PRINCIPLES OF MARKETING

MODULE 1: Week 1 –Week 2

Marketing Principles, Approaches and Goals

Marketing is a crucial business function through which a company carries out activities to plan,
price, promote and distribute products or services to its customers. The theory of marketing is
based on the belief that people buy a product or service to meet a need or because of a perceived
benefit. Marketing uses information gathered by applying principles from economics,
psychology and sociology to decide how best to develop and promote products and services to
the appropriate customer.

OBJECTIVE

At the end of this topic, the student will:

1. Define and understand marketing principles, goals and approaches (AMB_PM11-Iab-1)

Activity No.1
Preliminary Discussion

1. Define marketing in your own words, based on what you understand about it thus far?

2. Give three examples of products that you regularly see around you and describe how they are
marketed.

A.

B.

C.

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Activity No. 2

Direction: Encircle the word which is a related and significant for marketing activities.

Advertising Manufacturing Exporting Retailing

Press Release Promotion Distribution Pricing

Accounting Selling Merchandising Product Development

Wholesale Innovation Financing Surveying

DISCUSSION

What is Marketing?

Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering and exchanging offerings that have value for customers, clients, partners and society
at large.

Marketing is an organizational function because it is a core task that is expected of a modern

organization, whether or not it operates for profit. For instance, when the Department of Health
tries to convince the public to avoid cigarette smoking, it is actually engaging in marketing
campaign. However, instead of selling a tangible product, it is selling a healthier lifestyle.

Marketing is also set of processes because there are essential tasks that have to be engaged in
order to produce a viable marketing strategy and delivering of value to customers.

Principles of Marketing

The basic principles of marketing consist of product, price, place and promotion. Together,

these four principles are known as the “4 P” (for its initials in English) marketing, and include
the integration of marketing. For a marketing strategy to be effective, the four components must
be used correctly. The challenge for business owners and industry professionals is to determine
the appropriate method for each area, and integrate successfully.

Product

The product you sell can be a physical item or service intangible, such as sending food home or
service cleaning.  When you create your product, you need to consider factors such as the name,
packaging, different types of uses and safety when used. It is also necessary to determine how
the product appeals to a specific market segment. The product should meet the needs of a

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particular group of people, such as professionals, housewives, business owners, students or

golfers.

Definition of Product

The word “product “applies to anything that is being marketed, whether it is tangible product, an
intangible good, a service, a place, or even a person. Example of products are amusement parks,
apps on smartphones, banking services, hotel accommodations, legal advice, musical bands,, pet
care, radio stations, social media sites, telecommunication services, television programs.

Prices

You need to determine the price of the product. If the price is too high, you Keep far to potential
buyers. If it is too low, you may have difficulty obtaining profits. You will also have to consider
the price of the competition. Some models of common prices include the cost price plus a profit,
in which a fixed percentage of the cost of production is added, and the price based on the value
of the product, in which the price is set according to the value consumers perceive the product.
The latter kind of price is often used in more expensive luxury items.

Place

The concept of place refers to the distribution channels; this is where the product will sell and
how to hit the market. If you operate a business whose headquarters is home, as sales on eBay, it
is likely that the market is Internet, and you want to send your products directly to consumers.
Larger businesses, such as consumer goods manufacturers can sell their products at a grocery
wholesaler, who then distributed to retail stores in the field.

Promotion

Promoting the product or service involves raising awareness among potential customers about its
existence. It is likely that advertising is the most famous form of promotion, using media such as
television, radio, newspapers and magazines. The websites are also used as an advertising
medium. Promotion can serve a variety of purposes, such as gaining market share, improve
brand name or image, or bring to market a new product. The effective promotion will create the
need or desire for the product, which, ultimately, will lead to increased sales.

What is Marketing Exchange?

Marketing exchange is an act of obtaining a desired object from someone by offering

something of value in return.

Examples of Marketing Exchange:

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 Politicians offer promises and hope to potential voters in exchange for their votes that
bring them to office
 TV stations broadcast soap operas to homes in exchange for viewers watching the ads
that in turn would provide profit for the stations.
 Facebook offers it services to its millions of users for free in return for the users allowing
paid ads to occasionally show up in their feeds.

The Marketing System

Generally speaking, the ecosystem for marketing may be illustrated by following model.

Environment-------------------------------------------------------------------

Communication

INDUSTRY Goods/Services MARKET

Money

Information

The figure presents two key parties namely the industry (composed of businesses that seek to sell
a particular kind of good or service) and the market (composed of all current or potential
consumers for the given kind of good or service.) In the early days of marketing, only the two
central lines-goods/services and money were the key points for consideration. Today, the two
other lines have joined the equation, namely communication and information. These represent
the value of transmitting information both to and from the market and the industry.

The Marketing process can also be broken down into its components, which are:

Strategic Marketing- takes care of the more long-term, timeless nature of the business
proposition which involve customer segmentation, target market selection and value positioning.
Tactical Marketing- takes care of the more short and medium-term, flexible aspects of the
market strategy which involve product design and development, product portfolio management,
service development, pricing, and distribution and logistics.

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Activity No. 3

Web Watch

4 Principles of Marketing Strategy

Click this link, https://goo.gl/KC7FTm and watch the 25-minute talk by management guru Brian
Activity No. 4
Tracy about the principles of specialization, differentiation and concentration and how they help
SELF ASSESSMENT
create marketing strategy.

How well did you comprehend the topic? YES NO

1. Can you now give your own definition of Marketing? ( ) ( )
2. Do you know why communication is essential in marketing? ( ) ( )
3. Do you know what product is? ( ) ( )
4. Can you name various activities involving marketing? ( ) ( )
5. Do you know the difference between Strategic and Tactical
Marketing? ( ) ( )

Activity No. 5
DISCUSSION

1. Explain in your own words why marketing is principally about communication?

2. Explain how newspaper engages in marketing. What is its market? What is it selling?

3. Marketers charged consumers for the cost of their goods plus a markup for profit and
overhead. Consumers are therefore paying more than the actual cost of good. How do you feel
about this? Do you think that there are any moral implication to this?

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