Principles of MKTG Module Jan 11-29
Principles of MKTG Module Jan 11-29
Principles of MKTG Module Jan 11-29
A Diocesan School
NEW ILOILO, TANTANGAN, SOUTH COTABATO
Tel. No. (083) 229 – 1113
Email Address: [email protected]
II. PRE-ASSESSMENT
A – Direction: From the pool words inside the box, choose the appropriate
term for each description below.
Satisfaction Market share Durable Undifferentiated goods
Consumer goods Branding Current demand Primary demand
Brand equity Marketing Consumable
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NOTRE DAME OF NEW ILOILO, INC.
A Diocesan School
NEW ILOILO, TANTANGAN, SOUTH COTABATO
Tel. No. (083) 229 – 1113
Email Address: [email protected]
___________ 9. The number of people of a particular market at present
that would actually purchase the product or service offered.
___________10. This refers to measure of how well customer expectations
from a purchased product or service have been met.
III. CONTENT/ DISCUSSION/ INFORMATION
Module 1: Marketing Principles, Goals and Approaches
Lesson 1.1: Marketing Defined and understand the goals of marketing
and marketing Process
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A Diocesan School
NEW ILOILO, TANTANGAN, SOUTH COTABATO
Tel. No. (083) 229 – 1113
Email Address: [email protected]
Products, Services, and Experiences
What do organizations market? As consumers, we are most familiar with
the marketing of goods and services. Order than these, however, marketing
organizations also market experiences, ideas, advocacies, and even
personalities.
The Three Product Level
Consumers often think that a product is simply the physical item that he
or she buys. In order to actively explore the nature of a product further, let’s
consider it as three different products – the CORE product,
the ACTUAL product, and finally the AUGMENTED product. This concept
is known as the Three Levels of a Product.
Figure 2: Product Levels
The CORE product is NOT the tangible physical product. You can’t
touch it. That’s because the core product is the BENEFIT of the product
that makes it valuable to you. So with the car example, the benefit is
convenience i.e. the ease at which you can go where you like, when you
want to. Another core benefit is speed since you can travel around
relatively quickly.
The ACTUAL product is the tangible, physical product. You can get some
use out of it. Again with the car, it is the vehicle that you test drive, buy and
then collect. You can touch it. The actual product is what the average
person would think of under the generic banner of product.
The AUGMENTED product is the non-physical part of the product. It
usually consists of lots of added value, for which you may or may not pay a
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A Diocesan School
NEW ILOILO, TANTANGAN, SOUTH COTABATO
Tel. No. (083) 229 – 1113
Email Address: [email protected]
premium. So when you buy a car, part of the augmented product would be
the warranty, the customer service support offered by the car’s
manufacturer and any after-sales service. The augmented product is an
important way to tailor the core or actual product to the needs of an
individual customer. The features of augmented products can be converted
in to benefits for individuals.
Features and benefits of products
Features and benefits of a product are also relevant to the three levels
of the product. Products tend to have a whole series of features but only a
small number of benefits to the actual consumer.
Let’s look at this another way, if you buy a Nintendo console it has many
features; for example you can play games alone or you can play against
another opponent or two or three opponents. You can also have access to
the Internet. Avatars are adaptable so you can create yourself and your
friends. These are all examples of features to the consumer. However a
consumer may buy it because he or she wants to stay fit and will use
software and peripherals to become healthier. Becoming healthier is the
benefit to the consumer.
The consistent marketer will aim to discover the consumer’s preference for
benefits and will match individual features to the preference. That is why
professional salespeople for example, often ask many questions whereas a
novice salesperson will just tell you the features of the product
Classifications of Products/Goods
Products that are marked can be generally classified according to use,
differentiation, types, and durability.
Figure 3. Classification of Products/Goods
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A Diocesan School
NEW ILOILO, TANTANGAN, SOUTH COTABATO
Tel. No. (083) 229 – 1113
Email Address: [email protected]
According to Use: Consumer and Industrial Goods
When classified according to use, products/goods can either be
consumer goods or industrial goods.
Consumer goods are goods that are purchased for personal
consumption and/or for household use. Examples of these are instant
noodles, biscuits, milk, detergent soap, shampoo, and other similar items.
On the other hand, industrial goods are purchased in order to make
other goods, to serve as a raw material or input in the production of other
goods. Typical examples are aluminum (used to manufacture kitchen
equipment and cans) and electronic cables and wires (serve as electrical
conduits for home appliances) among others.
It would not be possible to say, however, that a product is always a
consumer good or an industrial good. A good that is ordinarily a consumer
good can also be used as an industrial good, and vice-versa. For example,
when a consumer buys sugar from the supermarket and uses this sugar to
sweeten his/her coffee, the sugar in this particular case is a consumer
good. However, if the sugar is added to flour, chocolate syrup, eggs, and
walnuts to make brownies and eventually sold, the sugar in this case is an
industrial good.
In other words, physical characteristics alone cannot determine whether
a product is a consumer good or an industrial good. One should also
consider how the product is ultimately used.
According to Differentiation: Undifferentiated and Differentiated
Goods
Undifferentiated goods are products whose physical characteristics
are so identical, that it would be difficult, it not impossible, to distinguished
one purchased from one vendor or another. Most undifferentiated goods
are products that sourced from nature.
A typical example of an undifferentiated good is rock salt. When a
housewife goes to the wet market to purchase rock salt from two different
vendors, determining which one came from one vendor or the other is a
challenge. Salt bought from the two different vendors looks, feels, and
tastes identical.
On the other hand, differentiated goods are varied in their
characteristics and features that make them distinguishable from one
another. If there are white-colored vehicles of each model from all local car
manufacturers parked side by side, the Toyota Fortuner would still be
readily distinguishable from the Mazda 3, the Nissan Sentra, the Honda
Civic, and from the other vehicles in the parking area. This is because each
manufacturer and car model has varying appearances and features. The
appearance of the Toyota Fortuner is different from mitsubishi’s Montero
Sport. They have different grill designs, headlights, body heights, hoods,
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NEW ILOILO, TANTANGAN, SOUTH COTABATO
Tel. No. (083) 229 – 1113
Email Address: [email protected]
ground clearance etc. The ability of manufacturers to successfully
distinguish their products from other competitors is called branding.
Branding provides a product or service a unique distinguishing name, logo,
symbol, or image which is used to differentiate it from other similar products
and services.
Why do some manufacturers brand their products, while others do not?
The major reason is cost. When a company decides to brand its products, it
must recognize that there are two responsibilities that accompany
branding:
All products carrying the brand must have quality consistency
The brand must be advertised and promoted
The underlying reason why manufacturers decide to engage in branding
despite the cost is that they want the brand to be known and to be
preferred by customers, eventually creating and building brand loyalty. No
customer will patronize a brand whose quality is inconsistent. For a brand
to be known, it must be extensively advertised and promoted.
Once a brand acquires customer recognition, a positive market
reputation and goodwill, higher selling prices can be charged, larger sales
revenues are generated, and higher profit margins are realized. This is
because customers begin to attach value to the brand than to the product
itself. This appreciation in a brand’s value from the point of view of
customers is called brand equity.
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NOTRE DAME OF NEW ILOILO, INC.
A Diocesan School
NEW ILOILO, TANTANGAN, SOUTH COTABATO
Tel. No. (083) 229 – 1113
Email Address: [email protected]
minutes. For this reason, many mis-interpret consumables to exclusively
include food, drinks, and edible items. Although these are consumables,
non-edible items such as detergents and toiletris are also considered
consumables. The benefit one can derive from soap, for example(for
cleaning oneself) may only last few days.
On the other hand, semi-durables provide benefits to the consumer for
a longer period of time, usually spanning several months. Semi-durables
are manufactured for longer-term use by consumers. Examples of semi-
durables are clothes, shoes, belts, jackets, etc.
Durables are products that are manufactured to last a long time. They are
capable of providing consumers with years of beneficial use. Durables are
casually expensive, and many, therefore, require an augmented product to
market them effectively. Examples of durable goods are automobiles,
houses home appliances, customer electronics, furniture, sports
equipment, and toys.
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A Diocesan School
NEW ILOILO, TANTANGAN, SOUTH COTABATO
Tel. No. (083) 229 – 1113
Email Address: [email protected]
insurance. These goods require advertising and aggressive selling and are
usually marketed using highly-trained and persuasive salespersons.
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A Diocesan School
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Tel. No. (083) 229 – 1113
Email Address: [email protected]
Utility, Value, and Satisfaction
Utility refers to the total satisfaction consumers can receive from the
consumption of a product or service.
Value, on the other hand, refers to the value customers place on a
product or service. Since consumers have different needs and buying
capacities, consumers assign varying values on the same product or
service. The product with the highest quality does not always provide the
highest value for customers. The perception of value is affected by the cost
required to acquire the product or service.
Satisfaction is the measure of how well customer expectations from a
purchased product or service have been met.
To ensure maximum customer value and satisfaction, marketers must:
Balance product or service quality and price.
Establish consistency among product availability, level of customer
service, and efficiency.
Create a buying atmosphere and deliver purchase convenience.
Customer-Perceived Value
Customer-perceived value is the quantitative difference between the
expected benefits and costs of a particular product or service in
comparison to a similar product or service. Customers rarely have an
accurate assessment of the value and cost of a product or service, and
make purchases based on their perception of its ability to satisfy his/her
needs and requirements.
To enhance their customers’ perceived value of products or services,
marketers advertise aggressively and invest heavily in highlighting products
features. In the case of cosmetics and personal care products, companies
invest heavily in packaging and labeling.
Some marketing organizations conduct marketing research to identify
the perceived values consumers attach to specific products/services.
Customer Value Proposition
A customer value proposition is a comparison of the benefits offered by
a company’s products to its customers in relation to the amount it is asking
customers to pay. Customers always ask question: “What’s in it for me?”
Marketing strategies enhance a product’s customer value proposition by
emphasizing key attributes of the brand in relation to competitors’ brands
and communicating to customers: ”Why us?”
Competition
A competitor is any company in n industry or similar industry that offers
a similar product or service.
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A Diocesan School
NEW ILOILO, TANTANGAN, SOUTH COTABATO
Tel. No. (083) 229 – 1113
Email Address: [email protected]
Levels of Competition
A firm’s competition can be classified either as a desire, generic, form,
or brand competitor.
Figure 4: Levels of Competition
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A Diocesan School
NEW ILOILO, TANTANGAN, SOUTH COTABATO
Tel. No. (083) 229 – 1113
Email Address: [email protected]
Market share is calculated using the following formula:
Company A’s annual revenue
Company A’ Market Share - x 100
Total annual revenue of Company A’s Industry
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NOTRE DAME OF NEW ILOILO, INC.
A Diocesan School
NEW ILOILO, TANTANGAN, SOUTH COTABATO
Tel. No. (083) 229 – 1113
Email Address: [email protected]
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 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.
Industrial marketing, also known as B2B or business-to-business
marketing is a branch of marketing which involves one business dealing or
marketing their goods and services to another business. 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.
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 benefiting
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.
Contemporary approaches followed by organizations:
Cause Marketing – It is the type of marketing in which a company and
charity team up together and spread awareness for a good cause. If
the campaign is successful, it can help in increasing the business
value for the company.
Event marketing – It is the type of marketing in which marketers
conduct promotional events and promote their products and services
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NOTRE DAME OF NEW ILOILO, INC.
A Diocesan School
NEW ILOILO, TANTANGAN, SOUTH COTABATO
Tel. No. (083) 229 – 1113
Email Address: [email protected]
in those events. This involves face to face contact and helps in
increasing the credibility of the brand.
Green marketing – It is the practice of marketing in which the services
and goods are marketed from their environmental benefits. Research
has shown that the customers are willing to pay extra for products
from companies which are concerned about the environment and
committed to sustainable development
IV. ASSESSMENT
A - Direction: Answer the following questions.
1. Marketing involves, among others, the delivery of value to consumers.
However, the value a consumer places on a particular products or service
is subjective. If you are a marketer, how can you increase customer’s
assessment of your product/service? Use a product/service of your choice
as an example.
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2. This is a common saying “All products sold involve the sale of service
to a greater or lesser extent. “Cite an example where product was sold
because of an accompanying service.
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NOTRE DAME OF NEW ILOILO, INC.
A Diocesan School
NEW ILOILO, TANTANGAN, SOUTH COTABATO
Tel. No. (083) 229 – 1113
Email Address: [email protected]
B - Market share
Direction: Complete the table below by computation.
Solution:
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A Diocesan School
NEW ILOILO, TANTANGAN, SOUTH COTABATO
Tel. No. (083) 229 – 1113
Email Address: [email protected]
V. FEEDBACK
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