0% found this document useful (0 votes)

133 views108 pages

Module in Principles of Marketing Updated

This document provides information about a Principles of Marketing course for senior high school students at Gordon College in Olongapo City, Philippines. The 3-page document outlines the course description, learning outcomes, grading rubric, schedule, modules, topics, and learning tasks. The course introduces marketing principles, strategies, and the marketing mix. It aims to help students understand marketing concepts and apply them to organizational decision-making. Students will demonstrate their knowledge through written work, performance tasks, and a major examination.

Uploaded by

Marie Pearl Nario

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

Download as DOCX, PDF, TXT or read online on Scribd

0% found this document useful (0 votes)

133 views108 pages

Module in Principles of Marketing Updated

Uploaded by

Marie Pearl Nario

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

Download as DOCX, PDF, TXT or read online on Scribd

You are on page 1/ 108

Republic of the Philippines

City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

Senior High School Department

Program: Academic Track – ABM
Course Code: ABM_PM12
Course Title: Principles of Marketing
Course Description: This course introduces principles and problems of marketing goods and
services. Topics include promotion, placement, and pricing strategies for products. Upon
completion, students should be able to apply marketing principles in organizational decision-
making.
Course Learning Outcomes:
Upon completion of the course, the students can:
1. demonstrate understanding of marketing terminology and concepts
2. identify wants and environmental factors that shape marketing activities for certain target
markets.
3. demonstrate knowledge of the individual components of marketing mix.
4. identify the key elements of the marketing plan
5. explain how the marketing plan is used by marketing and the overall organization
Grading Rubric:
Written Work - 35%
Performance Task - 40%
Major Examination - 25%

Learning Module:

Schedule Module Learning Topics and Teaching and Learning

(Weeks Number and Objectives Key Learning Tasks
Numbers Title (Most Essential Concepts Materials and
and Learning Resources
Hours) Competencies)
(Week 1-2) Module 1:  Define and  What is  Module Individual
8hours understand Marketin work:
Marketing marketing g and its  Online Written Task
Principles Traditio discussion  Identify a
and  Describe the nal products or
Strategies traditional Approac services do
approaches to hes?  Power point you
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

marketing Presentation regularly

 Goals of use or avail
 Discuss the Marketin  Video Clips of every
goals of g from day. And
marketing  Contemp YouTube kindly tell
orary us how
 Identify and Marketin  Textbooks many
explain g and Online brands of
contemporary Methods Articles products or
marketing services do
approaches. you
consume or
use
throughout
the day.

 Among the
traditional
approaches
to
marketing,
how does
the
marketing
orientation
differ from
the selling
orientation?

 Think of a
type of
business
that you
may want
to pursue in
the future,
list the
goals and
objectives
that you

Principles of Marketing-1st Sem 2020-2021

NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

want your
dream
company to
achieve.

Performance
Task
 Make an
interview
with your
parents or
relatives
regarding to
what
products
they are
using and
ask them
some
questions
how they
became
happy and
satisfied
using those
products.
And submit
your video
to my
messenger.
(Week 3-4) Module 2:  Define  Custome  Module  Individual
8hours “relationship r work:
Customer marketing” Expectat  Online Written Task
Relationship ions and discussion
and  Explain the Custome  Describe
Customer value of r Value  Power point the
Service customers Presentation experience
 Custome by
r  Textbooks checking
 Identify and Relation and Online the
describe ship and Articles appropriate
“Relationship Custome boxes
r Service which
Development
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

Strategies” represent
your
 Illustrate feelings.
successful
customer  Answer the
service following
strategy in the questions
Philippine concisely.
Business
Enterprise
(Week 5-6) Module 3:  Distinguish  Developi  Module  Individual
8hours between ng and work:
Market strategic and Impleme  Online Written Task
Opportunity marketing nting discussion
and planning in Marketin  Read the
Customer terms of g  Power point selection
Analysis objectives and Strategie Presentation carefully,
processes s then answer
 Video Clips the
 Analyze the  The from following
elements of Marketin YouTube guide
macro- and g questions
micro- Environ  Textbooks on the space
environment ment and Online provided.
and their Articles
influence to
marketing
planning
(Week 7) Module 4:  Define  Marketi  Module  Individual
4hours marketing ng work:
research, its Researc  Online Written Task
Market importance to h discussion
Opportunity a business Word Search
and enterprise and  Importa  Power point
Customer identify the nce of Presentation  Find and
Analysis steps in Marketi encircle the
marketing ng  Textbooks words
research Researc and Online related to
h to a marketing
Articles
Busines research.
s
Enterpri
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

se
(Week 8) Module 5:  Differentiate  The  Module Individual
4hours the buying Consum work:
behavior and er and  Online Written Task
Market decision Busines discussion  Examine a
Opportunity making of s buying
and individual/hous Markets  Power point decision
Customer ehold customer Presentation you have
Analysis versus the  Market made
business Segmen  Textbooks recently. It
(organization) tation, and Online could be a
customer Market purchase in
Articles
 Identify and Targetin either the
segment g, and market,
grocery
market for a Product
store, or in
product or Position
the
service ing shopping
 Select the mall.
appropriate Outline
target market your
segment and decision-
its positioning making
using the
steps in the
buying
process.

 Whose
advice do
you seek
with regard
to your
choices in
buying
products?
List them in
the table
below.

 List three (3)

product
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

taglines and
complete the
table below
by providing
the required
information.

(Week 9) MIDTERM EXAMINATION

(Week 1) Module 6:  Define a  Product  Module  Indivi

4hours product and dual
differentiates  Price  Online work:
Developing the product, discussion Written Task
the services, and  What
Marketing experiences  Power point makes
Mix  Identify and Presentation consumer
describes the products
factors to  Textbooks and
consider when and Online industrial
setting prices Articles products
and new different
product pricing from each
and its general other?
pricing Write your
approaches answer
inside the
box.
 Give
examples of
the
following
types of
consumer
products.
Complete
the table
below with
your
answers.

Performance
Task
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

 Kindly
think of any
product
which time
to time the
price is
changing
and all you
have to do is
discuss to
the class
why is it
happening.
(Week 2-3) Module 7:  Discuss the  Place  Module  Individual
8hours structure of work:
distribution  Promot  Online Written Task
channels, its ion discussion  Identify
Developing functions, and the pull or
the the nature of  Power point push
Marketing supply chain Presentation promotion
Mix management al
 Define and  Textbooks technique
identify and Online used in the
relevant Articles following
promotional situations.
tools, namely, Performance
advertising, Task
sales
promotion,  Think of
personal any
selling, public product/s
relations, and available
direct inside your
marketing to home and
create make a
awareness and short
persuade the presentatio
target market n on how
to buy the you
product or promote
patronize the that
service product.
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

Make at
least 3-5
minutes
video
presentatio
n and
submit to
our Group
page.

(Week 4-5) Module 8:  Explain the  Market  Module  Individual

8hours relationship Analysis work:
between  Online Written Task
Managing market  Marketin discussion
the analysis, g  Select a
Marketing planning, Planning  Power point marketing
Process implementation Presentation campaign of
and control  Impleme a local or
 Analyze the ntation  Textbooks international
company’s and and Online organization
situation, control Articles or business
markets, and firm and
environment analyze it
(the marketing using the
audit and aspects of
SWOT marketing
analysis) implementat
ion and
control. Fill
in the table
with the
required
information.
Performance
Task

 Research on
a well-
known
business in
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

the country.
Based on
your
research,
outline the
strategies
that the
company
perform
with respect
to the
aspects
discussed.
Incorporate
the budget
and finance
aspects
under the
target
market and
marketing
mix. After
that, you
will be
presenting
your
research in
our class
next
meeting.
(Week 6) Module 9:  Integrate the  Preparin  Module  Individual
4hours marketing g the work:
concepts and Marketin  Online Performance
Workshop techniques g Plan discussion Task
and learned by
Presentation preparing a  Power point  Gather all
of the marketing plan Presentation the data
Marketing needed to
Plan write your
marketing
plan. Please
be guided
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

by the
marketing
plan format.
Time to
time, we will
have a
consultation
time
throughout
the
development
of your
marketing
plan.

(Week 7-8) Module 10:  Present a mini-  Presenti  Module  Individual

8hours marketing plan, ng the work:
orally and in Marketin  Online Performance
Developing writing g Plan discussion Task
the
Marketing  Power point  Presentatio
Mix Presentation n of your
Marketing
Plan.
(Week 9) FINAL EXAMINATIOON

DETAILED LEARNING MODULE

Title: Marketing Principles and Strategies
Module 1:
I. Introduction:
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

Marketing is a concept that is as old civilization. It became fully developed during the
Industrial Revolution in the 18th and 19th centuries. The development in this period created a
distinction between the production and consumption of goods, with production moving away
from the home and gearing toward producing not only for subsistence but for profit.

II. Content Standards

The learners demonstrate an understanding of… the marketing principles, goals, and
traditional and contemporary approaches to marketing

III. Performance Standards

The learners shall be able to… plot marketing goals and approaches for products and
services.
IV. Most Essential Learning Competencies
After studying this chapter, the student will be able to:
 Define and understand marketing; (ABM_PM11-la-b-1)
- Principles
- Goals
- Approaches

V. Topics and Key Concepts

Introduce the Marketing and its traditional approaches

A. Lesson I – What is Marketing and its Traditional Approaches?

Let say that, Marketing is everywhere. Why? Because the moment you wake up in the
morning until you go to bed at night, all of your activities throughout the day likely
involve marketing. How so? Try to recall the times you went to purchase something in a
store. Which of the products you bought and services you availed of were given
marketing support such as advertisements, flyers or promos?

Principles of Marketing-1st Sem 2020-2021

What is Marketing?

 Kotler and Armstrong (2013) describe marketing as “managing the customers

profitability.” Marketing is also the process of conceptualizing, creating, developing,
promoting, and sustaining products and services by a company, focusing on the needs
and preferences of the customers.

TRADITIONAL MARKETING APPROACHES

Five major approaches which are known as marketing philosophies. These marketing
approaches guided marketers in designing their marketing strategies.

1. Production Orientation- this approach requires a company to embark on mass

production and distribution. This means that the company produces a large quantity
of a product and makes it available to all potential customers. However, one
limitation of the production approach is when a company manufactures only one
product in large quantities and fails to identify the number of customers who are
willing to buy them, the company ends up with surplus products. This is known as
marketing myopia or marketing short sightedness.

2. Product Orientation- this approach focuses on the product and its innovation to
attract customers. This approach was considered a solution to the limitations of the
production orientation.

Principles of Marketing-1st Sem 2020-2021

3. Selling Orientation- this approach relies on the strength of the company’s sales force
in convincing the customers to buy the product even if they do not need it. However,
since this approach prioritizes sales, it pays little attention to the customer’s actual
need for the product, which results in the failure of the business.

4. Marketing Orientation- in this approach, the customer’s preferences- what they

want, how much they are willing to pay, what form and feature they prefer, etc – are
prioritized. This approach is also known as the customer-centric approach.

5. Societal Orientation- this is similar to marketing orientation except that concern for
society’s well-being and the environment’s sustainability is prioritized as much as the
customer’s preferences. This marketing approach is also called green marketing and
the product is called a green product.
THE MARKETING PROCESS AND THE 4P’S
Marketing is a process that involves creating, pricing, distributing, and communicating goods,
services, and ideas to facilitate a satisfying relationship with customers and development and
maintain favorable relationships with stakeholders in a dynamic setting. These marketing
elements are product, price, place, and promotion, which are also known as the 4P’s.

 Product – the marketing process starts with creating a product that satisfies the
needs and preferences of customers.
 Price- with the right product, finding the right price is another challenge. The
question is, what is the most affordable price for customers? What is their
capacity to pay? How much are they willing to pay?
 Place – once the price is determined, the next issue to address is the distribution
or the place. Where do customers prefer to buy the product? What location is
sufficiently convenient to sell the product?
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

 Promotion- having created the right product, determined the right price for it, and
identified the right place and means of distribution, the marketer should now
determine the means of communicating the product message, or a certain message
about the product or service that the company wants to communicate to its
customers.

The Marketing Mix Activities The Marketing Elements (4P’s)

Creating A product with useful and attractive
features for the customers
Pricing A price affordable to the customers
Distributing A place where customers can
conveniently buy the product
Communicating A promotion that will capture the
attention of customers

Discuss the common goals of marketing and the roles of a marketer

B. Lesson II – Goals of Marketing

MARKETING GOALS AND OBJECTIVES

One of the key elements of a successful company is having a clear vision. A company has to
formulate a specific set of business goals and objectives which will serve as its stepping stones to
success.

Goals – are aspirations that every company would like to pursue or the general direction that it
wants to take.

Objectives – are the specific goals that can be measured in the short term or the long term. Thus,
objectives should be SMART or specific, measurable, attainable, relevant, and time-bound.

COMMON MARKETING GOALS

Here are the following common marketing goals:

1. To develop and maintain a profitable base of loyal customers.
2. To develop products and services which contribute the quality of life and promote
environmental conservation.

Principles of Marketing-1st Sem 2020-2021

3. To understand customers’ behavior and communicate the marketing offerings to

them.
4. To support the other functional areas of business in achieving the company or
corporate goals.

THE ROLES OF THE MARKETER

1. Instigator – the marketer serves as a strategist who analyzes current market trends to
guide the actions of the company.
2. Innovator – the marketer is tasked to research the kind of product the customers need
and ensure that the developed product not only meets customers’ expectations but
also exceeds them.
3. Integrator – the marketer mediates between the interests of the company and the
needs of the consumers.
4. Implementer – the marketer ensures that the marketing strategy for the developed
products is in place and implemented effectively.

*Differentiate old-generation customers from new-generation customers and discuss the

various contemporary approaches to marketing*
C. Lesson III – Contemporary Marketing Methods
1. Classification of customers
a. Old-generation customers – tend to be loyal to traditional products; it takes time for
them to adopt new products associated with technology.
b. New generation customers – are younger and more open to new products and
technologies.
2. Contemporary marketing methods
a. Digital marketing – involves the use of digital technologies in presenting the product
or service offerings of a company.
b. E-marketing or online marketing – utilizes the Internet in boosting promotional and
marketing efforts.
c. Social media marketing – makes specific use of social networking websites and
relevant applications in promoting a company’s products and services.
d. Outdoor promotion – involves displaying promotional materials for products and
services outdoors.
e. Mobile promotion – mobile advertising that uses signs and ads mounted atop
taxicabs, logos painted on the sides of buses or vans, or product stickers attached to
vehicles.
f. Telemarketing – involves the promotion of products or services through unsolicited
telephone calls to identified potential customers.
g. Events marketing – involves the hosting of a themed event that is especially tailored
for the product.
h. Sachet marketing – is adopted to appeal to consumers who are cost-conscious and
cannot afford to buy products in large quantities.
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

VI. Teaching and Learning Materials and Resources

1. Module
2. Online Discussion
3. Power point Presentation
4. Video Clips from YouTube
5. Textbooks and Online Articles

VII. Learning Tasks

Activity 1.1

1. Kindly identify a products or services do you regularly use or avail in every day. And
kindly tell us how many brands of products or services do you consume or use
throughout the day.

Activity 1.2

1. Think of a company or business and briefly state their goals and objectives.
___________________________________________________________________________

___________________________________________________________________________

Activity 1.3
Think of a type of business that you may want to pursue in the future. Then, using the table
below, list the goals and objectives that you want your dream company to achieve.
Company Name:
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

Type of Business:
Product or Services Offered:
Goals Objectives
1. 1.
2. 2.
3. 3.

Activity 1.4

APPLICATION: Performance Task

Make an interview with your parents or relatives regarding to what products they are using
and ask them some questions how they became happy and satisfied using those products.
And submit your video to my messenger.

VIII. Reference
Danilo M. Te, DBA, MBA, Rodilina Baltazar-Marte, MBA, MAEEE, Donna
Vida M. Abrina, MBA : Principles of Marketing for Senior High School

Title: Customer Relationship and Customer Service

Module 2:
I. Introduction:
In this chapter, let see how companies meet and manage expectations and satisfaction of the
customers. Meeting customer expectations provides customer value which, in turn,
contributes to customer satisfaction and loyalty.

II. Content Standards

The value of customer relations and customer services.

Principles of Marketing-1st Sem 2020-2021

III. Performance Standards

Develop a program for customer service.
IV. Most Essential Learning Competencies:
After studying this chapter, the student will be able to:
1. define “relationship marketing”; (ABM_PM11-lc-d-5)
2. explain the value of customers; (ABM_PM11-lc-d-6)

V. Topics and Key Concepts

*Discusses the importance of meeting customer’s expectations and providing them with
greater customer value*

A. Lesson IV – Customer Expectations and Customer Value

MEETING CUSTOMER EXPECTATIONS

First, what is Customer Expectations? It is referred to the perceived benefits and results a
customer expects when buying and using a product or availing a service.
In overall, customer expectations with companies revolve around the following main aspects:
a. Reliability- the ability to provide the expected benefits and results consistently.
b. Tangibles- the quality of physical facilities, personnel, and communication services.
c. Responsiveness- the willingness to provide prompt service and assistance.
d. Assurance- the ability to convey trust and confidence through expert knowledge and
courteous service.
e. Empathy- the care and attention given to each customer.
Under promise and over deliver – this strategy is often employed in businesses and services
that rely on quick delivery of products and services.
Blue Ocean Strategy – this strategy encourages businesses to expand their market base and
acquire new customers by creating new value which will give rise to new demand.
Customer Value
The customer perceived value refers to a customer’s assessment of the benefits gained from
buying and using a product compared to its cost as well as the competing offers on the market.
The graph below outlines how the customer determines value.

CUSTOMER

Principles of Marketing-1st Sem 2020-2021

BENEFITS AND COMPETING

COSTS COMPARES OFFERS

PERCEIVED VALUE

CUSTOMIZED CUSTOMER SERVICE

Customization means matching the specific wants of every customer with a certain product
offering of the company, creating value and ensuring customer satisfaction. If a company would
like to be satisfied, delighted, or amazed, then customization is one of the best strategies to
employ. Customization works well if the company has customers that can be segmented
(divided) based on their wants.
*Discusses how to cultivate and measure customer relationship*
B. Lesson V – Customer Relationship and Customer Service

The Customer-oriented firm constantly thinks about its customer, how their needs and wants can
be satisfied, and how their expectations can be met. A customer-oriented mindset puts the
customer first and regards them as “kings” and “queens”.

The famous saying “the customer is always right,” however, should not be taken to mean at
fault. In fact, there are cases of abusive customers, angry customers, nuisance customers. What
the saying means is that all customers must be treated the same; they should be respected and
listened to.

The impact of customer satisfaction on a business means that the customer-oriented firm must
always strive to satisfy customers. Firms are often organized based on the old paradigm where
only the frontline people meet and address customer complaints, while the middle and top
management have secondary roles in customer service.

Principles of Marketing-1st Sem 2020-2021

Top Top
Management Management

Middle
Middle Management
Management

Front Line Staff Front Line Staff

Customers Customers
Old Paradigm Customer-Oriented Firm

HAPPY EMPLOYEES MAKES HAPPY CUSTOMERS

Effective customer service starts with frontline people, as they face customers most of the time.
The company must ensure the satisfaction and happiness of its employees, as they have
significant impact on customer service. Happy employees perform better and serve customers
more effectively. They smile a lot, are more patient, and exhibit a proactive attitude.

MARKETING AND CUSTOMER RELATIONSHIPS

Once the business has convinced consumers to patronize its products, another important task that
marketers should focus on is establishing and maintaining a relationship with them to ensure
their continued patronage of the company’s products and services. Ensuring customer loyalty
maximizes the profit potential of a business.
Customer Relationship Management (CRM) refers to the development of strategies to
establish and sustain desirable customer relationships. The full profit potential of a business
through customer relations centers on three aspects: acquiring new customers, maintaining
existing customers and enhancing their profitability, and prolonging relationships with
customers.
One important aspect of customer relationship management is relationship marketing, a type of
marketing that focuses on establishing and maintaining customer loyalty. It emphasizes the
importance of ensuring that sales transactions and loyalty to the product and the company are
assured. Relationship marketing strives to:
1. understand the customer’s needs,
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

2. deepen the buyer’s trust,

3. enable customers to participate in the creation of value,
4. enhance cooperation and mutual dependence, and
5. build satisfying exchange relationship.

CUSTOMER EQUITY AND LIFETIME VALUE

Recognizing the value of the customer is essential in marketing. The central importance of the
customer is echoed in statements such as “the customer is king” and “the customer is always
right”. One aspect of customer relationship management is the collection and analysis of data on
consumers.
Companies use a customer relationship management program to manage, measure, and
understand customers. It encompasses lead generation (getting information about potential
customers and qualifying them in the process), customer acquisition (converting prospect to
current customer), monitoring and satisfying customer needs, and encouraging loyal customers.
Through the CRM:
1. prospective customers are profiled and monitored.
2. customers’ personal data and transactions are recorded in the company database; the
information is used to track customer buying patterns, their preferences, and expectations.
3. the collected data is utilized to measure the customers’ life value (customer equity).
Customer lifetime Values are determined by calculating the profit gained from each customer
within a specific time period (usually within a year). The sum of the customer lifetime value of
all current and future customers determines customer equity.

MEASURING CUSTOMER LIFETIME VALUE AND CUSTOMER EQUITY

The steps in computing for customer lifetime values and customer equity are as follows:
1. estimate the amount of money each customer spends in a year
2. calculate the total profit each customer generates each year
3. determine the amount spent in acquiring a new customer
4. determine the net cash flow by subtracting the acquisition cost per customer
5. calculate the present value of the net cash flow per customer
6. add up the present value of all net cash flows throughout the analysis period to obtain the
customer lifetime value.

Sample Scenario

Principles of Marketing-1st Sem 2020-2021

ABC Marketing Company has been in operation for three years. It has a base of loyal customers
and their transaction records are stored in its computer database. The company has a Marketing
Information System (MIS) that monitors its customers. Its competitors pricing, and trends in the
external environment. Ms. Donna Martin, the new marketing manager, wants to measure the
lifetime value of its top 5 customers (herein referred to as Customer l, Customer 2, Customer 3,
Customer 4, and Customer 5). She requested from the MIS office the data of these customers.
Below are the data generated.

ABC Marketing Company, MIS Report

Year 1 (Profit each customer generated, 000)

Month Customer 1 Customer 2 Customer 3 Customer 4 Customer 5
January 23 40 20 76 46
February 13 36 16 78 49
March 15 43 23 82 45
April 27 38 25 85 44
May 18 47 18 90 50
June 23 53 31 93 60
July 25 55 26 98 63
August 31 48 38 86 62
September 33 47 37 85 58
October 26 49 26 82 59
November 25 39 28 89 63
December 18 38 26 92 65
Total 278 533 314 1,036 664

Year 2 (Profit each customer generated, 000)

Month Customer 1 Customer 2 Customer 3 Customer 4 Customer 5
January 24 41 25 70 50
February 14 34 20 74 52
March 15 40 28 80 49
April 26 40 26 83 47
May 20 50 20 90 52
June 26 54 35 91 59
July 28 59 25 95 65
August 35 45 37 87 65
September 37 46 38 86 60
October 30 50 28 83 61
November 27 38 30 84 65
December 23 37 29 89 63
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

Total 305 534 341 1,012 688

Year 3 (Profit each customer generated, 000)

Month Customer 1 Customer 2 Customer 3 Customer 4 Customer 5
January 30 45 23 74 49
February 32 40 19 80 53
March 26 38 28 86 47
April 31 45 26 85 49
May 27 48 20 90 50
June 29 55 33 92 56
July 30 60 27 96 59
August 38 48 35 89 60
September 40 49 35 88 59
October 35 53 29 87 60
November 29 45 31 87 63
December 30 46 32 92 60
Total 377 572 338 1,046 665

The total profit each customer per year is then determined:

Year Customer 1 Customer 2 Customer 3 Customer 4 Customer 5
Year 1 278 533 314 1,036 664
Year 2 305 534 341 1,012 688
Year 3 377 572 338 1,046 665

The net cash flow is determined by subtracting the estimated cost of customer acquisition per
customer. Let us assume the acquisition cost of each customer is equivalent to 30% of their total
cash flow. This will yield the following values for the net cash flows per customer.
Net Cash Flow = Total Cash – Acquisition Cost
Year Customer 1 Customer 2 Customer 3 Customer 4 Customer 5
Year 1 195 373 220 725 465
Year 2 213 374 239 708 482
Year 3 264 400 237 732 465

To determine the present value, multiply the net cash flow by the present value discount factor.
The present value discount factor is determined by management to be 5% interest rate. Based on
the present value table, the discount factors are: Year I = 0.952; Year 2 0.907; and Year 3 =
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

0.864. The sum of the computed values over three years will be the computed lifetime value of
the customers.
Computed Lifetime Value
Year Customer 1 Customer 2 Customer 3 Customer 4 Customer 5
Year 1 186 355 210 690 443
Year 2 193 339 217 642 437
Year 3 228 346 205 632 402
Lifetime 607 1,040 632 1,964 1,282
Value

Determining the lifetime value of each customers allows the company to quantify customer
behavior. Marketers can identify which customers contribute heavily to the company's profit and
concentrate their efforts on retaining the customers and maintaining positive relationships with
them. The company can also focus on less profitable customers and determine ways to further
increase their profitability. These data have an impact on marketing strategies. For instance, the
company can offer a rewards program to top-performing customers - in this case, Customers 2, 4,
and 5. Meanwhile, the company can survey Customers 1 and 3 to determine what it can improve
in its products to make them purchase more. All in all, determining customer equity is an
important step in maximizing customer potential for profitability.
CUSTOMER SERVICE IS MARKETING
All activities related to customer service is part of marketing. Customer-related activities,
including face-to-face interaction, phone calls, and emails, are part of marketing. Marketers
utilize considerable resources to build positive relationships with their customers and the public.
Marketers determine the type of customers they want to attract, the brand image they wish to
project to the public, and the means by which they can communicate the benefits of their
products to potential customers.
VI. Teaching and Learning Materials and Resources

1. Module
2. Online Discussion
3. Power point Presentation
4. Textbooks and Online Articles

VII. Learning Task

Activity 2.1

Principles of Marketing-1st Sem 2020-2021

Your mother recently bought you a desktop computer set from Iphone iMac. When you
turned on your computer, it displayed a message saying that there was a problem with the
hard drive. You called the technical support service of the store and they promised that they
will send a technician to look into the problem the next morning. Resigned to the fact that
you will be unable to use your new computer immediately, you turned on your game console
and played your favorite game. The next day, a technician from Iphone iMac arrived at your
house at 8am. He took a look at your computer and was able to fix the problem in fifteen
minutes.

Directions: Describe the experience by checking the appropriate boxes which represent your
feelings.

My feelings…. Very Positive Somewhat Somewhat Very Negative

Positive Negative
1.When I
realized that
there was a
technical
“glitch”, I
felt……___
2. How did you
feel when the
technician
arrived?
3. Overall,
this
experience for
me was……
4. How
will you
describe this
experience to
others?

If you were the manager of Iphone iMac, how would you ensure that your customers are always
satisfied with your products and services? How can you avoid problems with customers in the
future?

Principles of Marketing-1st Sem 2020-2021

Activity 2.2

Answer the following questions concisely.

1. Why is it important for marketers to consider customer expectations and satisfaction?

___________________________________________________________________________

2. How can customization aid in improving customer value?

___________________________________________________________________________

3. Why should businesses adopt a customer-oriented perspective?

___________________________________________________________________________

Principles of Marketing-1st Sem 2020-2021

VIII. Reference
Danilo M. Te, DBA, MBA, Rodilina Baltazar-Marte, MBA, MAEEE, Donna
Vida M. Abrina, MBA : Principles of Marketing for Senior High School

Title: Market Opportunity and Consumer Analysis

Module 3:
I. Introduction:
In this chapter, let see how marketing strategy to be employed to satisfy its customers and
minimize the threats of competitors.
II. Content Standards
The importance of information, the market characteristics affecting consumer behavior and
the bases of market segmentation.
III. Performance Standards
Conduct marketing research, interpret market buying behavior on product or service, and
identify the product or service target market.

IV. Most Essential Learning Competencies:

After studying this chapter, the student will be able to:
1. distinguish between strategic and marketing planning in terms of objectives and
processes;(ABM_PM11-le-i-9)
2. analyze the elements of macro- and micro-environment and their influence to marketing
planning;(ABM_PM11-le-i-10)

V. Topics and Key Concepts

*Presents the importance of planning the right action in marketing any product. This
lesson discusses the strategic marketing process that will help any business organization,
big or small*

A. Lesson VI – Developing and Implementing Marketing Strategies

STRATEGIC PLANNING IN MARKETING

Principles of Marketing-1st Sem 2020-2021

According to Kotler (2011), strategic planning "sets the stage for the rest of planning in the
firm." That is, companies must be able "to develop and maintain a strategic fit between its goals
and capabilities and its changing market opportunities."
Thus, strategic planning is a process by which the company defines the general direction it will
take and translate this into broadly defined goals. It begins with defining the mission of the
company, then setting objectives and goals, and finally, designing its business portfolio.

STRATEGIC PLANNING PROCESS

Step 2:
Setting company
objectives and goals
Step 1: (corporate level and Step 3:
department level,
Defining company Designingcompany
e.g., financial,
mission business portfolio
operations/production
,human resource
management,
marketing, etc.

The company must first define its mission as a business. This gives meaning to what it is
supposed to do over a period of time. The following are some examples.

Company Mission Statement

Jollibee To serve great-tasting food, bringing joy of
eating to everyone.
Unilever To grow our business, while decoupling our
environmental footprint from our growth, and
increasing our positive social impact.
Smart Telecommunication Empower Filipinos everywhere with
customer-focused digital innovations that
unlock and share their infinite potential.
Meralco To provide our customers the best value in
energy products and services.

Then, the company needs to set its overall company objectives at the corporate level, which are
then translated into the respective departments' objectives and goals. For example, if a company
has an objective of pursuing market expansion, the marketing department may decide to pursue
market penetration and/or increase market shares.

Finally, after setting realistic objectives and goals per department, the collective products and
businesses to offer on the market can then be designed. This collection of businesses that the
company owns is referred to as business portfolio.

Principles of Marketing-1st Sem 2020-2021

THE STRATEGIC MARKETING PROCESS

After the strategic planning of an organization where it assesses its strategic direction, the next
step is for the various departments to implement their plans. The marketing department will
proceed with resource allocation, interpretation of the strategic plan into specific actions, and the
analysis of the projected plan.

To accomplish these tasks, the organization can use the strategic marketing process by
organization allocates its marketing mix resources to reach its target markets. The planning
process is a marketing plan.

After the company has assessed its overall strategic direction, the next step is for its various to
conduct their own strategic planning. The marketing department, in particular, its marketing
plan, which will address the following questions:
1. How do we allocate our resources to get where we want to go?
2. How do we convert our plans into actions?
3. How do our results compare with our plans?

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS

There are three steps involved in the strategic marketing process: (1) situation (SWOT) (2)
market-product focus and goal setting, and (3) the marketing program. In the phase. the
internal strengths and weaknesses, external competition, technological changes in the industry
culture, and the general state of the company are identified.

Step 1: Situation Step 2: Market

Planning Phase Product Focus and
(SWOT Analysis
Goal Setting

Marketing Implementation
Plan Phase

Principles of Marketing-1st Sem 2020-2021

NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY Step 3: The
Prepared by: Joan Joy A. De Vera, LPT Marketing
Evaluation Phase Program
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

SITUATION (SWOT) ANALYSIS

SWOT analysis is used to identify a company’s strengths, weaknesses, opportunities, and
threats. The primary objective of the process is to help organizations develop a full awareness of
all the factors, positive and negative, that may affect strategic planning and decision-making.
The SWOT analysis is an excellent tool for organizing information, presenting solutions,
identifying roadblocks, and emphasizing opportunities. The main purpose of the SWOT analysis
is to add value to a company's products and services so that new customers can be recruited,
loyal customers can be retained, and products and services can be extended to customer
segments over the long term.
The SWOT analysis can be used in the following circumstances:
 Exploring avenues of new plans
 Determining possibilities of introducing new products or entering new markets
 Identifying possible areas of change
 Making decisions about the direction of the company's plans
 Adjusting plans when new opportunities come up
 Communicating information gathered from studies or surveys

SWOT MATRIX

HELPFUL HARMFUL

INTERNAL IN STRENGTHS
WEAKNESSES
ORIGIN Great location Lack of marketing
Available Funding expertise
(ATTRIBUTES OF
Specialist Poor quality of goods
THE
or services
ORGANIZATION) Market Experience

EXTERNAL IN OPPORTUNITIES
ORIGIN A developing market
such as the internet TTHREATS
Principles ofNew Time delays
international Sem 2020-2021
Marketing-1st
(ATTRIBUTES OF market High costONLY
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE
THE Rising health
ENVIRONMENT)
Prepared by: Joan Joy A. De Vera, LPT
awareness
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

According to Kotler (2013), strengths include internal capabilities, resources, and all positive
situational factors that may help the company serve its customers and achieve its objectives.
Weaknesses include internal limitations and negative situational factors that may interfere with
the company's performance. Opportunities are favorable factors or trends in the external
environment that the company may be able to exploit to its advantage, and threats are
unfavorable external factors or trends that may present challenges to performance.

The SWOT analysis allows the marketer to closely examine the strong and weak points that have
not been previously considered. Once identified and enumerated, the company will be able to:
1. build on the company’s strengths,
2. correct a prevailing weakness,
3. take advantage of an opportunity outside the company, and
4. avoid potential threats.
STRATEGIC AND TACTICAL MARKETING: WHAT IS THE DIFFERENCE?
Simply put, a strategic plan determines specific goals, while a tactical plan identifies the means
in order to reach these goals. In business, a strategy is concerned with broad goals such as
increasing market shares and creating a particular image for the company. Strategic planning is
concerned with determining the direction of business growth in relation to the competition and
the company's own market position. Tactical planning, meanwhile. consists of planning the
actual activities that will improve the company's competitive position.
TACTICAL MARKETING
The term tactical marketing refers to actions the company takes in order to market a product.
This includes the various ways a company places and offers its product to its target customers,
such as:
1) repackaging a product;
2) changing the pricing scheme,
3) increasing the number of distribution partners like retailers and wholesalers;
4) placing advertisements such as online. radio, television and print marketing, sales promotions.
and events;
5) building websites and creating brochures and other mailings; and
6) implementing a follow-up system.

Principles of Marketing-1st Sem 2020-2021

Implementing tactical marketing requires the preparation of a budget which will cover the costs
of advertising and sales promotions.
*Describes the two environments that affect how a product or services is being marketed.
The planning of marketing strategies to market business organization’s products affected
by internal and external forces*
B. Lesson VII – The Marketing Environment
SCANNING THE MARKETING ENVIRONMENT
Change is inevitable. The greatest challenge for a business is adapting to the complex and
unpredictable changes in the environment within which it operates. Changes may be the result of
social, political, or economic crises or new trends in lifestyle. Technology can also trigger
change in the market. For instance, the introduction of downloadable content from the Internet
such as music and movies had an impact on the music and movie industries. These industries, in
turn, have to adopt new marketing strategies to address the challenges and opportunities brought
about by new technology.
A company's marketing environment consists of the forces outside marketing that affect the
management's ability to build and maintain successful relationships with the target consumer.
Market research and market intelligence allow marketers to collect information about the
marketing environment and come up with strategic plans to map out and meet the expectations of
consumers. Much of the time spent by marketers is on the customer and competitive
environments, where they adapt their strategies to meet the challenges and opportunities in the
marketplace.
According to Kotler (2013), the marketing environment consists of the microenvironment and
macroenvironment.
THE MICROENVIRONMENT
The microenvironment refers to the forces closely influencing the company and directly
affecting the organization's relationships. A few of these factors include the company itself and
its current employees, its suppliers and market mg intermediaries. competitors, customers. and
the general public. Microenvironmental forces can sometimes be controlled and Influenced by
the marketer.

THE COMPANY:


Customers

Suppliers

Publics

Marketing
intermediaries
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR
 CompetitorsGORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

THE COMPANY
Marketing decisions about the company's product offering and pricing, where to sell its products,
and how these will be communicated to its target customers require resources like cash,
materials, and skilled people, among others. Before marketing decisions can be made, top
management needs to assess the resources available to the company to determine their strengths
and weaknesses, companies examine the different aspects of their operations in various
departments such as Finance. Research, Human Resource. Production, IT, Logistics. etc. These
departments comprise the internal environment of the company.

Below are some examples of strengths and weaknesses of a company.

Strengths Weaknesses
Accounting  Real-time account  High bad debts,
balance uncollectible
accounts
Finance  High return on  High interest payable
investments
Sales  Increasing customer  Decreasing sales
base revenue
Marketing  Strong brand name  Lack of innovations
 Strong positioning in product offers
Production  Efficient production  Lack of skilled
process workers
 High inventory  High production cost
turnover
Human Resource  Effective training  High employee
programs turnover
 High employee  Weak performance
morale management system
I.T  Top-of-line  Lack of expertise
equipment
Logistics  Fast and efficient  High volume of
delivery breakage and
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

 Low transportation pilferage of goods to

cost be delivered.

The operations of all departments within an organization can positively or negatively impact
customer satisfaction. The marketer works closely with these departments to determine ways for
each to contribute to providing exceptional customer value. Departments cannot work in
isolation. They are interrelated and should work closely with other departments in the company.
Their actions have an impact on the plans and actions of the marketing department. Therefore,
building relationships with other departments is necessary to create an effective value delivery
network.
Customer satisfaction should be the primary concern of all the departments of the company. It
must uphold customer satisfaction in its planning and operations.
SUPPLIERS
In delivering value and satisfaction to customers, the company relies on external business
partners called suppliers who are either individuals or companies that provide the necessary
resources to produce goods and services. relationships with its suppliers.
From a retail perspective, suppliers deliver products in bulk. which are then packed or broken
down into smaller packaged proportions and sold in stores to consumers.
MARKETING INTERMEDIARIES
Marketing intermediaries help the company promote, sell, and distribute its products to the final
buyers. These intermediaries are an important component of the company’s overall delivery of
customer value.
Marketing Intermediaries includes:
1. Reseller
 They hold and sell the company’s products
 Wholesaler and Retailer
2. Physical Distribution Firm/Logistics Firm
 They help the company stock and move goods from a warehouse to the final place
of selling or other destinations.
3. Advertising/Marketing Services Agencies
 Help in targeting (through marketing research companies) and promoting
products (through advertising agencies)
4. Financial Intermediaries
 Help in financial transactions
 Banks, insurance companies, lending institutions


Principles of Marketing-1st Sem 2020-2021

COMPETITORS
Marketers conduct a competitive analysis by identifying competitors and analyzing the values
and benefits of their products. However, marketers should understand that competition is good
because they make the company alert and Innovative. On the other hand, they must be prepared
to meet the challenges and threats of competition.
There are different types of competition. Brand competition occurs when brands in the same
segment and Industry compete against each other. Substitutable products competition
meanwhile, involves products whose characteristics and benefits meet the same customer need.
Generic competition involves a variety of products that provide the same benefits and value to
the consumer.

PUBLICS
According to Kotler (2013). a public any group that has an actual or potential Interest in or
impact on an organization's ability to achieve its objectives. Financial publics influence the
company's ability to obtain funds; media publics carry news, features and opinions; government
publics include the company's lawyers; local publics include neighborhood residents and
community organizations; and internal publics includes workers, volunteers, managers, and the
board of directors.
CUSTOMERS
Customers are a vital factor in the company’s microenvironment. They are the actual buyers of
goods and services. It is the aim of companies to serve their target and create a positive
relationship with them. Customers refers to the general consumers, including individuals,
households, or organizations that purchase a product either for use in their operations or as a part
of another product to resell to the consumers such as schools and hospitals. The customer factor
of the microenvironment can be further divided into business and institutional customers. It is the
firm's marketing plan to target and attract consumers through products that meet the needs and
wants of its customers and provide excellent customer service. The company must study each
customer market closely since each market has its own characteristics. Marketers also develop
marketing messages that appeal to the individual needs of the customer.

Principles of Marketing-1st Sem 2020-2021

THE CUSTOMER MARKET

The Consumer Market The Business Market The Reseller Market

Individuals and They buy goods and services
They buy goods and
households that buy goods for further processing,
production, and eventually services and sell them at a
and services for individual
selling to consumers profit
consumption

The Government Market The International

Market
Agencies that buy goods and
services for government use Buyers of all types in
or in order to produce public foreign countries
services

Principles of Marketing-1st Sem 2020-2021

THE MICROENVIRONMENT
The macroenvironment consists of external forces that have a significant influence on marketing
strategy. The external forces in the macroenvironment cannot be controlled; therefore,
companies should learn to adapt to these forces. The external forces are identified and analyzed
through environmental scanning.
One framework in conducting environmental scanning is the PESTLE Analysis, which identifies
the external forces and determines opportunities and threats that arise from them. These major
external forces are political, economic, social, technological, legal, and environmental.
 Political Forces
These refer to government actions that influence the economy at large, such as policies and laws
on taxation, trade. and labor. The stability of the government and its various activities also have
an impact on the business environment. Businesses should pay close attention to the actions of
the government and unfolding political events and developments as these have an impact on the
country's economy. which in turn can affect the market.
 Economic Forces
Economic forces are the determinants of an economy and its condition like inflation rate,
interest rate, monetary policies, and foreign exchange rates. Businesses analyze these factors to
make decisions and implementing strategies that will address ensuring economic changes. A
market boom, a recession. or a growing inflation problem can affect marketing strategies. The
increased use of smartphones and the declining cost of wireless connectivity have led to the
prevalence of online social networking. Companies quickly took advantage of this change and
implemented marketing strategies using social media and online social networking.
 Social Forces
These include aspects of culture and society, demographics, lifestyle, values. social trends, and
other similar changes. Trends, in particular, are a significant social factor which must be
considered in a highly competitive market. Trends refer to particular behavior of a certain group
of individuals which lasts for a certain period. Marketers are interested in trends since they often
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

dictate the behavior of consumers, in terms of products to purchase or services to avail of. Trends
that are short-lived are called fads, such as a particular fashion or hairstyle among young people,
or a certain activity that gains popularity among a specific group of people over a given period.
Trends that persist over a long period are caned megatrends. These are often linked to health
and wellness and tend to have a deep emotional impact on consumers.
 Technological Forces
Advancements in technology have a great impact on business. and companies must keep abreast
with these changes. This prompts companies to analyze trends and developments in technology
and determine how these can be used for their benefit. New technologies are often integrated into
product development and the operations of organizations.
 Legal and Regulatory Forces
Legal forces refer to laws, regulations, and government policies that impact the business
organization and its operations. These include health and safety standards, advertising policies,
equal opportunity regulations, copyright laws, consumer rights, and policies on product labeling.
 Environmental Forces
Environmental concerns such as ecology, climate. weather, and climate change have an impact
on businesses. particularly with regard to resources such as land and raw materials, Additionally,
many organizations are now aware of the impact of climate change on the business environment.
particularly its effects on the general public and markets, and have devised plans and other
means to address the threats it poses.

UNDERSTANDING COMPETITIVE FORCES THROUGH THE FIVE FORCES

ANALYSIS
Porter’s Five Forces Analysis is a framework used to analyze the nature and level of
competition within an industry. This tool helps a marketer understand the strengths of the
competing organizations, determine the present status of the organization, and identify the best
possible position that it can occupy in the market. It also helps marketers determine if a new
product or service can be profitable.

The Five Competitive Forces and their related factors are outlined in the graph below:
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

Threat of New Entry

- Time and cost of entry
- Specialist knowledge
- Economies of scale
- Cost advantages
- Technology protection
- Barriers to entry

Bargaining Power of
Bargaining Power of Buyers
Suppliers - Number of
- number of suppliers customers
Competitive Rivalry
- size of suppliers - Size of orders
- uniqueness of service - Number of competitors - Differences
- ability to replace - Difference in quality between
supplier - Other differences competitors
- cost of changing - Switching costs - Price sensitivity
- Customer loyalty - Ability to substitute
suppliers
- Cost of changing

Threat of Substitution
- Performance of substitute
- Cost of change

In undertaking the Five Forces Analysis, marketers have to answer the following questions:
1. The entry of competitors – how easy or difficult is it for new businesses to enter the
market?
2. The threat of substitutes – how easily can our product be substitute by an existing
product on the market?
3. Bargaining power of buyers – how strong is the influence of buyers on the company?
Can they work together to drive down our prices?

Principles of Marketing-1st Sem 2020-2021

4. Bargaining power of suppliers – how strongly can suppliers influence the prices of
resources and materials? Is there only one supplier or are there many? Are there other
potential suppliers?
5. Competitive rivalry – is there strong competition among existing players? Is there a
dominant player, or are all businesses equal in strength?

VI. Teaching and Learning Materials and Resources

1. Module
2. Online Discussion
3. Power point Presentation

VII. Learning Tasks:

Activity 3.1
Read the selection carefully, then answer the following guide questions on the space
provided.
The SWOT of Facebook
Facebook began in 2004. It is well-known social networking service which has 1.94 billion
monthly active users as of March 2017. Individuals and businesses can sign up and create a free
profile where they can upload pictures and videos and post personal information. Founded by
Harvard entrepreneur Mark Zuckerberg, the business was floated in 2012.
The main success of Facebook is that its brand name has become synonymous with social
networking, similar to Apple and Google which have become premier brands for new
technology. There is no real competitor to Facebook. Facebook currently generates revenue
through advertising, either by cut per click or cost per impression. There is the opportunity to
extend this is the business grows. While Facebook has plenty of regular traffic, some would
argue that it is becoming mature and that it has already acquired most of its potential customer
base. Since Facebook is free, there is no income stream from subscription. Competitors such as
LinkedIn have a subscription approach.
Some would say that having such a young group of entrepreneurs run a large global business is
a potential risk. Most CEO’s tend to be over 40 years old.
As often reported, Facebook is having a similar history to MySpace. MySpace famously
became the premier place to network socially online. Then it became unfashionable and its
market share was eroded by businesses such as Facebook only once it had been sold. Thus,
there is an element of uncertainty about Facebook and whether it can maintain its growth in the
future.

Principles of Marketing-1st Sem 2020-2021

1. What is Facebook’s internal (company-specific) strengths, competencies, and

capabilities?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

2. What are its internal weaknesses that need to be improved on?

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

3. What opportunities presented by customers, competitors, and other forces can be taken
advantage of?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

4. What are possible threats to Facebook’s business operations?

VIII. Reference

Danilo M. Te, DBA, MBA, Rodilina Baltazar-Marte, MBA, MAEEE, Donna

Vida M. Abrina, MBA : Principles of Marketing for Senior High School

Title: Market Opportunity and Consumer Analysis

Module 4:
I. Introduction:
In this chapter, marketers need accurate and timely information about the market and
competitors so they can make effective decisions regarding the proper strategies to
implement.
II. Content Standards

Principles of Marketing-1st Sem 2020-2021

The importance of information, the market characteristics affecting consumer behavior and
the bases of market segmentation.
III. Performance Standards
Conduct marketing research, interpret market buying behavior on product or service, and
identify the product or service target market.
IV. Most Essential Learning Competencies:
After studying this chapter, the student will be able to:
1. define marketing research, its importance to a business enterprise and identify the steps in
marketing research;(ABM_PM11-le-i-11)

V. Topics and Key Concepts

*Describes how important data is in the process of making strategic decisions and action
plans for a business. It also illustrates the various tools useful for studying the market*

1. Lesson VIII – Marketing Research

Research is defined in the Webster Dictionary as a careful, systematic study in a field of

knowledge that is undertaken to discover or establish facts or principles. It is also defined
as a systematic process of collecting and analyzing data to find an answer to a question or
solution to a problem, or to validate or test an existing theory.

Business research is research intended to solve business problems or validate or test

existing business theories. In contrast with social science research, where the focus is on
social behavior, business research deals with business-related problems

WHAT IS MARKETING RESEARCH?

Churchill, Brown, and Suter (2012) define marketing research as the function that links the
consumer, customer, and public to the marketer through information. This information is used to
identify and define marketing opportunities and problems; generate, refine, and evaluate
marketing actions; monitor marketing performance; and improve understanding of marketing as
a process.

CLASSIFICATION OF MARKETING RESEARCH

Marketing research can be classified as qualitative or quantitative. Qualitative marketing

research involves exploring and understanding the problem or issue at hand, reducing the
number of options so that only the relevant ones are carried for further research, understanding
consumer behavior through observation and interpretation, or simply studying a company and its
operations. The output of qualitative research can be used as input for quantitative research,
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

either as part of the problem statement or as part of validation by triangulating quantitative

research results with qualitative research results.

The following are the major types of qualitative market research:

 Exploratory Research is conducted if the researcher would like to gather more

information about the problem or issue being investigated or reduce the available
research options to a manageable size. Literature review is done in exploratory research if
the research would like to build up the reference materials that can be used in the research
and crystallize some raw ideas.

 Ethnographic or Observational Research is done by observing consumer behavior

through various means. One is simple observation, where the observer watches the
consumers and records their behavior using video cameras, audio recorders, and
computers. There are factors to consider when observing consumer behavior. The
customer should be informed that he or she is being observed and must consent to being
monitored. However, awareness that he or she is being observed may affect the
consumer's behavior: he or she may behave in an unnatural manner. Consumer behavior
analysis is multi-disciplinary.

 Case Analysis involves the study of a particular company, group, or person through
personal interviews or published literature. To make it interesting to readers, the
personality of the person/s involved is reflected and linked to the case. The case analysis
is not intended to be an accurate solution to the problems or concerns of the company or
group mentioned, but to elicit further discussions about the people involved. Since it is
focused on a particular company or person, the results of such analysis cannot be
generalized.
The traditional format for a case analysis based on the Harvard model is:
- Problem and Objective/s
- Areas of Consideration
- Alternative Courses of Action
- Decision Criteria
- Recommendations

 Quantitative Marketing Research involves the collection of information, statistical

data, and precise measurements through surveys. The data gathered is subjected to
mathematical analysis and statistical treatment. Results or findings in quantitative market
research can be generalized across groups of people or used to explain a particular
phenomenon.
The following are the different kinds of quantitative market research:
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

- Descriptive Research answers the questions who, what, when, why, and how in
the problem statement. This kind of research is widely used because it is easy to
implement and the findings are easy to interpret. The interpretation involves
frequency count, percentage, or ratio.
- Correlational and Explanatory Research measure the relationships between
variables to determine their interdependence or dependence. Interpretation is done
through correlational, explanatory, or predictive methods. Multivariate techniques
such as factor analysis and multiple regression analysis are the commonly
preferred tools for statistical analysis.
- Causal Research is the most complicated kind of quantitative research. It looks
into the cause-and-effect relationships of its variables and constructs and how one
variable/construct would affect another variable/construct.
STEPS IN MARKETING RESEARCH
Kotler and Armstrong have devised a marketing research model composed of four steps.

Defining Implementi
the Developing ng the Interpreting
problem the research research and
and plan for plan, reporting
research collecting collecting the findings.
objective information and
analyzing

The Marketing Research Process (Kotler & Armstrong, 2013.)

Step 1. Defining the problem and research objective
Identifying the problem and the research objective in marketing research often requires
consultation with the decision makers (DM) in the company. Once the research problem has
been identified, the corresponding research objectives must be set. The following are possible
research objectives for each research type:
A. Exploratory Research – to determine the traits of consumers in Davao City which may
influence their preference for coffee.
B. Descriptive research - to determine the sales performance of a newly introduced
product in urban and rural areas over a period of one year
C. Causal research - to determine if an increase in the pension among senior citizens leads
them to prefer higher-priced products on the market
D. Correlational research - to determine if there is a relationship between an increase in
allowance and the number of hours spent by students in internet cafes
Step 2. Developing the research plan for collecting information
After the problem and objectives are set, the researcher must present to the DM the plan on how
the research will be designed, how data will be collected, analyzed, and interpreted, and what

Principles of Marketing-1st Sem 2020-2021

will be the scope and limitations of the research based on the design. If there are areas that the
DM would like to incorporate, the researcher can advise the DM on its viability whether in the
current research or in future research. This is also the part where an agreement is reached
through the terms of reference (TOR) which binds the researcher and the DM in the conduct of
the marketing research.
Step 3. Implementing the research plan collecting and analyzing the data.
Once the plan is agreed upon, the researcher starts to gather data. If secondary data related to the
research problem is available, the research could be facilitated faster. If there are no related
published data, there is a need to gather primary data to address the specific problem. Any
secondary data that would complement the primary data should be utilized in the research.
Collecting primary data entails the biggest cost in marketing research. In the Philippines, where
research is not given much attention, it takes much time, effort, and money to gather quality
primary data.
Once the primary data is collected, the researcher will proceed with analyzing it. Expert
researchers with statistical background may find it easy, but others without statistical background
should include statisticians in the research team.
Step 4. Interpreting and reporting the findings
Once the data is analyzed using the appropriate statistical software, the findings can be
interpreted and reported based on the defined objectives of the research. The interpretation can
also be based on existing business theories or company policies and practices. The findings
should be presented in such a way that the decision maker can comprehend it and use it as a basis
for decision-making. The researcher, thus, has the responsibility of making the report readable
and comprehensible.
IMPORTANCE OF MARKETING RESEARCH TO A BUSINESS ENTERPRISE
Marketing research plays a vital role in any business enterprise. The successful operation of a
business is largely defined by good marketing research. Information determines and defines
marketing opportunities and problems; generates, refines, and evaluates marketing actions;
monitors marketing performance; and improves the understanding of the marketing process. For
example, the results of a market study can be used as a basis by the sales department in making
sales projections.

THE MARKET STUDY

A market study focuses on the target market and determines and estimates its demand relative
to a particular company offering. The study also covers trends, competition, and socioeconomic
conditions affecting the demand of the target market. The data about the market and other

Principles of Marketing-1st Sem 2020-2021

information are collected through a market survey (primary data collection) and from existing
data from various sources (secondary data collection).
Warwick defines a market survey as a tool used to gather information about existing or potential
customers in a certain market or population
The following are the steps in conducting a market study.
1. Define the problem and objectives of the study.
2. Gather secondary data from existing literature and studies. You can use the internet to research
on related topics or you can consult with government agencies or business organizations that
have the data significant to your study. Try to look for the following data:
a. general market situation (socio-demographic)
b. specific competitive situation
c. specific marketing environmental factors (trends, technology, etc.) that influence market
demand.
d. specific supply situation.
3. Prepare a letter of request to conduct a market study addressed to your respondent or
4.Conduct a survey (gather primary data) on:
a. buyer's intentions and preferences
b. their demographic and geographic data
5. Tabulate, analyze, and interpret the data.
6. Prepare a Market study Report using the suggested format. For a sample market study,

MARKET STUDY FORMAT:

Title Page
Table of Contents
VI. Executive Summary (not to exceed 2 pages)
VII. Brief Introduction about the market, the company and its product/s.
VIII. Market study objectives
IV. Socio-demographic data
V. Competitive situation
VI. Supply and demand situation
VI. Supply and demand analysis and measurement
VIM. Company's core competency (strength) to meet demand (opportunity)
IX. Marketing (product, price, promotion)
X. Recommendations
XI. References
XII. Appendices (survey questionnaire, other supporting documents)
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

DATA-GATHERING FOR THE MARKET STUDY

Below are guidelines, factors to consider, and guide questions in gathering data for a market
study from the EDCEL Entrepreneurial Competency Training Manual (Diaz, 1993).
1. Gathering general marketing information (Secondary Data):
 What is the population in the locality? What are its relevant traits (e.g. sex, age,
occupation, school population)?
 What is the market size, or the portion of the total population who will want the product
or service?
 How many businesses make the same product or offer the same service?
 How many businesses make complementary products?
 What other relevant information about the market is available?

2. Matching the product or service with market realities (Guide Questions for Primary Data
Gathering preparation):
 Who will be my customers (also called target market)? Are they teenagers, employees, or
retired people? Do they have lots of leisure time? Do they have special interests? Etc.
 What particular services or products are they looking for?
 What special features are they looking for in a product or service (size, color, speed, extra
function, etc.)?
 What special services are they looking for (longer working hours, free home delivery or
repair, etc.)?
 Why will they patronize my business instead of my competitors'?
 How much is the earning capacity of the target market (through the demographic data of
respondent)?
 Which combination/s will appeal to my target market? Why?
a. low price, high quality
b. low price, medium quality
c. low price, low quality
d. high price, high quality
e. high price, medium quality
 Where is the target market found? (Distance in terms kilometers, city, region, island
global, etc.)
 When is the best time to reach my target market? (daily, weekly, particular hours of th
day, particular days of the week, etc.)
 What kinds of promotion can the company use to communicate with the target market?
 How does the competition reach its target market (distribution and promotion)?

Principles of Marketing-1st Sem 2020-2021

 How will the company position its brand relative to the competition?

DESIGNING A SURVEY QUESTIONNAIRE

Below are sample questions to determine buyer's intention, preference, and demographic data:
1. Buyer or Customer's Intention
Examples:
a. Would you enroll in our marketing program? Please check the appropriate box.
Yes NO Not Sure
b. What is the probability of your enrolling in our marketing program? Please check the
appropriate box.
Highly probable Somewhat probable Highly not probable
Probable Not probable
Or:
c. On a scale of 1-10, where 1 is very unlikely, and 10 is very likely, what is your
probability of enrolling in our marketing program? Please check the box
corresponding to your answer.
10 9 8 7 6 5 4 3 2 1

2. Buyer or Customer's Preference

Example:
What factors do you consider in choosing the marketing program? Please check the
boxes corresponding to your answer.
Quality education
Qualified and experienced faculty
Employment opportunities
Reasonable tuition and fees
Other (please specify) _________________

3. Demographic Data of Respondents:

Principles of Marketing-1st Sem 2020-2021

a. Gender
Male Female

b. Civil status

Single Married Separated Widowed/ Widower

c. Educational attainment
High school graduate College graduate
Technical school graduate Other (pls. specify) _______________
d. Profession/occupation
Teacher Nurse Other (pls. specify) ______________
Accountant Student
e. What is your monthly household income?
More than Php100,000 Php8,001 - 15,000
Php50,001 - 100,000 Php8,000 or less
Php15,001 -50,000
f. If a student, how much is your daily allowance?
Php50 - 100 Php250- 500
Php100-250 Other (pls. specify)

SAMPLE SUPPLY AND DEMAND ANALYSIS AND MEASUREMENT

Short-Term Demand
For short-term demand (one year or less), we use the formula of Philip Kotler as shown below:

Principles of Marketing-1st Sem 2020-2021

Q = nqp
Where:
Q = Total Demand for a given period
n = Target Market
q = average consumption
p = estimated price

Compute the demand for shampoo X (sachet) for 1 quarter.

Given: n = 50,000 Solution: Q = nqp
q = 4 times a week Q = 50,000 (4 x 4 x 3) Php5.00
p = Php5.00 Q = Php12,000,000

Long-Term Demand (based on past sales or volume)

There are many methods one can use to measure long-term demand. The most preferred is
Simple Regression Method (time series).
Simple Regression Computation can be done through an Excel spreadsheet, as shown below.
Step 1: Prepare and label the cells with existing data (historical data):
Sales (000)
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
1310 1340 1520 1635 1710

Step 2: After the cells have been labeled and filled with data (past sales), highlight the values of
years 1 through 5. Your mouse at the intersection of year 5 cell and year 6 cell (bottom) should
show the plus sign (+).
Step 3: Drag and drop it (+) up to year Year 8 cell. The result below should show:

Sales (000)
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
1310 1340 1520 1635 1710 1831.5 1941 2050.5

Principles of Marketing-1st Sem 2020-2021

CONCEPTUALIZING THE MARKETING MIX

The results of the market study will help determine the optimal marketing mix the company will
employ in addressing the needs of the target market. Conceptualizing the marketing mix means
determining the significant aspects of the product, which is the 4Ps (product, price, place,
promotion). Market research is essential in developing the marketing mix since the information
about customer traits and preferences will guide marketers in determining the right marketing
mix. Developing each aspect of the marketing mix entails certain decisions, activities, and the
use of company resources.

Product
This refers to the traits or aspects of the product. In marketing, the marketer should decide which
traits of the product are highlighted in its promotion to the market.
Price
Price is not just about cost and its markup or markdown. It is also about how it is perceived
based on quality and expected benefit. If the product is perceived to deliver more value (quality
and benefit), then it can be priced higher than the competition.
Place or Distribution
The distribution channel should be described not only through its location but also through the
aesthetics or atmospherics of the place to capture the imagination of shoppers or consumers.
Promotion
Proper and precise communication is very important in reaching the target market. The choice of
a proper media (TV, print, broadcast, web, etc.) as well as the appropriate media copy can
increase its effectivity. It must also be complemented with positioning taglines (e.g. Nike - "Just
Do It," Coke - "Coke Is It") and promotional tools (samples, freebies, extended warranty, etc.).
IX. Teaching and Learning Materials and Resources
1. Module
2. Online Discussion
3. Power point Presentation
4. Textbooks and Online Articles

X. Learning Tasks
Activity 4.1
Word Search
Find and encircle the words related to marketing research.

Principles of Marketing-1st Sem 2020-2021

Total words: 17
I N F O R M A T I O N M P
I S P R E D I C T R T A O
S P R I M A R Y D P E R P
N S P O S D N E R T K K U
O E R P T W A O C R R E L
I D O M A I B N O R A T A
S U C R N L T I A C M I T
U T E R E T V E T L X N I
L I S M H A T C P A Y G O
C T S E H Z I A L M J Z N
N T R E S E A R C H O V E
O A B B U S I N E S S C R
C C U S T O M E R S S N R

XI. Reference
Danilo M. Te, DBA, MBA, Rodilina Baltazar-Marte, MBA, MAEEE, Donna
Vida M. Abrina, MBA : Principles of Marketing for Senior High School

Title: Marketing Opportunity and Consumer Analysis

Module 5:
I. Introduction:
In this module, it discusses how business operate in both consumer and business
markets.

II. Content Standards

The importance of information, the market characteristics affecting consumer behavior and
the bases of market segmentation.
III. Performance Standards
Conduct marketing research, interpret market buying behavior on product or service, and
identify the product or service target market.
IV. Most Essential Learning Competencies:
After studying this chapter, the student will be able to:
1. Differentiate the buying behavior and decision making of individual/household
customer versus the business (organizational) customer; (ABM_PM11-le-i-13)
2. Identify and segment market for a product or service;(ABM_PM11-le-i-14)

Principles of Marketing-1st Sem 2020-2021

3. Select the appropriate target market segment and its positioning; (ABM_PM11-
le-i-15)

V. Topics and Key Concepts

*Describes the two different types of market – consumer markets and business markets –
in which businesses may operate*

A. Lesson IX – The Consumer and Business Markets

THE CONSUMER MARKET
Anyone involved in the process of consuming, using, or buying products for personal use is
referred to as a consumer. Purchases made by consumers not only benefit them individually but
their households as well, which are referred to as household customers.
CONSUMER'S BUYING DECISION PROCESS
Consumers buy goods and services because these serve a purpose. Before making a purchase, a
customer goes through a series of steps which determines his/her buying decision. Kotler and
Armstrong (2012) outline the following steps in the buying decision process:
1. Need or Problem Recognition. The consumer recognizes that he or she has a need to be
satisfied or a problem that must be addressed. This is often brought about by the
realization of a difference between a customer's actual condition and his or her desired
state of being.

2. Information Search. As soon as the consumer recognizes his or her need, he or she
starts searching for products or brands that will best satisfy the need. The consumer
begins by recalling familiar products or brands. This is the internal search. When this is
not enough, he or she seeks other sources such as friends, experts, and printed materials
and literature like magazines, flyers, etc, and by checking out actual products and reading
their labels and packages. This is called the external search. The products or brands
which the consumer considers out of the many available choices belong to his or her
evoked set or consideration set.

3. Evaluation of Alternatives. At this stage, the consumer sets his or her evaluation
criteria, which can be both objective and subjective. This step will result in a decision to
purchase a specific product or brand.

4. Purchase. At this point, the consumer considers other issues related to actual purchase
such as seller choice (where to buy, availability of product) and terms of sale (whether
payment allows use of credit, installment, etc).

Principles of Marketing-1st Sem 2020-2021

5. Post-purchase Evaluation. If a purchase was made, the buyer begins consuming or

using the product. The consumer then examines his or her consumption experience or the
actual product performance against his or her expected satisfaction levels. This can lead
to either a positive level of satisfaction or dissatisfaction. Some consumers may
experience what is known as cognitive dissonance, which is described as doubts that
arise shortly after a purchase questioning whether the right decision was made.

LEVEL OF INVOLVEMENT AND CONSUMER PROBLEM-SOLVING PROCESSES

An important aspect of the buying decision process is the consumer's level of involvement,
which refers to the amount of time and effort spent on each purchase. There are four levels of
involvement: low, high, enduring, and situational (Pride, Ferrell, and Hunt, 2013). Products that
are routinely purchased, such as convenience products like shampoo and conditioner, require low
involvement from the consumer. These products tend to be less expensive and have less risk so
customers do not spend much time deciding on their purchase.
If the purchase involves expensive and important products such as clothing or cars, this will
require high involvement from the customer. This means that they will exert more effort in
decision-making as the risk of making a wrong choice is high.
Enduring involvement happens when a person has an ongoing and long-term interest in a
product. Customers regularly update themselves on information regarding the product and make
regular purchases over time.
Situational involvement refers to buying decisions which are necessitated by circumstances
beyond the control of the consumer.

MAJOR INFLUENCES IN THE CONSUMER'S BUYING DECISION

Philip Kotler (2012) proposed a model of buyer behavior which considers the buying decision
process as being influenced by various stimuli primarily encountered by the consumer in the
environment. These stimuli are then processed by the buyer's "black box" which consists of the
buyer's characteristics and his or her decision-making process. The process results in responses
which are evident in the consumer's preferences and buying behavior. Kotler's Model of Buyer
Behavior is presented below.
The Environment Buyer’s Black Box Buyer Response
Marketin Other Buyer’s Buying attributes and
preferences
g Stimuli characteristics

Principles of Marketing-1st Sem 2020-2021

Product Economic
Purchase behavior: what
Price Technological Buyer’s decision the buyer buys, when,
Place Social process where, and how much
Promotion Cultural
Brand and company
relationship behavior
Kotler’s Model of Buyer Behavior (2012)
Kotler's model is a useful tool in understanding the internal processes and external influences
which determine consumer choice and behavior. The internal factors that define customer
behavior include personal and psychological characteristics, while external factors include the
social and cultural environments.
The figure below presents the internal and external factors which influences the consumer's
buying decision.

Personal
Characteristics

Social Psychological
Influence Influence
Buyer's
Black Box

Cultural and Consumer

Social Buying
Behavior

Internal and External Factors Influencing Buying Decision

PERSONAL CHARACTERISTICS
The following personal characteristics influence the consumer's buying decisions (Kotler and
Armstrong, 2012):
 Age and life cycle stage - whether child, teenager, young adult, adult, or senior citizen
 Occupation - whether blue-collar worker, yuppie or young professional, office
professional, etc.

Principles of Marketing-1st Sem 2020-2021

 Economic situation - personal income, savings, credit access, etc.

 Lifestyle - the person's pattern of living in terms of his/her activities, interests, and
opinions
 Activities include work, hobbies, shopping, sports, social events, etc.

 Interests include food, fashion, family, vacation, etc.

 Opinions about self, social issues, health, the government, etc.

 Personality and Self-concept - described in terms of traits such as openness,

conscientiousness, extroversion, aggressiveness, and neuroticism

 Self-concept or self-image - People's possessions are statements of how they see

themselves. They buy products that help define who they are. They are also
attracted to brands that match their personality.

 Companies take advantage of the influence of self-concept by developing

products that match their target market's personality. The following are the five
major brand personality traits (Aaker, 1997):

a. sincerity - down-to-earth, honest, wholesome, and cheerful

b. excitement - daring, spirited, imaginative, and up-to-date
c. competence - reliable, intelligent, and successful
d. sophistication - upper-class and charming
e. ruggedness - outdoorsy and tough
PSYCHOLOGICAL FACTORS
Psychological factors include motivation, perception, learning, and beliefs and attitudes.
According to Abraham Maslow and Sigmund Freud, individual behaviors are driven by a
motive, which is a pressing need, either biological (e.g., hunger) or psychological (e.g., need for
acceptance), that requires a means to satisfy it. Schiffman & Kanuk (2006) define motivation as
the driving force within individuals that impels them to action. Consumer actions such as buying
and consumption always have underlying motivations. Maslow's Hierarchy of Needs is a theory
that categorizes needs along the following levels of importance:
1. Self-actualization needs refer to self-development and realization.
2. Esteem needs pertain to self-esteem, recognition, status.
3. Social needs refer to a sense of belonging and love.
4. Safety needs are concerns for security and protection.
5. Physiological needs include hunger and thirst.

Principles of Marketing-1st Sem 2020-2021

Another psychological factor that influences buying decisions is perception. This refers to how a
person is aware of and interprets reality through the five senses, and is also defined as the
process by which people select, organize, and interpret information to form a meaningful picture
of the world (Kotler and Armstrong, 2012).
Selective attention refers to the tendency of humans to filter out most of the information they
are exposed to, only focusing on stimuli that they need to pay attention to (Kotler and
Armstrong, 2012).
Selective distortion, meanwhile, refers to the tendency of people to interpret information in
ways that support their own beliefs or ideas.
Finally, selective retention refers to the tendency of people to remember information which is
related to their personal interests.
Learning refers to a change in a person's behavior as a result of experience (Kotler and
Armstrong, 2012).
Beliefs and attitudes also play a role in determining buying decisions. Belief refers to a person’s
idea about something and is primarily influenced by learning and knowledge. Marketers seek to
influence the beliefs of consumers by providing them information regarding products and
services. In some cases, though, marketers’ resort to providing false information in order to sell
their products.
Attitudes, meanwhile, refer to people's predisposition to act favorably or unfavorably toward a
certain person, object, or idea (Schiffman and Kanuk, 2006).
Social Influences
The external influences on a consumer's buying behavior include his or her social and cultural
environments. Consumers may have all the suitable personal characteristics and positive
psychological factors to favor a product or brand.
Groups exert significant influence on the buying decisions of individuals, like:
 Membership groups are small groups to which an individual belongs which exert a
direct influence on him or her. These include the family, a class section, clubs, or
cliques.
 Reference groups, meanwhile, are groups of which the individual is not a member,
though he or she strongly identifies with their behavior or lifestyle. Among these,
 Aspirational groups exert the greatest influence since these are groups a person wishes
to be part of. A person who aspires to be a professional basketball player has a favorite
basketball team, buys basketball merchandise, and exerts effort to excel at basketball in
the hopes of becoming part of his favorite basketball team in the future.
Word-of-mouth influence and buzz marketing are also significant social tools that impact
consumer behavior. These rely on personal recommendations by trusted people who are close to
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

the consumer. Marketers also seek out opinion leaders whose expertise and knowledge make
them authorities on certain issues, or people whose personalities and characteristics give them
influence over many people.
Social roles and social status are also important determinants of behavior. Social roles refer to
the set of expected behaviors and responsibilities which arise from a person's position within a
group. Social status, meanwhile, refers to the esteem assigned to certain social roles.
CULTURAL FACTORS
Culture exerts a broad and deep influence on consumers. Culture consists of values, views and
behavior imparted by groups such as the family and social institutions. Values that have been
associated with Filipino culture such as the importance of family, hospitality, and a sense of
community are often referred to in popular television commercials.
The existence of subcultures, which are smaller groups of people within a culture that share
distinctive traits and values, should also be considered.
THE BUSINESS MARKET
Apart from selling to customers in the consumer market, business can also participate in the
business market, which is composed of individuals, organizations, or groups who purchase
specific products for various purposes related to business such as resale, production, and
operations. Purchasers in the business market are called business customers. Retailers buy
products in order to resell them to customers; manufacturers purchase materials that will be used
in producing goods; and businesses purchase products for their operations. Since most of the
participants in a business market are business organizations, it is also known as the business-to-
business (B2B) market.
TYPES OF BUSINESS MARKETS
Producer markets refer to businesses that purchase products used for production or business
operations. These markets involve a wide range of industries such as agriculture, transportation,
and communication.
Reseller markets consist of intermediaries who buy finished products and sell them for Profit.
 Resellers do not usually alter the physical form of the product, although some repackage
Products to make them available in smaller quantities. Resellers are classified as either
wholesalers or retailers.
 Wholesalers purchase products in bulk and resell them to other wholesalers and retailers.
They also sell to producers, governments, and institutions.
 Retailers, meanwhile, acquire Products from wholesalers and resell them directly to
consumers. Generally, resellers consider the factors when making purchase decisions:
customer demand, inventory space, supplier's ability to deliver, order placement,

Principles of Marketing-1st Sem 2020-2021

technical support, and compatibility of purchased products with those carried by the
reseller.
Government markets refer to local and national government units and agencies that purchase
goods and for their operations and for providing citizens with public goods and services. This
market implements a purchasing process which emphasizes transparency and accountability.
Purchases are often made through a bidding system, where various suppliers submit thew bids
detailing specifications of products and services to a government unit or agency
Institutional markets involve organizations such as charitable, educational, and community
organizations deal with non-business goals. institutions often have varied and specialized needs
but limited resources. Therefore, marketers should use special efforts to cater to them.

BUSINESS MARKET ACTIVITIES

Transactions in business markets are often formal and involve discussions and negotiations that
require considerable time and effort. Purchasing decisions are often made by several individuals
or groups. It is common for businesses to have a purchasing department which conducts
transactions with business markets and finalizes the purchase of business products and services.
The complex nature of transactions in the business market is due to the fact that these
transactions are much larger and more expensive than individual consumer transactions.
Business purchases are classified into three types: new-task purchase, straight rebuy, and
modified rebuy.
 New-task purchase refers to the initial purchase of a product or service to address a need
or problem.
 A straight rebuy occurs if the initial transaction is satisfactory and the buyer makes
another purchase of the same product or service with the same conditions.
 A modified rebuy happens when business buyers negotiate new terms or conditions with
regard to quantity, delivery, price, and other aspects of the transaction for their next
purchase.

*Discusses the process of identifying a suitable specific group of customers to serve, how to
make the product significantly different from your competitors, and how to communicate
to your product to customers*
B. Lesson X – Market Segmentation, Market Targeting, and Product Positioning
SEGMENTING THE MARKET
Most companies may find the task of serving the entire consumer market too daunting. However,
should they decide to undertake this, marketers should consider the following questions:

Principles of Marketing-1st Sem 2020-2021

 Does the product or service appeal to the whole market?

 Does the company have the resources to serve the entire market?
 Is it able to face a large number of competitors?
Market segmentation is the process of dividing the total market into particular groups or market
segments which consist of people, groups, or organizations that have similar needs and wants.
Segmentation divides the market based on the following dimensions or categories:
1. demographic segmentation - based on age, gender, education, occupation, income
2. geographic segmentation - based on location of customers
3. geo-demographic segmentation - combines demographic and geographic factors
4. psychographic segmentation - based on lifestyle and personality
5.behavioral segmentation - first time vs. regular users, light users vs. heavy users
6. other considerations such as occasion or time
A priori segmentation, though useful, has certain limitations. Modern marketers recognize that
effective marketing must rely on timely and accurate information. To get a more accurate read of
customer's preferences, needs, and wants, marketer resort to research and data-gathering methods
to acquire information. Research is essential in market segmentation since marketers rely on
customer surveys. Market segmentation based on information gathered from market research is
called post hoc segmentation.
Below is an example of post hoc segmentation in a study conducted by Dr. Danilo Te in 2008.
The research established an associated profile of mall shoppers in Davao City. Based on the
information, Dr. Te identified three major clusters of shoppers which he described as traditional
shoppers, destination shoppers, and enthusiastic shoppers.

Principles of Marketing-1st Sem 2020-2021

31% 29%

40%

1st Qtr 2nd Qtr 3rd Qtr

Major Clusters of mall shoppers in Davao City

1st Quarter – (29%) Traditional Shoppers
2nd Quarter – (31%) Destination Shoppers
3rd Quarter – (40%) Enthusiastic Shoppers

Cluster 1: these shoppers are labeled as Traditional Shoppers. They value price, store smell,
and retail space. These shoppers comprise 29% of the respondents. They are mostly young, with
an average age of 28 years old. The following are the significant characteristics of the cluster:
Age / Life Stage Gender Education Civil Status Income Class
55% Generation Y 52% male 36% college 66% single 27% Class C
23% Generation X 45% female students 32% married 24% Class D
21% Baby Boomers 39% college 2% others 2% Class B
graduate 2% Class E
14% high school 45% No income
11% others (students)

Cluster 2: These are the Destination Shoppers who value product quality and convenience.
They comprise 31 (h of the respondents. These shoppers are mostly young but they are a little
older than cluster 1, with an average age of 30 years. The following are the significant
characteristics of the cluster:

Principles of Marketing-1st Sem 2020-2021

Age / Life Stage Gender Education Civil Status Income Class

55% Generation Y 42% male 37% college 60% single 22% Class C
28% Generation X 53% female students 38% married 27% Class D
28% Baby Boomers 37% college 2% others 16% Class E
graduate 3% Class B
20% high school 32% No income
4% others (students)

Cluster 3: These shoppers are labeled as Enthusiastic Shoppers. They value mall essentials
(aesthetics, comfort, promotion) and entertainment. They comprise 40% of the respondents. This
group is the youngest among the three clusters, with an average age of 25 years. The following
are the significant characteristics of the cluster:
Age / Life Stage Gender Education Civil Status Income Class
67% Generation Y 55% male 43% college 71% single 25% Class C
18% Generation X 42% female students 28% married 20% Class D
15% Baby Boomers 47% college 1% others 7% Class E
graduate 6% Class B
20% high school 42% No income
9% others (students)

TARGETING THE PREFERRED SEGMENTS

After the market has been segmented and the profiles of potential customers have been
developed, marketers need to select the most promising market segments and make the
appropriate strategies to target them. In targeting the preferred segment, the company should
consider if it has the right products or services for the target market segment, and if it has the
competency to serve these customers well - on par with or even beyond their competitors.
The company should also look into the following:
1. access to the market - Does the company have easy access to the market?
2. marketing budget - Is there a sufficient budget to implement appropriate marketing strategies?
3. company objectives- Do the characteristics of the target market conform to the Objectives of
the company?
4. potential for growth and sustainability - Is there potential for growth even if the market is
small?
POSITIONING THE PRODUCT OR SERVICE
Product positioning refers to activities undertaken to create and maintain an idea of the product
in the customers' minds. Al Ries and Jack Trout (1987) consider marketing as positioning the
product in the minds of the customers. Marketing battles, in a sense, are not fought at retail stores
but are waged in the minds of consumers
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

Another significant aspect of product positioning is brand identity. Positioning the product
through brands is done by using positioning statements and taglines. A positioning statement
concisely defines the purpose of the brand and is meant to guide marketers and other members of
the company in their marketing efforts to ensure that all marketing decisions stay true to the
product or brand identity. Examples of positioning statements are the following:
Target - Style on a budget
Volvo - For upscale American families, Volvo is the family automobile that offers maximum
safety.
Home Depot - The hardware department store for do-it-yourselfers
Taglines are brief and catchy statements which are designed to convey the personality and
benefits of the product to consumers. The same companies mentioned have come up with
taglines based on their positioning statements.
Target- Expect more. Pay less.
Volvo - For life.
Home Depot -You can do it. We can help.
It should be noted that taglines are an integral part of the brand identity and as such, are often
used for long periods.
Just as product positioning is vital to the success of a product on the market, the company should
also be able to reposition its products or brands to take advantage of changes in the market or to
address certain issues with the product. Product repositioning is done by changing the brand's
status relative to competing brands. Repositioning is done either by changing certain aspects of
the product, developing a new image through promotional efforts, or by aiming the product at a
different target market.
VI. Teaching and Learning Materials and Resources

1. Module
2. Online Discussion
3. Power point Presentation
4. Textbooks and Online Articles

VII. Learning Tasks

Principles of Marketing-1st Sem 2020-2021

Activity 5. 1

Examine a buying decision you have made recently. It could be a purchase in either the market,
grocery store, or in the shopping mall. Outline your decision-making using the steps in the
buying process.

Need or Problem Recognition: (What situation made you realize that you needed to buy or
purchase a certain product?)

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

Information Search: (What were your possible choices? List three.)

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

Evaluation of Alternatives: (What things did you consider in determining which of your
choices was the best possible choice?)

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

Purchase: (Describe how you arrived at your final choice of product based on the following
factors:
a. Availability of the product
______________________________________________________________________________
______________________________________________________________________________

b. Experience with the seller

Principles of Marketing-1st Sem 2020-2021

______________________________________________________________________________
______________________________________________________________________________

c. Conditions of the selling situation

______________________________________________________________________________
______________________________________________________________________________

Post-purchase evaluation: (Were your expectations of the product met? If so, describe how
the product met your needs. If not, describe your experience. How did you deal with it?)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

Activity 5. 2
Whose advice do you seek with regard to your choices in buying products? List them in the table
below.
Membership Groups
People in your membership groups For which product do you seek their advice
regarding purchase?
Ex. Father Cars – he discusses what to consider of great
value in cars.
1.
2.
3.
4.
5.

Principles of Marketing-1st Sem 2020-2021

Activity 5.3
List three (3) product taglines and complete the table below by providing the required
information.
Positioning Tagline To whom is the Tagline Briefly explain the messages
communicated? Describe of the tagline.
the target market.
Ex. Nike “Just Do It!” Young athletes, sport enthusiasts, It encourages its target market to be
athletic, stylish, and trendy people. bold and follow their dreams; to be
adventurous.
1.

VIII. Reference
Danilo M. Te, DBA, MBA, Rodilina Baltazar-Marte, MBA, MAEEE, Donna
Vida M. Abrina, MBA : Principles of Marketing for Senior High School

Title: Developing the Marketing Mix

Module 6:
I. Introduction:
In this module, let see how products and services are different from each other. It also
focuses on how consumers think about the quality of products and how the prices affect the
satisfactions of every customers.

II. Content Standards

The essence of the new product development, pricing, placing (distribution), and promoting a
product or service

Principles of Marketing-1st Sem 2020-2021

III. Performance Standards

Design a new product or service, decide types of pricing approach, and choose distribution
methods and promotion tools that respond to market trends.

IV. Most Essential Learning Competencies:

After studying this chapter, the student will be able to:
 Define a product and differentiates the product, services, and experiences; (ABM_PM11-
lla-e-16)
 Identify and describes the factors to consider when setting prices and new product pricing
and its general pricing approaches. (ABM_PM11-lla-e-17)

V. Topics and Key Concepts

*Discusses the classification of products, product lines and assortment, product packaging
and labelling and branding. The lesson also discusses marketing strategies for existing
products, the stages of new product development, and the product life cycle*
A. Lesson XI – Product

The Marketing mix is a set of elements that companies or businesses consider in order to
successfully create and sell their products. These elements are also collectively referred to as the
4Ps of marketing: product, price, place, and promotion.

PRODUCTS AND SERVICES DEFINED

A product is defined as anything that can be offered to a market for attention, acquisition, use,
or consumption to satisfy a want or need. Products can be tangible (those we can see) or
intangible (those that we cannot see but we can experience). Major product classifications
include goods, services, and ideas.

Goods are physical products that we can touch, smell, see, and hear, while services are
intangible products that we obtain through ideas or experiences. Products can also include
events, places, or organizations (Kotler and Armstrong, 2013).

LEVELS OF PRODUCTS
To know more about the nature of products, it is important to discuss its five levels: the core or
generic product, the actual product, the extended product, the modified product, and the
potential product. A finished product is expected to have at least the first three levels (core,
actual, and extended product).

Principles of Marketing-1st Sem 2020-2021

Core or Generic Product

The core or generic level refers to the functional essence of the product. It is the reason why a
customer purchases a product in the first place.
Actual Product
This level corresponds to the basic features of a product that make it usable in the first place.
This level is most evident in the product's packaging and labels.
Extended Product
This level refers to additional features added to the product to attract more customers.

Modified Product
This product level pertains to additional product features that will meet new demands and needs
of customers. Companies may consider modifying an existing product so that it will continue to
sell.
Potential Product
This level refers to the product features that a firm plans to add or change in the future. The firm
adds these features in order to further differentiate their products from that of their competitors.

CLASSIFICATION OF PRODUCTS
Products are classified as either consumer products or industrial products. Consumer products
are those that are personally used by customers, such as convenience products, shopping
products, specialty products, and unsought products. On the other hand, industrial products are
those used by companies or firms for product creation and other business operations. These
include raw materials, finished products, equipment, and supplies.
TYPES OF CONSUMER PRODUCTS
 Convenience Products
Convenience products are goods that people normally buy and consume frequently.

 Shopping Products
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

These are goods that people buy or consume less frequently and are more expensive than
convenience products. Before purchasing a shopping product, people tend to compare it with
alternative products or services.

 Specialty Products
Specialty products are those that are distributed exclusively by an authorized distribut0t are even
more expensive than shopping products. Specialty products include gadgets electronic
appliances, and luxury vehicles.
 Unsought Products
These are goods and services that consumers may not consider highly necessary in their lives.
Consumers may avoid purchasing them but companies can successfully sell them through
extensive marketing or personal selling.

TYPES OF INDUSTRIAL PRODUCTS

 Raw Materials
These are goods that the firm processes or assembles to create a new product.
 Finished products
Finished products are the final products the firm produces. These are developed using the raw
materials, technology, equipment, and manpower provided by the company.
 Equipment
These are the machines and tools used in creating products or providing services.
 Supplies
Supplies are products which may not necessarily be used in creating products, but are important
in the daily operations of a firm.
PRODUCT LINES AND PRODUCT ASSORTMENT
Firms do not produce or sell only one or a few products. Manufacturers often produce several
related products which they group together as a product line, intended to meet the varied needs
of its customers. Retailers also carry several related products so that customers can have options
to choose from when purchasing products.
A related concept to the creation of a product line is product assortment, or the overall range of
products sold by a firm.

Principles of Marketing-1st Sem 2020-2021

PRODUCT PACKAGING AND LABELING

Aside from quality and price, aesthetics also plays a major role in how a product is perceived by
customers. This is why manufacturers are also expected to present the product in the best way
possible through packaging and labeling.
 Packaging
The process through which products are enclosed in a container, wrapper, or in a similar
medium. Packaging helps protect the product and prolong its shelf life. It can also guarantee
customers easy use of the product.
 Labeling
The act of providing information about the product in its container. Some of the features found in
a label are the brand and firm name, amount of product, and its main use. Food labels also
include the manufacturing date, expiry date, and nutritional content of the product. There are also
products whose labels indicate additional features (e.g., special ingredients or added content) and
warnings. Since customers highly depend on labels in deciding whether or not to buy a product,
manufacturers are expected to label their products clearly and avoid misleading their customers.
 BRANDING
A means through which companies make their products distinct. A brand helps customers
identify a product more easily, and encourages them to purchase it. The other features associated
with branding are logos and symbols.
Brands sometimes merge with one another to lessen a firm's expenses while earning more profit
and gaining more shares in the market. Brands that are merged may or may not be related to one
another. Dual branding takes place when two brands are being marketed and sold jointly.
This is seen in the case of Sony and Ericsson electronics products, which at one point were
jointly marketed as Sony Ericsson. On the other hand, multi-branding takes place when more
than two brands are jointly sold by a firm, as in the case of Unilever selling numerous brands,
including Dove, Knorr, Lipton, and Surf.
MARKETING STRATEGIES FOR EXISTING PRODUCTS
Products are primarily marketed and developed based on quality, benefits, and features.
However, products already on the market also need to be evaluated to determine if they perform
well and satisfy customers. When these expectations are not met, companies may change the way
they develop and market their products. They may modify or add features to their products to
improve the quality and enhance the benefits derived from them.
Marketing and development strategies are expected to discourage marketing myopia or the
tendency of the firm to focus intently on ensuring its success in the market, instead of focusing
on the needs of its customers.
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

DEVELOPMENT OF NEW PRODUCTS

New products may be developed for different reasons. A firm may believe that its existing
products have failed to satisfy the needs of customers and thus are no longer performing well on
the market.
New products undergo the following six stages in development:
 Idea Generation
All products start with an idea. Business firms source their ideas internally or externally
employees and salespeople can be good sources of product ideas.
 Idea Screening
Not all ideas will see the light of day, as only a few will gain support and will be developed into
a new product. In order to determine which idea will be developed, the company hires an expert
or organizes a committee to implement idea screening.
 Project Planning
Once an idea has been screened and deemed acceptable, it undergoes project planning. In this
stage, the idea is further developed and conceptualized into a product for consumers, and the
demand for such product is estimated.
 Product Development
Once project planning has determined that the product's performance on the market will be
satisfactory, the firm can proceed with product development.
 Test Marketing
Test marketing gives further assurance to the firm that its product is acceptable to consumers.
Small quantities of the product are tested in selected areas – often in places where the market is
quite discriminating with the new product.
 Commercialization
When the initial stages in product development produce promising results, the firm can decide to
go into full-scale launching or commercialization. Commercialization, however, requires good
timing. When will the firm launch the new product, assuming a competitor is also producing a
similar product?

THE PRODUCT LIFE CYCLE

Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

Upon launching on the market, the product starts to go through the product life cycle (PLC).
This period encompasses its first promotion up to the time that it is no longer sold to customers.
The product life cycle is composed of four stages -- introduction, growth, maturity, and decline.
The graph below presents these stages with the bell curve indicating the sales performance of a
product.

Introduction Growth Maturity Decline

Low Sales Increasing Sales Constant Sales Reducing Sales

High Cost Reducing Cost Reducing Costs Constant Costs
Little Profits Some Profits Increasing Reducing Profits
Profits

Sales
Time
(Product Life Cycle)

The introduction stage is when the product is officially launched on the market. At this stage,
the company spends money and resources to promote its product. As shown in the bell curve, the
sales of the product at this stage are still low and thus, little profit is expected.
At the growth stage, more customers become aware of the product and its sales start to increase.
Costs are also lessened and the firm begins to earn more, as the product has already reached a
wider base of consumers. This is shown by the rising bell curve.
At the maturity stage, the product reaches its peak sales performance. The firm also maintains
high profits and lesser costs in marketing the product. However, it works to maintain a
satisfactory sales performance. This is shown in the steadiness of the bell curve.
At the decline stage, the sales of the product begin to decrease. The firm spends resources to
prevent the product from being phased out. The decrease in both sales volume and profit is
represented by the dipping of the curve.

Principles of Marketing-1st Sem 2020-2021

Irregularities in the product life cycle can be observed in certain circumstances, such as in fads.
A fad is a situation where the demand for a product suddenly increases but also decreases after a
short period.

PRODUCT DIFFUSION
The progression of a product's sales and life cycle can be further explained by Everett Rogers,
diffusion of innovations theory. This theory examines how new ideas and technology spread
and become widely popular among people. One important aspect of the theory is the concept of
adopters, or individuals who adopt an innovation and are classified according to the rate by
which they accept or adopt the innovation. In marketing, the five types of adopters are the
innovators, the early adopters, the early majority, the late majority, and the laggards. They
describe how customers accept a new product in the market.
When a new product is released, only a few customers are willing to try it. These are the:
Innovators, who are willing to buy a new product though it may be expensive. After a product is
released and positive feedback about it spreads.
Early adopters try them. Early adopters are less adventurous than innovators, but are willing to
try the product if they find it satisfying and useful. They then spread word about the product to
other people, and influence them to buy the product.
Early majority a group of consumers who make sure that the product has a practical cost and
proven quality before purchasing it. The product then reaches the late majority when it becomes
accepted by a larger part of the population and its price is somewhat reduced.
Laggards are either senior citizens or those in the lower socio-economic classes. They may only
purchase a product if it becomes necessary or has become very cheap.
The diffusion of products can be further illustrated through the case of smartphones such as
Samsung, Lenovo, and Asus. The process through which smartphones reach the five levels of
diffusion is explained in the table below.
Innovators Upon hearing of the new release of a smartphone, innovators may be
willing to buy the product although it will most likely be more expensive
than other products under the same brand. They may be interested in its
features or in the fact that it is a new product.
Early adopters Early adopters may purchase this product sometime after it has been
formally introduced and innovators have spread positive feedback about
it. They may then inform other people about the product and influence
them to purchase it in the future.
Early majority The early majority may consider purchasing this product after its
practicality and usefulness have been established. This may happen even
though the price of the product has not significantly decreased.
Late majority The late majority will likely only buy smartphones after a few months or
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

years, when its price has already significantly decreased. An example of

this is when a phone that has been previously priced at P6,000 now costs
10% or 20% less.
Laggards Laggards will only purchase a smartphone when there are no other
options to choose from or if it has become highly affordable. For
instance, if senior citizens think that a smartphone is difficult to use, they
may only buy one if regular mobile phones are no longer sold.
Meanwhile, people in the lower socio-economic classes will buy a
smartphone when its price has been greatly reduced.

MARKETING STRATEGIES AND THE PRODUCT LIFE CYCLE

Possible marketing strategies for products differ in each stage of their life cycle. These strategies
may differ in terms of their objectives, their extent, and for how long they are implemented.
Products at the introductory stage can be marketed through informative advertising as well as
sales promotions and support. Informative advertising focuses on describing the features and
benefits of the product. Sales promotions and support help further market the product through
various means such lower pricing than those of competing products.
At the growth stage, products can be marketed through persuasive advertising and additional
sales promotion and support. Persuasive advertising highlights the features of the product that
give it an edge over its competitors. Additional sales promotion and support can help reinforce
the performance of the product in stores and other distribution channels. These strategies help
attract more customers to buy the product and to reach price stability. This is a condition where
the price of a product does not suddenly increase or decrease.
At the maturity stage, marketing a product may not be as intensive as in the previous stages, but
Companies aim to maintain their hold on their target markets. Products may be marketed mainly
through reminder advertising, which reinforces the presence of the product in the market. Sales
promotions during this stage may also be minimized.
Finally, at the decline stage, firms can try to improve the sales performance of the products by
lowering the price to regain customers' interest. If this does not work, companies may need to
Prepare for its ultimate demise. They may also need to consider replacing the product with a new
one.

SERVICES AND CUSTOMER EXPERIENCE

Principles of Marketing-1st Sem 2020-2021

Aside from purely tangible products, companies also offer services to customers. Services are
intangible offerings that companies provide for their customers. Some companies offer pure
services, such as in the case of salon, carwash, and hotel services.
Services and products are an important component of customer experience, which is the overall
result of all the interactions between a customer and a firm. These interactions begin with the
introduction of a service or product to a customer, and extend to the moment that it is delivered
and how problems in the service or product are addressed, up to the perception that the customer
eventually develops about the firm.

NATURE AND CHARACTERISTICS OF A SERVICE

A company must consider four characteristics of services when delivering them to customers.
These are intangibility, inseparability, variability, and perishability.
 Intangibility
Services are intangible since they cannot be seen, tasted, felt, heard, or smelled before they are
purchased. An example would be the services rendered by a dentist. Upon paying for tooth
extraction services, you cannot see its result until the service is done.
 Inseparability
Services are produced and consumed at the same time and cannot be separated from their
providers. Physical or tangible goods may be produced and stored for later use or sold in the
future. In contrast, services are produced by their provider and consumed by customers at the
same time. The service provider and the service itself are thus considered one entity. For
example, airplane flights can never exist without the pilots, flight attendants, and other crew
involved in delivering the service.
 Variability
In hotels, for example, some employees may be highly efficient and hospitable, while some may
be slow-moving and unpleasant towards customers. This may cause differences in the service
being delivered. Some customers may find that their requests and orders are fulfilled slowly, or
perhaps not at all, while others find that the services are rendered quickly.
 Perishability
This means that the service cannot be stored for later sale or use. An airline service, for example,
only offers seats for a particular flight before the plane departs. Once the plane has departed,
customers can no longer avail of the service for that particular flight. Any unsold seats on the
plane, therefore, lose their value. Perishability can become a challenge when the demand for a
service fluctuates. This is why during "off-peak" months, airlines offer discounts to encourage
cust01ners to avail of their services.

Principles of Marketing-1st Sem 2020-2021

*Discusses pricing, its objectives and the strategies in setting prices for existing and new
products. The lesson also discusses pricing based on quality as well as value and cost-based
pricing*
B. Lesson 12 – Price

PRICING CONCEPTS
Price is the only component of the marketing mix that provides revenue for the company. This is
why it is important to understand the concepts and strategies in pricing, and to know when to
increase or decrease the price of a product.
One of these concepts is the computation of prices. This involves understanding the various
elements of pricing, and can be further studied through formulas. Variability is also an important
concept in pricing.
A related concept to the variability of prices is the reference price, or the price that customers
expect the product to have. The reference price is based on the price that the company has
announced and on the prices of competing products. This especially becomes a challenge due to
the easy access to information nowadays through communication and computing devices.
PRICE AND QUALITY
Price is not mainly based on the cost incurred in creating the product or service. We as
consumers may not even bother to ask how much a product cost to make. Instead, most
consumers look at quality as the indicator of price. High-quality products have high prices, while
those of low quality often have low prices. Quality is often based on the customer's evaluation of
the product' as well as the feedback of consumers who have had experience with the product or
service.

CUSTOMER VALUE-BASED PRICING

Pricing decisions, just like any other aspect of marketing, must be based on customer value, or
the value and benefits customers gain from purchasing a product or service. Through effective
customer value-based pricing, companies show that they understand the value that consumers
place on the benefits they receive from using a particular product.

PRICING OBJECTIVES
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

Every firm has an objective that determines the pricing of a product. This pricing objective may
depend on the characteristics of the market or of the firm itself. The following are some
examples of pricing objectives.
 Survival Pricing
This becomes the main pricing objective when the firm is in deep competition. The firm will
settle for break-even pricing or even set a price below break-even in some instances. The firm
anticipates that conditions in the market will soon return to normal, and normal pricing will be
reinstated once nuisance competitors run out of funds and abandon the cutthroat pricing war.
This pricing objective is disadvantageous for the firm and the industry in the long run, as it
would erode the company and industry's profitability.
 Market Penetration Pricing
When a firm is new in a particular industry or market segment, it does its best to increase its
market share. Thus, the firm prices its product slightly lower than the competition in order to
grab shares from the weakest competitors, assuming the market is saturated.
 Market Skimming Pricing
When a firm happens to develop a unique product ahead of its competitors and the market fin ds
the product very interesting, it can implement market skimming pricing, where the price of the
new product is set very high. The purpose of this is to make an extra profit margin and set it as a
buffer in case of entry from the competition. Once competitors come in and offer similar
products, the firm can leverage this by setting a price which is lower than the competitor’s. This
strategy of preempting the competitors is effective if the competitors cannot match the features
of the product because of product differentiation.
 Parity Pricing
When a firm is new to a particular industry or market segment, it can benchmark its pricing
scheme with those of competitors. This strategy is often implemented by firms that would like to
play it safe and avoid retaliation from existing firms. Parity pricing is also a good way to
ascertain the reaction of existing competitors to the firm's entry into the market.
 Regulated Pricing
The firm must abide by government regulations in setting prices. Regulated pricing reflects the
firm's social and ethical responsibility. This also sends a positive signal to the general public and
results in a positive image for the company. Basic commodities such as rice, fish, poultry and
meat products, vegetables, and canned goods are regulated to protect the general public from
unscrupulous traders. The Department of Trade and Industry (DTI) tasked with monitoring and
setting the right prices for basic commodities.

COMMON PRICING STRATEGIES AND SCHEMES

Principles of Marketing-1st Sem 2020-2021

 Cost-based Pricing
One commonly practiced pricing scheme today is cost-based pricing, which is mostly
concerned with the expenses of the company in creating a product. As suggested by its name,
cost-based pricing takes two components into consideration: the unit cost of the product and its
mark-up price.
The unit cost is the total amount of money needed to create the product. The three values
important in determining the unit cost are: the fixed cost, the variable cost, and the total product
units.
Fixed cost refers to the expenses necessary to create products, regardless of their quantity or
type. The fixed cost comprises necessities such as electricity and rent.
Variable cost, on the other hand, comprises expenses needed for the creation of the specific
product. These include the raw materials used and the wage of the laborers who helped create
these products.
Total product unit is the quantity or volume of the products created. Companies expect their
sales performance to match their total product units.
The unit cost can be obtained by dividing the sum of the variable cost and the fixed cost by the
total product units. A sample of this computation is provided below:
Given
Total variable cost: Php150,000
Fixed cost: Php300,000
Total product units: 20,000 units
Computation
Unit cost = fixed + total variable cost
Total product units
= 300,000 + 150,000
20,000
= 450,000
20,000
Unit cost = Php 22.50

The mark-up is then added to the unit cost in order to determine the selling price of the product.
The rate for the mark-up is based mostly on the return on investment that the company expects to
gain. Thus, for example, if the company expects to gain a 25% return on its investment, the
mark-up price will be computed as follows:

Mark-up = unit cost x mark-up percentage

Principles of Marketing-1st Sem 2020-2021

= Php 22.50 x 0.25

Mark-up = Php 5.63

The mark-up price can also be based on the investment returns that competitors expect to have.
This is especially applicable for companies utilizing parity pricing strategies. For instance, if
competing companies gain a 20% return on their investment, the mark-up price for the product
will be computed as follows:

Mark-up = unit cost x mark-up percentage

= Php 22.50 x 0.20
Mark-up = Php 4.50

The mark-up will then be added to the unit cost already determined earlier If the company
applies the 25% mark-up rate, the selling price of its product will be computed as follows:
Selling price = unit cost + mark-up
= Php22.50 P5.63
Selling price = P28.13
However, if the company utilizes a 20% mark-up rate, the selling price of its product will be as
follows:
Selling price = unit cost + mark-up
= P22.50 + "4.50
Selling price = Php 27.00

 Demand-based Pricing
Demand-based pricing focuses on the needs of customers. A company utilizing this approach
conducts thorough research to find out how much customers are willing to pay for a product
based on their perceived value of the product. The company then comes up with a selling price
that meets both the company's expected profits and the expectations of the market. Demand-
based pricing may also be based on the concept of peak and off seasons.

 Break-even Pricing

Principles of Marketing-1st Sem 2020-2021

When employing break-even pricing, companies may earn just enough to cover the costs of
production without any profit. The firm may even set a price lower than the break-even price in
some instances.
However, one problem with break-even pricing is the possibility of making incorrect sales
estimates. This can then lead to losses for the company instead of meeting the break-even point,
or the point when the company has gained enough revenue to cover its total production costs.
Thus, break-even pricing must be employed with caution.
One way of ensuring effective break-even pricing is by utilizing the break-even sensitivity
analysis, which helps determine the minimum amount at which the break-even point can be
reached. A related concept is the sensitivity range, which refers to the range of prices at which a
product can be sold to cover the company's production expenses.
Two values are mainly solved for in the break-even sensitivity analysis. One is the breakeven
point or volume:
Break-even point =______ fixed cost_________
price – variable cost per unit

If for example, the fixed cost of a product is P 750,000; the variable cost is P 150 per unit; and
the company is selling the product for P 200, the break-even point will be computed as follows:

Break-even point = 750,000

200 – 150

= 750,000
50

Break-even point = 15,000 units

This means that 15,000 units of the product must be sold for the company to sufficiently cover its
production costs.

The other value is the break-even price, which refers to the minimum price at which a product
must be sold for the company to regain its production costs.
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

The break-even price is obtained using the following formula:

break-even price = fixed cost + variable cost per unit

number of units

If, for example, the fixed cost fora product is P 750,000; the variable cost is P 150 per unit; and
the company is selling 15,000 units of the product, the break-even price will be computed as
follows:

break-even price = __750,000 + 150

15,000

= 50 + 150

break-even price = Php 200

This means that the company must sell the product at Php 200 per piece to cover its production
costs.

 Psychological Pricing
Psychological pricing appeals to customers' ideas regarding affordability and value.
Psychological pricing is primarily used for convenience products. The validity of psychological
pricing has been the subject of much debate, but it still persists in the market.
Lastly, psychological pricing may be in the form of price bundling, or the strategy of combining
products in a bundle and pricing them as one unit. The products then appear to be cheaper than
when they are bought individually.
 Time-based Pricing
Companies utilizing time-based pricing consider a certain time frame in setting prices. An
example is considering the time of day in selling perishable products such as food. Bakeries
often sell their excess products at a discount at the end of the day. Vegetables may also be priced
less late in the afternoon to avoid the need to refrigerate them or throw them away.

 Location-based Pricing
In location-based pricing, marketers consider proximity and the quality of the area in setting
prices. At concerts, for example, seats nearer the stage are more expensive than those farther
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

from the stage, because the nearer seats offer a better view of the performer. The opposite
happens in movie theaters, where orchestra seats near the screen are cheaper compared to seats in
the middle or at the far end of the movie house. Products may also be priced higher when sold in
Stores with a high-quality ambiance, or found in highly commercialized areas. compared to
when they are sold in locations that are less posh or upscale.
 Competitive Pricing
This approach involves setting prices that match those of rival products on the market, usually
those that are popular or well-known. However, companies can also opt to set higher or lower
prices for their products to make them distinct from others on the market.
 Premium Pricing
In this strategy, products are deliberately priced higher than similar offerings to show that they
are "exclusive" and of the highest quality.
PRICING STRATEGIES FOR NEW PRODUCTS
I. The market skimming pricing strategy is often used by pioneers in a particular product
category.
2. The market penetration pricing strategy is generally used by new entrants to a market
already dominated by one or several companies. Through penetration pricing' customers may
buy a certain product or try a specific brand on the basis of value and saving money.
PRICE ELASTICITY OF DEMAND
Determining changes in prices is done by analyzing price elasticity of demand (PED), which
refers to the relationship between changes in prices and the change in the quantity demanded of a
product. When there is an elastic demand for a product, a price increase leads to a significant
change in its demanded quantity. When there is inelastic demand for a product, a price increase
does not lead to a significant change in its demanded quantity.
.
Price elasticity of demand (e) = % change in quality demanded
% change in price

This can be further expanded to the following formula:

e = (Q1 – Q0) ÷ Q0
(P1 – P0) ÷ P0

Principles of Marketing-1st Sem 2020-2021

Where:
Q1 = new quantity after the price increase
Q0 = initial quantity before the price increase
P1 = the increase price
P0 = the initial price

VI. Teaching and Learning Materials and Resources

1. Module
2. Online Discussion
3. Power point Presentation
4. Textbooks and Online Articles

VII. Learning Task

Activity 6.1

1. What makes consumer products and industrial products different from each other?
Write your answer inside the box.

2. Give examples of the following types of consumer products. Complete the table
below with your answers.

Principles of Marketing-1st Sem 2020-2021

Convenience products
Shopping products
Specialty products
Unsought products

3. Give examples of the following types of industrial products. Write your answers in
the table below.

Raw materials
Equipment
Supplies

Activity 6.2

1. Compute for the price elasticity demand using the data below. Determine whether
there is elastic or inelastic demand for the product.

New quantity demanded = 15,000 units

Previous quantity demanded = 19,000 units
New price = Php 150 / unit
Previous price = Php 120 / unit

Activity 6.3

Principles of Marketing-1st Sem 2020-2021

Kindly think of any product which time to time the price is changing and all you have to do is
discuss to the class why is it happening.

VIII. Reference
Danilo M. Te, DBA, MBA, Rodilina Baltazar-Marte, MBA, MAEEE, Donna
Vida M. Abrina, MBA : Principles of Marketing for Senior High School

Title: Developing the Marketing Mix

Module 7:
I. Introduction:
It is important for firms to create a quality products and price affordably. Companies
must strategize how to use distribution channels and the means through which
products will be sold.

II. Content Standards

The essence of the new product development, pricing, placing (distribution), and promoting a
product or service
III. Performance Standards
Design a new product or service, decide types of pricing approach, and choose distribution
methods and promotion tools that respond to market trends.

IV. Most Essential Learning Competencies:

After studying this chapter, the student will be able to:
 discuss the structure of distribution channels, its functions, and the nature of supply chain
management; (ABM_PM11-lla-e-18)
 define and identify relevant promotional tools, namely, advertising, sales promotion,
personal setting, public relations, and direct marketing to create awareness and persuade
the target market to buy the product or patronize the service. (ABM_PM11-lla-e-19)

V. Topics and Key Concepts

*Discusses the structure of distribution channels, the types of marketing channels, the
strategies in supporting distribution channels, and concerns in the use of distribution
channels*
A. Lesson XIII – Place

DISTRIBUTION CHANNELS

Principles of Marketing-1st Sem 2020-2021

A distribution channel or marketing channel is the path that a product takes before it is sold to
the consumer. The distribution channel is an important element of the marketing mix, as it
determines where and when the product will be available to customers.

MARKETING INTERMEDIARIES IN DISTRIBUTION CHANNELS

Distribution channels mainly involve marketing intermediaries, which refer to individuals or
businesses that sell products to a firm or another vendor, or to the consumers themselves.
Wholesalers are independently-owned firms that purchase and sell goods in bulk quantities to
vendors and businesses. These goods are often owned by the wholesalers themselves, and are
sold under their name. Suppliers of goods are an example of wholesalers.
Retailers are individuals or groups of people who sell goods directly to consumers. They
purchase their goods from wholesalers or from other marketing intermediaries.
Like wholesalers, distributors also sell bulk products to other businesses and vendors. However,
unlike wholesalers, distributors only sell non-competing products and product lines.
Agents are individuals who represent a manufacturer or a company to convince buyers to
purchase their products.
TYPES OF DISTRIBUTION CHANNELS
There are two main types of distribution channels: the direct marketing channel and the
indirect marketing channel. These channels may be implemented through various structures
which are defined by the number of levels or intermediaries involved.
The structure of a direct marketing channel is composed of two levels: the manufacturer and
the end consumer.

Manufacturer Consumers

In this structure, the manufacturer sells directly to the consumers. This arrangement, however,
may be difficult for both manufacturers and consumers. Either the manufacturer needs to go
where the consumers are in order to sell the product, or the consumers need to go to the
manufacturer to buy the product.
The indirect marketing channel, on the other hand, is the traditional distribution channel
structure implemented by most firms. In this structure, the manufacturer sells to the wholesaler,
who in turn sells to retailers.

Principles of Marketing-1st Sem 2020-2021

The first type of indirect channel is composed of four levels: the manufacturer, wholesaler,
retailer, and end consumers. This can be considered the traditional distribution channel structure.

Manufacturer Wholesaler Retailer Consumer

In this structure, the manufacturer creates goods which are bought by the wholesaler. The
wholesaler then sells the products to retailers. Finally, small retailers such as sari-sari stores sell
the products to the end consumers.
In the second indirect marketing channel structure, wholesalers no longer participate in the
distribution of products. This role is taken by big retailers such as shopping malls.

Manufacturer Big Retailer Consumer

In some cases, big retailers can even prevent a manufacturer from interacting with them.
The last structure of the indirect channel is also composed of three levels. This structure,
however, replaces big retailers with online stores.

Manufacturer Online Retailer Consumer

Online stores order or purchase products from manufacturers. These stores then sell these
products directly to customers through social media sites such as Facebook, Twitter, and
Instagram.

OTHER EXAMPLES OF DISTRIBUTION CHANNELS

Vending machines have automated mechanisms which dispense products to customers upon
inserting the correct amount of money into the machine. These machines are commonly found in
schools, transport terminals, comfort rooms, and other public places.
Sidewalk kiosks and stores allow customers to purchase products on the streets. Vegetables
fruits, meat and fish products, and street food are often sold in sidewalk kiosks and stores at
cheaper prices than in malls and other high-end retail stores.
Home services involve personal visits from company personnel to provide services at the
customer's home.

Principles of Marketing-1st Sem 2020-2021

Gray marketing channels, meanwhile, refer to the unauthorized distribution of genuine

products. Gray marketing offers products at cheaper prices but customers have less assurance
that the manufacturing company will address problems with the product or service. \

INTENSITY OF DISTRIBUTION
The intensity of distribution refers to the degree with which marketing intermediaries are
involved in the distribution and selling of products. These intermediaries are mostly retailers.
Based on intensity, distribution may be classified as exclusive, selective, and intensive.
1. Exclusive distribution employs only one intermediary in a specific area. Companies use
this type of distribution when they want to maintain control over the production and the
selling of their products. Thus, it often involves exclusive dealing arrangements, where a
retailer is granted exclusive rights to sell the supplier's products, but only in a specific
area.

2. Selective distribution utilizes several intermediaries in specific areas. Products sold

through selective distribution are often sold in high-end malls and retail stores. These
include prestige goods such as electronic appliances and designer clothes.

3. Lastly, intensive distribution involves selling products in as many outlets as possible.

Food toiletries, and other consumer products are often sold through intensive distribution.
These products are of lower value compared to electronic appliances and luxury cars.
Thus, intensive distribution ensures that customers can easily access them and helps
companies earn profit easily.

VERTICAL AND HORIZONTAL MARKETING SYSTEMS

Vertical and horizontal marketing systems help companies manage their distribution channels,
ensure efficiency in the distribution of products, and avoid conflict among the people involved.
 Vertical marketing system (VMS) involves all the intermediaries in selling a product or
delivering services under the same manufacturer. A vertical marketing system gives the
manufacturer greater control over the costs and logistical aspects of product sales and
distribution.

 Horizontal marketing system (HMS), two or more separate companies work together to
improve their sales performance. Even though these companies are separate, they all
belong to the same channel level.

Principles of Marketing-1st Sem 2020-2021

MEANS OF SUPPORT FOR DISTRIBUTION CHANNELS

Online banking can be used to pay for products and services at the customer's convenience.
Examples of online banking are GCash and the BPI Globe BanKo services. These services allow
customers to pay bills and shop online using their desktop computers, laptops, smartph0neS' and
other mobile devices.
Customers can also use debit and credit cards when making purchases. Debit cards allow
transactions wherein a certain amount is deducted from the customer's balance. Credit cards, on
the other hand, can serve as a temporary replacement for cash.
Telemarketing, involves the direct contact with potential customers through telephone or the
internet. Telemarketing is done in call centers, where agents make outbound calls to sell products
or services.

CONCERNS IN UTILIZING DISTRIBUTION CHANNELS

Several concerns in the use of distribution channels involve the delivery of products and the
relationships between businesses are:
 Logistical concerns involve the movement and storage of the products or services being
sold and the management of the people taking part in selling the product. Some problems
related to logistics management are slow delivery of products or services and the cost of
shipping the products.

 Failure to meet demand arises when stores have insufficient supply of the product being
sold, or when there is an insufficient number of employees to deliver a service. When
these situations arise, the store and the manufacturer fail to meet the needs of customers,
which may result in the loss of patronage to the store and to the company's products or
services.

 Pressure from channel leaders. Channel leaders are large-scale organizations or

companies that have greater control over the marketing actions of small businesses. The
smaller businesses are referred to as channel members.

 The presence of franchised chain stores pertains to the proliferation of well-known

franchised stores (e.g., 7/11 convenience stores) in certain areas which can greatly affect
similar local stores. The well-known stores offer stiff competition to local stores, since
the former are already established in the market.

Principles of Marketing-1st Sem 2020-2021

SUPPLY CHAIN MANAGEMENT

The supply chain organizes the parties and activities involved in the production and delivery of
goods and services in an orderly and logical sequence. These parties include suppliers;
intermediaries such as the wholesaler, retailer, and the distributor; and the customers as the end
point. The activities in the chain involve the improvement of the design and quality Of products
their actual delivery, and customer services.
The activities in the supply chain are classified into two categories: upstream and downstream.
Upstream activities such as managing raw materials, inbound logistics, and storage facilities are
performed by suppliers. In contrast, downstream activities are performed by intermediaries
such as the wholesalers and retailers. These activities involve more immediate and direct
interactions with customers, such as managing the storage of finished products, delivering
products to stores, marketing and selling products, and providing customer service. The activities
in the supply chain are outlined in the diagram below.

Here is the example of a supply chain:

UPSTREAM DOWNSTREAM

Supplier
(raw materials)
Manufacturer Wholesaler Retailer Consumer

*Discusses product promotion and its objectives. The lesson also discusses the
strategies in utilizing the promotional mix, and how to set a budget for it*
B. Lesson XIV– Promotion
Promotion is the communicative element of the marketing mix. Through promotional activities,
companies give information about the features and benefits of a product. Potential customers
then use this information to make their purchasing decisions. If promotion is used effectively,
companies can attract potential customers and encourage them to be loyal to the company.

Principles of Marketing-1st Sem 2020-2021

THE ROLE OF PROMOTION IN THE MARKETING MIX

Promotion has different roles in helping a company perform well in the market. These roles
include building awareness and creating interest, reinforcing a brand, and persuading customers
and enhancing sales.
 Building awareness and creating interest. Companies use promotion to provide
information about a product or brand, especially when it is new in the market, and let
customers know what makes it different from its competitors. It may have a unique
feature or a higher quality compared to others.
 Reinforcing a brand. Promotion can help strengthen a brand's place in the market by
establishing brand recall. Brand recall involves the customer's association of a product
with a specific brand in his or her mind.
 Persuading customers and enhancing sales. Promotion can encourage customers to
purchase a product and continue doing so by providing the reasons why they need to buy
the products immediately or in greater quantities. Promotion is also used to associate a
product with celebrations and special events in the customers' lives, as well as certain
occasions throughout the year.
 Improving the performance of a declining product. Finally, promotion is used to
inform customers if a product is being rebranded, and to provide details on the company's
efforts to improve it. This information is given to encourage customers to patronize the
product once again and restore its position in the market.
TARGETS OF PROMOTIONAL ACTIVITIES
The following groups serve as the targets of promotional activities:
I. The actual audience which includes current, former, and potential customers of the company.
These are the people who purchase the product from retailers. The information that they obtain
from promotional activities play a role in their purchasing behavior
2. Influencers are people and organizations that have an impact on the purchasing decisions of
the actual audience. When influencers become aware of a product and patronize it' they can
encourage the actual audience to purchase the product.
3. Individuals in distribution channels are involved in supplying and handling products before
they reach the end consumers. Information about products can aid intermediaries in helping
customers make their purchasing decisions. In retail stores, for instance, sellers can help
customers decide which products to buy based on prices or quality.
4. Other companies are those that can be persuaded to collaborate with the company to 4,
promote their product. Joint promotions involve one or more products which may or may be
related.

Principles of Marketing-1st Sem 2020-2021

THE PROMOTIONAL MIX

Companies must do more than just create customer value. They should also clearly and
persuasively communicate this value through the promotional mix. The promotional mix is
single tool, but rather a mix of tools used by the company to coordinate its promotional to deliver
a clear and consistent message about the organization and its products. promotional mix is also
called a marketing communications mix (Kotler, 2013). The mix consists of advertising, sales
promotion, public relations, and personal selling and direct marketing tools.

ADVERTISING SALES PROMOTION

PROMOTIONAL
MIX

PUBLIC RELATIONS PERSONAL SELLING

Advertising is defined as any paid, non-personal form of promoting products, services, and ideas
by a company or organization. Advertising can be done through television and radio
commercials, print advertisements, flyers, brochures, and billboards.
Sales Promotion refers to short-term strategies and incentives that help improve a product,s
sales performance. Sales promotion can help increase the demand for the product, as it shows
customers the additional benefits of purchasing it.
Public relations (PR) refers to the means a company employs to maintain positive connections
with the public, which includes customers and the general public, suppliers, stockholders,
employees, and the government. Maintaining good public relations helps increase the credibility
of the company, thereby convincing customers to purchase or avail of their products and
services.
Personal selling is done by the company's salespeople and involves one-on-one interactions with
potential customers to persuade them to purchase a product or service. Personal selling is done
through sales presentations, trade shows, and product demonstrations. Salespeople are expected
to have a positive attitude, extensive product knowledge, and a pleasant appearance and
demeanor in order to effectively represent the company and sell its products.

Principles of Marketing-1st Sem 2020-2021

STRATEGIES IN UTILIZING THE PROMOTIONAL MIX

The promotional mix can be further developed and maximized through two types of strategies:
push promotional strategies and pull promotional strategies. These strategies differ in the
promotional approaches utilized, and in the individuals or organizations targeted. Despite these
differences, both strategies can be integrated in the promotional projects of a company.

PUSH PROMOTIONAL STRATEGY

In push promotional strategies, each person or organization in the supply chain "pushes" the
product or service forward until it reaches the end consumers. Manufacturers convince
wholesalers or large retailers to handle and sell their products to retailers. Retailers, whether they
are large or small, then finish the process by selling the product to the final consumers.
Promotional techniques used in push strategies are as follows:
 Negotiation with retailers, where companies work with or convince retailers to sell a
product to the end consumer.
 Personal selling, where one intermediary sells the product to another, or a retailer sells
the product to end customers, and which can be performed in showrooms, department
stores, or other similar locations.
 Point-of-sale displays, which provide information about the product and are found at
checkout or cashier counters in large retails stores.
PULL PROMOTIONAL STRATEGY
In pull promotional strategies, the company itself directly convinces customers to purchase its
products or services. This time, the main role of marketing intermediaries is to fulfill the
increasing demand for the product resulting from the company's promotional efforts.
Following are some of the techniques used in a pull promotional strategy:
 Advertisements - comprised mainly of television and radio commercials, print
advertisements, and billboards
 Word-of-mouth referrals - customers passing on favorable experiences with the product
or service to other consumers
 Discounts and sales promotion - lowering the price of a certain product; and often takes
place during the holidays or other special occasions during the year;
 Social media promotions - the use of social media sites to post advertisements or sales
promotions for a product or service

Principles of Marketing-1st Sem 2020-2021

 Customer relationship management- keeping constant contact with customers through

different means, including mobile or telephone communication and messaging through social
networking sites.
SETTING THE ADVERTISING BUDGET
Since advertising is one of the most widely used forms of promotion, companies need to first
find out how to effectively set a budget for it.

Here are following methods to set their promotion budget:

1. Percentage-of-sales method
This method sets a percentage for the advertising budget of the company based on its forecasted
sales performance for a specific time period. This percentage is often chosen by the company
itself. It is considered the easiest method, but it also has major disadvantages. years.
2. Affordable method
Companies that employ this method set their advertising budget based on what the company can
afford. Money is allocated to advertising and promotion only after setting the budget for other
components of the marketing mix.
3. Competitive parity method
In this method, the company determines the advertising budget by matching the budget of its
competitors.
4. Objective-and-task method
This involves setting a budget based on a company's promotional goals and the tasks that
must be performed to achieve them. These objectives often include (1) increasing the market
share of the company, and (2) increasing customer awareness of the product or brand within
a specific time frame.
GUERRILLA MARKETING
Guerrilla marketing is considered a unique approach in promoting products because it uses
unconventional techniques to attract customers' attention. One type of guerrilla marketing is
viral or buzz marketing, which relies on word-of-mouth in order to spread awareness of the
product. Another form of guerilla marketing is street marketing, which involves placing ads
or promotional materials in streets, parks, and other public places.

Principles of Marketing-1st Sem 2020-2021

VI. Teaching and Learning Materials and Resources

1. Module
2. Online Discussion
3. Power point Presentation
4. Textbooks and Online Articles

VII. Learning Task

Activity 7.1
Identify the pull or push promotional technique used in the following situations.
__________1. A 20% discount is set for selected products in a well-known mall in Olongapo
City.
__________2. Companies promote their services through Facebook, Twitter and Instagram.
__________3. A company employs salespeople to sell its products via face-to-face interactions
with potential customers.
__________4. A company that sells food supplements places brochures about its product at the
cashier counter.
__________5. Real estate companies rent a space in large, high-end malls to sell their services to
prospective customers.
__________6. A telecommunication company provides a hotline for customer care that can be
contacted free of charge.
__________7. More and more people pass on information about a new restaurant in the local
community because of its delicious food and satisfactory customer service.
__________8. A large billboard is used to promote a beauty soap on one of the main roads of
Olongapo City.
Activity 7.2
Think of any product/s available inside your home and make a short presentation on how
you promote that product. Make at least 3-5 minutes video presentation and submit to our
Group page.

VIII. Reference
Danilo M. Te, DBA, MBA, Rodilina Baltazar-Marte, MBA, MAEEE, Donna
Vida M. Abrina, MBA : Principles of Marketing for Senior High School

Principles of Marketing-1st Sem 2020-2021

Title: Managing the Marketing Process

Module 8:
I. Introduction:
The marketing process involves activities undertaken to identify business opportunities,
select target markets, develop the targeting mix to address the needs and wants of the target
market, and implement strategies to guide and manage marketing efforts.

II. Content Standards

The necessity of a marketing plan in business and proper interpretation of marketing
strategies through workshop and presentation.

III. Performance Standards

Create a new product or service design and pricing, and promotion and distribution strategies
orally defend the mini-marketing plan to a group of marketing professionals
IV. Most Essential Learning Competencies:
After studying this chapter, the student will be able to:
 explain the relationship between market analysis, planning, implementation and control;
(ABM_PM11-llf-20)
 analyze the company’s situation, markets, and environment (the marketing audit and
SWOT analysis); (ABM_PM11-llf-20)

V. Topics and Key Concepts

*Discusses the importance of analyzing the market, examining close competitors, and
the company’s strengths and weaknesses.
A. Lesson XV – Market Analysis
The major steps in the marketing process are market analysis. marketing planning, and
implementation and control.
This diagram outlines the major steps in the marketing process.

Market Analysis
The firm analyzes the business environment and identifies opportunities to satisfy unfulfilled
customer needs; the firm also looks into its capabilities to address the needs of the market as well as
other challenges in the business environment.

Principles ofMarketing
Marketing-1st Sem 2020-2021
Planning
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Strategies are identified toPrepared by: Joanopportunities;
pursue marketing Joy A. De Vera,
the LPT
firm selects a specific market,
develops the marketing mix, and positions the product or service within the market.
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

Marketing Implementation
Marketing strategies are executed through specific actions such as mobilizing resources and
manpower, completing tasks, determining the budget, implementing policies, establishing a
timeline, and coordinating marketing activities.

Marketing Control
Marketing efforts are monitored and adjustments are made in reaction to changes in the market; the
firm aims to consistently meet the needs of its customers over the long term.

The first step in the marketing process is market analysis. It is done to determine the
attractiveness of the market, formulate marketing strategies, and make business decisions. The
following are the aspects considered in conducting market analysis:
1. Market size is determined by sales volume and is used to find out the profitability of the
market.
2. Market trends focus on price and spending patterns.
3. Cost structure determines and evaluates the resources needed to create a product or
provide a service.
4. Distribution channels take into account existing and new channels.
5. Technology and resources involve an analysis of their impact on production as well as
other aspects of marketing.
SWOT Analysis is an important tool in conducting environmental analysis. This takes into
consideration the internal and external forces which influence the market and the performance of
the company. The following are the major aspects of SWOT Analysis:
1. Strengths refer to the company's competencies and competitive advantages that give it an
edge over the competition.
2. Weaknesses pertain to the company's limitations in developing and implementing marketing
strategies.
3. Opportunities are market conditions which give the company a chance to succeed should it
decide to exploit them.
4. Threats are hindrances that prevent the company from achieving its goals.

Principles of Marketing-1st Sem 2020-2021

The matrix below details the strategies that can be created based on the SWOT Analysis.
Strengths Weaknesses
Opportunities SO Strategies OW Strategies

match strengths with match opportunities with

opportunities to develop weaknesses to minimize the
competitive advantages effect of the latter
Threats ST Strategies WT Strategies

identify company strengths Match weaknesses with

which can address threats threats and identify means to
reduce these weaknesses

*Discusses the marketing plan and its components, including the marketing strategy, the
marketing mix that fits it, the financial objectives, and the action plan*
B. Lesson XVI – Marketing Planning
THE MARKETING PLAN
The marketing plan is a document that guides a company in developing and marketing a
product or service. It provides detailed strategies on successfully marketing a product and earn a
projected amount of return from the effort. It may focus on strategies over a twelve-month
period, the next calendar year, or a span of three to five years.
The marketing plan generally contains the following components:
 the marketing strategy which discusses the target market, its segments, and the
marketing mix that will satisfy their needs;
 the financial objectives which may be linked to profit and sales; and
 the action plan which states the specific and short-term tactics or tasks to be achieved in
marketing the product or services.

THE MARKETING STRATEGY

The marketing strategy explains how the company will identify and cater to its target market.
Companies must make sure that the target market is sufficiently large to provide enough profit.
The marketing strategy must also discuss how the target market will be divided into its segments.
These segments are smaller groups whose members share certain interests and preferences.
Finally, the marketing strategy must discuss how the product or service will be positioned
positively in the consumers' minds. This positioning may be based on various factors, including
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

affordability and functionality. Positive positioning allows a company to show its value to
customers. Customers will see that buying a product or service will be worth their money, and
they will continue purchasing it.

THE MARKETING MIX

To come up with an effective marketing strategy, companies also need to develop the ideal
marketing mix of the four elements—product, price, place or distribution, and promotion.
Companies can enhance the product component by focusing on its features and benefits. The
price component can be improved by matching the price with the product's quality. Companies
may also look into how the pricing fits the current status of the product in the market. Companies
may examine the place component by determining where, when, and how the product will be
sold. Finally, the promotion component can be developed by determining how the product or
service will be publicized.

THE FINANCIAL OBJECTIVES

The financial objectives mainly state the company's target profit growth in the long run. The
financial objectives may also incorporate the company's targeted growth in sales and return on
investment, or the rate at which the company obtains enough profit with respect to the incurred
costs in product development.

THE ACTION PLAN

The action plan (also called tactics) outlines the actual strategies and steps to be taken in
developing and marketing the product. The company must consider if these Strategies will be
performed on a daily, monthly, or quarterly basis. The action plan incorporates the following
aspects.
The target market. The company must come up with strategies to find out the preferences of
customers, either by conducting surveys or creating questionnaires.
1. Product. The company needs to ensure that products are of high quality and developed
effectively. Experts can provide inputs in product development.
2. Price. The company must ensure that customers do not find the product either highly
expensive or inappropriately priced. A reasonable price gives the impression that the product is
of good quality and may encourage customers to purchase it.
3. Place. The company must ensure the availability of their products by constantly
communicating with retailers and wholesalers.

Principles of Marketing-1st Sem 2020-2021

4. Promotion. Company must include strategies on how to introduce the product to the target
customers and persuade them to buy it. These strategies may include discounts, promos, and
publicity through media and the internet.
Budget and finances. The company must also think of ways to use its finances wisely. It should
be enough to maximize the potential of the product, but not to the point of incurring losses. A
helpful way to do this is to list down all of the expenses for marketing the product, down to the
last details. If applicable, the budget and finances for developing and marketing a product can be
integrated in the discussion of the other aspects.
*Discusses the implementation of the marketing plan and the monitoring of the company’s
performances*
C. Lesson XVII – Implementation and Control
MARKETING IMPLEMENTATION
Marketing implementation is the process of executing marketing strategies through specific
actions which ensure that the marketing objectives of the company are achieved. Effective
implementation is vital to the success of the marketing plan.
Planning and implementation are interdependent processes and as such, the marketing plan
continually evolves based on the experiences and information gained from its implementation.
Implementing the marketing plan entails the following steps:
1. Organizing the marketing unit. Businesses often have a marketing department which takes
charge of formulating and implementing marketing plans. It is important that the members of the
marketing unit are aware of their specific roles and responsibilities in relation to the marketing
strategies that will be implemented.
2. Motivating marketing personnel. This is done through internal marketing, which refers to
managerial actions that inform the members of the marketing unit about the goals of the
organization and convince them to accept and undertake their respective roles in implementing
the marketing plan.
3. Communicating with management. Communication ensures coordination and synergy with
other departments of the business organization. All personnel must be aware of the marketing
goals so that their activities are consistent with them.
4. Defining the marketing budget. The marketing budget is an estimate of the costs required to
undertake marketing activities to promote the products and services of the company. The budget
defines the operational costs, organizational costs, staffing costs, and capital costs required.
5. Coordinating marketing activities. Relationship between the internal staff and external
organizations such as advertising agencies, researchers, resellers, and shippers must be well
coordinated for a successful implementation of the marketing plan.

Principles of Marketing-1st Sem 2020-2021

6. Establishing a timetable for implementation. The marketing timetable identifies the specific
activities to be implemented and determines the time required for each activity. A timetable
allows marketers to organize marketing activities in their proper order by identifying which
activities should be implemented in a sequence and which can be done simultaneously.
MARKETING CONTROL
Marketing control refers to strategies that help the business stay on track in the implementation
of the marketing plan and in the achievement of its goals.
An important component of marketing control is the strategic performance evaluation which is
utilized to evaluate the effectivity of marketing strategies. The following are the components of
strategic performance evaluation:
1. Establishing performance standards. The company sets expected standards of performance
against which the actual performance is compared. The standards are based on the objectives of
the marketing plan and define what the marketing strategies should accomplish. These standards
are defined in terms of sales, costs, and communication dimensions such as brand awareness or
product feature recall.
2. Analyzing actual performance. Actual performance can be evaluated through several means.
The company can compare the previous state of the market to the state of the market during or
after the implementation of the marketing strategy.
a. Sales analysis uses sales figures to evaluate the company's performance. The frequency of
sales transactions is determined as well as the market share of the company compared to its
competitors.
b. Marketing cost analysis determines the effectiveness of the marketing strategy by comparing
the sales achieved with the costs sustained.
3. Comparing actual performance with performance standards. The actual performance is
compared to the standards set to determine success or failure and identify problems with
implementation. If a strategy is deemed successful, marketers must study it closely to gain
information and insight which can be used to further improve market strategies. If a strategy is
ineffective, marketers must study the problem and determine appropriate courses of action or
corrective actions. Examples of corrective action include
a. altering or changing strategies to make it more effective,
b. acquiring additional resources and funding, and
c. changing marketing objectives which have been found to be unrealistic.

VI. Teaching and Learning Materials and Resources

1. Module
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

2. Online Discussion
3. Power point Presentation
4. Textbooks and Online Articles

VII. Learning Task

Activity 8.1
Research on a well-known business in the country. Based on your research, outline the
strategies that the company perform with respect to the aspects discussed. Incorporate the
budget and finance aspects under the target market and marketing mix. After that, you will be
presenting your research in our class next meeting.
Activity 8.2
Select a marketing campaign of a local or international organization or business firm and
analyze it using the aspects of marketing implementation and control. Fill in the table with
the required information.
Name of the business organization

Marketing campaign

Objectives/s of the marketing campaign

Strategies and activities implemented

Achievements of the campaign

Reasons for success

Problems or issues experienced

Reasons for problems

Corrective actions taken

Results of corrective actions

VIII. Reference
Danilo M. Te, DBA, MBA, Rodilina Baltazar-Marte, MBA, MAEEE, Donna
Vida M. Abrina, MBA : Principles of Marketing for Senior High School

Title: Workshop and Presentation of the Marketing Plan

Module 9:
I. Introduction:
In this chapter, let see how students can easily understand and familiarize with the
format of the marketing plan. And they have to gather information for preparing the
marketing plan.

II. Content Standards

The necessity of a marketing plan in business and proper interpretation of marketing
strategies through workshop and presentation.

III. Performance Standards

Create a new product or service design and pricing, and promotion and distribution strategies
orally defend the mini-marketing plan to a group of marketing professionals

IV. Most Essential Competencies:

After studying this chapter, the student will be able to:
 integrate the marketing concepts and techniques learned by preparing a marketing plan;
(ABM_PM11-llg-j-24)

V. Topics and Key Concepts

*Gives guidelines and tips in conceptualizing ideas for and preparing the marketing plan*

Principles of Marketing-1st Sem 2020-2021

A. Lesson XVIII– Preparing the Marketing Plan

TIPS FOR THE PREPARATION OF THE MARKETING PLAN

1. Understand the consumers. Start with a quick market study that captures the demand and
supply situation, as well as the general socio-demographic and competitive data. The results of
the market study will be valuable input for the marketing plan.
2. Make your marketing plan simple but relevant and attainable. Don't develop a marketing
plan for the entire business as it will be too complicated to measure the performance of numerous
products. Develop a marketing plan for a product or a product line.
3. Familiarize yourself with the company and its top management.

MARKETING PLAN FORMAT

1. Title Page. Contains the title of the marketing plan, to whom it will be submitted to, who
submitted it, and the date of submission. These should be centered and spread throughout the
page.
2. Table of Contents
3. Executive Summary. This should consist of not more than two pages, including the synthesis
or highlights of the report.
4. Business Overview. This describes the company and its operations and analyzes the
company's strengths, weaknesses, opportunities, and threats.
5. Market Analysis. This focuses on the following:
a. Current products/services. Discusses and analyzes the current products or services
the company offers to its target market
b. current target market. Discusses and analyzes the socio-demographic profile of the
c. Current competitors. Discusses and analyzes the main competitors of the company;
describes similarities or differences between the competing products/services
d. External assessment. Discusses the forces and factors (e.g. trends, regulations, etc)
6. Marketing Strategy. This discusses the current marketing strategy being implemented by the
company as well as the strategies of its competitors
7. Marketing and Financial Objectives. Identify the marketing and financial objectives of
8. Marketing Implementation. This includes the following:

Principles of Marketing-1st Sem 2020-2021

a. the marketing mix strategies needed to achieve the marketing and financial objectives
of the company
b. the tactical plans needed to support the marketing mix strategies; may be monthly,
quarterly, or semi-annual strategies
9. Marketing Control. This identifies the control measures that will monitor the implementation
of the marketing plan and the risks that should be controlled.
10. Financial Projections and Break-even Analysis. This presents a three-year financial
projection and break-even analysis.

VI. Teaching and Learning Materials and Resources

1. Module
2. Online Discussion
3. Power point Presentation

VII. Learning Task

Activity 9.1
Gather all the data needed to write your marketing plan. Please be guided by the marketing
plan format.
Time to time, we will have a consultation time throughout the development of your
marketing plan.

VIII. Reference
Danilo M. Te, DBA, MBA, Rodilina Baltazar-Marte, MBA, MAEEE, Donna
Vida M. Abrina, MBA : Principles of Marketing for Senior High School

Title: Workshop and Presentation of the Marketing Plan

Module 10:
I. Introduction:
In this chapter, let see how student present and defend their own marketing plan. If
there’s any error, revise the marketing plan.

II. Content Standards

The necessity of a marketing plan in business and proper interpretation of marketing
strategies through workshop and presentation.

Principles of Marketing-1st Sem 2020-2021

III. Performance Standards

Create a new product or service design and pricing, and promotion and distribution strategies
orally defend the mini-marketing plan to a group of marketing professionals
IV. Learning Objectives:
After studying this chapter, the student will be able to:
 Present a mini-marketing plan, orally and in writing; (ABM_PM11-llg-j-25)

V. Topics and Key Concepts

*Discusses the presentation of the marketing plan and provides a rubric that will be used in
evaluating the marketing plan and its presentation*

A. Lesson XVIII – Presenting the Marketing Plan

PRESENTING THE MARKETING PLAN

1. The teacher should be provided a copy of the marketing plan

2. The marketing plan should be presented using a PowerPoint slide presentation.
3. The salient points of the plan should be presented.
4. Follow the prescribed format for the slide presentation.
(choose appropriate fonts; font size not less than 24)
5. The presentation should last for about 15 to 20 minutes.

RUBRIC OF THE MARKETING PLAN

The following rubric will be used to grade the marketing plan and its presentation.
Very Good Good Needs Ineffective Score
4 3 Improvement 1
2
1. Ge
neral
Market
Situation
Analysis
2. Ma
rketing
Principles of Marketing-1st Sem 2020-2021
NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT
Republic of the Philippines
City of Olongapo
Gordon College
Olongapo City Sports Complex, Donor St., East Tapinac, Olongapo 2200

planning
3. Ma
rketing plan
control
4. Fin
ancial
projections
5. Po
wer point
presentation
6. Presenter
delivery
TOTAL:

GRADE EQUIVALENT
SCORE GRADE EQUIVALENT
24 100
23 98
22 95
21 93
20 90
19 88
18 85
17 83
16 80
15 78
14 75
13 73
12 70
11 68
10 65
9 63
8 60

VI. Teaching and Learning Materials and Resources

1. Module
2. Online Discussion
3. Power point Presentation

VII. Learning Task

Activity 10.1
Presentation of your Marketing Plan.

VIII. Reference
Danilo M. Te, DBA, MBA, Rodilina Baltazar-Marte, MBA, MAEEE, Donna
Vida M. Abrina, MBA : Principles of Marketing for Senior High School

Principles of Marketing-1st Sem 2020-2021

NOT FOR SALE. EXCLUSIVE FOR GORDON COLLEGE ONLY
Prepared by: Joan Joy A. De Vera, LPT

MKT-101_SYLLABUS.docx
No ratings yet
MKT-101_SYLLABUS.docx
16 pages
College of Commerce and Accountancy
No ratings yet
College of Commerce and Accountancy
7 pages
Principles of Marketing
No ratings yet
Principles of Marketing
34 pages
Pnadf Exportacion
No ratings yet
Pnadf Exportacion
89 pages
Final Fishery Report
No ratings yet
Final Fishery Report
62 pages
Magadh Dairy Project
100% (1)
Magadh Dairy Project
41 pages
التسويق الإلكتروني كمدخل لتحقيق الميزة التنافسية في ا... ت الاقتصادية الجزائرية دراسة حالة شركة إتصالات الجزائر مديرية مستغانم
No ratings yet
التسويق الإلكتروني كمدخل لتحقيق الميزة التنافسية في ا... ت الاقتصادية الجزائرية دراسة حالة شركة إتصالات الجزائر مديرية مستغانم
24 pages
Syllabus - Principles of Marketing
100% (1)
Syllabus - Principles of Marketing
8 pages
DDL Marketing Week3
No ratings yet
DDL Marketing Week3
6 pages
For Agricultural Marketing: (Ma. Eden S. Piadozo, PHD) Cem - Uplb
100% (1)
For Agricultural Marketing: (Ma. Eden S. Piadozo, PHD) Cem - Uplb
108 pages
01 Audit Overview
No ratings yet
01 Audit Overview
55 pages
Q3 - Principles of Marketing - Week 8
No ratings yet
Q3 - Principles of Marketing - Week 8
4 pages
Head & Shoulder Pakistan.
83% (18)
Head & Shoulder Pakistan.
43 pages
Sec. 21-37 Revised Corpo Code
No ratings yet
Sec. 21-37 Revised Corpo Code
59 pages
Abm 12 Principles of MNGT 1st Semester Midterm Module 1 Pielago
No ratings yet
Abm 12 Principles of MNGT 1st Semester Midterm Module 1 Pielago
14 pages
Group4 - Financial Markets
No ratings yet
Group4 - Financial Markets
61 pages
Lesson 4
No ratings yet
Lesson 4
41 pages
Citi Park
No ratings yet
Citi Park
94 pages
Tài Liệu Tham Khảo Part 7
No ratings yet
Tài Liệu Tham Khảo Part 7
27 pages
Swot Analysis of Nike
No ratings yet
Swot Analysis of Nike
4 pages
Marketing Lesson Plan
100% (1)
Marketing Lesson Plan
10 pages
Pitch Deck
No ratings yet
Pitch Deck
26 pages
Principles of Marketing Reviewer
No ratings yet
Principles of Marketing Reviewer
14 pages
Chapter 2 Customer Relationship
100% (1)
Chapter 2 Customer Relationship
39 pages
Chapter 3
No ratings yet
Chapter 3
4 pages
Q4 ABM Principles of Marketing 11 Week 7 8
100% (1)
Q4 ABM Principles of Marketing 11 Week 7 8
4 pages
Bsbcus201 Assessment V7.1217 PDF
No ratings yet
Bsbcus201 Assessment V7.1217 PDF
20 pages
Powerweave Company Profile
No ratings yet
Powerweave Company Profile
55 pages
A Detailed Lesson Plan in Principle of Marketing
No ratings yet
A Detailed Lesson Plan in Principle of Marketing
3 pages
ABM - Class Schedules
No ratings yet
ABM - Class Schedules
17 pages
Parag Milk Foods: PCG Research
No ratings yet
Parag Milk Foods: PCG Research
17 pages
Guide to Revenue Operations- The FullFunnel Approach
No ratings yet
Guide to Revenue Operations- The FullFunnel Approach
10 pages
LAA Playbook
100% (1)
LAA Playbook
35 pages
Document Type: Document Code Revision No. Document Title: Effective Date
No ratings yet
Document Type: Document Code Revision No. Document Title: Effective Date
15 pages
03 Different Departments in Hotel
No ratings yet
03 Different Departments in Hotel
30 pages
Chapter 5 Managing The Marketing Effort Edited
No ratings yet
Chapter 5 Managing The Marketing Effort Edited
28 pages
Customer Relationship Management "A Case Study of Four Star Hotels in London"
No ratings yet
Customer Relationship Management "A Case Study of Four Star Hotels in London"
35 pages
4-5 - Q2 Marketing
No ratings yet
4-5 - Q2 Marketing
10 pages
ABM - Culminating Activity - Business Enterprise Simulation CG - 2 PDF
No ratings yet
ABM - Culminating Activity - Business Enterprise Simulation CG - 2 PDF
4 pages
Introduction To Marketing Chapter-1: Meaning of Market
No ratings yet
Introduction To Marketing Chapter-1: Meaning of Market
6 pages
Learning Module: Entrepreneurship Quarter 1/week 3
No ratings yet
Learning Module: Entrepreneurship Quarter 1/week 3
16 pages
Applied Economics11 - q2 - Week 10 12 Removed
No ratings yet
Applied Economics11 - q2 - Week 10 12 Removed
32 pages
Project Report On Daraz 4.o
No ratings yet
Project Report On Daraz 4.o
17 pages
MODULE 3 Diwa
No ratings yet
MODULE 3 Diwa
70 pages
Principles of Marketing Q2 Week 1
No ratings yet
Principles of Marketing Q2 Week 1
11 pages
Principles of Marketing Eighth Edition Philip Kotler and Gary Armstrong
No ratings yet
Principles of Marketing Eighth Edition Philip Kotler and Gary Armstrong
14 pages
Copy Writing
No ratings yet
Copy Writing
9 pages
WHLP-Week 1-4 Principles of Marketing Meinrad C. Bautista
67% (3)
WHLP-Week 1-4 Principles of Marketing Meinrad C. Bautista
9 pages
1L Spring - 2.5 X 3.5 Flashcards
No ratings yet
1L Spring - 2.5 X 3.5 Flashcards
6 pages
Funnel, Lead Generation and Prospecting
No ratings yet
Funnel, Lead Generation and Prospecting
26 pages
Entrepreneurship BOW
No ratings yet
Entrepreneurship BOW
63 pages
Q4 Principles of Marketing 12 - Module 5 (W2)
No ratings yet
Q4 Principles of Marketing 12 - Module 5 (W2)
18 pages
The Learners Demonstrate An Understanding of The Learners Shall Be Able To The Learners
100% (1)
The Learners Demonstrate An Understanding of The Learners Shall Be Able To The Learners
6 pages
Retail and Franchise Assignment
100% (1)
Retail and Franchise Assignment
8 pages
Entrepreneurship 12 q1 Module 5
No ratings yet
Entrepreneurship 12 q1 Module 5
24 pages
Principles of Marketing: Quarter 1 - Module 2: Marketing Approaches
No ratings yet
Principles of Marketing: Quarter 1 - Module 2: Marketing Approaches
16 pages
Salesmanship A Form of Leadership-Jlc April 3, 2023
No ratings yet
Salesmanship A Form of Leadership-Jlc April 3, 2023
4 pages
Week 6 Principles of Marketing
No ratings yet
Week 6 Principles of Marketing
9 pages
DLL Q1 Week 1 PM
No ratings yet
DLL Q1 Week 1 PM
5 pages
DLP Co
No ratings yet
DLP Co
3 pages
KO ĐÁP ÁN - 100 Questions (English For Marketing)
No ratings yet
KO ĐÁP ÁN - 100 Questions (English For Marketing)
21 pages
NOTES FOR MARKETING DYNAMICS (All Credits To Pearson Education)
No ratings yet
NOTES FOR MARKETING DYNAMICS (All Credits To Pearson Education)
9 pages
DISS 700 Homework 8 Ezana D. Aimero
No ratings yet
DISS 700 Homework 8 Ezana D. Aimero
10 pages
Deped-IDP PM (1dfsdf
No ratings yet
Deped-IDP PM (1dfsdf
40 pages
Principle Sof Marketi NG: Quarter 1 - Week 6
No ratings yet
Principle Sof Marketi NG: Quarter 1 - Week 6
10 pages
Department of Education: Week 1 7Ps of Marketing and Branding
No ratings yet
Department of Education: Week 1 7Ps of Marketing and Branding
13 pages
Charter Change
No ratings yet
Charter Change
2 pages
Chapter 4 DLP 13 Target Market
100% (1)
Chapter 4 DLP 13 Target Market
2 pages
DLL (Entre) 2
No ratings yet
DLL (Entre) 2
5 pages
2017 Marketing Plan Scoring Rubrics
No ratings yet
2017 Marketing Plan Scoring Rubrics
6 pages
Strategic Marketing vs. Tactical Marketing
No ratings yet
Strategic Marketing vs. Tactical Marketing
24 pages
Soft Corporate Offer: Sales Terms Transaction Procedure On Fob (Russian Ports)
No ratings yet
Soft Corporate Offer: Sales Terms Transaction Procedure On Fob (Russian Ports)
3 pages
Chapter 1 Marketing Principles and Strategies
No ratings yet
Chapter 1 Marketing Principles and Strategies
32 pages
PRINCIPLES OF MKTG - TOS 1ST Quarterly Exam Proj Quadrant - FINAL 2
No ratings yet
PRINCIPLES OF MKTG - TOS 1ST Quarterly Exam Proj Quadrant - FINAL 2
2 pages
DLL PrinciplesofMarketing 2ndQ W6
No ratings yet
DLL PrinciplesofMarketing 2ndQ W6
4 pages
Buying Behavior of Individual Customer VS
No ratings yet
Buying Behavior of Individual Customer VS
1 page
Learning Module: Principles of Marketing
No ratings yet
Learning Module: Principles of Marketing
20 pages
11 Entrepreneurship - Module 2
No ratings yet
11 Entrepreneurship - Module 2
8 pages
Marketing Promotional Tools Presentation
No ratings yet
Marketing Promotional Tools Presentation
5 pages
Principles of Marketing Week 2 1
No ratings yet
Principles of Marketing Week 2 1
10 pages
Market STP
0% (1)
Market STP
4 pages
Q2 SSLM3 Principles-Of-Marketing JPestano
No ratings yet
Q2 SSLM3 Principles-Of-Marketing JPestano
6 pages
3i's
No ratings yet
3i's
5 pages
BLP Entrep
100% (1)
BLP Entrep
3 pages
Q4 ABM Principles of Marketing 11 Week 11
No ratings yet
Q4 ABM Principles of Marketing 11 Week 11
5 pages
Q3 - Principles of Marketing - Week 6
No ratings yet
Q3 - Principles of Marketing - Week 6
4 pages
LeaP ABM Principles of Marketing 3rd QTR Week 7
No ratings yet
LeaP ABM Principles of Marketing 3rd QTR Week 7
4 pages
Q1W4-Principles of Marketing DIGITAL
No ratings yet
Q1W4-Principles of Marketing DIGITAL
6 pages
The Aim of Marketing Is To Make Selling Unnecessary (Peter Drucker)
No ratings yet
The Aim of Marketing Is To Make Selling Unnecessary (Peter Drucker)
6 pages
B & N - Million Dollar Closing Techniques
No ratings yet
B & N - Million Dollar Closing Techniques
22 pages
Marketing Management Group Project Report Contents: Marketing Plan Outline Includes The Following Marks
No ratings yet
Marketing Management Group Project Report Contents: Marketing Plan Outline Includes The Following Marks
1 page
Day 1 Day 2 Day 3 Day 4: - Additional Materials From Learning Resource (LR Portal)
No ratings yet
Day 1 Day 2 Day 3 Day 4: - Additional Materials From Learning Resource (LR Portal)
2 pages
Distinguish Between Strategic and Marketing Planning in Terms of Objectives and Processes ABM - PM11-Ie-i-9
No ratings yet
Distinguish Between Strategic and Marketing Planning in Terms of Objectives and Processes ABM - PM11-Ie-i-9
4 pages
Segmentation, Targeting, Positioning (STP)
No ratings yet
Segmentation, Targeting, Positioning (STP)
6 pages
Lesson Plan # 4 Subject Faculty Name Title Sub-Titles Aim
No ratings yet
Lesson Plan # 4 Subject Faculty Name Title Sub-Titles Aim
2 pages

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.

Module in Principles of Marketing Updated

Uploaded by

Module in Principles of Marketing Updated

Uploaded by

Republic of the Philippines

Senior High School Department

Schedule Module Learning Topics and Teaching and Learning

marketing Presentation regularly

Principles of Marketing-1st Sem 2020-2021

 List three (3)

(Week 9) MIDTERM EXAMINATION

(Week 1) Module 6:  Define a  Product  Module  Indivi

(Week 4-5) Module 8:  Explain the  Market  Module  Individual

(Week 7-8) Module 10:  Present a mini-  Presenti  Module  Individual

DETAILED LEARNING MODULE

II. Content Standards

III. Performance Standards

V. Topics and Key Concepts

*Introduce the Marketing and its traditional approaches*

A. Lesson I – What is Marketing and its Traditional Approaches?

Principles of Marketing-1st Sem 2020-2021

 Kotler and Armstrong (2013) describe marketing as “managing the customers

TRADITIONAL MARKETING APPROACHES

1. Production Orientation- this approach requires a company to embark on mass

Principles of Marketing-1st Sem 2020-2021

4. Marketing Orientation- in this approach, the customer’s preferences- what they

The Marketing Mix Activities The Marketing Elements (4P’s)

*Discuss the common goals of marketing and the roles of a marketer*

MARKETING GOALS AND OBJECTIVES

COMMON MARKETING GOALS

Here are the following common marketing goals:

Principles of Marketing-1st Sem 2020-2021

3. To understand customers’ behavior and communicate the marketing offerings to

THE ROLES OF THE MARKETER

*Differentiate old-generation customers from new-generation customers and discuss the

VI. Teaching and Learning Materials and Resources

VII. Learning Tasks

APPLICATION: Performance Task

Title: Customer Relationship and Customer Service

II. Content Standards

Principles of Marketing-1st Sem 2020-2021

III. Performance Standards

V. Topics and Key Concepts

A. Lesson IV – Customer Expectations and Customer Value

MEETING CUSTOMER EXPECTATIONS

Principles of Marketing-1st Sem 2020-2021

BENEFITS AND COMPETING

CUSTOMIZED CUSTOMER SERVICE

Principles of Marketing-1st Sem 2020-2021

Front Line Staff Front Line Staff

HAPPY EMPLOYEES MAKES HAPPY CUSTOMERS

MARKETING AND CUSTOMER RELATIONSHIPS

2. deepen the buyer’s trust,

CUSTOMER EQUITY AND LIFETIME VALUE

MEASURING CUSTOMER LIFETIME VALUE AND CUSTOMER EQUITY

Principles of Marketing-1st Sem 2020-2021

ABC Marketing Company, MIS Report

Year 1 (Profit each customer generated, 000)

Year 2 (Profit each customer generated, 000)

Total 305 534 341 1,012 688

Year 3 (Profit each customer generated, 000)

The total profit each customer per year is then determined:

VII. Learning Task

Principles of Marketing-1st Sem 2020-2021

My feelings…. Very Positive Somewhat Somewhat Very Negative

Principles of Marketing-1st Sem 2020-2021

Answer the following questions concisely.

1. Why is it important for marketers to consider customer expectations and satisfaction?

2. How can customization aid in improving customer value?

3. Why should businesses adopt a customer-oriented perspective?

Principles of Marketing-1st Sem 2020-2021

Title: Market Opportunity and Consumer Analysis

IV. Most Essential Learning Competencies:

V. Topics and Key Concepts

A. Lesson VI – Developing and Implementing Marketing Strategies

STRATEGIC PLANNING IN MARKETING

Principles of Marketing-1st Sem 2020-2021

STRATEGIC PLANNING PROCESS

Company Mission Statement

Principles of Marketing-1st Sem 2020-2021

Introduce the Marketing and its traditional approaches

Discuss the common goals of marketing and the roles of a marketer