BATANGAS COLLEGE OF ARTS & SCIENCES, INC.

Banaybanay Concepcion, Lipa City, Batangas

COLLEGE DEPARTMENT
Second Semester, AY 2019-2020

SUBJECT CODE – Marketing Management (PMC-MMMarkMan)

LEARNING MODULE 3

NUMBER
TOPIC/CONTENT of LEARNING ACTIVITIES REQUIRED OUTPUT
HOURS

PRODUCTS, SERVICES 3 Read Unit 6, pages 130-159, of the main reference e-book. In the Give examples of the
AND BRANDS: BUILDING process, you should be able to: Philippine companies that
CUSTOMER VALUE follow line branding and
➢ identify the levels of a product double branding strategies.
6.1 Product Concepts ➢ state the product line and product mix decisions What are the benefits of
➢ identify the distinct characteristic of services and classify the following these strategies, for
6.2 Services services the companies?
6.2.1 Characteristics of ➢ discuss the extended marketing mix for services and the GAP
Services Model Answer the question using
6.2.2 Classification of ➢ explain the elements of branding like brand identity, brand Microsoft Word application.
Services equity, etc. Save the file using filename
6.2.3 Extended Marketing ➢ realize various branding strategies in this format:
Mix for Services
6.2.4 Service Quality and Key Unit Takeaways: Your Name-Module 3a Task
Differentiation
✓ Companies create customer value by providing them Ex. Rowena P. Salazar-
6.3 Brands satisfactory products and services. Companies often create Module 3a Task
6.3.1 Brand Identity brands to influence consumer perceptions and create lost
6.3.2 Brand Equity lasting bond with the consumers.
6.3.3 Brand Image
6.3.4 Types of Brands

PMC-MMMarkman-MODULE 3 Page 1 of 8
 6.3.5 Branding Strategies ✓ A product is anything that can be offered to a market for
attention, acquisition, use, or consumption that might satisfy a
need or want. A good is a tangible product that can be seen
and touched.

✓ Most companies market more than one product. A product item

refers to a particular version of a product that is distinct. A
product line is a closely related group of products for essentially
similar use, and technical or marketing considerations.

✓ Product mix is the total number of products that a company

market. Product mix consistency means how closely related
different product lines are in their end use, production
requirements, and distribution.

✓ A service is an activity or series of activities of more or less

intangible nature that normally, not necessarily, takes place in
interactions between the customer and service employees
and/or physical resources or goods and/or system of the
service provider, which are provided as solutions to customer
problems.

✓ Unique characteristics of services include intangibility,

inseparability of service production.

✓ Managing consumers’ perceived service quality requires

matching consumer expectations and the perceived service
quality, and depends on reliability, responsiveness, assurance,
empathy, and physical evidence of the service.

✓ Brands are believed to be the real generators of wealth of 21st

century and determine the market value of business entities.
Gillette, Lakmé, Hit, and Goodnight are different names, but
there is one thing common among them.

PMC-MMMarkman-MODULE 3 Page 2 of 8
 ✓ A brand mark refers to that part of brand which is not made up
of words, but can be a symbol or design such as swoosh mark
of Nike, or Golden Arches of McDonald’s.

✓ Branding delivers certain advantages. It helps create an

identifiable brand enjoying a unique position and directed at a
well-defined target segment, and the company can cover an
entire market composed of several segments by creating
multiple brands each addressing a different segment.

Key Concepts:

✓ BRANDING: A brand is a name, term, sign, symbol or design or

a combination of them, intended to identify the goods and
services of one seller or group of sellers and the differentiate
them from those of the competition.

✓ BRAND EQUITY: It can be a useful measure of the value

contained in a brand. It can help evaluate brand extensions,
create partnerships and provide certainty around market share
expectations.

✓ BRAND IDENTITY: It refers to a unique set of brand

associations that the brand strategist aspires to create or
maintain.

✓ BRAND IMAGE: It involves the Impression in the consumers’

mind of a brand’s total personality which is developed over time
through advertising campaigns with a consistent theme, and is
authenticated through the consumers’ direct experience.

✓ PRODUCT: A product is anything, which is offered to the

market to satisfy consumer needs and wants.

✓ PRODUCT LINE: A set of individual products that are closely

related.

PMC-MMMarkman-MODULE 3 Page 3 of 8

NEW PRODUCT
DEVELOPMENT AND
PRODUCT LIFE CYCLE
STRATEGIES
7.1 New Product Options
7.2 New Product
Development Process
7.2.1 Idea Generation
7.2.2 Idea Screening
7.2.3 Concept Testing
7.2.4 Business Analysis
7.2.5 Product
Development
7.2.6 Test Marketing
7.2.7 Commercialization
7.3 Concept of Product
Life Cycle
7.4 Stages of Product Life
Cycle
7.4.1 Strategies at
Introduction Stage
7.4.2 Growth Stage
7.4.3 Maturity Stage
7.4.4 Decline Stage
7.5 Implications and
Limitations of Product Life
Cycle Concept
PMC-MMMarkman-MODULE 3
✓ SERVICE: A service is an intangible product involving a deed, a
performance, or an effort that cannot be physically possessed.
3 Read Unit 7, pages 161-182, of the main reference e-book. In the 2-minute statement of
process, you should be able to: personal concepts and
perceptions on the stages of
➢ identify the new product options product life cycle
➢ discuss the new product development process
➢ state the concept of product life cycle (PLC) * You will be graded on the
➢ explain the strategies adopted at various stages of PLC quality of your insights as well
➢ know the implications and limitations of PLC as how effective your
statement is in generating
Key Unit Takeaways: further critical thought.
Express yourself mindful of
✓ It is essential for companies to develop new products for the the time allotment so that
sake of their survival. Researchers have identified six everyone can actively
categories of new products depending on their newness to the participate in this process.
world, to the consumer, or to the company. New products also
include repositioned or upgraded products.
✓ New product development involves seven stages:
➢ idea generation involves searching for new product ideas;
➢ idea screening refers to selecting the potential ideas
➢ concept testing is presenting product concepts and product
benefits to target customers to assess their responses to
identify and eliminate poor product concepts
➢ business analysis step assesses the new product’s profit
potential and compatibility with markets
➢ test marketing involves testing the product in some types
of settings to evaluate consumer responses towards the
product and the marketing program, and
➢ commercialization is full-fledged product launch in the
market.
✓ Use of modern virtual reality technology may be of help to
shorten the duration involved in new product development.
Page 4 of 8
 ✓ Product life cycle is one of the enduring and widely publicized
frameworks in marketing literature. Both, theory of innovations
and diffusion, as well as theory of monopolistic competition
endorse this framework.

✓ Product life cycle can be viewed from different levels of

products, like core product, product category, brand and so on.
In marketing literature, several prescriptions have been
proposed for using product life cycle for formulating marketing
strategy.

✓ A typical product life cycle passes through stages of

introduction, growth, maturity and decline stage. The
characteristics and strategies to be followed at each of these
stages vary from one to another.

Key Concepts:

✓ CONCEPT TESTING: Getting information from customers about

how well a new product idea fits their needs.

✓ DROP ERROR: This is an error, which the product manager

commits by dropping a very good purchase idea.

✓ GO ERROR: This is an error which a new product manager

commits by taking a bad idea further and investing in that idea.

✓ NEW PRODUCT: A product that is new in any way for the

company concerned.

✓ PRODUCT DEVELOPMENT: Offering new or improved products

for present markets.

✓ PRODUCT LIFE CYCLE: The market response to a new product

idea after the product is commercialized and till it eventually
goes out of the market.

PMC-MMMarkman-MODULE 3 Page 5 of 8

PRICING: 3 Read Unit 8, pages 184-201, of the main reference e-book. In the
UNDERSTANDING AND
CAPTURING CUSTOMER
VALUE
8.1 Price Setting
8.1.1 Price Competition
8.1.2 Non-price
Competition
8.2 Pricing Objectives
8.3 Factors Affecting
Pricing Decisions
8.4 Pricing Strategies
8.4.1 New Product Pricing
8.4.2 Price Adaptation
8.4.3 Psychological
Pricing
8.4.4 Promotional Pricing
8.5 Selection of Pricing
Methods
8.5.1 Cost-based Pricing
8.5.2 Competition-based
Pricing
8.5.3 Demand-based
Pricing
8.5.4 Perceived-value
Pricing
8.5.5 Product Range
Pricing
PMC-MMMarkman-MODULE 3
✓ TEST MARKETING: This is a process of testing the feasibility of
the product and its marketing program in a limited and selected
market.
Identify two(2) companies
process, you should be able to: that use competition-based
pricing method. Can you
➢ realize the relevance of ‘price’ as an integral part of marketing suggest any alternative and
mix more effective pricing
➢ state the objectives of pricing method for them?
➢ identify the factors influencing pricing decisions
➢ discuss the various pricing strategies Answer the question using
➢ explain the pricing methods used by various companies Microsoft Word application.
Save the file using filename
Key Unit Takeaways: in this format:
✓ Price represents the value that is exchanged in a marketing Your Name-Module 3b Task
transaction. A marketer usually sells a specific combination of
need-satisfying product or service, and additional services like Ex. Rowena P. Salazar-
warranty or guarantee. Module 3b Task
✓ Pricing should never be seen as an isolated component of a
company’s marketing decision-making. Companies spend large
amounts of money on product development, promotion, and
distribution and face risks.
✓ Price is often the only marketing mix element that can be
changed quickly to respond to changes in demand or
competitive moves.
✓ Pricing objectives focus on what a company wants to achieve
through establishing prices. These objectives should be clear,
concise, and understood by all involved in pricing decisions.
Pricing objectives affect decisions in various other functional
areas such as finance and production etc.
Page 6 of 8
 8.5.6 Two-part Pricing ✓ A number of different internal and external factors affect
pricing decisions and this may pose some complexity. In
8.5.7 Bid Pricing general, there is uncertainty about how consumers,
competitors, resellers etc. would react to prices.

✓ There are specific pricing strategies like price skimming,

penetration pricing, loss leader pricing, superficial pricing,
special event pricing, psychological pricing, etc.

✓ Prices can be decided by analyzing the firm’s costs through

different pricing methods like full cost methods, target return
pricing method and marginal cost method. These methods do
not take care of the market condition and current market
structure for making a decision.

✓ However, the second category of methods is competition based

or market-based methods, in which the prices are decided on
the prevailing market condition and customary pricing
methods.

Key Concepts:

✓ GOING RATE PRICING: In this method, the firm bases its price
on what the average price of the product is in the industry or
prices charged by competitors

✓ ODD-EVEN PRICING: In this method, the buyer charges an odd

price to get noticed by the consumer. A typical example of odd
pricing is the pricing strategy followed by Bata.

✓ PERCEIVED VALUE PRICING METHOD: In this method, prices

are decided on the basis of customer’s perceived value. They
see the buyer’s perceptions of value, not the seller’s cost as the
key indicator of pricing. They use various promotional methods
like advertising and brand building for creating this perception.
Price: Price is the exchange value of goods and services in
terms of money.

PMC-MMMarkman-MODULE 3 Page 7 of 8
 ✓ PSYCHOLOGICAL PRICING: In this method, the marketer bases
prices on the psychology of consumers. Many consumers
perceive price as an indicator of quality. While evaluating
products, buyers carry a reference price in their mind and
evaluate the alternatives on the basis of this reference price.
Sellers often manipulate these reference points and decide
their pricing strategy.

✓ SEALED BID PRICING: In this method, the firms submit bids in

sealed covers for the price of the job or the service. This is
based on firm’s expectation about the level at which the
competitor is likely to set up prices rather than on the cost
structure of the firm.

✓ TARGET RETURN PRICING: In this method, the firm decides

the target return that it expects out of business and then
decides prices.

Prepared by: Checked by: Noted by:

ROWENA P. SALAZAR, MAEd JOHN ANTHONCY C. LAJARA, MAEd RENIE M. DE CASTRO, PhD
Instructor College Coordinator Dean

PMC-MMMarkman-MODULE 3 Page 8 of 8