Republic of the Philippines

Department of Education
DIVISION OF CALAPAN CITY

PRINCIPLES OF MARKETING
GRADE 12-Week 1

Diagnostic Test
Directions: From the pool of words inside the box, choose the appropriate term for each description below.

Satisfaction market share durable undifferentiated consumer goods

branding
Differentiated goods unsought goods brand equity marketing
consumable
Marketing ____ 1. It is a form of communicating or promoting the value of a product, service, or brand to the
consumers.
Consumer Goods 2. These are goods that are purchased for personal consumption and/or for household use.
Undifferentiated goods3. These are products whose physical characteristics are so identical, that it would be difficult, if
not impossible, to distinguish one purchased from one vendor or another.
branding 4. This is the ability of manufacturers to successfully distinguish their products from other
competitors.
brand equity 5. This is the appreciation in a brand’s value from the point of view of customers.
Consumable 6. It is a product whose benefit can only be used by a consumer for a short period of time,
sometimes only a few minutes.
durable 7. These are products that are manufactured to last a long time.
Unsought goods 8. Are goods that consumers seldom actively look for, and are usually purchased for extraordinary
reasons, such as adversity, rather than desire.
differentiated goods 9. Are varied in their characteristics and features that make them distinguishable from one another.
Satisfaction 10. This refers to measure of how well customer expectations from a purchased product or service
have been met.

Motivation:

K-W-L CHART
What I Know What I Want to Know What I Learned

- I still remember my past lessons

- I already know the what
marketing is.
- Different goods
- Consumer/services
- What are the principles of in my Grade 11 subjects that are
marketing? related in marketing such as the
- What are the processes in concepts of marketing and other
terminologies like demand,
marketing?
goods, purchases, interest, and
sales.

READ THIS…

MARKETING Defined
Marketing is a form of communicating or promoting the value of the product, service, or brand to the consumers. The
“by the word of mouth” marketing may be the simplest, oldest, and most natural way of marketing a service or a product
for profit and nonprofit purposes. Marketing for profit aims to increase sales of products or services while marketing for
nonprofit purposes aims to communicate messages for social purposes, such as health and public safety information
disseminated by the government.

The American Marketing Association (AMA) defines marketing as “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”.

The key to this definition of marketing is the word “value”. Thus, marketing can be summarized as the creation,
communication, and the delivery of value to customers.

Alternately, the Philippine Marketing Association (PMA) defines marketing as a “science and a profession guided
principally by the universal principles of ethics, corporate citizenship, and corporate social responsibility,”.

This definition emphasizes an adherence to ethical principles, corporate citizenship, and social responsibility.
Marketers must avoid offering products and services that may be harmful to one’s health and well-being or promote
violence and immorality. Products or services that serve no purpose or contribute nothing to individual and societal well-
being should not be marketed.

Marketing is the key for success of any organization whether it is a profit or non-profit organization.

GOALS OF MARKETING

The goals of marketing can be summarized as follows:

1.Understand the market and its consumers, and satisfy their changing needs and wants.

2.Introduce and innovate products and services that improve human condition and the quality of life.

3.design and implement effective customer-driven marketing strategies.

4.Develop marketing programs that deliver superior value to consumers.

5.Build and maintain mutually beneficial and profitable customer relationships.

6.Capture customer value to create profits.

7.Promote value transactions with full regard to society’s well-being.

THE MARKETING PROCESS

Figure 1: The Marketing Process

The marketing process can be illustrated in the following diagram.

The Situation Analysis Marketing Strategy

>Micro-environment Formulation
>Macro-environment >Market Segmentation
>The Market >Target Market Selection
>Customers >Value Proposition
>Competition >Product Positioning
>Strengths, Weaknesses, Opportunities, and
Threats

Marketing Mix Decisions

Implementation and Control >Product
>Implementation >Price
>Monitoring >Place
>Marketing Mix Adjustment >Promotion
Activity 1.2

Before marketing products and/or services, the organization must have a thorough analysis of the external
environment, the market, its competitors and customers and an incisive (perceptive) audit of its internal operating
characteristics. This is followed by the formulation of relevant marketing strategies coupled with a calibrated response
using the elements of marketing) commonly known as the 4P’s (Product, Price, Place, Promotion). As soon as the
marketing strategy is implemented, regular monitoring takes place in order to identify deviation and, if necessary, make
adjustments to any or all elements of the marketing mix.

Products, Services, and Experiences

What do organizations market? As consumers, we are most familiar with the marketing of goods and services.
Other than that, however, marketing organizations also market experiences, ideas, advocacies, and even personalities.

Marketing Products

Products or goods are physically tangible items. As such, they are generally perceivable by the human senses and can,
therefore, be inspected prior to purchase.
Figure 2: Product Levels

Formal Product
*Features *Price
*Styling *Color
*Others

Core or Generic Product

Augmented Product
*Credit terms *Warranty
*Installment Terms *Service
*Installation *Repair and Maintenance
*Others

Product Levels
All products have a core or generic product, which houses its core or generic function. A product’s core or
generic function can be defined as the purpose for which the product was created. For example, the core or generic
function of a wristwatch would be “to tell time”. On the other hand, for automobiles, it would be “to transport”. However,
physical products cannot be effectively marketed on the sole basis of their core or generic function because similar
product have the same core generic function because similar product have the same core or generic function. All
wristwatches can tell time, and all automobiles are capable of transporting people.
 It would be, therefore, be difficult, if not impossible, for a marketer to convince consumers to prefer a brand of
wristwatch or automobile over another, if it were to be marketed solely on its ability to tell time or to transport. Product
differentiation would not be possible.

The situation necessitates the creation of a second product level to be added on to the product’s core or generic
function. This level includes factors that could effectively differentiate automobiles manufactures by one company over
those manufactured by others with the same core or generic function. This second level is called formal product. Car
manufacturers incorporate unique styling into their automobile models, utilize different hood and grills, uses various paint
colors, incorporate advanced features, and charge varying selling prices among others. All these are undertaken with one
objective in mind – to differentiate their automobile from those manufactured by other firms.

It would usually be sufficient for the formal product of most marketing organizations to successfully differentiate
their product offering from their competitors. However, certain type of products/goods, particularly those that are very
expensive and have long service lives, require a third level: the augmented product.

An augmented product is necessary in the case of products/goods such as condominium units, motor vehicles, and
major household appliances. Because of their relative high price, most customers may not have immediate funds available
for purchase. Therefore, it becomes necessary to offer credit or sometimes installment terms, allowing customers to
purchase these products at a discount or spreading payment over months or years.

CLASSIFICATION OF PRODUCTS/GOODS
Products that are marketed can be generally classified according to use, differentiation, type, and durability.

According to Use: Consumer and Industrial Goods

Consumer Goods are goods that are purchased for personal consumption and/or for household use. Examples of
these are instant noodles, biscuits, milk, detergent soap, shampoo, and other similar items. On the other hand, industrial
goods are purchased in order to make other goods. Typical Examples are aluminum (used to manufacture kitchen
equipment and cans) and electronics cables and wires (serve as electrical circuits for home appliances) among others.

According to Differentiation: Undifferentiated and Differentiated Goods

Undifferentiated goods are products whose physical characteristics are so identical, that it would be difficult, if
not impossible, to distinguish one purchased from one vendor or another. Most undifferentiated goods are products that
are sourced from nature. On the other hand, differentiated goods are varied in their characteristics and features that
makes them distinguishable from one another. The ability of manufacturers to successfully distinguish their products from
other competitors is called branding.

Branding provides a product or service a unique distinguishing name, logo, symbol, or image which is used to
differentiate it from other similar products and services. When a company decides to brand its products, it must recognize
that there are two responsibilities that accompany branding: > all products carrying the brand must have quality
consistency; > the brand must be advertised and promoted. Once a brand acquires customer recognition, a positive market
reputation and goodwill, higher selling prices can be charged, larger sales revenues are generated, and higher profit
margins are realized. This is because customers begin to attach value to the brand than to the product itself. This
appreciation in a brand’s value from the point of view of customers is called brand equity.

According to Durability: Consumable, Semi- Durable, and Durable Goods

Based on durability, products are either consumables, semi-durables, or durables. Durability refers to the length of time a
consumer can derive benefit from the product or good purchased.

A consumable is a product whose benefit can only be used by a consumer for a short period of time, sometimes
only a few minutes. For this reason, many mis-interpret consumables to exclusively include food, drinks, and other edible
items. On the other hand, semi- durables provide benefits to the consumer for a longer period of time, usually spanning
several months. Semi- durables are manufactured for longer-term use by consumers. Examples of semi-durables are
clothes, shoes, belts, jackets, etc.
 Durables are products that are manufactured to last a long time. They are capable of providing consumers with
the years of beneficial use. Durables are usually expensive, and many, therefore, require an augmented product to market
them effectively. Examples of durable goods are automobiles, houses, home appliances, customer electronics, furniture,
sports equipment, and toys.

According to Type: Convenience, Shopping, Specialty, and Unsought Goods

Convenience goods are products that are purchased frequently, are usually inexpensive, and do not require much purchase
effort and evaluation. Examples are newspapers, gum, and candy.

Shopping goods, on the other hand, are purchased less frequently than convenience goods, are relatively more expensive,
and require some amount of information search and evaluation prior to purchase. Consumers of shopping goods consider
features, evaluate attributes, and compare prices. Examples of shopping goods are shoes, clothes, and handbags.

Specialty goods are goods that requires an unusually large effort on the part of consumers to acquire. Consumers are
usually willing to travel great distances to where these goods can be purchased. Examples are branded luxury
merchandise, work of art, automobiles and homes.

Unsought goods are goods that consumers seldom actively look for, and are usually purchased purchase for extraordinary
reasons, such as fear or adversity, rather than desire. Examples are investments, memorial plans, and life insurance.

KEEP IN MIND

Marketing is all about creating value through the exchange process. Marketing is an art, a science,
and a field of discipline. To a layman, marketing will indeed be all about selling a product. But to a
marketing professional, marketing is a process. It is a process that begins right at the moment when an
aspiring entrepreneur or business development manager realizes that there is an
opportunity to build up a business. Marketing is also about communication. In fact, there is a trend
toward using the term marketing communications” rather just “marketing”. This reflects the fact that
selling a product is really all about properly communicating that product to the market and to the
world at large.
 ACTIVITY SHEET NO. 1

Activity 1.1 Marketing Process Diagram

Explain the marketing process using the diagram.

The Situation Analysis Marketing Strategy Formulation

- defines potential customers, evaluates projected
growth, assesses competitors, and makes a
practical assessment of your business. It involves
targeting the explicit objectives in the market and
identifying the factors that support or hinder those
objectives.
Its purpose is to indicate to a company about the
organizational and product position, as well as the
overall survival of the business, within the
environment.
- process of defining an organization's
marketing goals and objectives. This allows
formulators to create a guide. They examine
the market and in doing so, use that
information to determine what marketing
approaches will be best at reaching clients
and enticing them to seek out the business'
services.

IMPLEMENTATION AND CONTROL Marketing Mix Decisions

- critical to the success of any firm because The marketing mix has been defined as the
Activity 1.2
it’s responsible for putting marketing "set of marketing tools that the firm uses to
strategies into action. Implementation refers
pursue its marketing objectives in the target
to the “how” part of the marketing plan. Some
market".[1] Thus the marketing mix refers to
of this misunderstanding stem from the fact
four broad levels of marketing decision:
that marketing strategies almost always turn
out differently than expected product, price, place, and promotion.

Classify the products or goods by checking the column that corresponds to your answer.

Examples Consumer Industrial Specialty Unsought Shopping Convenience

Goods Goods Goods Goods Goods Goods
1.clothes ✔
2.detergent powder ✔
3.aluminum ✔
4.newspaper ✔
5.memorial plans ✔
6.investments ✔
7.automobiles ✔
8.bags ✔
9.candy/gum ✔
10.luxury items ✔

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Parents/Guardian Name /Signature & Contact No.