PRINCIPLES OF MARKETING

Module 1: Week 3 to Week 5 The Principles of Marketing

Marketing Origins, Exchange and Value,

Conteporary Approaches of Marketing

Marketing is we all know it today for as you will know it through this subject is a fairly recent
development in the world of business. To fully appreciate how it came to being, it will be useful to
see how the stage in a market’s maturity affects how the businesses can best sell to the market.

Objectives:

At the end of this lesson, the student will:

1. understand the evolution behind the principles of marketing; and
2. define relationship marketing
3. Explain the value of customer

Activity No.1
Preliminary Discussion

1. Using your own words, define “Value”. Try to really go as deep into its meaning as you can.

2. Give Three examples of what you believe to be are valuable products and explain why you
think these are valuable.

1.

2.

3.

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Discussion Week 3
The Origins of Marketing

Stage 1. Supply<Demand

When supply is less than demand, manufacturer generally has no problems selling whatever they
produce. This is what typically is called a seller’s market and the sellers have the upper hand in
these situations. The market is hungry for the product has the disposable income to pay for it.
Production Orientation is if your objective was to be the market dominant force, then you
would want to take advantage of such situation by scaling up your production as quickly as
possible in order to take as much of the market as you can.

Stage 2. Supply<Demand, Competition Growing

The entry of competitors in a potentially huge market space generally leads to innovations as
challengers strive to make their offerings different enough. Improved quality, new and better
features, better comfort, and better design-all of which are undertaken with the hope that the
product will speak for itself and that consumers will choose your products based on the merits of
your wares. This mindset is called product orientation and it is often colloquially referred to as
“building a better mousetrap”

Stage 3. Supply >Demand

When businesses begin to crowd into limited market space, then competition can get quite fierce.
Especially if the businesses are not particularly savvy in either offering least cost options or in
differentiating their products. In such cases, it is the sales force that may best come to the rescue.
The sales force becomes the frontliners who take matters into their hands and push the products
directly to the customers.Using sales organizations to push your product is called sales
orientation.

Stage 4. Supply>Demand, Customer-centric Strategies Emerge

As competition becomes fierce, firms soon realize that a better way to compete would be by
prioritizing customer needs more than their own. When the mindset moves to this sphere, then
this is the starting point for a marketing orientation. The marketing orientation begins with
identifying and understanding a particular target market because, to put it plainly, you cannot
please everyone.
Products are then designed according to what could best fit the needs of the target market, priced
according to their typical budgets, sold where it is most convenient for them, and promoted in a
way that best catches their attention.
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Exchange

What this implies is that the only reason you would want to exchange one thing for another is if
that other thing offers more value to you than the item that you currently have. Marketing is all
about fostering such positive exchanges. It is imperative that the customers feel better off after a
transaction because otherwise they may feel that they should have spent their money elsewhere-a
feeling which prevent them from becoming loyal customers.

Activity No. 2
Build a Better Mousetrap

Let us go product centric. Select a particular functional non-electronic or non-electrical

consumer product, such as comb, scissors, vegetable peeler, shoes etc. Then formulate your own
formulate a strategy how you can create a better product that will revolutionize its product
category. The product should be given a catchy brand.

Criteria:

Criteria Details Total Points Your Points

Creativity How innovative is the 40%

product proposal?

Viability How feasible is the 30%

proposed product?

Audience Appeal How enthusiastically 30%

does the public
respond to the idea?

Total 100%

Activity No. 3
Discussion
1. Identify a brand, product or services that currently operates under the production orientation.
Describe the average buyer of this product as well as his or her typical profile.

Brand/Product’s Production Orientation

Who do you think the typical buyer is?

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Why?

Week 4
Value of Customers
Value refers to the suggested retail price of goods and services in the market.

Kinds of Economic Utility That can be offered by Products and Services

1. Form Utility- A product, by its form, saves the customer from the effort of having to make
the product himself. A person will value vegetables sold in the market because it saves her the
effort of having to grow the vegetables herself.

2. Place Utility- The convenience offered by making product available around the proximity of
the customer is also valued. Between buying product X from Store Y, that is located 1 km. away,
and from Store Z, that is located just next door, a customer will perceive more value in the
service of Store Z and will be willing to pay a little bit more for this convenience.

3.Time Utility- If a firm can offer a product or service far quicker than alternative providers, the
customer will also value this speed of service.

4. Possession Utility-For some products, mere ownerships is already valued by the customer.
This is especially true for branded items that command a premium over commodity substitutes.

5. Information Utility- Knowing certain things about the product can already imbue it with
value. For instance, a recognized brand ca instantly generate trust while advertising helps build
the assurance of the product.

Activity No. 4
Web Reading

It is the Little Things: Adding Value without Lowering Prices

http://goo.gl/YtileW

Even the tiniest of things can affect a customer’s experience. This in turn can affect the customer’s
perception of value. This article from Beyond Philosophy explains how it is the little details that
often drive value in products and services.
Activity No. 5

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1. Recall a time when you were not happy with a purchase. Analyze exactly what made you
unhappy about it. Was it the price? The quality? The reality versus expectations? Frame your
analysis using the concepts explained in this section.

Product that you were not happy with

Reason/s for dissatisfaction

Explain your dissatisfaction analytically

2. 3. Explain the concept of sentimental value. What type of utility is at play here?

Week 5
Contemporary Approaches to Marketing

Marketing is all about understanding the needs and preferences of your audience rather than
serving them what the company has to offer. The contemporary approach of marketing focuses
on the customer and their needs towards the product and the services. This theory is based on the
importance of traditional marketing orientation versus customer orientation.  They use different
tactics and strategies to build a relationship with their clients and targeted audiences.

Contemporary approaches to Marketing includes the following;

 Relationship marketing
 Industrial marketing
 Social marketing

Relationship marketing is a strategy that helps the brand develops a strong connection with
their customers. It helps the brands in forming long-term bonds with their loyal customers. It is

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essential to maintain and establish relationships with customers and other brands these days. It is
beneficial for brands as it helps them understand their audience in the long-run.
Example: Ikea- The Swedish furniture maker has a worldwide base of intensely loyal customers.
When the company changed the font in their ubiquities catalog, Ikea lovers took to the internet to
air their complaints. Rather than alienate their customers for trivial reason, Ikea changed the font
back in the next catalog.

Industrial marketing, also known as B2B or business-business marketing is a branch of

marketing which involves one business dealing or marketing their goods and services to another
business. Rather than the customer base, the brands are targeting industrial customers in this type
of marketing. Long-term relations can be built if the industrial buyers are adequately satisfied.
However, the total number of business buyers will be less in comparison to the number of
customer buyers.
Example: A company that provides cleaning, laundering and other facility service needs to
various businesses.

Social marketing is an approach of marketing which seeks to bring any social change. It
integrates marketing theories and tactics with other plans to achieve social change. Social
marketing is aimed at benefitting individuals and different communities of society. Social
marketing should not be mistaken with social media marketing in any way. This approach
focuses on changing human behavior. This branch of marketing works for the welfare of the
people which helps the brands creates their positive image in the eyes of the customer. Thereby,
helping the brands create long-term relations with their customers.
Examples are Health and safety campaign, environmental causes, and social activism.
2

Activity No. 6
Application and Advancement

1. Assess what it takes for a product or service to become worthy of a word of mouth promotion.
What does it takes for you to share something to your peers? List down the requirements,

2. If you are a condominium developer, can you think of a better way of selling your
developments other than just fielding sales teams to try searching for potential buyers?

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3. Give an example of a popular product that you believe to be is marketing oriented. Explain
why you believe this to be so and note down all the indicators to seem to prove your point.

Activity 7 Post Assessment

Multiple Choice:

1. Relationship marketing is all about

a. frequent traveler programs
b. maintaining customer relationships
c. true loyalty based on behavior
d. creating database value

2. The goal of an organization should be

a. get more customers
b. lose fewer potential customers at all costs
c. get more return customers
d.all of the above

3.Value_____ strategies are designed to rectify a lapse in service delivery.

a. added
b. recover
c.created
d.resurrection

4. In relationship marketing true customer loyalty built on

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a. frequent traveler programs

b.good word of mouth and direct selling
c.giving bigger rewards to your most valued customers
d. none of the above

5. ___________is an approach of marketing which seeks to bring any social change.

a. relationship marketing
b. social marketing
c. industrial marketing
d. e-marketing

6. A person will value vegetables sold in the market because it saves her the effort of having to
grow the vegetables herself. This is an example of_________________________
a. form utility
b. place utility
c.possession utility
d. time utility

7. _________ refers to the suggested retail price of goods and services in the market.
a. pricing
b. value
c. peso amount
d. all of the above

8. It is often colloquially referred to as “building a better mousetrap”.

a. sales orientation
b. product orientation
c. hard selling
d. marketing orientation

9. Which of the following best describe Industrial Marketing

a. No-Smoking Campaign
b. A company that provides cleaning, laundering and other facility service needs to various
businesses.
c. Putting a suggestions, comments, and customer hotline on a packaging.
d. Sending customers gift items for a positive product feedback

10. Statement No.1 Marketing exchange implies is that the only reason you would want to
exchange one thing for another is if that other thing offers more value to you than the item that
you currently have.
Statement No. 2 It is imperative that the customers feel better off after a transaction
because otherwise they may feel that they should have spent their money elsewhere-a feeling
which prevent them from becoming loyal customers.
a. Statement No. 1 is true but Statement No. 2 is false
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b. Statement No. 1 is false but Statement No. 2 is true

c. Both statements are true
d. Both statements are false.

Activity No.8
Essay

Discuss the following:

1. Relationship Marketing

2. Industrial Marketing

3. Social Marketing

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