Marketing Concept- means that an organization should seek to make a profit by serving the needs of the customers groups. What is MARKETING? The process of planning and executing conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goal. MARKETING MANAGEMENT – the process of conceptualizing, analyzing, planning, implementing, and controlling marketing activities to achieve the organization’s desired key result area. Strategic Planning – includes all the activities that lead to the development of a clear organization mission, organizational objectives, and appropriate strategies to achieve the objectives for the entire organization. THE STRATEGIC PLANNING PROCESS

Organizational Mission- statement of mission or organization and the description of their existence.



Key Elements: 1. The organization’s history- history of objectives, accomplishment, mistakes and some critical characteristics and events of the past 2. The organization’s distinctive competencies – things that an organization does well; so well in fact that they give it an advantage over similar organization. 3. The organization’s environment – the environment dictates the opportunities, constraints, and threats that must be identified before a mission statement is developed.


Mission statement must be; a. Achievable b. Motivational c. Specific
II. Organizational Objectives – are the end points of an organization’s

mission and are what it seeks through the ongoing, long-run operations of the organization. These objectives must be; Specific, measureable, action commitments by which the mission of the organization is to be achieved. Objectives can accomplish the following; 1. They can be converted into specific action. 2. They will provide direction 3. They can establish long run priorities for the organization. 4. They can facilitate management control.
III. Organizational Strategies – involves the choice of major directions the

organization will take in the pursuing its objectives. a. Organizational Strategies Based on Products and Markets – developing organizational strategies is to focus on the directions the organization can take in order to grow. Four paths in order to grow 1. Market penetration strategies – focus primarily on increasing the sale of present products to present customers 2. Market development strategies – pursuing growth through market development, an organization would seek to find new customers for its present products. 3. Product development strategies – the new products developed would be directed primarily to present customers 4. Diversification – strategy can lead the organization into entirely new and even unrelated business. Seeking new products for customers not currently being served b. Organizational Strategies Based on Competitive Advantage – devising means to gain competitive advantage against other. Competitive advantage is an ability to outperform competitors in providing something that the market values c. Organizational Strategies Based on Values – focuses on developing and delivering superior value to customers as a way to achieve organizational objectives. It also focuses not only on

customers need , but also on the question, How can we create value for them and still achieve our objectives.
IV. Organizational Portfolio Plan- final phase of strategic planning process

is the formulation of the organizational portfolio plan, that is, portfolio of business, product line. Strategic Planning Environment – give necessary information to strategic plan 1. Cooperative environment – includes all firms and individuals who have a vested interest in the firm accomplishing its objectives 2. Competitive environment – includes primarily other firms in the industry that rival the organization for both resources and sales 3. Economic environment –state of macro economy and changes in it that also bring about marketing opportunities and constraint. 4. Social environment – includes general cultural and social traditions, norms, and attitudes 5. Political environment – includes the attitude and reactions of the general public, social and business critics, and other organizations. Legal environment – includes a host of federal, state, and local legislation directed at protecting both business competition and consumer rights.

Marketing Research – is the process by which information about the environment is generated, analyzed, and interpreted for use in marketing decision making. It is an aid to decision making and not a substitute for it. In other words, marketing research does not make decision, but it can substantially increase the chances that good decisions are made. THE MARKETING RESEARCH PROCESS The 5 P’s of the Research process 1. Purpose of the research – to determine explicitly why the research is needed and what it is to accomplish. 2. Plan of the research – it spells out the nature of the research to be conducted and includes an explanation of such things as the sample design, measures, and analysis technique to be used.


3. Performance of the research – involve preparing for data collection and actually collecting them. Data collection will defend on the kind of research and the type of data needed. 4. Processing of research data – the preparation of data for analysis and the actual analysis of them. 5. Preparation of research report – completes statement of everything done in a research project and includes a write- up of each of the previous stage as well as the strategic recommendation from the research. Sample Research Plan I. Tentative projective title II. Statement of the problem One or two sentences describing the general problem under consideration III. Define and delimit the problem States the purposes and scope of the problem. Purpose refers to goals and objectives. IV. Outline This is a tentative framework for the entire project. Show statistical tables in outline form, and also show planned graphs V. Method and Data source The types of data to be sought are briefly identified. A brief explanation of how the necessary information or data will be gathered ( surveys, experiment, library sources) VI. Sample design This provides a description of the population to be studied and how it will be defined. VII. Data collection forms The forms to be employed in gathering the data are discussed here. These involve surveys, questionnaire, or an interview schedule. The plan should state how these instruments have been validated and should be given any evidence of their reliability and validity. VIII. Personnel requirements This provides complete list of all personnel who will be required, indicating exact jobs, time duration, and expected rate of pay. IX. Phases of the study with the time schedule This is the detailed outline of the plan to complete the study. The study should be divided into workable pieces: - Preliminary investigation - Final test - Sample selection - Mail questionnaire, field follow up, and so forth - Additional task

A major table that will appear in the report should be presented. skills. b. and power. wants. and educational institutions. and fraternal organizations and professional association. coding instruction. Qualitative and Quantitative Research Qualitative research – typically involves face-to-face interviews with respondents designed to develop a better understanding of what they think and feel concerning a research topic.X. and behavior. Cultural values are transmitted through three basic organizations: the family. Social Influences a. Culture and Subculture – one of the most basic influences on an individual’ needs. Reference groups and families – when forming attitudes and opinions as described as reference groups. Marketing Influences 5 . Thus . religious organizations. Cost estimate for doing the study This includes all cost incurred in doing the study. an understanding of consumers and their needs and purchasing behavior is integral to successful marketing. 2. a product. and the type of data analysis. INFLUENCES ON CONSUMER DECISION MAKING 1. since all facets of life are carried out against the background of the society in which an individual lives. a package. such as a brand name. Group includes family and close friends. Analysis plans This is the discussion of editing and proofreading of questionnaire. c. CONSUMER BEHAVIOR The marketing concepts emphasizes that profitable marketing begins with the discovery and understanding of consumer needs and then develops a marketing mix to satisfy these needs. Social class – develop on the basis of such things as wealth. or an advertisement. Quantitative research – involves more systematic procedures designed to obtain and analyzes numerical data. XI.

Physical Features – most readily apparent features of a situation.primary need of human body to survive b.Product influences – attributes of a company’s product. Time – a dimension of the situations that may be specified in units ranging from time of day to season of the year. Persons characteristics. 3. Product Knowledge – the amount of information a consumer has stored in her/his memory about the particular products b. newness. sales promotion. Social Features – provide additional depth to a description of a situation. Safety needs – need for protection from physical harm c. These are monetary mood or monetary conditions rather than chronic individual traits. Psychological Influence a. quality. Offering products by non-store methods such as internet or by catalog. Physiological needs. Price Influences – the price of the products and services often influences whether consumers will purchase them after which competitive offering is selected. Esteem needs – self awareness and importance to others 6 . b. visible configuration etc. a. Place Influences – distribution of products can influence in several ways. Current Conditions – make up a final feature that characterizes a situation. sounds. shop for. d. and what experience in purchasing and using the products. c. and the physical appearance of the product such as packaging and labeling information. b. a. Situational Influences a. 3). Products are sold in an exclusive outlets. their roles and interpersonal interactions are potentially relevant examples. Product Involvement – a consumer’s perception of the importance of an item CONSUMER DECISION – MAKING PROCESS 1. and publicity can influence what consumers will think about products. décor. or obtain information about the general or specific purchase. 4. 2). c. Promotion Influences – advertising. d. Belongingness and love needs – a social needs or need for companionship d. Task features – a situation include an intent or requirement to select. salespeople. 1). Products that are convenient to buy in a variety of stores. e. These includes geographical and institutional location. including brand name. Need Recognition – starting point of the buying process is the recognition of an unsatisfied need by the customer.

Group sources – common source of information for purchase decision comes from communication with other people. or both. Consumer has information about a number brands in a product class. The brand that is perceived as offering the greater number of desired attributes f. Self-actualization needs – defined as a desire to become more and more what one is. 2. 4. and perhaps trying the product while shopping. the actual purchase is a common result of search and evaluation. etc. examining. b. Internal sources – searched through whatever stored information and experience in his mind for dealing with the need. The forgone alternatives have many favorable features. b. The brand the consumer like best is the brand the consumer will intend to purchase. ) d. to become everything one is capable of becoming. The decision is an important one psychologically or financially. b. salesperson. Marketing sources – information include such factor as advertising. Public sources – information include publicity. Alternative Search a. Purchase Decision If no other factors intervene after the consumer has decided on the brand that is intended for purchase. and display. Consumer perceive that at least some of the brands are viable alternatives for satisfying a recognized need c. e. packaging. Each the these brands has a set of attributes ( color. Alternative Evaluation a. and independent rating of the product. There are number of forgone alternatives c.e. such as newspaper article about the product. A set of this attribute is relevant to consumer e. Experiential sources – refer to handling. size. Post purchase Evaluation a. 3. 5. c. d. quality. dealers. THE STRATEGIC 3C’S AND THE MARKETING TRIANGLE 3C’s in Marketing Customers 7 .

KRA – Key Results Area used to evaluate of marketing performance KRA Basic Components Shares 8 . Who are your customers and why? Who are not your customers and why? 2. and expectations? Competition Determine the direct and indirect competition • Direct Competition – offering the same line of product • Indirect Competition – all company competing for the customers share of money 3 Ways to Competitive Advantage Better Faster Closer Company  Competencies of company to devise strategy and tactical plan to satisfy customers. What are your customer’s needs.Competition Customers Company Two Basic Questions 1. wants.

Evaluating 3C’s into KRA What is marketing? 3C’s Consumers Competition Company How it is measured? KRA Sales Market shares Profit    Maximizing Sales Sales = Selling Price x Sales Volume 2 Basic Ways to maximize sales 1. New-to-the-world products. Products that are inventions. New users (who uses the product) 2. More usage (when & in what occasion is it used) II. WRITTEN REPORT OF ORAL PRESENTATION Topic: New Product Planning and Development New Product Strategy 1. 9 . Market Share – resulting from outperforming competition.Market Shares Profit Sales – resulting from satisfying customer’s requirements. New usage (for what purpose is the product used) 3. increase or maximize the selling price 2. Profit – resulting from having excess of sales over expenses. increase or maximize sales volume 3 Ways to increase sales volume 1.

wants. The product is supported by friendly. benefits. 3. Idea Screening 10 . The product’s technological synergy with the company. Current products made better. 2. 4. and the whole planning process depends on the quality of idea generation and screening process. Products that take a firm into a category new to it. 10. to the firm’s current markets. and size. How easy the market is to penetrate from a competitive standpoint. 6. Ten Factors Associated with New Product Success 1. receiving adequate resources suited to the customer’s needs. prompt and efficient customer service. The magnitude of the market opportunity.2. Technological compatibility. 7. 9. Products that are retargeted for a new use or application. Since idea generation is the least costly stage in the product development process. quality. The product’s quality for the consumer’s money. Ideas are the raw materials for product development. uniqueness. Product superiority/quality. The product’s synergy with the company. it makes sense that an emphasis be placed first on recognizing available sources of new product ideas and then on funneling these ideas to appropriate decision makers for screening. New Product Planning and Development Process 1. Repositioning. and so on. flankers. The competitive advantage the product has by virtue of features. 4. Products that are line extensions. and buying behavior. New category entries. Defined opportunity. How familiar or “close to home” the product is to the company’s current products and markets. 5. Product improvements. Competitive situation. 8. Additions to product lines. 2. and so on. Familiarity to the company. Market need. The new product process is well-planned and executed. but are not new to the world. Whether the product process has a well defined category and established market to enter. Market-driven process. Overall/project fit. 5. Economic advantage to the user. courteous. Idea Generation Every product starts as an idea. 3. growth. Customer service.

11 . in 1971 when three young men. know what the value proposition is for the customers. there were more than 3. Starbucks has decided to stick to its knitting. marketing. manufacturing. Test Marketing The management goes outside the company and submits the product candidate for customer approval. The proposal is analyzed in terms of production. III. 3. Gerald Baldwin. such as packaging or advertising.The primary function of the idea screening process is twofold: first.400 Starbucks Coffee Houses throughout the world. Washington. By 2002. Test market programs are conducted in line with the general plans for launching the product. Test marketing is a controlled experiment in a limited geographical area to test the new product or in some cases certain aspects of the marketing strategy. Project Planning The new product proposal is evaluated further and responsibility for the project is assigned to a project team. to expand viable ideas into full product concepts. decided to try their hand at selling gourmet coffee. finance. Product Development At this juncture. and do everything possible to get close to the customers. understand its core competency. the product idea has been evaluated from the standpoint of engineering. financial. 4. it is considered a candidate for further research and testing. and second. and competitive factors. and marketing. to eliminate ideas for new products that could not be profitably marketed by the firm. Commercialization This is the launching step where the firm commits to introducing the product into the marketplace. They were betting that consumers would pay $1.50 for a cup of coffee compared to 40 cents for generic coffee offered elsewhere. and Zev Siegl. If it has met all expectations. Gordon Bowker. 5. 6. WRITTEN REPORT OF CASE PRESENTATION Case Study: Starbucks Brief Background Starbucks Coffee Houses were started in Seattle.

Conclusion In order to maximize the sales profit. They must also offer various products to attract their customers and to maintain their competitive advantage by continuously developing new products. the company will then have an increase in their sales growth. IV. By saturating the market with new products that are well strategized.Main Problem How to boost sales growth far more rapidly than current sales? Objective • To develop ways and means to attract new customers while maintaining the old customers • To maximize sales volume SWOT Analysis Strength • High revenue • Large profit margin Weakness • Difficulty to perfectly replicate their product to their different branches Opportunity • Only 5% of coffee consumption in the US is done in coffee houses leaving ample room for growth Threat • New competitors enter the industry Alternative Courses of Action • Develop a variety of products to offer in the market • Saturate the market • Increase the selling price Recommendation Starbucks must saturate the market by means of opening and locating branches to every corner of major cities. we must maximize the sales price or sales volume. COMPILATION OF WRITTEN REPORTS 12 . and/or both.

and other processing facilities. these products are fairly homogeneous. This category includes the following: a. • Generic Product . Organizational Goods Such products are purchased by business firms for the purpose of producing other goods or for running the business.is the sum of the physical.the tangible product along with the whole cluster of services that accompany it. tools. PRODUCT STRATEGY OBJECTIVES • To be able to learn on how to make a strategic plan in marketing a product. Product . Parts or components. since it is through the sale of products and services that companies survive and grow. such as basic machinery.the physical entity or service that is offered to the buyer. • Extended Product . b. d. Agricultural products and raw materials These are goods grown or extended from the land or sea such as iron ore. and sociological satisfactions the buyer derives from purchase. 13 . • To learn on how to go with the flow of the current trends. CONTENT Product strategy – is a critical element of marketing and business strategy. Types of product • Tangible Product . In general. Major and minor equipment. wheat. c. Raw materials and semi-finished goods. and have low value per unit or in bulk weight. psychological. ownership. and consumption.the essential benefits the buyer expects to receive from the product.2. sold in large volume. 2. Supplies of items used to operate the business but that do not become part of the final product. • To have a great opportunities to increase sales and develop a sustainable competitive advantage. and sand. Product Classification 1. which become an integral element of some other finished goods.

can be defined as what the customer gets in exchange for what the customer gives. such as foods. Product quality when products do what they do very well. which are purchased after some time and energy.3.can be defines as the degree of excellence or superiority that an organization’s product possesses. Consistent advertising and other marketing communications in which brands tell their story often and well. Convenience goods. It is a composite of all products. The dynamics of competition lead to multiproduct lines. Special goods. b. which are unique in some way so the consumer will make a special purchase effort to obtain them. are spent comparing the various offerings. c. such as appliances. 2. Product Quality and Value Quality . Three reasons organizations offer varying products within a given product 1. which are purchased frequently with minimum effort. Impulse goods would also fall into this category. Branding Factors that serve to increase the strength of a brand 1. Consumer goods Consumer goods can be divided into three classes: a. 14 . Value . brands or items within each product line Product Line Product line is a group of products closely related to each other. Shopping goods. Potential customers rarely agree on a single set of specifications regarding their “ideal product” differing greatly in the importance and value they place on specific attribute 2. Customers prefer variety. Product Mix and Product Line Product Mix Product mix is the complete list of all products offered for sale or produced by a company. They are intended for same uses or they function in similar manner. 3. 3. Distribution intensity whereby customers see the brand wherever they shop.

approach uses a brand name to facilitate entry into a new market segment. 2. and therefore given legal protection. symbol. Brand personality where the brand stands for something. 3. Branding Strategies 1. or deleted.new products or brands eventually enter the industry. 2. Brand Extension . It is a brand registered under the Intellectual Property Office (IPO).4. sales and profit start to decline. Growth Stage . The Product Audit Product audit is a marketing management technique whereby the company’s current product offerings are reviewed to ascertain whether each product should be continued as is.is a registered company name.during this stage. Trademark . 5. improved. 4. Multibranding Strategy . Factors to be considered in Deletion of Products 1.a current brand name is used to enter a completely different product class. Franchise Extension or Family Branding .also known as joint or co-branding. modified. Packaging Packaging is a group of activities in product planning which involved designing and producing container or wrapper for a product. term.also known as the “Market acceptance stage”. Dual Branding . Product Life Cycle 1. The legal term for brand is Trademark. 3. 4.a company attaches the corporate name to a product either to enter a new market segment or a different product class.is a name. Decline Stage . Maturity Stage . strategy is one in which two or more branded products are integrated. Line Extension . Sales trends How have sales moved over time? What has happened to market share? Why have sales declined? What changes in sales have occurred in competitive products both in our line and in those of other manufacturers? 2.companies may also choose to assign different brand names to each other. Brand . design. Introduction Stage. Profit Contribution 15 . This is when sales and profits increase at an increasing rate.this is the stage when the product is launched in the market. or any other feature that identifies one seller’s good or service as distinct from those of other sellers.

Product Life Cycle Has the product reached a level of maturity and saturation in the market? Has new technology been developed that poses a threat to the product? Are there more effective substitutes on the market? Has the product outgrown its usefulness? Can the resources used on this product be put to better use? 4. how are these tied to price? Have selling. Second part includes the product life cycle which consists of its introductory stage. It must take in account the capabilities in terms of engineering. Navotas Press. product line and product mix. prioritize and implement ongoing product improvement activities. (2007) “Elements of Marketing”. and distribution costs risen out of proportion to sales? Does the Product require excessive management time and effort? 3. Quality and Marketing teams to monitor product quality/yield/cost and then identify.. maturity stage and the decline stage. CONCLUSION Product Strategy is perhaps the most important function of a company. Ruby F.febpatrimoine. REFERENCES • Alminar-Mutya. of production. will customers of this product switch to other substitute products marketed by our firm? In total. First.htm 16 . Manufacturing. Navotas City • http://www. product classification. product quality and value. SUMMARY This chapter discussed the central element of marketing management which is the product strategy.com/english/corporate/product_strategy.What has been the profit contribution of this product to the company? If profits have declined. branding and brand equity and packaging. It must evaluate the customers expectations at the time of delivery. the basic issues in product management which includes the product definition. promotion. Customer Migration Patterns If the product is deleted. growth stage. Fourth Edition. The last part which is the product audit includes the factors in deciding if the products are to be deleted in the market. will profits associated with our line increase due to favorable switching patterns? Product Improvement Product Improvement is a cross-functional effort between the Engineering. It must foresee the competition (including new entrants) probable moves to enter the same market. It includes the four important areas of concern in developing product strategies. of distribution (sales) existing in the company or of time to acquire them (by hiring or by mergers).

Products that are inventions. Products that are retargeted for a new use or application. Overall/project fit. The magnitude of the market opportunity. NEW PRODUCT PLANNING AND DEVELOPMENT New Product Strategy 1. 2. benefits. prompt and efficient customer service. Additions to product lines. Whether the product process has a well defined category and established market to enter. Product improvements. The new product process is well-planned and executed. 4. Repositionings. The competitive advantage the product has by virtue of features. Technological compatibility. growth. and so on. New-to-the-world products. Products that are line extensions. Products that take a firm into a category new to it. but are not new to the world. and buying behavior. courteous. 2. The product is supported by friendly. The product’s quality for the consumer’s money. 4. Product superiority/quality. How easy the market is to penetrate from a competitive standpoint. Ten Factors Associated with New Product Success 1.masetllc. The product’s technological synergy with the company. Competitive situation.shtml 3. 9. Idea Generation 17 .com/products/452. 7. Defined opportunity. uniqueness. wants. 8. New Product Planning and Development Process 1. 3. flankers. to the firm’s current markets. quality. Market need. Customer service. Market-driven process. and size. receiving adequate resources suited to the customer’s needs. and so on. The product’s synergy with the company. Current products made better. 10.• http://www. 6. Familiarity to the company. 5. How familiar or “close to home” the product is to the company’s current products and markets. New category entries. 3. 5. Economic advantage to the user.

It aims to ensure consistency of message and the complementary use of media. Since idea generation is the least costly stage in the product development process. 5. 2. financial. Product Development At this juncture. to eliminate ideas for new products that could not be profitably marketed by the firm. Test market programs are conducted in line with the general plans for launching the product. 3. 4. Project Planning The new product proposal is evaluated further and responsibility for the project is assigned to a project team. If it has met all expectations. The proposal is analyzed in terms of production. It is a planning process designed to assure that all 18 . manufacturing. 4. Commercialization This is the launching step where the firm commits to introducing the product into the marketplace. and marketing. 6. and second. Test Marketing The management goes outside the company and submits the product candidate for customer approval. it makes sense that an emphasis be placed first on recognizing available sources of new product ideas and then on funneling these ideas to appropriate decision makers for screening. such as packaging or advertising. finance. to expand viable ideas into full product concepts.Every product starts as an idea. Ideas are the raw materials for product development. marketing. and the whole planning process depends on the quality of idea generation and screening process. The concept includes online and offline marketing channels. Test marketing is a controlled experiment in a limited geographical area to test the new product or in some cases certain aspects of the marketing strategy. and competitive factors. the product idea has been evaluated from the standpoint of engineering. INTEGRATED MARKETING COMMUNICATIONS Integrated Marketing Communications is a term used to describe a holistic approach to marketing. Idea Screening The primary function of the idea screening process is twofold: first. it is considered a candidate for further research and testing.

Database marketing and Public relation. sales promotion (sales and trades promotion). approaches. service. radio. and Internet TV. public relations. microblogging. and personal selling activities. Offline marketing channels are traditional print (newspaper. and resources within a company which maximizes impact on consumer mind and which results into maximum profit at minimum cost. blog. podcast. Sponsorship marketing. email. industry relations. In this section a basic definition of each method is offered while in the next section a comparison of each method based on the characteristics of promotion is presented. Integrated marketing communication is integration of all marketing tools. advertising does typically attempt to persuade potential customers to purchase or to consume more of 19 . Generally marketing starts from "Marketing Mix". However. Taken together these comprise the promotion mix. affiliate. RSS. It also includes Internet marketing. Marketers have at their disposal four major methods of promotion. price. and promotion). place. and television. ADVERTISING It is a paid form of nonpersonal communication about an organization. And integration of all these promotional tools along with other components of marketing mix to gain edge over competitor is called as Integrated Marketing Communication. billboard. or organization are relevant to that person and consistent over time. its product or its activities that is transmitted through a mass medium to a target audience. from search engine optimization (SEO). Advertising is a form of communication used to help sell products and services. Promotional activities include Advertising(by using different medium). magazine). Integrated Marketing Communications is a term used to describe a holistic approach to marketing. banner to latest web related channels for webinar. Typically it communicates a message including the name of the product or service and how that product or service could potentially benefit the consumer.brand contacts received by a customer or prospect for a product. Online marketing channels include any e-marketing campaigns or programs. Promotion is one element of Marketing Mix. The concept includes online and offline marketing channels. mail order. Direct marketing. A company develops its integrated marketing communication programme using all the elements of the marketing mix (product. THE PROMOTION MIX The promotion mix concept refers to the combination and types of non personal and personal communication. pay-per-click.

cinema. radio. including traditional media such as television. ADVERTISING DECISIONS  THE EXPENDITURE QUESTION Determining the size of the advertising budget or determining how much to spend on advertising.a particular brand of product or service. newspapers. There are many media used to deliver these messages.  Per-Unit Expenditure One in which a fixed monetary amount is spent on advertising for each unit of the product expected to be sold. Today.  All You Can Afford The advertising budget is established as a predetermined share of profits or financial resources. billboards. mail or post and Internet marketing. Modern advertising developed with the rise of mass production in the late 19th and early 20th centuries. 20 . magazines. video games. METHODS  Percent of Sales The firm simply takes a percentage figure and applies it to either past or future sales.[1] Many advertisements are designed to generate increased consumption of those products and services through the creation and reinvention of the "brand image". Advertising is often placed by an advertising agency on behalf of a company or other organization. advertisements sometimes embed their persuasive message with factual information. new media such as digital signage is growing as a major new mass media. For these purposes.  The Research Method The advertising budget is argued for and presented on the basis of research findings.  Competitive Parity Advertising budgets are based on those competitors or other members of the industry. the carrier bags.

 THE ALLOCATION QUESTION This question deals with the problem of deciding on the most effective way of spending advertising dollars. etc. SALES PROMOTION Sales promotion is an element of the marketing process that can close the sale of goods or services to a potential customer by providing the incentive to make a positive purchase decision. television. It should be predicated upon a good theory of consumer motivation and behaviour. 3 BASIC COMMUNICATION PROCESS 1. sounds and other forms of audiovisual stimuli that are designed to affect consumer behavior. It should take into account the basic principles of communication. The receiver or the audience  Media Mix Advertising process which involves different media types such as newspapers. Two General Criteria for Effective Advertising Message 1.  Marketing Strategy Advertising process involves creating messages with words. The sender or the source of communication 2. As a 21 . internet. The communication or the message 3. radio. 2. ideas. The Task Approach It initially formulates the advertising goals and defines the tasks to accomplish those goals. Sales promotion describes promotional methods using special short-term techniques to persuade members of a target market to respond or undertake certain activity.

These include:    Consumer Market Directed Trade Market Directed Business-to-Business Market Directed PUBLIC RELATIONS Public relations describes the various methods a company uses to disseminate messages about its products. something more for the same price).g. or other interested members of the community. and accelerating their sales of a product. suppliers. money back) or the inclusion of additional value-added material (e.g.. to offer a favorable mention of the marketer’s company or product without direct payment to the publisher of the information. lower purchase price. employees. stockholders. Also referred to as publicity. The point of public relations is to make the public think favorably about the company and its offerings. or overall image to its customers.  Commonly used tools of public relations:  news releases 22 . retailers. stocking.  Pull strategies involve aiming promotional efforts directly at customers to encourage them to ask the retailer for the product. and sales personnel to gain their cooperation in ordering. and particularly the news media. this type of promotion uses third-party sources. Classification of Sales Promotion Sales promotion can be classified based on the primary target audience to whom the promotion is directed.. marketers offer something of value to those responding generally in the form of lower cost of ownership for a purchased product (e.  Objectives of Sales Promotion      Building Product Awareness Creating Interest Providing Information Stimulating Demand Reinforcing the Brand  Push versus pull marketing  Push strategies involve aiming promotional efforts to contributors. services.reward.

maintain. and protect the organization's reputation  Enhance its prestige  Present a favorable image. Areas of Public Relations     Product public relations Employees relations Financial relations Community relations. press conferences  speaking engagements  And community service programs. Measurability allows direct marketers to test a variety of lists. Measurability sets direct marketing apart from general advertising and other forms of marketing. offers. direct marketing is an "interactive system of marketing which uses one or more advertising media to affect a measurable response and/or transaction at any location. Direct marketers can measure the response to any offer. Goals of Public Relations  To create. DIRECT MARKETING According to the official definition of the Direct Marketing Association (DMA). PRICING STRATEGY 23 . media—virtually any aspect of a campaign—in order to allocate marketing resources to the most effective combination of elements. Direct Marketing Media      Direct mail Telephone-based direct marketing (telemarketing) Magazines Newspaper Television 7.

This can be possible. SKIM THE CREAM PRICING – Involves setting a higher price from what the market expects. peso sales or market share without primary reference to profit. Economy pricing strategy is charging a low price for lower quality product.PRICE – means the money value of product or service expressed in terms of peso and or centavos. Target return objective sets a specific level of profit of an objective. 2. PENETRATION PRICING – Involves setting a low initial price for the product or service. This amount is often stated as percentage of sales or investment. These companies simply stabilize price by sticking to their own price line. A good value strategy is charging lower price for high quality product. 24 . STATUS QUO OBJECTIVE – This objective adopted by managers who are satisfied with their present profits under market share. 3. Product is priced at minimum that will generate profit. since the buyers associate higher prices with better quality goods. SALES ORIENTED OBJECTIVE – seek higher level or sales volume. Profit maximization objective seeks to get as much profit as possible. and the overcharging strategy is overpricing price of the product in relation to quality. Businessmen want satisfactory return as an assurance of corporate survival or success. PROFIT ORIENTED OBJECTIVES. Price is also means the amount of money needed in order to acquire a product or service and its accompanying services PRICING OBJECTIVES 1. b. Some managers are more concerned about more sales than profit. since more sales lead to more profit. 2. This is a non-price competition company. PRICING STRATEGY FOR NEW PRODUCTS 1 PREMIUM PRICING STRATEGY – Is the use of a high price for high quality product. PRICING STRATEGIES 1. a. This concern can only be possible if costs of materials are not increasing. The aim of this strategy is to target the mass market immediately.

or leave it and decide just for the main product at the base price. market entry for competitors must not be easy to undercut the high price. 4. the quality of the product can be relative to its high price. By –Products are those sawdust from lumber mills. cost of production for small volume must not be high to affect high price. the marketer may set a higher price for the premium category and lower price for the regular category because they differ in costs. Market may decide to take optional items at optional prices.2. 2. product features and competitor’s prices. MARKET PENETRATION PRICING – Involves setting a low initial price for the product or service. PRICING STRATEGY FOR PRODUCT MIX/PRODUCT LINE 1. The aim of this strategy is to target the mass market immediately and win a large market share. This strategy can be effective when market is price sensitive. For example. Second. CAPTIVE PRODUCT PRICING – The strategy of pricing accessory products required to be used along with a main product. petroleum product which can be sold to another industrial market who can re-processed these items into another final products. And finally. chocolate bars. The marketer quotes the base price for the product and offer accessory products at optional price. OPTIONAL PRODUCT PRICING – The strategy of pricing options or accessory products along with a main product. processed meats. a product has several varieties – regular and premium categories. 3. SKIM-THE-CREAM PRICING – Involves setting higher price from what the market expects. 25 . This strategy makes sense under certain condition. bar soaps. Marketers commonly set a low price for main products and high price for the accessory product. BY-PRODUCT PRICING – This decision requires manufacturers to seek a market for its by-products and should accept any price that covers more than the cost of storing and delivering them. 3. features and performance. This will allow manufacturers to lower expenses and reduce main product’s price. First. This can be possible since e the buyer’s associate higher prices with better quality goods. Product is priced at minimum that will generate profit. where low price result to market growth. PRODUCT LINE PRICING – Determining the price levels between product varieties in a line based cost differences.

2. but the package price must be low enough to get them buy the bundle.5. it saves time. This can be used if freight costs can b e a minor issue on the seller’s cost structure or this is given as additional service in the form of free delivery.95. PSYCHOLOGICAL PRICING POLICIES 1. the seller charges the same amount for similar products of the same quantity and quality irrespective of the distance or nearness of the buyer’s business.00. P39. FACTORY POINT – When seller quotes the price at FOB factory (Free on Board). that P19. Seller quotes a price which includes delivery cost regardless of the buyer’s location. for example.95 lower than P100. ODD-PRICE POLICY – Prices are set at odd amounts. This pricing is based on the belief that buyers feel. where goods are sold to customers at the same price. POSTAGE PRICE STAMPING – This is a geographic pricing policy where the seller is pricing FOB at the buyer’s location. The buyer is responsible for paying the cost of transportation. such as P19. PRODUCT BUNDLE PRICING – This combines products and offers the bundle or total package at a reduced price. VARIABLE PRICE POLICY –Price paid by custo0mer at a given time for a certain item is determined by the buyer’s bargaining power. because they give more attention to the peso figure than the centavos. Seller receives net profit on each sale depending upon the amount of his shipping costs. 2. Title to the products and risks are transferred to the buyer at the time of loading the goods of the shipper’s dock or carrier’s place. and can be used for self service store. This gives the seller flexibility in dealing with customers like by lowering prices to some buyers. 3.95 is much lower than P20.00 or 99. P99. Under FOB factory price policy. ZONE PRICING – This geographic policy is synonymous with pricing of parcel post service. FIXED-PRICE POLICY – In-store retailers adopt one-price system.95. This gives advantage such as building customer confidence in the store. 26 . long distance telephone service. 3.95. Zone lines for the total market must be carefully drawn to avoid discrimination among buyers. GEOGRAPHICAL PRICING POLICY 1. This strategy can promote sales of products which consumer may need or are slow-moving items.

In monopolistic competition. such as the quantity of raw materials needed to produce quantity of output.Types of costs are the fixed and variable costs. MARKET AND DEMAND – Before setting the price. Economists recognize four types of markets: pure competition.Although delivered prices may vary from one zone to another. Companies often position their products on price. The sum of the fixed cost and variable cost is called total cost. 3. ELEMENTS TO CONSIDER IN SETTING PRICES INTERNAL ELEMENTS AFFECTING PRICING DECISION 1. distribution. product quality leadership or competitive survival. interest and the like. These maybe the rentals. 2. and promotion decisions. style or services. and pure monopoly. In an oligopolistic 2. buyers and sellers can trade over range of prices. all customers pay the same delivered price. Common objectives are profit maximization. prices and offers. 27 . quality. market share leadership. COMPETITOR’S COST. A consumer planning to purchase a product will evaluate prices of comparative competitor’s brands. the marketer must understand the relationship between price and demand under different types of market. executive salaries. competitors and product design. wherein it defines the target market. oligopolistic. then targets costs that will ensure that the price is met. because sellers can differentiate offers to buyers in terms of variations in features. wherein it starts with identifying ideal selling price. MARKETING MIX STRATEGY – Pricing decisions vary with products features. PRICES AND OFFERS – A company’s pricing decision is affected by its competitor’s cost. In a pure competition. Variable Costs are directly related to output level. Fixed costs are overhead expenses that do not vary with quantity produced or sold. COSTS . MARKETING OBJECTIVES – The Company must first decide on its marketing objectives. EXTERNAL ELEMENETS AFFECTING PRICE DECISION 1. monopolistic. This technique is called target costing. within a zone. a seller cannot charge higher than the on-going price because buyers can obtain as much as they need at the regular price.

00. the manufacturer’s unit cost will be: Unit cost = VC + (FC/Unit sales) = 10 + Php30.000. COST BASED PRICING a. Manufacturer’s Selling Price = Unit cost / (1. Variable cost Fixed cost Expected Unit sales Php 10.00 Therefore.50 Cost-Plus pricing remains popular because sellers are more concern about costs than demand.000 / 1.50 the company must sell at least 1091 units to break-even. COST-PLUS PRICING – This is the simplest method wherein a standard mark-up is added to the cost of the product. Government restrictions and social concerns may also be taken into account.000.00 / (1-. Break-even Volume = Fixed cost / (Price-variable cost) 28 .00.500 = Php 30. inflation affecting pricing decisions.% mark-up) = Php 30.Other external elements are economic factors like interest rates. they do not have to make frequent adjustments as demand changes.00 30. suppose a manufacturer has the following variable and fixed costs and expected sales. BREAK EVEN PRICING – Wherein the marketing organization tries to determine the price at which it will break even or achieve the target profit it aims. at Php 37.20) = Php 37. b. Supposing fixed cost is Php 30.00 1. To illustrate.00 Suppose the manufacturer wants to earn 20% markup on sales. variable cost is Php 10.500. PRICING APPROACHES 1.

29 . Potential of potential buyers (organizational buyers or final consumers) 4. and gender. 1. In short. VALUE BASED PRICING – Considers consumers perceived value on the product. = 1091 units 2. SEALED BID PRICING – This sets price based on how the marketer thinks that the other competitors will price. 3. Demographic Factors – In the initial selection of the target market that a firm intends to serve. GOING RATE PRICING – The company places less attention on its own costs or demand. and their age. 3. PRICING STRATEGY DEMAND INFLUENCES ON PRICING DECISIONS Demand influences on pricing decisions concern primarily the nature of the target market and expected reactions of consumers to a given price or change in price. b. irrespective of cost and demand. COMPETITION BASED PRICING a. Number of potential buyers. and feel that holding to the ongoing price will minimize price wars. Location of potential buyers. A.50-10) for its marketing program. when company bids for job. 2. a number of demographic factors are usually concerned. and price is set to match consumer’s perceived value. Demographic factors that are particularly important for pricing decisions include the following. Some firms follow the leader’s price. the lesser is the chance of getting the contact. Pricing begins with analyzing consumer needs and value perceptions. the higher the marketing organizations set its price above cost.000 / (37. This approach charges the same price with that of major competitors.= 30. Value pricing is offering just the right combination of quality and good service at the fair price. education. This means that the price is considered before designing the product or planning for its marketing program. Expected consumption rates of potential buyers.

and chemical features. PERISHABILITY – Goods that are very perishable in a physical sense must be priced to promote sales without costly delays 2. Product Consideration in Pricing 1. Psychological Factors – Psychological factors are related to pricing concern primarily how consumer will perceive various prices or price changes. plus a profit for the offering to be a value to the firm. DISTINCTIVENESS – Products can be classified in terms of how distinctive they are. C. LIFE CYCLE 30 . there is an implicit assumption that this sum represents the economic value of the product in the market place. Cost Considerations in Pricing – The price of a product is usually must cover costs of production. e = percent change in quantity demand / percent change in price SUPPLY INFLUENCES ON PRICING DECISIONS A. In addition. The most common pricing objectives are (1) pricing to achieve a target return on investments (2) stabilization of price margin. PRICE ELASTICITY Both demographic and psychological factors affect price elasticity. when products are priced on the basis of costs plus a fair profit. and (4) pricing to meet or prevent competition. and distribution. promotion. B. Homogenous goods are perfect substitutes for each other. engineering design. Economic strength of potential buyers. 3. B. which is turn should be derived in corporate objectives. which is estimated by dividing relative changes in the quantity sold by the relative changes in price. Pricing Objectives – pricing objectives should derive from overall marketing objectives. trademark.5. (3) pricing to achieve a target market share. while most manufactured goods can be differentiated on the basis of certain features. Price elasticity is a measure of consumers’ price sensitivity. as in the case of bulk wheat or whole milk.

the firm must consider its competition and how competition will react to the price of the product. 8. Number of products sold by competitors. 2. Conditions of entry into the industry. B. Size of competitors. Competition – In setting or changing prices. 1. Government Regulations GENERAL PRICING MODEL APPROACH SET PRICING OBJECTIVES EVALUATE PRODUCT PRICE RELATIONSHIP ESTIMATE COST AND OTHER PRICE LIMITATION ANALYZE PROFIT POTENTIAL SET INITIAL PRICE STRUCTURE CHANGE PRICE AS NEED 31 . 4. Location of competitors. Historical reaction of competitors to price changes. Number of competitors. 6. Cost structure of competitors. 7. 3. Degree of vertical integration of competitors. 5.ENVIRONMENTAL INFLUENCES ON PRICING DECISION A.

Marketers must then estimate the likely profit in pricing levels in this range. CONCLUSION 32 . ANALYZE PROFIT POTENTIAL Analysis in the preceding stages should result in a range of prices that could be charged. discounts and allowances may have to be larger or more frequent than planned to get greater marketing effort to increase demand to profitable levels. In the short term.SET PRICING OBJECTIVES Given a product or service designed for a specific target market. These objectives guide the pricing strategy and should be designed to support the overall marketing strategy. SET INITIAL PRICE STRUCTURE The price structure takes into account the price to various channel members. Channel members may bargain for greater margins. ESTIMATE COST AND OTHE PRICE LIMITATIONS The cost to produce and market products provides a lower bound for pricing decisions and baseline from which to compute profit potential. the pricing process begins with a clear statement of the pricing objectives. CHANGE PRICE AS NEED There are many reasons why an initial price may need to be changed. EVALUATE PRODUCT PRICE RELATIONSHIP Marketers need to consider what value the product has for customers and how price will influence product positioning. such as wholesaler and retailers. as well as the recommended price to final consumers or organizational buyers. or costs may increase with inflation. competitors may lower their prices. Price limitation that need to be considered are government regulations and the prices that are charged by competitors for similar and substitute products.

Pre-empt competitors global move 5. 8. GLOBAL MARKETING The process of conceptualizing and then conveying a final product or service worldwide with the hopes of reaching the international marketing community. Elements of the global marketing mix Product A global company is one that can create a single product and only have to tweak elements for different markets 33 . competition. Modern – day marketing managers cannot ignore the complexity or the importance of price management. Increase profit prospect Maximize total sales revenue Take advantage of economies of scale Improve overall market position  Defensive Goals 1. Have access to technological innovations that are developed in other countries. Not be locked out of future markets by arriving too late. business conditions. channel of distribution and general resources can determine the success or failure of a business. 4. 3. 2. Take advantage of significant differences in operating costs between countries. product variables. There are many ways for more to flow out of a firm in the form of costs. but often there is only one way to bring revenues and that is by price-product mechanism. Different strategies are implemented based on the region the company is marketing to. 3. Proper global marketing has the ability to catapult a company to the next level. BASIC REASON WHY FIRM INVEST IN OTHER COUNTRIES:  Offensive Goals 1.Pricing decision that integrate firm’s cost with marketing strategy. if they do it correctly. demand. Compete with foreign companies 2. Pricing strategy must be continually reviewed and must take into account that the firm is dynamic entity operating in a very competitive environment. This places very heavy burden in the price maker. 4.

development and creation. 4 Organizational Issues to consider: 1. and interurban 34 . then delivering that message in a relevant. low-cost choice. Population Characteristic . etc. and to speak with one voice. and cost-effective way is the challenge. the product’s position in relation to the competition influences the ultimate profit margin. minimize redundancies in personnel and work. engaging. rural. Problems with Entering Foreign Markets      Cultural Misunderstanding Political Uncertainty Import Restrictions Exchange Controls and Ownership Restrictions Economic Conditions PROGRAMMING FOR GLOBAL MARKETING Global Marketing Research . promotion (specifically advertising) is generally the largest line item in a global company’s marketing budget. Additionally. The global corporation seeks to reduce costs.Price Price will always vary from market to market. Price is affected by many variables: cost of product development (produced locally or imported). urban. cost of ingredients.).marketing manager should be familiar with the total population and with the regional. expensive choice. maximize speed of implementation. integrated marketing is the goal. tariffs. Placement How the product is distributed is also a country-by-country decision influenced by how the competition is being offered to the target market Promotion After product research. and much more. If the goal of a global company is to send the same message worldwide.Organizations must collect and analyze pertinent information to support the decisions before getting to the issues addressed by market research. At this stage of a company’s development. the economical. Whether this product is considered the high-end. cost of delivery (transportation. or something in-between helps determine the price point.

Data Content c. extent of available financing 3. education. rate of growth in buying power d. 2. Ability to Buy 4 broad measures should be examined: a. Differences in Research Tasks and Process Problems that a market researcher is likely to encounter: a. distribution of income c. Availability in the United States Global Product Strategy Product planning is necessary to determine the type of product to be offered and whether there is sufficient demand to warrant entry into a foreign market Global Distribution Strategy Manufacturer No Control Some Control Much Control United States Foreign Market Resident Buyer Export Agent Export Merchant Foreign Agent Foreign Distributor Foreign Branch Foreign Consumer 35 . Other demographic variables are also important such as the number and size of families.the cultural framework of consumer motives and behavior 4. Willingness to Buy . Language b. Timeliness d. occupation. and religion. gross national product or per capita national income b.distribution.

export agents. or export merchandise located in the United States have the manufacturers' least control. Entry and Growth Strategies for Global Marketing There are six ways by which company can initially enter global market and pursue growth in the global market place. Exporting – occurs when a company produces the product outside the final destination and then ships it there for sale. offices to develop and implement the ad campaign .manufacturers become more directly involved and. ____ inflation. and currency conversion. Direct channels of distribution .Use either a U.An important promotion decision that must be made is the type of agency used to prepare and place the firm's advertisements .S. The easiest and most common approach for a company making its first international move. 1. These are the most indirect channels of distribution.Indirect channels of distribution . Global Advertising and Sales Promotion Strategy .S. hence.based multinational agency or a multinational agency with the U.Sales promotion can also lead to opportunities and problems for marketers in foreign markets. antidumping laws. have greater control over distribution when agents and distributor located in foreign markets are selected Global Pricing Strategy Pricing task is often more complicated in foreign markets because of additional problems associated with tariffs.the channel arrangement where the manufacturers sell to resident buyers. . Advantages: • It avoids the cost of establishing manufacturing operation in the host country • It may help a firm achieve experience-curve and location economies Disadvantages: • Sometimes higher cost associated with the process • Necessity of the exporting firm to pay import duties or face trade barriers 36 .

• Firms gains by sharing costs and risks of operating in a foreign market • Political considerations make joint ventures the only feasible entry mode. Franchising – is similar to licensing but tends to involve long term commitments. Advantages: • Firms may be able to benefit from a partner’s knowledge of the host country’s competitive position. It is commonly employed by service firm. Advantage: • The firm does not have to bear the development cost risks associated with operating up with foreign market. Strategic Alliances considered as distinct entity for two reasons: 37 . political systems. Disadvantages: • Firm does not have tight control over manufacturing. 4. culture. language. etc.• Delegation of marketing responsibility for the product to foreign agents who may not be dependable 2. Joint Venture – are especially popular in industries that call for large investments. • Allow firms to take advantage of a partner’s distribution system. Disadvantages: • Firm may risk giving up control of proprietary knowledge to its partner • Firm may lose the right control over a foreign subsidiary needed to engage in coordinate global attacks against rivals 5. exposed to manufacturing firms. such as natural gas exploration and automobile manufacturing. or marketing skills. Licensing – is the most common strategy for small and medium- size company. marketing and strategy that is required for realizing economies of scale • There is risk that the license technology may be capitalized on by foreign companies 3. technological know-how.

Direct Ownership Advantages: • Complete control over its technology and operations • Immediate access to foreign markets • Instant credibility and gains in the foreign country • Ability to install its own management team Disadvantage: • Huge costs and significant risks associated with this strategy Regardless of the choice method used to gain in entry into and grow within a foreign marketplace. company must somehow integrate their operations. Disadvantage: • The increased risk of competitive conflict between the partners 6.a. As a guideline. accelerate technological diffusion and new product development. and overcome legal and trade barriers. it is more likely to succeed under the following conditions: • When markets are economically similar • When worldwide customer are the basis for segmenting markets • When customer behavior and lifestyle are similar • When the product is culturally compatible across the host country • When a firm’s competitive position is similar in different markets • When competing against the same competitors rather than competing against purely local companies 38 . normally partnerships entered into by two or more firms to gain competitive advantage on worldwide versus local basis b. A critical decision that marketing managers must make relates to the extent of adaptation of the marketing mix elements for the foreign country in which the company operates. usually of a much longer-term nature than are joint venture Advantage: • It can be used to reduce manufacturing costs.

new products. and special promotional strategies had made McDonald’s Corporation a leader of fast food industry. MAIN PROBLEM How will McDonalds cope up with the improved and new product lines offered by its competitors? III. CEO of McDonald’s Corporation is thinking about the “Big Mac Attack” which resulted to McDonald’s earnings to decline in the late 1990’s and early 2000’s. and legal environment of the home and host countries • When the marketing infrastructure in the home and host countries are similar V. political. Jack Greenberg was trying to decide on a set of appropriate strategies for the future in order to reverse the declines to stay ahead of the competition. sales growth in the United States had slowed to below the industry average in recent years.• When the product is an organization and high-technology product rather than a consumer product • When there are similarities in the physical. COMPILATION OF CASE PRESENTATION CASE 2: MCDONALD’S MILLENIUM CORPORATION IN THE NEW I. II. Dynamic market expansion. BRIEF BACKGROUND Jack Greenberg. However. OBJECTIVES • To improve their product lines • To increase its sales IV. SWOT ANALYSIS Strength • Drive thru sales grow three times faster than on-premise sales • They train employees in faster food preparation methods • Using timers to encourage employees to prepare and deliver food faster Weaknesses • They have minimal line of products • Using timers to encourage employees to prepare and deliver food faster 39 .

and Zev Siegl.50 for a cup of coffee compared to 40 cents for generic coffee offered elsewhere. there were more than 3. RECOMMENDATION McDonald’s should be quick in introducing or in improving its product line to be able to take advantage of the changes in customer’s preferences and tastes. They were betting that consumers would pay $1. understand its core competency. CASE 3: STARBUCKS Brief Background Starbucks Coffee Houses were started in Seattle. They should think of a strategy in which they could counter attack the products offered by its competitors. McDonalds should think of a way on how they could retain their products in the Growth Stage like improving their product lines or introducing new products that will suit the consumer’s preferences and tastes. Starbucks has decided to stick to its knitting. and do everything possible to get close to the customers. CONCLUSION Therefore.400 Starbucks Coffee Houses throughout the world. Gerald Baldwin. V. Main Problem How to boost sales growth far more rapidly than current sales? 40 . Washington.Opportunity • McDonalds is a popular fast food chain in the industry • Price is lower than other competitors • Advertisement Threats • Competitors – indirect & direct competitors • Young consumers are getting tired of fast food and are thinking about their health. VII. Gordon Bowker. in 1971 when three young men. decided to try their hand at selling gourmet coffee. By 2002. know what the value proposition is for the customers. ALTERNATIVE COURSES OF ACTION • Survey • Introduce new/improved line of products • Promotional strategy VI.

Objective • To develop ways and means to attract new customers while maintaining the old customers • To maximize sales volume SWOT Analysis Strength • High revenue • Large profit margin Weakness • Difficulty to perfectly replicate their product to their different branches Opportunity • Only 5% of coffee consumption in the US is done in coffee houses leaving ample room for growth Threat • New competitors enter the industry Alternative Courses of Action • Develop a variety of products to offer in the market • Saturate the market • Increase the selling price Recommendation Starbucks must saturate the market by means of opening and locating branches to every corner of major cities. By saturating the market with new products that are well strategized. INC.. a Territory Manager of Pfizer Inc. CASE 4: PFIZER. She sold high quality animal health 41 . and/or both. the company will then have an increase in their sales growth. we must maximize the sales price or sales volume. Conclusion In order to maximize the sales profit. They must also offer various products to attract their customers and to maintain their competitive advantage by continuously developing new products. Animal Health Group in western Montana and south-eastern Idaho. ANIMAL HEALTH PRODUCTS INDUSTRY DOWNTURNS AND MARKETING STRATEGY Brief Background – Gail Oss.

  To provide two-way communication between the consumers and the producers.Some other reasons for the decline are Switching to alternative meat product.products. Objectives  To provide solution to the recession condition of the cattle industry. Gail Oss worried not only about her company but most especially to her livelihood. She is also responsible to visit and communicate with the ranchers in her territory. Health/nutrition issues. Main Problem The problem is that the Pfizer. To instill and maintain good and long-term relationship among consumers and distributors. The NAFTA agreement with Canada and Mexico had hit the local rancher particularly hard. One way in which ranchers could cut costs was either scrimp on animal health products or to switch to a lower cost alternative and some ranchers wants to give up. often times at a premium price. That make rancher no choice but to lower their price.  To increase sales SWOT Analysis Strength  Strong manufacturing capabilities  Known for quality products  Continuous research and development Weakness  Products are sold at premium price. Inc.Ranchers were actively seeking ways to cut costs. Health Products declines its marketing stability due to industry downturns. Changes in customer lifestyles. Opportunity  Global marketing coverage  Good relationship among customers  Ranching has already been a part of the history in Montana 42 .

nursing care for parents  1976 -1977 – leased a 40-bed hospital and converted it to a nursing home  1979 – business incorporated as Longevity Nursing home. 210 beds. advertising. with this the Pfizer get a high sales and they will provide solution to the recession condition of the cattle industry.  1980-85 – acquired 8 nursing homes in Grand Rapids area. Conclusion We came up with the conclusion that through the aid of marketing strategies such as sales promotions. public relations etc.  1990-91. CASE 7: LONGEVITY HEALTH CARE SYSTEM INC.  1986-88 – Constructed nursing homes in Grand Rapids area. 480 beds. 280 beds.  1992-93 – Acquired 7 nursing homes in Toledo are. BRIEF BACKGROUND  1972 – 75 .Threat  NAFTA Agreement  Local competitors (direct and indirect) Alternative Courses of Action  Use marketing strategies that will give benefits not only to Pfizer but also to cattle industry  Make use of its company’s resources  Minimize the selling price Recommendation  Use marketing strategies such as sales promotions and advertisement that will give benefits not only to Pfizer but also to cattle industry for example Pfizer should launch a commercial or any other promotion mix. 43 . which tells that the cattle will be healthy if they use the product and also tell the benefits people can get in eating this kind of cattle. We will be able to make solution on the on going industry downturns in Montana.converted a 30 bed wing of Grand Rapids nursing home to sub acute care  1992 -93 – Constructed a 50-bed sub acute care facility in Grand Rapids area.  1992 – Acquired a retail pharmacy in Grand Rapids.

Ohio OBJECTIVES:  To increase the profitability of nursing homes in Toledo. To be sensitive to the cost/price of their nursing homes.  WEAKNESS lack of marketing strategy  OPPORTUNITIES high demand for nursing homes. 1993 – Corporation name changed to Longevity Healthcare Systems Inc MAIN PROBLEM:  How to increase the profitability of Longevity ‘s nursing homes in Toledo . CONCLUSION AND RECOMMENDATION  Customer satisfaction would become an important competitive factor and Longevity would need to assess the reactions of nursing home residents and their families to the quality of its services.  Expanding into Alzheimer’s treatment because of the demographics and the growing need for facilities in the area. Ohio. increasing the need for Alzheimer's treatment. SWOT ANALYSIS  STRENGTH Longevity’s nursing homes in grand rapid Michigan is profitable.  THREAT Competitors ALTERNATIVE COURSES OF ACTION     Introduced sub acute care To have an Alzheimer's treatment Integrate longevity by establishing a pharmacy in Toledo.  It is also an opportunity to further integrate Longevity b y establishing a pharmacy in Toledo. 44 .

Tupperware relies heavily on overseas market to generate sales growth but due to economic downturns. revenues drop by more than one third. That quarter also saw 20 percent decline in the number of selective US dealers. Competitors like Rubbermaid were introducing low-priced products and capturing market. Main Problem Loss of business due to economic downturns. Justin dart purchased Tupperware from former DuPont chemist Earl Tupper for $10 million. In 1992. Selling Tupperware might be a lot easier except that most women (55 percent Tupperware’s estimate) either have no idea how to find Tupperware or no desire to go to a Tupperware party. From that the time until 1980. Tupperware earned an estimated $3 billion pre-tax and had a phenomenal 25-year record of doubling sales and earn every 5 years. sales for the second quarter fell 33 percent from the same period a year before. Tupperware plastic products were sold at in-home parties. SWOT ANALYSIS  Strength  Offers variety of new products  High Quality product  Multi-purpose product  Weakness 45 . In 1983. Tupperware sales slipped 7 percent and operating profit of 15 percent. competition and poor placement of the product OBJECTIVE To meet the increasing competition and to regain its lost market. Traditionally.CASE 8: TUPPERWARE Brief Background In 1958. Some 40 percent of Tupperware’s sales are from people who skip the parties but send orders along with friends who attend.

The company must change their selling strategy to increase their sales. E-commerce 3. companies around the world starts thinking globally. to access potential consumers from all over the world. High price  Poor placement  Opportunities  Exposure of products all over the world  Threat  Bankruptcy ALTERNATIVE COURSES OF ACTION  Reinvent its marketing approach through eMarketing  Lower the product’s price  Hired more trained tupperware ladies to promote and explain the product’s advantages. LIBRARY RESEARCH FOR RELATED LITERATURE 46 .  Sell tupperware on cart-like kiosk in malls across the country RECOMMENDATION Reinvent its marketing approach through eMarketing 1. this is due to the fact that there are only few percentage of consumers have no desire to go to Tupperware parties. But then. transportation. The concept of in home parties is to show and prove the quality of Tupperware. TV Shopping 2. and financial flows. Direct Mail CONCLUSION Tupperware’s intention of retaining direct selling using in-home parties is an effective approach in increasing the firm's sales in later years. it has been such an effective channel in Tupperware historically. time and distance are shrinking rapidly with the advent of faster communication. VI. The company should take advantage of eMarketing which opens up new avenues for smaller businesses on much smaller budget.

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