducted initially which are validated subsequently with quantitative
market research, although qualitative researches are also used to probe
deeper into information (such as knowing “why”) gathered from
quantitative research.
 Among the popular qualitative market research are Focus Group
Discussion (FGD), and In-depth Interview (IDI).
 The difference between FGD and IDI is that FGDs are conducted by a
seasoned facilitator in a relaxed atmosphere. The small group is
composed of 7-9 people per batch, chosen based on pre-determined
criteria. Meanwhile, IDIs are done individually.
Exhibit 3A-8: Comparison of FGDs and IDIs

Focus Group Discussions In-Depth Discussions

(FGDs) (IDIs)

Number of participants  7-9 per batch  Individual

Advantages  Share  Privacy - no need
experiences to be conscious
 Build from others of the presence
in the room of others
 Not influenced by
opinions of others
in FGDs
 Ability to follow up
answers
 Disadvantages  Discussion with  More time-
strangers in the consuming
room  Inability to share
 Maybe experiences and
influenced by build from others
opinions of others
 Inability to follow
up individual
replies

 Among the more popular quantitative market researches is the Usage,

Attitude and Image Studies (UAI), which help marketers understand the
consumer’s product usage and attitude (used in market segmentation) as
well as image (used in brand positioning).
Exhibit 3A-9: Typical Questions Asked in Usage, Attitude and Image Study

Sections of UAI Detail Topics Probed in UAI

Brand Awareness Brand awareness, advertising
awareness, sources of awareness
Usage Behavior Product category use, or why not it is
used – never or not anymore, size or
variant mix, usage frequency, who
uses, who else uses, when is the
product used, product usage, brands
tried, brand last used, brand used
previous to last, brands used most
often, brand being used presently
Purchase Behavior Where it was last bought, where it is
most often bought, purchase
frequency, size mix purchase, quantity
last bought, price paid, alternative in
mind during last purchase, brand
availability, what else was bought
with brand
Product Experience Product attribute/s desired, likes
about existing brands, dislikes about
existing brands, rating of competing
brands on attributes, socio-
demographics data, media habits
 Market research allows the marketers and entrepreneurs to answer the
various “Wh” questions (who, what, when, etc.), such as:
1. In the macro level, market segmentation answers the question, “What are
the groupings of similar customers?”
2. In the micro level, these questions can be answered:
a) Decision Making Unit (DMU) points to “Who purchases the product?”
b) Decision Making Process (DMP) answers the question, “How, where, and
when is the purchase made?”
c) Consumer motivation and preferences guide the marketer to answer,
“What do the consumers want and why?”
 Other popular qualitative market research includes ethnographic or
observation research while quantitative may include product or service
concept research, depending on the needs of the brand or the company.

B. 6 Steps in Marketing Research

 Exhibit 3A-10 identifies the general steps in marketing research process:
Exhibit 3A-10: Marketing Research Process

Steps in Marketing What it is Example

Research
1. Define your This gives focus and Know the voice of
research problems clarity on why you are channel customers,
or issues doing market research specifically pain point
and how data will be (or BIDA, acronym for
used in making barriers, irritants,
decisions. disappointments and
annoyances) and
context of pain points of
distributors.
2. Choose your Determine if you need In-Home visit plus in-
market research qualitative and/or depth interview (IDI) of
approach quantitative approach, distributors.
then determine the
specific type of
marketing research you
will use to attain your
research goals.
3. Create your Draft and test the Ask dislikes as well as
research design questions to be asked to wish lists. Subdivide
the right sampling target respondents via new
and plan how data will distributors, lapsed
be analyzed.
 distributors and top
performing distributors.
4. Collect data This involves having the One-on-one interview.
invited respondents
answer your research
completely.
5. Interpret the data Cluster and convert the Lapsed distributors lack
“what” to “so what” to confidence. They quit
gain insights or new after experiencing a
truths. sales rejection even
after passing their sales
training.
6. Recommend Convert “so what” to Offer demo assistance
solutions “now what”, meaning, and coaching to lapsed
the actions that should distributors who easily
be taken by the target get discouraged.
user or users. It may be
possible to recommend
different actions for
different users.