PRINCIPLES OF MARKETING

CONTENTS:
 Marketing Principles and Strategies
 Customer Relationship
 Market Opportunity Analysis (Market RESEARCH, Market Segmentation, Targeting, Positioning)
 Developing Marketing Mix
 SWOT Analysis, Marketing Process
 Marketing Plan

REQUIREMENTS:
 Market Research
 Product/Service (Prototype or sample)
 Product Expo (Presentation of Products) – January or February 2020
 Marketing Plan (Paper and Presentation) – February 2020

INTRODUCTION OF MARKETING
Unlike other business discipline, marketing has a distinction of being the most vague (unclear
distinction) because it seems to have no distinct boundaries.

 Finance (focus on numbers) – realm of money

 HR – focus on people, hiring, relationship and HBO
 Operations – focus on the processes
 Marketing – it’s in all aspect (finance, HR, operations, marketing)

What is Marketing?
 Marketing is all about creating value through the exchange process
 It is an art, a science and a field of discipline.
 Kotler defined MARKETING a process by which companies create value for customers and build
strong customer relationships in order to capture value from customers in return.

Two Interacting Components of Marketing

 A MARKET is composed of people or organizations that have the need, have the ability, the
willingness, and the authority to pay for their purchases.
 Satisfying one without satisfying the other is NOT marketing.

Key Objectives of the 3Cs of Marketing:

 Customers – to satisfy the needs, wants and expectations of target customers
 Competition – to outperform competition
 Company – to ensure corporate health and profit

Satisfaction Vs Unsatisfied Need

 SATISFACTION – A condition wherein expectations are met
 UNSATISFIED NEED – A condition that motivates a consumer to satisfy the unmet need.

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Needs, Wants and Demands
 NEED – Something that is essential.
 WANTS – Something that is influenced by culture, personality, society and others.

MARKETING PHILOSOPHY

“Being better than before, better than others and better than expected” can provide a standard for
judging marketing effectiveness.

APPROACHES TO MARKETING
TRADITIONAL MARKETING
 A form of conventional marketing that was used before the internet era.

MODERN MARKETING
 Building a relationship with MIS customer and is achieved through an integrated, corporate wide set of
marketing activities

GOALS OF MARKETING
4-Step Approach to lead to a profitable lifetime relationship
Step 1: AWARENESS
Step 2: AVAILABILITY
Step 3: TRIAL
Step 4: REPEAT PURCHASE

STEP 1: AWARENESS
• Make your target know you.
• Inform them, persuade them and remind them so your brand can be among the top.
STEP 2: AVAILABILITY
• Make products available according to the purchase pattern of the target consumers.
• Attention should be given to coverage, placement, display, inventories, resale prices and goodwill with
customers.
STEP 3: TRIAL
• Provide a low risk initial experience to allow target consumers and customers to form positive
impression.
• This is typically done via sampling, introductory price, money back guarantee, among others.
STEP 4: REPEAT PURCHASE
• Form an ongoing relevant relationship by continuously satisfying needs and wants of target consumers
to be the preferred brand
• Product and service quality must therefore deliver as advertised or promised.

MARKET OPPORTUNITY ANALYSIS

BUYER BEHAVIOR
4 Characteristics Influencing Buyer Behavior in Consumer Markets
1. Cultural Characteristics
2. Social Characteristics
3. Personal Characteristics
4. Psychological Characteristics

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Culture
 Beliefs, customs, rituals and practice that a particular group of people follows.
 The marketer should carefully study all the different cultures and frame the marketing strategies
accordingly.

Social Class
 A social position that an individual occupies in a society.
 People belonging to a social class have many characteristics, such as education, occupation, ownership
of property and source of income

Social Classes

Percentage Distribution of Socioeconomic Classes in the Philippines

Class % Share in Number of % Share in Total Income Average Annual

Families Income
AB 1% 9% PHP1,857,000
C 9% 26% PHP603,000
D 60% 56% PHP191,000
E 30% 9% PHP62,000
Total 100% 100% PHP206,000

Family
 Family members, have a great impact on buyer behavior.
 Two kinds of families may be formed.
o The first kind is a family in which someone is born and grows, and religion, politics, economics
and education of that person depends directly on that family.
o The second kind of family in which the buyer’s behavior is affected includes children and people
under supervision.
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Reference Groups
 Includes buyer reference group heavily influence the selection and specific brand.
 They somehow affects the value and behavior of others.
 Types of Reference Groups
o Primary Groups – there is regular but informal interaction (family, friends, neighbors,
coworkers)
o Secondary Groups – More formal and have less regular interaction (religious groups and
professional association)
o Aspiration Groups – one that a person wishes to be a member of,or wishes to be identified with.

Roles and Statuses

 Social status of each person throughout his life depends on a family group, clubs and organizations.
 Person's position within each of these groups can be defined based on the role and status of the
individual.

Personal Characteristics
Age and Life-Cycle Stage
 People change the goods and services they buy over their lifetimes.
 Tastes in food, clothes, furniture, and recreation are often age related.
Lifecycle stages
 Bachelor Stage – young, single and independent
 Newly Married Couples – young, no children, also known as DINKs (double income, no kids)
 Full Nest I – families with children, with youngest child below six years
 Full Nest II – families with children, youngest child six years or older
 Full Nest III – families with dependent children
 Empty Nest I – older married couples, no children living with them
 Empty Nest II – older married couples, retired, and no children living with them
 Solitary Survivor I – older, no family and supporting self
 Solitary Survivor II – older, no family and retired

Occupation
 Blue-collar workers
 White-collar workers

Economic Circumstances
 Marketers of income-sensitive goods watch trends in personal income, savings, and interest rates.
 The high costs of labor in foreign countries have brought about the rise of the call center industries in
developing countries like India and Philippines.

Lifestyle
 It is a person’s pattern of living as expressed in his or her psychographics.
 It involves activities (work, hobbies, shopping, sports and social events) and interests (food, fashion,
family, recreation) and opinions (about themselves, business, products)

Personality
 It refers to the unique psychological characteristics that lead to relatively consistent and lasting
responses to one’s own environment.

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Psychological Characteristics
Motivation
 A need becomes a motive when it is aroused to a sufficient level of intensity.
 A motive (or drive) is a need that is sufficiently pressing to direct the person to seek satisfaction.

Perception
 The process by which people select, organize, and interpret information to form a meaningful picture of
the world.
 Example: Red wine has been experiencing increasing demand, as people perceived it to be good for the
heart as well as giving the drinker a sophisticated image.

Learning
 Learning describes changes in an individual's behavior arising from experience.

Beliefs and Attitudes

 A belief is a descriptive thought that a person has about something

MARKET
Market
 It is a place where sellers and buyers exchange goods (and services) upon an agreed price.
 A group of people or organization that buy a particular good, service, or a concept;
 It is any mechanism that enables buyers and sellers to strike bargains and to transact.
 Market = untapped market + captured market

Markets According to Type of Institutions

 Consumer Markets – buyers who intend to directly consume a product or service constitute the
consumer market.
 Organizational Markets – buyers of products or services whose intention is to produce another product
or service.
 International Markets – refers to all types of buyers found abroad including consumers and
organizations.

Markets According to Form

 Primary Markets – this type of market that is formed when a firm introduces a new product class in
response to latent demand or needs.
 Secondary Market – this type is an offshoot of the primary market and it is formed when customers
develop specific needs or preferences

MARKET SEGMENTATION

Market Segmentation
 It is a sub-group of a particular market which is composed of units with more or less similar
characteristics;
 It may be defined as the process of identifying the various segments of a company’s particular market.

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Advantages of Market Segmentation
 Segmentation forces the marketer to be aware of realities in the market.
 Segmentation provides clues in the design of products and marketing programs that will reach the
prospective customers.
 Segmentation can help identify opportunities for new product development.
 Segmentation can help improve the strategic allocation of marketing resources.

Ways of Segmenting a Market

Demographic Geographic Psychographic Behavioral

- Age - Countries, - Social class - User status

- Gender nations, - Values - Usage rate
- Family size states, - Personality - Benefits sought
- Education regions and - Lifestyle - Loyalty
- Income cities - Attitude
- Family life - Rural,
cycle stage suburban,
and urban

DEMOGRAPHIC SEGMENTATION
Variables of Demographic Segmentation

Age
- Infant to Toddler - Young Adult
- Kinder school age to Tween - Adult
- Teenager - Senior Citizens to Retirees
Gender
- Male
- Female
- LGBTQ
Civil Status
- Single - Divorce
- Single Parent - Widow
- Married
Income
- A - C
- AB - D
- B - E
Education (examples)
- Illiterate - Unemployed
- Grade School - Student
- High School - Housewife
- Vocational - White collar
- College - Blue collar
- Post Graduate - Farmer
- Masteral - Teacher
- Doctoral - OFW
- Profession

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Geographic Segmentation
- Location – Urban, Suburban, Rural
- Geographic – GMA, Luzon, Visayas, Mindanao, Asia. US
- Example:
Most banana producers are found in Mindanao and export to Japan, China, Korea, Iran, UAE and Saudi
Arabia
Family Size
- Solo
- Husband and Wife
- Family
- Example: Movies within the drama, action or comedy genre target the whole family, while love stories
usually cater to couples or teenagers

Religion
- Example: Some companies are known to favor hiring members of Iglesia ni Kristo, knowing their
church does not allow its members to go on strike.

BEHAVIORAL SEGMENTATION
 Purchase Frequency – Regular, Occasional
 User Status – Non-user; Ex-user, First time user, Occasional user, Regular user
 Usage Rate – Heavy user, Medium user, light user
 Loyalty status – Absolute, strong, medium, small, none
 Readiness – awareness, knowledge, interest, desire, intention to buy

PSYCHOLOGICAL SEGMENTATION
 Social Issues (Religion, Politics, Work, Women’s rights)
 Personal Interest (Family, Home, Food, Health, Friends)

Example: COCA COLA

Demographic Geographic Psychographic Behavioral

- Family - International - Loves or prefers to - Occasion – Coca cola

- Income (different levels) - Local drink soft drinks usually is served on
occasion

TARGETING STRAGIES and POSITIONING

TARGETING STRATEGIES
 Undifferentiated Marketing – the business considers the entire market as the target market.
 Differentiated Marketing – the business considers the different segments in the market.
 Concentrated Marketing – The business develops product for one segment of the market.

Undifferentiated marketing
 The other term used for this approach is mass marketing
 This marketing approach attempts to sell through persuading a wide audience.
 Example: Toothpaste, Cola Drinks

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Differentiated marketing
 These products are designed to satisfy the smaller segments
 Most companies do this for specialization and to remain competitive.

Concentrated marketing
 The popular term for concentrated marketing is niche marketing.
 Another term for the same is “Focused Market”.
 A niche market is a subset of the market on which a specific product is focusing

Market targeting
 Criteria Size: The market must be large enough to justify segmenting. If the market is small, it may
make it smaller.
 Difference: Measurable differences must exist between segments.
 Money: Anticipated profits must exceed the costs of additional marketing plans and other changes.
 Market targeting
 Accessible: Each segment must be accessible to your team and the segment must be able to receive your
marketing messages
 Focus on different benefits: Different segments must need different benefits.

Estimating Market Demand

 Total Population
 Total Purchasing Power
 Average expenditure on food
 Average expenditure spent on processed food
 Average expenditure on processed food that is spent on canned foods
 Average expenditures on canned foods that is spend on canned spreads

Target Market
 A fairly homogenous group of people or organizations to which a company wishes to appeal
 The Primary Target Market (PMT) is a segment of the market considered to be the logical volume
customers
 Secondary Target Market (SGT) is the next logical volume of customers.

Example
Logical PTM of Close Up PTM of Gran Matador Light
Age – 16-21 Age – 18-24
Sex – Male/Female Sex – Male / Female
Income – C Income – C-D Socio Economic
Civil Status – Single Civil Status – Single
Education – High School / College Education – College
Profession – Student Profession – Student
Location – Urban, Rural Location – Urban/Rural
Psychographics – Free Spirit, Outgoing, Playful, Psychographics – For the new breed of drinkers
Active, Hygienic who are focused, knowledgeable and in control
Benefits Desired – Fresh breath of their lives
Behavioral – Sensible in the choice of drinks
Benefits Desired – Lower Alcohol Content

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 POSITIONING
Positioning
 It is defined as owning a distinctive characteristic for your product in a product category.
 It refers to how you communicate the essential benefits of your small business to potential customers.

How do you position your product in the market?

 Specific demographic
o If you try to be everything to everyone, you may not appeal to any group.
o Example: Deodorant for women
 Low-price strategy
o Some companies position themselves as affordable options for consumers by selling low-priced
goods.
o Example: 99 store
 High-price strategy
o Some companies price their products or services higher than their competition to create a
perceived value
 Distribution
o Where you sell your product says much about its quality.
o Example: Tennis and golf equipment manufacturers position certain models in their line as
higher quality by selling them only in pro shops or specialty stores.
 Affinity
o If you have a customer base with a common, personal denominator, you can position your
company to play on their loyalty to their group.
o Example: Christian-owned businesses; Sponsorship of a school sports program

Perceptual mapping
 A technique used to visually display the mental image that the target market has on a product relative to
its competitors.

MARKETING MIX
PRODUCT, PLACE, PRICE, PROMOTION
MARKETING MIX
 Also known as the 4Ps of Marketing
 A set of controllable and interrelated variables composed of product, place, price and promotions that
a company assembles to satisfy a target group better than its competition.

Functions of each marketing mix

 PRODUCT – to satisfy the needs and wants of the target market
 PLACE – to make the product conveniently available to the target market consistent with their
purchasing patterns.
 PROMOTIONS – to build and improve consumer demand
 PRICE – to make the product affordable to the target market and reflect the value of benefits provided.

For service industries, 3 Ps are added:

 PHYSICAL ENVIRONMENT – refers to the place where service is performed
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  PROCESS – refers to the procedures, flow of activities and other mechanisms that deliver the intended
experience.
 PEOPLE – refers to all members of the team who contribute to the delivery of the service and its brand
promise

THE PRODUCT
 Product is anything offered for sale by a firm to buyers to satisfy their wants and needs.
o A physical object o An organization
o A service o An idea
o A place o A personality

Levels of Product
 Core Product – The most basic level
 Actual Product - the quality level, product and service features, styling, branding and packaging.
 Augmented Product - the additional non-tangible benefits

Classification of Products Consumer Products

 Consumer Products  Rate of consumption
 Industrial Products  Consumer Shopping habits

Rate of Consumption
 Durable Goods – tangible goods which normally survive many uses. Example: Motorbike, refrigerator,
and cabinets
 Non-Durable Goods – tangible goods which are consumed in one or few uses. Example: ice cream,
toothpick, petrol
 Services – intangible goods like activities, benefits or satisfaction which are offered for sale.

Consumer’s Shopping Habits

 Convenience Goods – those which are purchased with a minimum effort.
 Shopping Goods – those that are bought only after an effort to compare with other goods is made.
 Specialty goods – Those that the consumer seek to buy and they are not willing, or they are not able to
accept substitutes.
 Unsought Goods – those that are not yet wanted by or are still unknown to the consumer

Industrial Categories
 Installations – refers to industrial products with long life, generally expensive and they form part of the
major capital equipment of an industrial firm. Example: building, generators, computer
 Accessory Equipment – used as aids in the production process. Example: Lift trucks, fax machines
 Raw materials – unprocessed goods that will become part of another product
 Industrial Categories
 Components Parts and Materials – these are processed industrial good that will still be used and
become an actual part of the finished product. Example: Paper to be processed into printed magazine,
flour into bread
 Supplies – items that are used as aids in the operating process but do not become part of the finished
product. Example: pencils, ink, paper clips
 Services – expensive items that assist in the operations. Example: Housekeeping, security services.

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What is Branding?
 Branding – a marketing action which identifies and helps differentiate the goods or series of one seller
from those of another.
 Brand is a name, term, sign, symbol or design or a combination of these elements that is intended to
identify the goods or service of one seller or a group of sellers.
 2 Distinct Parts of Brand
o Brand Name – refers to that part of a brand consisting of words, letters, and/or numbers that can
be vocalized
o Brand Mark – refers to that part of a brand that appears in the form of symbol, design or
distinctive coloring or lettering.

Elements of the brand:

 Trade name – the trademarked name by which the product is known. Example: Coca Cola
 Generic category – the category in which the brand would fall under, such as search engine, or
beverage
 Logo – the visual symbol or image that will identify the product
 Tagline – an optional catchphrase
 Visual cues – brands can also be represented with distinctive visual identifiers
 Shapes – the actual shape or form of the product or packaging
 Colors
 Sounds – an advertising jingles
 Scents – signature fragrances
 Tastes – secret ingredients in their food formulation

Licensing
 In a licensing agreement, the firm which owns or controls a brand allows another firm to use the brand
in exchange for royalties or some other form of payment.

Criteria for a Good Brand

 It suggests something about the product’s benefits and qualities;
 It should be easy to pronounce, recognize, spell and remember;
 It should be distinctive;
 It must be adaptable to additional product lines;
 It must be capable of being legally registered.

Packaging
 Refers to all activities involved in designing and producing the container or wrapper for a product.
 The package may include up to three levels of materials briefly as described as follows:
o Primary package - the product’s immediate container.
o Secondary package - protects the primary package
o Shipping package - contains the secondary package. It provides ease of storage, identification
and shipping.
Labelling
 The part of the product which provides information about the product and the manufacturer is called the
label.
 It may be a part of the package, or a tag attached to the product.
 Types of Labels
o Brand label – this label identifies the product or brand.
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 o Descriptive label – the label provides information about the product: who made it, where and
when it was made, its contents, how it is used and how to use it safely
o Grade label – this label identifies the product’s judged quality with a letter, number or word like
“premium”
o Promotional label – this label provides attractive graphics to help promote the product.

Product Warranty
 It is a manufacturer’s written promise as to the extent of the repair, replacement, or otherwise
compensation for defective goods.

Product Life Cycle

 PLC refers to a product’s sales growth from the beginning to its peak, followed by a decline, and its
eventual withdrawal from the market
 4 Stages
o Introduction – the product is introduced to the public.
o Growth – a successful introduction stage
o Maturity – the growth in sales slows down and the competition is intensified
o Decline – begins with a permanent drop in sales

PRICING
 PRICE is the twin component of product quality, which, when combined, make up what is called
PRODUCT VALUE or VALUE PROPOSITION.
 Product Value is assembled first before marketing programs are formulated

What is PRICE?
 It is the amount of money asked or given for “something”.
 It comes in different names:
o Lessor – Rent
o Employees – Wages
o Banks – Interest
o Lawyers, Doctors – Professional fee/Consultancy fee

Factors to Consider in Pricing

Internal Factor #1: PRODUCT COST
 Product cost must be broken down to fixed and variable cost.
 Two common types of setting prices under a cost-based pricing strategy:
o Mark-up
o Target Profit

MARK-UP
 A standard percentage based on cost is adopted.
 It is the difference between the selling price of a good or service and its cost.

TARGET PROFIT
 Prices are se towards attaining a satisfactory rate of return.
 Example: A manufacturer wishes to make a 35% return on investment (ROI) on an invested capital of
P2 million and having a cost base of P20 a unit with forecasted sales volume of 100,000 units.

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  Example: A manufacturer wishes to make a 35% return on investment (ROI) on an invested capital of
P2 million and having a cost base of P20 a unit with forecasted sales volume of 100,000 units.

𝑇𝑎𝑟𝑔𝑒𝑡 𝑅𝑂𝐼 𝑥 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡

Target Profit Pricing = Unit Cost + 𝑈𝑛𝑖𝑡 𝑆𝑎𝑙𝑒𝑠
0.35 𝑥 2,𝑜𝑜𝑜,𝑜𝑜𝑜
Target Profit Pricing = P20 + 100,000
Target Profit Pricing = P27

COST-BASED PRICING
 This pricing approach is based on the cost of producing, distributing, and promoting the product.
𝑭𝒊𝒙𝒆𝒅 𝑪𝒐𝒔𝒕
Unit Cost Pricing = Variable Cost + 𝑼𝒏𝒊𝒕 𝑺𝒂𝒍𝒆𝒔
𝟏,𝟎𝟎𝟎,𝟎𝟎𝟎
= P10 + 𝟏𝟎𝟎,𝟎𝟎𝟎
= P20
Internal Factor #2: COMPANY’S OBJECTIVES
 A company’s objectives and the characteristics of the consumer can lead to different pricing
classification.
 3 Groups of Pricing Objectives
o Differential Pricing
o Competitive Pricing
o Product Line Pricing Strategy

Differential Pricing
 Same brand is sold at different prices to different market segments
 Pricing Strategies:
o Random Discounting
o Second Market Discounting
o Periodic Discounting

RANDOM DISCOUNTING
o Consumers cannot predict random discounts.
o Examples are “Sale Prices or Special Discounts occasionally provided by companies.
o The marketer tries to maximize the number of customers uninformed about the random discount
at his product’s high price rather than its low price

SECOND MARKET DISCOUNTING

o Only the second market segment enjoys saving through lower price.
o Example:
 Unilab sells many branded drugs but have also entered the generic market segment
(second market) through RiteMED.

PERIODIC DISCOUNTING
o The manner of discounting is predictable over time and known to consumers and the discount
can be used by all consumers.
o Example:
 A promo between 5-7 pm for “Happy Hours” drinks in bars.

Competitive Pricing Strategy

 Prices are set to exploit a firm’s competitive position.
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  Pricing Strategies:
o Pricing Signaling
o Penetrating Pricing
o Experience Curve Pricing
o Geographic Pricing

PRICE SIGNALING
o Prices are set high regardless of high or basic product quality.
o The high price aims to influence consumer’s perception of high quality.
o Example:
 Branded Perfume and fragrances
 Imported Wine

PENETRATION PRICING
 It exploits economies of scale by having cheaper cost, superior technology, and an efficient
organization.
 Example:
CDR-King sells CDs and related product in various kiosks, saving on the margin typically given
to retailers.

EXPERIENCE CURVE PRICING

 The pricing of a product at a lower than average-cost level on the basis that costs will decrease as
production experience increases.
 Example: Technology products like consumer electronics

Geographic Pricing
 It can be adopted when there are adjacent market separated by transport costs rather than reservation
or transaction costs.
 Within each zone, it would charge one price.
 Example: Delivery

Product Line Pricing Strategy

 Related brands or products are sold at prices that exploit mutual dependencies or balance pricing over
product line.
 Pricing Strategies
o Image Pricing, Price Bundling, Premium Bundling, Complementary Pricing, Captive Pricing,
Two-Part Pricing, Loss Leader Pricing

Image Pricing
• It makes use of high price to signal high quality and uses the profit it makes from high priced
version to subsidize the price of lower priced version.

Price Bundling
• The basic ideas is buying the whole bundle is cheaper than buying the parts separately.

Premium Pricing
• The firm sets a high price emphasizing on unique product features.

Complementary Pricing
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 CAPTIVE PRICING
• Where products have complements, companies will charge a premium price since the
consumer has no choice.
• Example:
low price printer but expensive ink refills

TWO-PART PRICING
• It is used by service-based firms.
• There is a fixed fee plus a variable fee charged to the customers.
• Example:
PLDT charging a fixed monthly fee and per call fee for long distance

LOSS LEADER PRICING

• Prices of well-known brands are dropped to attract traffic to the store.

External Factor #1: Market Demand

 Perceived Value – Products have different features or attributes.
 Demand Differential – Marketers choose a price level that would support their planned sales volume
and profit.
Example of Perceived Value
 Product: Photocopying Machine
 Customers would consider the following:
Ease of operation Copy quality
Reliability Copy speed
Compact size Service quality

Example of Demand Differential

• Product: Alaska vs Bear Brand
Customers would consider the following:
Alaska powdered milk (P8) vs Bear Brand (P12)

External Factor #2: Competition

 Going Rate – marketers work within the prevailing market price.
 Sealed Bid – marketers price their product or service depending on how competitors are expected to
price theirs

Other Pricing Strategy:

PSYCHOLOGICAL PRICING
Odd-Number Pricing
• Prices that end in non-rounded odd numbers

Free Pricing
• Selling two complementary products
• Bundle

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DISTRIBUTION (PLACE)
Distribution (Place)
 It aims to make products or service available to its target market consistent with their purchasing pattern.
 Nestle’s battle cry in distribution :
Whenever, Where, However
 Coca Cola’s battle cry:
Within an arm’s reach.

Distribution Mix
• Coverage • Display
• Placement • Resale Pricing
• Volume • Goodwill

Coverage
• This decision includes whether to have:
Mass coverage
Selected coverage
Exclusive coverage
Placement
• A product has placement when it is carried in a store it wants.
• Having the right target number of outlets ensuring customer’s utmost convenience
• Example:
Coke sells their “Sakto” bottles only in sari-sari stores and not in supermarkets.

Volume
• The right inventory level at the stores.
• Problem
Overloading or Excess Stocks
Display
• The proper shelf and off-shelf locations plus adequate display space to assure marketers a higher
profitability that consumers will choose their brand over competition.
• Good spaces and eye level
• Resale Pricing
• Having the right resale prices promotes healthy competition among dealers.

Goodwill
• The best relationship between a supplier and his channel members.

DISTRIBUTION CHANNELS
• It performs the work of moving products from manufacturers
to final consumers or business users.
• A good distribution channel shortens the time, place, and
possession gaps between the manufacturers and consumers,
and provides convenience to consumers.

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Distribution Channels

MANUFACTURERS
• An entity that makes a product through process involving raw materials, components or assembles to
produce a final good.
DISTRIBUTORS
• Appointed to perform the distribution function from manufacturers in making their products available.
• May sell to wholesalers or retailers or may even go directly to consumers

WHOLESALING
• The activity of persons or organizations that sell to those who buy for resale or business use.
• Examples:
Suy Sing
Divisoria
Ex-Truck

RETAILING
• An activity involving the sales of products or services directly to final consumers.
• Other Examples of Retailers
Clothing Store Appliance Stores
Supermarket Sport shops
Convenience Stores Bag stores
Drugstores Hardware stores
Bookstores Sari-sari stores

FRANCHISING
• An accelerated method to expand distribution coverage
• Example: Belgian Waffles used franchising to aggressively expand to over 500 stores in 5 years.

DIRECT SELLING
• Examples
Avon (cosmetics and related products) Tupperware (plastic wares)
Nu Skin (beauty and health care) Wacoal (undergarments)
Symmetry (food supplements) Water (water purifiers)

THE INTERNET
• E-Business

HOME DELIVERY
• It offers a huge potential influenced by more women working, lack of household maid, traffic and
parking problems.
• Examples:
Fast food companies offer home delivery.
Grab
Food Panda

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PROMOTIONS

PROMOTION MIX
• Advertising
• Sales Promotions
• Public Relations
• Selling

PROMOTION MIX
• Advertising – to effectively inform, persuade, and remind target market
• Sales Promotions – to convince customers to buy
• Public Relations – to offer positive image of the company and the brand
• Selling – to get the customers to buy

PUSH and PULL MARKETING

• Advertising is often referred to as a product PULL because it takes an indirect longer-term approach to
gain customers.
• Sales Promotions are often referred to as the product PULL because they resort to a direct shorter-term
objective to gain customers.

Several Purposes of Advertising

• Brand Advertising • Advocacy Advertising
• Institutional Advertising • Classified Advertising
• Promotional Advertising

Brand Advertising
• Aims to stimulate demand for a particular brand
• Example: Globe and Smart

Institutional Advertising
• Aims to develop goodwill for a company or industry.
• Example: PAGCOR advertisement about responsible gambling.

Promotional Advertising
• Aims to inform prospects about promotional activities.
• Example: Jollibee and McDonald’s

Advocacy Advertising
• Aims to convince audiences regarding a particular cause
• Example: Metrobank Foundations (Outstanding Teachers, Soldiers and Police Officers)

Classified Advertising
• Aims to inform prospects regarding opportunities such as buy and sell, events and employments
• Examples: Ads by Manila Bulletin and Jobstreet.com

Objectives of Advertisement must be:

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 • S – Specific
• M – Measurable
• A – Attainable
• R – Realistic
• T – Time-bound

ADVERTISING EXECUTION
• Slice of Life –shows one or more persons using the product in a normal setting.
• Scientific Evidence – presents survey or scientific evidence that the brand is better, or better liked than
one or more other brands.
• Testimonial Evidence – features a highly believable or likable source endorsing the product
• Technical Expertise – shows the company’s expertise in making the product.
• Lifestyle – shows how a product fits in with a particular lifestyle.
• Fantasy – creates a fantasy around the product or its use. For instance, many ads are built around dream
themes
• Image – builds a mood or image around the product or service, such as beauty, love, or serenity
• Musical - shows people or cartoon characters singing about the product
• Personality Symbol - creates a character that represents the product

Where and When to Advertise

• Exposure is the placement of the advertisement in a media vehicle such as:
TV
Radio
Outdoor (Billboard, Tarpaulin, Stickers)
Print (Newspaper, Magazine)
Online

SALES PROMOTIONS
• Demand-stimulating activity designed to supplement advertising and co-ordinate personal selling.
• Short term incentives designed by marketers for the purpose of encouraging the purchase of a product.

CONSUMER PROMOTIONS
• Sampling – a limited amount of free products offered for consumers to try a product or service
• Coupons – These are certificates entitling the bearer to save on the purchase made
• Price off – Offers immediate savings upon purchase.
• Rebates – like coupons except that the price reduction is usually larger and they are given after the
purchase.
• Bonus Packs – involves giving extra quantity of the same products without increasing the price.
• Sample packs – involves a trial size of a product at a price usually lower than market standards.
• Special packs – Products combined as single packs can bring savings for consumers.
• Free Trial – invites prospective customers to try the product without cost
• Prizes – raffle draws
• Patronage rewards – an incentive in proportion to the volume of the product regularly purchase.
• Contests – promotions given to customers to have a chance of winning something of value.
• Personality – “Mystery visitor”

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