ACLC College Tacloban Marketing Principles

ACLC COLLEGE TACLOBAN | P R I N C I P L E S O F M A R K E T I N G
TABLE OF CONTENTS
QUARTER 3
CHAPTER 1 MARKETING PRINCIPLES AND STRATEGIES

3
Lesson 1 Marketing Principles and Strategies 3

Lesson 2 Contemporary Approaches of Marketing13
Lesson 3 Marketing Process 16
GRADING SYSTEM
CHAPTER 2 CUSTOMER RELATIONSHIP: CUSTOMER SERVICE
23 THIRD QUARTER
Average TQ Written Works x 40%
Lesson 1 Customer Relationship Management 23 Average TQ Performance Tasks x 60%
Lesson 2 Customer Service Strategies 29 THIRD QUARTER GRADE xx%
CHAPTER 3 MARKET OPPORTUNITY AND CONSUMER ANALYSIS FOURTH QUARTER
40 Average FQ Written Works x 40%
Average FQ Performance Tasks x 60%
Lesson 1 Strategic and Tactical Marketing & The Mktg. Env’t. 40 FOURTH QUARTER GRADE xx%
Lesson 2
2|QUICKNOTES
Third Quarter Grade+ Fourth Quarter Grade only promote and sell a luxurious-prized coffee but they provide a unique feel to any customer
General Weighted Average= entering their premise: it’s the kind of experience that Starbucks never failed to provide to their
2
customers. Currently, Starbucks operates in 67 countries with a total of 22,519 stores. Its
revenue in 2014 reached $16.45 billion, with net income of $2.07 billion by estimate.
QUARTER III
Now, we may be asking, how did they arrive at the concept of “providing a unique touch
Chapter 1 Lesson 1 towards customers?” The answer could mainly be because of a good Marketing Strategy. So,
MARKETING PRINCIPLES AND STRATEGIES let’s understand the main concept of MARKETING.
What is Marketing?
As we start ourselves with our discussion on the basic principles of marketing, a question may
have arisen in our minds as to what marketing is. Well, to simply put, marketing is engaging Many people think marketing as only selling and advertising. We are bombarded every day
customers and managing profitable customer relationship. It aims to create customer value in with TV commercials, catalogs, spiels from salespeople, and online pitches. However, selling
order to capture value from customers as a return. But how do marketing works? and advertising are only the tip of the marketing iceberg.
Today, marketing must be understood not in the old sense of making a sale—“telling and
Learning Objectives: selling”—but in the new sense of satisfying customer needs. Broadly defined, marketing is a
social and managerial process by which individuals and organizations obtain what they need
The learners are expected to learn the following: and want through creating and exchanging value with others. In a narrower business context,
marketing involves building profitable, value-laden exchange relationships with customers.
The definition of marketing and how it should be understood; Hence, marketing is the process by which companies engage customers, build strong customer
The discussion of the goal of marketing; and relationships, and create customer value in order to capture value from customers in return.
The identification and description of the different approaches of marketing. (P. Kotler et.al)
Brief History of Marketing

Starbucks: Knowing How they made a Unique Impression to
Gain Customer Value Marketing is essentially a means of meeting and satisfying certain needs of people. It is a
highly developed and refined system of thought and practice characteristic of a period in the
Founded in Seattle, Washington DC in 1971, Starbucks is currently the largest coffeehouse development of market economy. A latent presumption in the practice of marketing has been
company in the world. Their mission is to “inspire and nurture the human spirit – one person, that marketing gives to society more than society gives to it. The fact is that marketing is but
one cup and one neighborhood at a time.” They have grown to offer a variety of products, one of several means of accomplishing a social objective.
ranging from fresh foods and baked goods to brand merchandise and coffee equipment.
Starbucks ensures that the ingredients they use are taken from a fresh, Earlier Theories Relevant to Marketing Thought
high quality coffee bean from some selected countries which culture
these. Starbucks, despite selling costly products, never fails to The development of marketing thought began early in the twentieth century with the
provide customer value. Through this, their customers continue to conception of marketing. Early students of marketing were actually educated as economists.
favor their products over its competitors. They are accustomed to the Although they brought forth divergent theories, students of marketing evolved a body of
experience that Starbucks provides. That’s right – Starbucks does not thought that by its nature, scope and application, set them apart from the usual economists.
3|QUICKNOTES
Market
Consumer
By 1900, it was found that demand consisted of more than simple purchasing power. It
reflected desire as well as ability to purchase, and new experiences with advertising and Not until the latter part of the nineteenth century, with the writings of the Austrians did real
salesmanship were proving that desire could be increased and molded by factors other than the consideration of the consumer make its way into economic theory.
mere existence of supply. It concerned its capacity to adjust itself automatically to a
harmonious equilibrium. It had long been held that competitive forces would normally, in the Enlargement of the Market
long run, dissipate tendencies of dis-equilibrium, but as competition diminished in some
industries and trades, the assumptions found in traditional economic theory became The classical economist has assumed local markets wherein demanders and suppliers knew of
increasingly invalid. A third idea was that cost was the principal determinant of price, at least each other’s presence and this knowledge resulted in perfect competition. With the Industrial
in the long run. Concepts of the elasticity of demand were still another influence upon the Revolution, new importance was attached to information, promotion, and the quest for
thinking of early students of marketing. Marketing writers as a theoretical basis for selling, satisfactory products. Extended markets gave the opportunity for production on a scale larger
advertising and the promotional work of marketing in general have long used Alfred than had ever before been undertaken. The rapid transition from an agricultural economy to an
Marshall’s concept of elasticity of demand. industrial economy at the end of the century poured into the market such quantities of products
as to warrant the conclusion that a buyers’ market was replacing a sellers’ market. It had long
Value Theory been a presumption of economic theorists that production was basic that the value created by
production constituted the extent of demand in the market, but the American market was
Value theory was another area of economic thought relevant to early studies of marketing. anything but static.
Economists leaned heavily upon input factors, determining their relative quantities and prices.
Adam Smith held also, against most commonly held beliefs that distributive activities Marketing Goals and Objectives
contributed to value, but only indirectly. They extended the market, thereby making
opportunities for increased production and for greater specialization of labor in production. Goals and objectives are usually used interchangeably in many aspects. Both actually refers to
an outcome that a person or business desires to achieve. However, there is significant
Economists also distinguished in their value theories value in-use and value in-exchange. difference between the two if we will technically define them and put them into practice. Goals
are brief statements of a desired outcome that can be accomplished over a long period of time.
Production Objectives on the other hand are brief statements of a desired outcome as well but
accomplishable within a short period of time.
In the eighteenth century, productivity was held by the physiocrats to be the production of a
surplus over costs. Concepts of production included: diminishing returns, marginal productivity Goal of Marketing
opportunity costs and the representative firm. However, in 1900, there was no clear concept of
the justification of marketing as a productive activity or as a contribution to economic The goals of marketing can be summarized as follows;
production. On the contrary, the popular impression was that the middleman added cost instead
of value. Adam Smith conceived man as the economic man ‟bent upon a constant effort to  Understand the market and its consumers, and satisfy their changing needs and wants;
better his condition.” Thus, there was a natural basis for competition, and according to natural
 Introduce and innovate products and services that improve human condition and the
motivations they would affect perfect competition. Ricardo foresaw the uncertainties of an
quality of life;
expanding economy. He viewed a growing disparity of interests in the rising factory system.
 Design and implement effective customer-driven marketing strategies;
Alfred Marshall perceived basic cooperation among all parties through the system of markets.
His viewpoint, insofar as he emphasized the short run, tended to coincide with the interests of  Develop marketing programs that deliver superior value to consumers;
businessmen.  Build and maintain mutually beneficial and profitable customer relationships;
 Capture customer value to create profits; and
4|QUICKNOTES
 Promote value transactions with full regard to the well-being of societies. Human needs are states of felt deprivation. They include basic physical needs for food,
clothing, warmth, and safety; social needs for belonging and affection; and individual needs
Developing SMART Marketing Objectives for knowledge and self-expression. Marketers did not create these needs; they are a basic part
of the human makeup.
Essentially our marketing objectives need to fit in with the overall business objectives and
drive the direction of our marketing strategy. To be effective, any objective should be SMART. Wants are the form human needs take as they are shaped by culture and individual personality.
To differentiate the needs from wants, a Filipino needs food but he wants McDonald’s Happy
A SMART objective is always: (1) Specific; (2) Measurable; (3) Achievable; (4) Realistic; and Meal. Wants are shaped by one’s society and are described in terms of objects that will satisfy
(5) Time-bound those needs.
The purpose therefore of setting SMART objectives is to clarify where we want to be, Wants become demands when backed with buying power. Given their wants and resources,
providing a measurable objective that can be monitored and plans developed to help meet the people demand products and services with benefits that add up to the most value and
business goals. satisfaction.
One typical marketing objectives we see clients set includes the increase of the number of Market Demand and How it is Measured
enquiries from our marketing communications activities by 15% by the end of the year and the
increase sales by 20% within 18 months. This can be done through facilitating a marketing Market demand is the total demand of all potential customers for a specific
objectives workshop where key issues can be discussed and agreed. Alternatively, with smaller product/service over a specified period in a specific market area. It can either be
companies we work directly with Managing Directors on a one-on-one basis to help them primary or selective. Primary demand is the total demand of all brands of a particular
develop their key marketing goals and objectives. Both approaches can help a company to products or service. It is sometimes referred to as total industry demand. Selective
agree business objectives and marketing objectives and allow a marketing plan to be developed demand, on the other hand, is the demand for a specific brand of product or service.
to set a direction out as to how these objectives can be achieved. Other issues, which can also
be discussed in a workshop, include methods of measuring success and monitoring and Types of Demand
evaluation processes.
 Potential Demand – emerges when there is no demand yet for a
Key Performance Indicators (KPI) particular product/service, but there exists a market with sufficient
financial capability to purchase. A very good example to this is an
Key performance indicators (KPIs) are used to check that the marketing activities of a education course where there is very low or no demand at all. It is an
company are on track. KPIs are specific metrics which are used to track performance to make existing market, but letting the students favor in it is a challenge to
sure the firm is on track to meet specific objectives. They are sometimes known as counter.
performance drivers or critical success factors for this reason.  Latent demand – it is a result of inability of the customers in a market
to satisfy a specific desire because no product/service exists in the
Some notable marketing goals are increasing sales, building brand awareness, growing market market that can satisfy them. It can also happen when the product/or
share, launching new products or services, targeting new customers, entering new markets service is available, but has an unreachable price. Best example to this
internationally or locally, improving stakeholder relations, enhancing customer relationships, is a smartphone. People wants to posses more features of the
improving internal communications and increasing profit. smartphone. However, it could mean a high cost to be settled. So, they
might just want to go for a normal phone, but they still get itchy of
Understanding the Concept of Needs, Wants and Demand getting ownership of a smartphone.
5|QUICKNOTES
 Current demand – it is the number of people of a particular market at
present that would actually purchase the product or service offered. Marketing must be Coordinated Activities
This can be measured in several ways but the most widely used is the
“intent-to-buy” survey. A great example to this is umbrella, which is a Coordination activities must start in the product planning process. The product is the
seasonal product. key element that the customer wants to buy that is worth his money. Price is another
important component as customers would like to get his money’s worth. The place of
Marketing Research distribution must be within his reach and the promotional activities must be appealing
for him to decide which product to purchase.
Determining the needs and wants of the market may sound easy and simple, but
consider some of the questions that confront marketers as they design marketing Marketing must be able to achieve the Performance Target Goals and Objectives
strategies. Marketers need information in order to develop, implement, and evaluate
strategies. Customer-oriented and coordinated marketing aims to achieve its profit, objectives and
goals. These goals and objectives hinge on the increase in sales volume and customer’s
Common types of marketing research: patronage. When product planning, price, promotion and distribution and properly
coordinated, it will result in the most effective way of satisfying the customer’s needs
 Market research (about the market, size, growth rate, competition, and wants. The sales volume and profit objective will be realized.
demographics,);
 Sales research (where the sales are coming from, shares of competition); Factors for Developing Marketing Concepts
 Product research (characteristics of the product that consumers like); and
 Advertising research (reactions of consumers to the firm’s Capturing Marketing Insights
communications/advertising program).
The overall direction of marketing should be focused on the company’s vision and
mission. The organizational goals and objectives must be directed towards the creation
Marketing Concept of value to its customers. These must be the inherent philosophy of the marketing
organization. Nowadays, marketing puts importance in building of long-lasting
According to Garovillas (2004), marketing concept is a business philosophy, which holds that relationship with its target market, thus marketing organization must ensure that
the key to achieving organizational goals consists of determining the needs and wants of target organizational plans be in direct accordance towards customer satisfaction.
markets and delivering the desired satisfactions more effectively and efficiently than
competitors do. Effective Financial Management System
The philosophy of doing business is formulated as people started to realize that marketing has This system in the procurement of quality and affordable materials for processing of
an important role to the success of any marketing organization. It emphasizes customer the product is a vital component in effective operation of the marketing system. The
orientation and coordination of marketing activities to achieve the marketing goals and competition in the market is based on affordable quality products where labor and
objectives. Now let us consider the following marketing concepts: materials interplay in their production. Financing the marketing program will develop
effective sales program that will bring in sustainable profitability.
Marketing must be Customer Oriented
The Value of Human Resources
The process of marketing must be driven to customer satisfaction. It must be focused
in determining what will satisfy the needs and wants of the customer segment and the
important link in the business operation.
6|QUICKNOTES
Whatever industry we may belong, human resource is vital for the operation. The Print marketing is the oldest form of traditional marketing. Loosely defined as advertising in
people in the organization must be committed in the production and delivery of quality paper form, this strategy has been in use since ancient times, when Egyptians created sales
products and service, respectively. They must develop work ethics and strong messages and wall posters on papyrus. Today, print marketing usually refers to advertising
commitment to the marketing efforts of the organization. A Sustainable development space in newspapers, magazines, newsletters, and other printed materials intended for
and progress rest with people who are willing to put all efforts towards the distribution.
organizational objective of quality products and service is technically needed.
Broadcast Marketing
The Production Process
Broadcast marketing includes television and radio advertisements. Radio broadcasts have been
The process must be in conformity to standards in terms of product quality. The race to around since the 1900s, and the first commercial broadcast—a radio program supported by on-
economic profitability is the production of products that shall satisfy the customer’s air advertisements—aired on November 2, 1920. Television, the next step in entertainment
wants and needs. The role of marketing is to sell more products, but it must conform to technology, was quicker to adopt advertising, with less than ten years between its inception and
customer demand. Production may produce so many products, yet they are useless the first television commercial in 1941.
inventory when they fail to reach their target market. With marketing efforts, it will
turn them into profitable inventory. Direct Mail Marketing
The Presence of Competitors Direct mail marketing uses printed material like postcards, brochures, letters, catalogs, and
fliers sent through postal mail to attract consumers. One of the earliest and most well-known
The marketing of products becomes interesting with the presence of competitors. examples of direct mail is the Sears Catalog, which was first mailed to consumers in 1888.
Marketing outfit must develop strategies in capturing their target market and develop
and sustained patronage. These marketing strategies must develop customer loyalty to Telemarketing
the brand or the product. Product improvement and pricing strategies with sustained
promotional and advertising program are important components in the competitive Telephone marketing, or telemarketing, is the practice of delivering sales messages over the
market. phone to convince consumers to buy a product or service. This form of marketing has become
somewhat controversial in the modern age, with many telemarketers using aggressive sales
Traditional Approaches of Marketing tactics. The U.S. federal government has passed strict laws governing the use of telemarketing
to combat some of these techniques.
Traditional marketing is a rather broad category that incorporates many forms of advertising
and marketing. It's the most recognizable type of marketing, encompassing the advertisements Ansoff's Matrix Theory (Source: Professional Academy)
that we see and hear every day. Most traditional marketing strategies fall under one of four
categories: print, broadcast, direct mail, and telephone. It is also associated with Cross-media Traditional marketing theories include Ansoff's Matrix, a theory that proposes
marketing. Cross-media marketing is a form of cross-promotion in which promotional products/services fall into one of four categories depending on the market and the product
companies commit to surpassing traditional advertisement techniques and decide to include released. It was invented by Igor Ansoff in 1965 and is used to develop strategic options for
extra appeals to the products they offer. The material can be communicated by any mass media businesses.
such as e-mails, letters, web pages, or other recruiting sources.
Print Marketing
7|QUICKNOTES
 How can we extend our market?
 Through new market sectors?
 Through new geographical areas?
Diversification
This concept focuses on reaching new markets with new products. Diversification can
be either related or unrelated.
o Related Diversification: The organization stays within a market they have

familiarity with.
o Unrelated Diversification: The organization moves into a market or industry
they have no experience with. This is considered a high-risk strategy.
Marketing Management Orientations
Marketing management wants to design strategies that will engage target customers
and build profitable relationships with them. But what philosophy should guide these
marketing strategies? What weight should be given to the interests of customers, the
Market Penetration organization, and society? Very often, these interests are conflicting. There are five
alternative concepts under which organizations design and carry out their marketing
This portion focuses on increasing the volume of sales of existing products to the strategies:
organization’s existing market. Questions usually asked are the following:
Production Concept
 How can we defend our market share?
 How can we grow our market? The production concept holds that consumers will favor products that are
available and highly affordable. Therefore, management should focus on
Product Development improving production and distribution efficiency. This concept is one of the
oldest orientations that guides sellers.
This strategy focuses on reaching the existing market with new products. Question
usually asked is: The production concept is still a useful philosophy in some situations. For
example, both personal computer maker Lenovo and home appliance maker
 How can we expand our product portfolio by modifying or creating products? Haier dominate the highly competitive, price-sensitive Chinese market through
low labor costs, high production efficiency, and mass distribution. However,
Market Development although useful in some situations, the production concept can lead to
marketing myopia. Companies adopting this orientation run a major risk of
This strategy focuses on reaching new markets with existing products in the portfolio. focusing too narrowly on their own operations and losing sight of the real
Questions usually asked are the following: objective—satisfying customer needs and building customer relationships.
8|QUICKNOTES
Product Concept The marketing concept holds that achieving organizational goals depends on
knowing the needs and wants of target markets and delivering the desired
The product concept holds that consumers will favor products that offer the satisfactions better than competitors do. Under the marketing concept,
most in quality, performance, and innovative features. Under this concept, customer focus and value are the paths to sales and profits. Instead of a
marketing strategy focuses on making continuous product improvements. product-centered make-and sell philosophy, the marketing concept is a
customer-centered sense-and-respond philosophy. The job is not to find the
Product quality and improvement are important parts of most marketing right customers for your product but to find the right products for your
strategies. However, focusing only on the company’s products can also lead to customers.
marketing myopia.
The figure below contrasts the selling concept and the marketing concept.
For example, some manufacturers believe that if they can “build a better
mousetrap, the world will beat a path to their doors.” But they are often rudely
shocked. Buyers may be looking for a better solution to a mouse problem but
not necessarily for a better mousetrap. The better solution might be a chemical
spray, an exterminating service, a house cat, or something else that suits their
needs even better than a mousetrap. Furthermore, a better mousetrap will not
sell unless the manufacturer designs, packages, and prices it attractively;
places it in convenient distribution channels; brings it to the attention of people
who need it; and convinces buyers that it is a better product.
Selling Concept
The selling concept takes an inside-out perspective. It starts with the factory,
Many companies follow the selling concept, which holds that consumers will focuses on the company’s existing products, and calls for heavy selling and
not buy enough of the firm’s products unless it undertakes a large-scale selling promotion to obtain profitable sales. It focuses primarily on customer conquest
and promotion effort. The selling concept is typically practiced with unsought —getting short-term sales with little concern about who buys or why.
goods—those that buyers do not normally think of buying, such as life
insurance or blood donations. These industries must be good at tracking down In contrast, the marketing concept takes an outside-in perspective. As Herb
prospects and selling them on a product’s benefits. Kelleher, the colorful founder of Southwest Airlines, once put it, “We don’t
have a marketing department; we have a customer department.” The marketing
Such aggressive selling, however, carries high risks. It focuses on creating concept starts with a well-defined market, focuses on customer needs, and
sales transactions rather than on building long-term, profitable customer integrates all the marketing activities that affect customers. In turn, it yields
relationships. The aim often is to sell what the company makes rather than to profits by creating relationships with the right customers based on customer
make what the market wants. It assumes that customers who are coaxed into value and satisfaction.
buying the product will like it. Or, if they don’t like it, they will possibly forget
their disappointment and buy it again later. These are usually poor Implementing the marketing concept often means more than simply
assumptions. responding to customers’ stated desires and obvious needs. Customer-driven
companies research customers deeply to learn about their desires, gather new
Marketing Concept product ideas, and test product improvements. Such customer-driven
marketing usually works well when a clear need exists and when customers
know what they want.
9|QUICKNOTES
The figure below shows companies should balance three considerations in
In many cases, however, customers don’t know what they want or even what is setting their marketing strategies: company profits, consumer wants, and
possible. As Henry Ford once remarked, “If I’d asked people what they society’s interests.
wanted, they would have said faster horses.”9 For example, even 20 years ago,
how many consumers would have thought to ask for now-commonplace
products such as tablet computers, smartphones, digital cameras, 24-hour
online buying, digital video and music streaming, and GPS systems in their
cars and phones? Such situations call for customer-driving marketing—
understanding customer needs even better than customers themselves do and
creating products and services that meet both existing and latent needs, now
and in the future. As an executive at 3M put it, “Our goal is to lead customers
where they want to go before they know where they want to go.”
Societal Marketing Concept
The societal marketing concept questions whether the pure marketing concept The figure below indicates the basic comparison of the different marketing management
overlooks possible conflicts between consumer short-run wants and consumer orientations:
long-run welfare. Is a firm that satisfies the immediate needs and wants of
target markets always doing what’s best for its consumers in the long run? The
societal marketing concept holds that marketing strategy should deliver value
to customers in a way that maintains or improves both the consumer’s and
society’s well-being. It calls for sustainable marketing, socially and
environmentally responsible marketing that meets the present needs of
consumers and businesses while also preserving or enhancing the ability of
future generations to meet their needs.
Even more broadly, many leading business and marketing thinkers are now
preaching the concept of shared value, which recognizes that societal needs,
not just economic needs, define markets.10 The concept of shared value
focuses on creating economic value in a way that also creates value for society.
A growing number of companies known for their hardnosed approaches to
business—such as GE, Dow, Google, IBM, Intel, Johnson & Johnson, Nestlé,
Unilever, and Walmart—are rethinking the interactions between society and
corporate performance. They are concerned not just with short-term economic
gains but with the well-being of their customers, the depletion of natural
resources vital to their businesses, the viability of key suppliers, and the
economic well-being of the communities in which they operate.
10 | Q U I C K N O T E S
Early
Approaches to Produc tion Conce pt Product Concept Se lling Concept Marketing Conc ept
Marketing
On making superior products;
"The customer is king".
"Better-mousetrap" fallacy. The
Production orientation. The firm Determine what the
organization feels that it knows its Selling methods focus on advertising just
specializes in making production consumer wants, then
product better than anyone else selling an already existing product, and
Focus as much as possible of a given produce the same and
does. The firm knows what will using promo-tion techni-ques to attain the
product or service. Thus, the sell the same. Avoid
work in designing and producing highest sales possible.
firm exploits economies of scale. having a dissatisfied
the product and what will not
customer.
work.
Demand for a product is greater
than supply. A Production
A firm employing a product
orientation may be deployed When a firm holds dead stock, it is useful
orientation is chiefly concerned Supply is greater than
When used when the demand for a product for un-sought goods, i.e., encyclopedias
with the quality of its own demand.
or service is high coupled with a and political candidates.
product.
good certainty that consumer
tastes will not rapidly alter.
Profit through selling methods selling
Profit through quality products. As
important, not post-consumer satisfaction.
Profit through efficient long as product was of a high
No need to determine new con-sumer
production methods knowing all standard, people would buy and
desires. The selling philosophy holds that Profit through
output can be sold. Also, useful consume the product. Not only
Objective an organi-zation can sell any product it satisfaction of needs and
concept when increasing product is of good quality, but
produces with the use of adver-tising and wants of customers
production raises economies of price, distribution and promotion
personal selling. The assumption is that a
scale etc. to reduce price. too should be good so as to "make
well-trained and motivated sales force can
& sell".
sel any product.
From mid-19th century to early
1930s to WWII 1950s to
20th Century industrial 1920s to mid-1930s WWII to early 1950s
Until the 1960s in the Western present in the USA and
Dominant Era revolution in the USA, till 1950 in the USA and between the 1950s and
Europe. 1970 to present day in
in Western Europe and until 1960 in the Western Europe.
the Western Europe.
1991 in India.
Traditional Marketing Strategies and the 4P’s–or Are there Five?
Traditional marketing has always been defined by the 4P’s–Product, Promotion, Price and
Place. Traditional marketing techniques typically focus on identifying the right audience
segment, understanding their behavior, and providing the proper incentive to get them to buy a
product or service, and in addition, there is the location or channel consideration.
In the past, marketers were limited to one-way broadcast media. The goal was to use the proper
media mix to deliver as many impressions as possible, providing the right promotional
incentive to get the consumer to buy the product or service. With the advent of Google, the
increasing penetration of smartphones, and the proliferation of social media platforms –
marketers now face a daunting array of possible options. It now has been suggested that
marketers add a fifth “P” – for People – to the mix.
Advantages of Traditional Marketing
Identifying and understanding your target audience is still the key to marketing success. Many
traditional marketing techniques remain appropriate. Audience segmentation is one example.
Marketers can identify ways to provide a relevant and meaningful customer experience by
creating segments for a number of components like audience composition, buying behavior,
geography and events.
Traditional Marketing in 2013
With defined audience segmentation and on target offers, traditional marketing is still very
effective when acquiring some customer segments. Traditional marketing strategies offer an
effective way to deliver content to current and prospective customers, and can become a
catalyst to drive your web site along other traffic marketing assets. This traditional marketing
approach is often referred to as “push” marketing.
Promotions and offers are still important pieces in the marketing mix, but in 2013, content is a
new form of currency. Instead of relying solely on coupons and price discounts, marketers can
offer valuable information that consumers will find relevant and engaging.
Delivering the right message through the proper channel is more important than ever.
Traditional marketing strategies still work as they expand to incorporate more options.
Strategic Marketing Solutions Can Help
Here is how Strategic Marketing Solutions can help with your traditional marketing strategies:
Identify your target audience.

Creating relevant content that will optimize the customer experience. Written Works 3.1.1
Select channels for delivery including Email and/or Direct Mail.
Develop a variety of marketing materials for the selected channels
Test messages and then measure results. Direction: In a yellow paper, answer the following questions. Note, the back of the paper must
be clean. You can use multiple papers as you want. Write the question first in your paper
How is a traditional Marketing Plan Developed & Employed? before writing your answer. WRITE LEGIBLY.
The strategies for developing a traditional marketing plan vary widely, according to the form of
advertising used and the type of business. In some companies, particularly small businesses, 1. Which among the Traditional Marketing Approach is still used in this contemporary
the entire staff will contribute to planning and execution. Larger companies often have world? Explain your answer.
marketing departments dedicated to creation of advertising campaigns that use traditional
marketing. 2. Using Google as your search engine, search for two (2) existing establishment – one
(1) for a Philippine-based and another one (1) for a none Philippine-based – which still
The first step in developing a plan is to choose print, broadcasting, direct mail, or uses cross-media marketing as the MAIN TOOL for promoting their products or
telemarketing. This choice depends on the budget and the marketing message conveyed. For services.
example, a store that is announcing a sale will use more immediate impact strategies like
broadcasting or print, while a business launching a general awareness campaign might choose 3. Site an example of a marketing strategy that develops a SMART Marketing objective?
direct mail, which stays in consumers’ hands for a longer period of time.
For print and broadcast marketing, the business must arrange to purchase advertising space.
The timing of this step depends on the lead-time, or how far in advance the advertising space
must be purchased. Some print media, such as wide-circulation magazines, have lead times of
several weeks. For example, an advertisement in Sports Illustrated magazine must be reserved CRITERIA FOR GRADING PERCENTAGE
at least five weeks in advance and longer for premium placement. Other markets have shorter Completeness
times, with some newspapers allowing next-day ad placement. All requirements must be answered 35%
Relevance
The development of marketing materials also varies depending on the form. Direct mail and Answers should be relevant to the topic 30%
print campaigns require graphic design and copywriting. For telemarketing, the advertisers Organization and Clarity
write a script for the sales representatives (or outsourced telemarketing company) to follow. Explanation should be well organized, arranged and must be unique 20%
Radio ads may be either produced and pre-recorded, or scripted and read by on-air Timeliness
personalities. Finally, television commercials can either be written by the marketing Examples are up-to-date or timely 15%
department and produced in-house, or contracted out to production companies. TOTAL 100%
Sources:
AMAES Online Education. Principles of Marketing Module 001. Marketing Principles and
Strategies. Pages 1-10
QUARTER III
Kotler, Philip et.al (2017). Principles of Marketing 17 Edition. Marketing: Creating Customer
th
Chapter 1 Lesson 2
Value and Engagement. pages 25-28, 37-38 CONTEMPORARY APPROACHES OF MARKETING
Whiteside, Jupiter et.al. Principles of Marketing for Senior High School. Marketing Principles
and Strategies. Pages 1-15
As we continue ourselves with our discussion on the basic principles of marketing and
introduced the traditional approach of marketing, we will now be studying the contemporary
Daguit, Maridel et.al. Principles of Marketing for Senior High School. Marketing Principles
marketing approach and identify the points that makes it different as compared to cross-media
and Strategies. Page 8, 17-18
marketing. But how does this approach work?
Indeed Editorial Team. What Is the Difference Between Goals and Objectives?
https://www.indeed.com/career-advice/career-development/difference-between-goals-
Learning Objectives:
and-objectives. January 26, 2022
The learners are expected to learn the following:
Professional Academy. Marketing Theories - Explaining The Ansoff Matrix.
https://www.professionalacademy.com/blogs/marketing-theories-explaining-the-
The definition of contemporary approaches of marketing;
ansoff-matrix/. January 26, 2022
The difference between traditional and contemporary approach of marketing; and
The identification and description of the different contemporary approaches of
May Alkhaldi, The Value Creating Strategy of Starbucks. https://digital.hbs.edu/platform-
marketing;
rctom/submission/the-value-creating-strategy-of-starbucks/. December 10, 2021
Overview
The very initial study of marketing emphasized on the allocation and trading of commodities
and manufactured goods and found its basics in economics (Marshall 1927 as cited in Vargo,
Lusch 2004). Attention was focused on commodities exchange, the establishment that made
goods available and arranged for handing over control of the goods, and the basic functions
that were required to help in the exchange transactions (Vargo and Lusch 2004). The study of
managerial marketing developed in the early 1950s. During this time, managerial theorists
defined marketing management as a process of decision-making or problem solving. This
approach emerged out of the traditional sales approach and became a broadly accepted function
of business stressing on the basics like product planning and developing, pricing, promoting
and distributing (Webster, Jr. 1992). These fundamental functions, to supply goods to final
consumers and satisfy their needs formed the marketing mix.
Emerging Types of Marketing and its Application

Contemporary Marketing Defined
Based on a 2017 report by Kleiner Perkins Caulfield and Byers, an internet trend investment
Contemporary marketing refers to marketing strategies that are consumer focused. firm, 3.4 billion people use the internet. Therefore, the internet has become an easy and quick
Contemporary marketing strategy offers products and services based on what the target market way to research, reach and engage customers.
desires rather than what the company wants them to have, thereby, offering greater support for
their customers and becoming able to take advantage of more advanced marketing funnels to o Search engine optimization is majorly concerned with increasing a business’
track progress. visibility and rankings on search engine result pages. It is a simple way of attracting
organic traffic of potential customers to a website. SEO can be maximized with paid
Marketing Strategies adverts (Google AdWords), strategic content marketing and social media networks.
o Pay per Click advertising: This is advertising presented on search engine result pages
Marketing Strategies consist of selecting a segment of the market as the company’s target or web pages where the advertiser is only charged based on the number of times
market and designing the proper “mix” of product/service, price, promotion, and distribution someone clicks on the ads to go to the advertiser's targeted website.
system to meet the want and needs of the consumers within the target market. o Email marketing is a type of marketing based on the distribution of messages through
emails. Email marketing provides direct contact with customers and allows businesses
to create relationships with their customers. Updates, exciting news, and call to actions
Contemporary Marketing Orientation vs. Traditional Marketing can be sent directly to customers.
Orientation o Referral marketing: is a type of marketing where an individual or customer pleased
with the results gotten from a product refers the product to another person. It's a very
The main difference between the contemporary marketing orientation and traditional marketing subtle form of marketing that can provide great results especially when the person
orientation is that while the former is consumer-focused, the latter is company-focused. referring is an Influencer in that industry.
Traditional marketing is concerned with pulling customers and does not really consider the o Affiliate marketing: is a prominent type of internet marketing where a third party
customer's diverse needs. Rather it is concerned with the market or industry in promotes a product and earns commission, or a piece of the profit gotten from every
which the company operates in. sale made through that referral.
o Video marketing: Videos act as one of the most interactive types of online marketing
Contemporary marketing aims for customers satisfaction in order to build a relationship with and can prove to be a great way to raise awareness about a business or product. In fact,
them. Therefore, the types of marketing strategies under contemporary marketing are according to Mushroom networks, YouTube is the second biggest search engine.
concerned with the needs of customers. Therefore, video marketing can prove to be a great way to pass messages to target
customers.
Since it first emerged as a distinct business and management phenomenon, marketing has o Inbound marketing is a very powerful contemporary marketing strategy that focuses
evolved significantly with new types of marketing to address changing trends in the market. on different tactics to draw consumers in and convince them to buy goods. It is one the
This is probably because most successful businesses use a combination of different types of result-oriented types of marketing that uses content to drive results. A key subset of
marketing whether they’re contemporary or traditional marketing strategies to get great results. Inbound marketing is Content marketing which the Content Marketing Institute refers
Business owners now see more reasons to get the best out of the functions of marketing by to as "a strategic marketing approach focused on creating and distributing valuable,
enhancing their target marketing plan example to deliver more developmental benefits. The relevant, and consistent content to attract and retain a clearly defined audience."
diversity and improvement in marketing nowadays could sometimes prompt one to wonder o Green marketing refers to the process of selling products and/or services based on
what marketing is meant to look like. Our contemporary marketing world now features
their environmental benefits. Company are selling products and/or services by first
advanced marketing skills and improved marketing mix.
promoting its benefit that is environmentally friendly or produced in an
environmentally friendly way.
Social Marketing:
For green marketing to be effective, there are three things that needs to be done:
o Focus: Benefit to society.
 Being genuine o Objective: Profit through caring for social interests.
 The company is doing what it claims to be doing in its green o When Used: Realization that no harm be made to the interest of the society.
marketing campaign and; o Dominant Era: 1990s to present day in the Western Europe.
 The rest of the business policies are consistent with whatever
the firm is doing that’s environmentally friendly. Social marketing is more popularly known as societal marketing, when a firm takes care of its
social responsibility.
 Educating the customers isn’t just a matter of letting people know that
the company is doing whatever it doing to protect the environment, but
also a matter of letting them know why it matters.
 Giving customers an opportunity to participate means personalizing

the benefits of the company’s environmentally friendly actions,
normally through letting the customer take part in positive
environmental action.
Types of Contemporary Approaches of Marketing

Kotler et.al. (Marketing Management, 13th Edition, and Pearson) has put contemporary
approaches in one term called “Holistic Marketing,” which includes relationship marketing,
integrated marketing, internal marketing, and performance marketing.
Relationship Marketing/Customer Relationship Marketing
o Focus: On whole relationship between suppliers and customers.

o When Used: To concentrate on selected customers.
o Dominant Era: 1960s to present day in the Western Europe.
o Objective: Profit through best possible customer service and building customer
loyalty.
Business Marketing/Industrial Marketing
o Focus: On industrial goods or capital goods rather than consumer products or products.
o Objective: Building and keeping relationships between organizations.
o When Used: Industrial customers are important.
o Dominant Era: 1980 to present day in Western Europe
Sources:
Written Works 3.1.2 AMAES Online Education. Principles of Marketing Module 002. Contemporary Approaches
to Marketing. Pages 1-10
Whiteside, Jupiter et.al. Principles of Marketing for Senior High School. Marketing Principles
Direction: In a yellow paper, answer the following questions. Note, the back of the paper must and Strategies. Pages 1-15
before writing your answer. WRITE LEGIBLY.
1. Which among the Contemporary Marketing Approach do you think is the best?
Explain your answer.
2. When do you use each of the Contemporary Marketing Approach? Site at least one (1)
example for each in a Philippine-based setting.
CRITERIA FOR GRADING PERCENTAGE

Completeness
All requirements must be answered 35%
Relevance
Answers should be relevant to the topic 30%
Organization and Clarity
Explanation should be well organized, arranged and must be unique 20%
Timeliness
Examples are up-to-date or timely 15%
TOTAL 100%
Understanding the Marketplace and customer needs

As a requisite, an understanding of customer needs and wants and the marketplace in which
QUARTER III they operate is necessary to be done first. We examine five core customer and marketplace
Chapter 1 Lesson 3 concepts: (1) needs, wants, and demands; (2) market offerings (products, services, and
MARKETING PROCESS experiences); (3) value and satisfaction; (4) exchanges and relationships; and (5) markets.
Understanding Customer Needs, Wants and Demands

In this lesson we will try to dig into the process for a successful marketing set-up. By this, we
In our previous lesson, we made an explicit discussion about the needs, wants and market
will be able to know the importance of customer-value and how it will lead to value from
demands. An understanding of those will lead us to the understanding of how market offerings
customers in the form of sales, profit, and long-term customer equity.
work with this requisite.
Market Offerings—Products, Services, and Experiences

Consumers’ needs and wants are fulfilled through market offerings—some combination of
The learners are expected to learn the following: products, services, information, or experiences offered to a
market to satisfy a need or a want. An example to this is
The marketing process; and Proctor and Gamble Philippine’s commercial advertisement on
The extensive discussion of the first two steps of the process; their product Old Spice. They formulated a tagline, “The smell
that never dies.” The commercial might be a bit hyperbolic but
it was actually an exaggeration implying that the smell of the
Marketing Process deodorant applied to the body will last even at the end of the day.
Market offerings are not just physical products, but also intangible products such as services,
which are activities or benefits offered for sale that are essentially intangible and do not result
in the ownership of anything. Examples include banking, airline, hotel, retailing, and home
repair services.
Market offerings also include other entities, such as

persons, places, organizations, information, and ideas.
For example, the Local Government of Palawan, has
currently introduced their new tagline “Where nature
begins and never ends,” an advertising campaign
which encourages tourists to visit the natural
resources of Puerto Princesa, Palawan. They ensured
a tight preservation of most large natural resources of
the area.
Many sellers make the mistake of paying more attention to the specific products they offer than Exchange and relationships trigger the concept of a market. It is the set of actual and potential
to the benefits and experiences produced by these products. These sellers suffer from buyers of a product or service. These buyers share a particular need or want that can be
marketing myopia. They are so taken with their products that they focus only on existing satisfied through exchange relationships.
wants and lose sight of underlying customer needs. They forget that a product is only a tool to
solve a consumer problem. A manufacturer of quarter-inch drill bits may think that the Marketing means managing markets to bring about profitable customer relationships. However,
customer needs a drill bit. But what the customer really needs is a quarter-inch hole. These creating these relationships takes work. Sellers must search for and engage buyers, identify
sellers will have trouble if a new product comes along that serves the customer’s need better or their needs, design good market offerings, set prices for them, promote them, and store and
less expensively. The customer will have the same need but will want the new product. deliver them. Activities such as consumer research, product development, communication,
distribution, pricing, and service are core marketing activities.
Customer Value and Satisfaction
Although we normally think of marketing as being carried out by sellers, buyers also carry out
Consumers usually face a broad array of products and services that might satisfy a given need. marketing. Consumers market when they search for products, interact with companies to obtain
How do they choose among these many market offerings? Customers form expectations about information, and make their purchases. In fact, today’s digital technologies, from online sites
the value and satisfaction that various market offerings will deliver and buy accordingly.
Satisfied customers buy again and tell others about their good experiences. Dissatisfied
customers often switch to competitors and disparage the product to others.
Marketers must be careful to set the right level of expectations. If they set expectations too low,
they may satisfy those who buy but fail to attract enough buyers. If they set expectations too
high, buyers will be disappointed. Customer value and customer satisfaction are key building
blocks for developing and managing customer relationships. We will revisit the concept in the
proceeding chapters.
Exchanges and Relationships
Marketing occurs when people decide to satisfy their needs and wants through exchange
relationships. Exchange is the act of obtaining a desired object from someone by offering
something in return. In the broadest sense, the marketer tries to bring about a response to some
market offering. The response may be more than simply buying or trading products and and smartphone apps to the explosion of social media, have empowered consumers and made
services. marketing a truly two-way affair. Thus, in addition to customer relationship management,
today’s marketers must also deal effectively with customer-managed relationships. Marketers
Marketing consists of actions taken to create, maintain, and grow desirable exchange are no longer asking only “How can we influence our customers?” but also “How can our
relationships with target audiences involving a product, service, idea, or other object. customers influence us?” and even “How can our customers influence each other?”
Companies want to build strong relationships by consistently delivering superior customer
value. We will revisit the concept in the proceeding chapters. The figure above shows the main elements in a marketing system. Marketing involves serving
a market of final consumers in the face of competitors. The company and competitors research
Markets the market and interact with consumers to understand their needs. Then they create and
exchange market offerings, messages, and other marketing content with consumers, either
directly or through marketing intermediaries. Each party in the system is affected by major
environmental forces (demographic, economic, natural, technological, political, and Philippines profitably targets Filipino family-oriented individuals. UKB199 targets
social/cultural). individuals who wants to experience a Korean vibe with various Korean barbecue
cuisines.
Each party in the system adds value for the next level. The arrows represent relationships that
must be developed and managed. Thus, a company’s success at engaging customers and Ultimately, marketing managers must decide which customers they want to target and,
building profitable relationships depends not only on its own actions but also on how well the on the level, timing, and nature of their demand. Simply put, marketing management is
entire system serves the needs of final consumers. Walmart cannot fulfill its promise of low customer management and demand management.
prices unless its suppliers provide merchandise at low costs. And Ford cannot deliver a high-
quality car-ownership experience unless its dealers provide outstanding sales and service. Choosing a Value Proposition
The company must also decide how it will serve targeted customers—how it will
differentiate and position itself in the marketplace. A brand’s value proposition is the
Designing a Customer-Value Driven Marketing set of benefits or values it promises to deliver to consumers to satisfy their needs.
Customer-Value Driven Marketing For Example, Coca-Cola promotes to “live the Coke for life,”
promising the people to provide refreshment in their body and
Once we fully understand consumers and the marketplace, marketing management can design a spirit. With this, they invite people to create a positive life
customer value–driven marketing strategy. We define marketing management as the art and with their Coke that provides happiness in each bottle of it.
science of choosing target markets and building profitable relationships with them. The
marketing manager’s aim is to engage, keep, and grow target customers by creating, delivering, Such value proposition differentiates one brand from another. They answer the
and communicating superior customer value. customer’s question: “Why should I buy your brand rather than a competitor’s?”
Companies must design strong value propositions that give them the greatest
To design a winning marketing strategy, the marketing manager must answer two important advantage in their target markets.
questions: What customers will we serve (what’s our target market)? And How can we serve
these customers best (what’s our value proposition)? Preparing an Integrated Marketing Plans and Programs
Selecting Customers to Serve The company’s marketing strategy outlines which customers it will serve and how it will create
value for these customers. Next, the marketer develops an integrated marketing program that
The company must first decide whom it will serve. It does this by dividing the market will actually deliver the intended value to target customers. The marketing program builds
into segments of customers (market segmentation) and selecting which segments it will customer relationships by transforming the marketing strategy into action. It consists of the
go after (target marketing). Some people think of marketing management as finding as firm’s marketing mix, the set of marketing tools the firm uses to implement its marketing
many customers as possible and increasing demand. But marketing managers know strategy. We will attempt to put emphasis on its detail in later chapters.
that they cannot serve all customers in every way. By trying to serve all customers,
they may not serve any customers well. Instead, the company wants to select only
customers that it can serve well and profitably.
For example,
Jollibee Foods
Corporation in the
Sources:
Written Works 3.1.3

The Coca-Cola Company. Purpose and Vision.
https://www.coca-colacompany.com/company/purpose-and-vision#:~:text=Our
Direction: In a yellow paper, answer the following questions. Note, the back of the paper must %20vision%20is%20to%20craft,lives%2C%20communities%20and%20our
be clean. You can use multiple papers as you want. Write the question first in your paper %20planet. January 27, 2022
Kotler, Philip et.al (2017). Principles of Marketing 17th Edition. Marketing: Creating Customer
Value and Engagement. pages 30-38
1. What are the different marketing mix? How are they connected to the preparation of an
integrated marketing plan?
2. Into what happening does marketing myopia occurs?
3. Search for a Philippine-based establishment (aside from the examples given in this
module), and identify the following:
a. SEC/DTI-registered name of establishment (e.g. Coca-Cola Bottlers Philippines

Inc.)
b. Owner of Establishment
c. Company’s vision and mission
d. Market offerings
e. Market segmentation/Targeted markets
f. Market’s value proposition

Completeness
Relevance
Timeliness
TOTAL 100%
every Sainsbury’s branch to ensure convenience in shopping for customers. While the
in-stores catalogs are still in use at Argos stores, the centers have been radically
transformed
Performance Task 3.1 into hi-tech outlets and “digital” stores. The idea behind all these changes is that the
customers of today are more informed and deserve the best. Argos’s approach is to
ensure that value creation for customers permeates every phase of the organization’s
CASE STUDY: Analyze the situation provided and accomplish the requirements needed. activities.
Write your answer in a yellow paper. Note, the back of the paper must be clean. You can use
multiple papers as you want. Write the question first in your paper before writing your answer. Catalog Retailing
WRITE LEGIBLY.
Although Argos is noted for a number of things in the British retail sector, its core
Argos: Creating Customer Value amid Change and Turbulence hallmark is its consistent focus on the satisfaction of the needs and wants of its target
(Philip Kotler et.al.) customers. This is not only ensured through the thousands of products that it offers its
customers both online and across its various stores in the country, but also in all the
One of the biggest news items in the UK retail sector recently was the £1.4 billion phases that encapsulate the customers’ experience in their transactions, from placing
acquisition in September 2016, of Home Retail Group, the parent company of Argos, the order to receiving the items. Argos’s focus on catalog retailing is based on its quest
by Sainsbury’s, one of the leading British supermarkets. Unsurprisingly, the highlights to satisfy customers through convenience. The idea is to make it easier for customers to
of this business decision are the huge sum involved and the associated risk in the meet their needs, especially as the company deals in a variety of products. The shopper
complex marketing environment. So why was this considered a good decision, checks the catalog, places the order, and receives it shortly afterwards. So, its twice-
especially after the British referendum in favor of leaving the European Union (EU) yearly catalog and internet site aid the way the establishment creates value for its
and the uncertainty in the business environment that follows? customers.
The key answers to these questions are not hard to find. The deal makers can see the Market Offerings
gold in the rack record of the organization. Argos, the leading UK digital retailer, was
established in July 1973 as the United Kingdom’s first catalog retailer with only 17 The assortment of products offered by Argos to its various customers across the
stores; it now has over 750 stores throughout the United Kingdom and the Republic of country illustrates the core value that it offers its target market. The organization is
Ireland, serving over 130 million customers annually. Approximately one-third of the noted for offering a wide range of products that are categorized on its websites to make
UK population shops in an Argos store annually, buying one thing or another. Even shopping easy for its online visitors. For example, customers who are interested in
before the agreement on the takeover deal, 10 Argos outlets that opened in Sainsbury’s products such as TVs, telephones, or computers would simply need to click on the
stores already had a record 30 percent sales increase, and the takeover is expected to “Technology” link to be ushered into the world of these gadgets. Similarly, there are
result categories for “Home and Garden,” “Sports and Leisure,” “Clothing,” “Health and
in annual savings of £160 million. As part of its attempts to create value for its Beauty,” “Toys,” and many more.
customers, Argos has undergone remarkable changes in the 21st century. The design
makeover has turned the tatty faux-wooden floorboards and display cabinets into tiled One critic noted that Argos’s focus is on being a “working class” brand, implying that
floors and LED display boards for easy shopping. It is thus not surprising that Argos their customers are mainly less well-off. However, former CEO John Walden disagrees
was valued so highly by Sainsbury’s. Ultimately, the plan is to have an Argos center at with this customer stereotype and insists that while this may have been true five years
earlier, things have now changed at Argos; the company now targets all demographics. Same-Day Delivery
Beyond the rhetoric of who their customers actually are is the issue of keeping those
customers satisfied with seasoned products and excellent customer service. This has As the retail environment in the United Kingdom becomes more competitive, Argos
been strategically identified by John Rogers, the new CEO of Argos, as the cornerstone also continues to explore various means of maintaining and improving its market share.
of his approach in marketing after taking over the job. The core objective is to ensure To this end, the management has set a long-term goal of having 250 Argos collection
not only that the customers are encouraged to shop at Argos but that they are motivated points that will be located within Sainsbury’s to ensure that customers get their ordered
to stay loyal even when the competition tries to entice them. For example, Tesco has a items more quickly than before the acquisition of the firm—which, according to Mike
strong plan in place to price-match best-selling toys by the end of this year. This is Coupe, the CEO of Sainsbury’s, was meant to give customers more choice in their
clearly in direct competition with Argos. The retailer’s mainstay is the continuous purchasing decisions and make life easier for them.
effort to clearly outperform competitors like Tesco and Amazon in meeting customers’
needs and addressing their concerns. In 2015, Argos introduced a striking and daring policy—its “Same-Day Delivery”
service. As the name suggests, a customer could now order the desired products and get
them immediately in the store or delivered at home on the same day through a “fast
tracked” option. This quickly became a very popular strategy and was considered a
good gesture among the customers. It not only reinforced loyalty among the
organization’s current clientele but also wooed others keen on efficiency in the
marketplace. As the company experienced increase in demand, it also realized that this
would require a commensurate increase in resources, hence the recent increase in its
delivery vans to about 800 and the 30,000 people employed in different areas of the
organization, including customer service, packaging, and order delivery, across its 845
stores. In the run up to Christmas sales in 2016, Argos reportedly hired several
additional seasonal staff, adding to the current number.
Digital Retailing
Developments in the world of technology are transforming businesses in various

sectors, and retailing is no exception. Based on data from the food and grocery research
charity IGD, 5 percent of grocery sales in the United Kingdom are done online. This
small figure is due to a variety of challenges associated with this transaction mode, but
this is very likely to improve over time. As a key organization in the retail sector in the
digital age, Argos is also working toward transforming itself into a “click and collect”
business. Toward the end of 2012, Argos announced its mission to rediscover itself as a
digital retail leader. John Coombe, the chairman of Home Retail, Argos’s parent
organization, remarked that Argos is not only an icon of the British high street but also
a leading player in the digital transformation of UK retailing business. In June 2016, a
report indicated that
Argos’s Internet sales had gone up by 16 percent, the strongest record in three years. It is tempting to conclude that Argos’s focus on maximizing customer value is
Around the time Argos was being sold to Sainsbury’s, John Walden debunked the view predominantly driven by profit. However, evidence suggests that the company does
that being digital would be like operating a traditional retailing outfit with just one believe in taking responsibility for the environment, improving the local communities,
store. According to him, it would still involve hiring people, bringing stock in, and pursing a number of initiatives that revolve around long-run benefits for customers
expanding, and upgrading. Around 60 percent of Argos’s sales are now done as online and society. Argos is focused on reducing the amount of resources used in its
transactions, which is also closely linked to the fact that the organization is the first operations and the CO2 (carbon dioxide) emissions it produces. It clearly
retailer in the United Kingdom to make over £1 billion through mobile payments. Its communicates its green credentials on its web pages. Apart from its catalog, which is
hefty catalogs are being replaced by iPad-style terminals to facilitate order processing. 100 percent recyclable, it sources the paper it uses from sustainably managed forests
All of this has helped Argos make a seamless entry into the digital world in retail and encourages customers to recycle old catalogs in their possession as these have
business. proven useful to newspaper print manufacturers. According to the firm, it has already
been able to recycle 91 percent of waste from the business, had a 9 percent reduction in
Special Offers its carbon footprint, ensured a 35 percent reduction in the waste sent to landfill, and has
established a goal to reduce its CO2 emission per square foot by 40 percent by the year
Argos’ commitment to delighting its customers is not only evident in the increasing 2020. Argos’s impacts in the local community are also notable: it supports various
range of products it offers its customers and the sleek distribution system, but also in charities and other related organizations, and it specifically chose Macmillan Cancer
the various promotional programs it offers. Some of these are offered to existing loyal Support as its charity of the year from 2015 to 2017. Argos has shown that it is quite
customers through the Argos loyalty card scheme while others are to attract new possible to create value for customers and still build relationships with stakeholders.
customers. Periodically, it sends its customers various promotional offers, money-off
vouchers, and other financing offers. When Black Friday hit the UK high street and its Questions:
public awareness grew, Argos was quick to explore the opportunity through various
special price-cut offers that also attracted a response from many new and existing 1. To what extent do you think the acquisition of Argos by Sainsbury’s resulted in
delivering superior value to customers?
customers. About 12 million customers reportedly visited the company’s website on
the 2015 Black Friday, resulting in 18 purchases in a second. The expectation for 2016 2. How is the concept of share of customer illustrated in the case study?
is that around 38 percent more sales than what was recorded for the previous year will
have been made. John Rogers also estimates that at least 70 percent of its orders will be 3. To what extent would you agree with the claim that Argos’s marketing management
taken online on Black Friday while normal trading will account for 50 percent. The orientation is a marketing concept? Justify your standpoint with relevant points from
Argos gift voucher promotions, which are managed by the company’s affiliates, offer the case study.
its customers
something to fall back on during their various subsequent purchases. The periodic 4. What are the key actions taken by Argos that show that the organization is following
product-specific special offers on certain products like furniture, computers, and TVs the changing marketing landscape?
also constitute part of the package that keeps Argos’ stores busy over the years, and
with this, it generates customer value profitably. 5. In view of the stiff competition in the UK retail sector, suggest various ways by which
Argos could continue to provide better value to its customers.
Argos and Society
QUARTER III
Chapter 2 Lesson 1
Completeness CUSTOMER RELATIONSHIP MANAGEMENT
Relevance
Answers should be relevant to the topic 30% Customer service is the support you offer your customers — both before and after they buy
Organization and Clarity your product — that helps them have an easy and enjoyable experience with you. It is more
Explanation should be well organized, arranged and must be unique 20% than just providing answers; it is an important part of the promise your brand makes to its
Timeliness customers. In addition, it is a critical to the success of your business.
TOTAL 100%

Source: The definition of customer relation and customer relationship management;
The stages of customer relationship;
Kotler, Philip et.al (2017). Principles of Marketing 17th Edition. Marketing: Creating Customer The concept of customer(-perceived) value, customer satisfaction;
Value and Engagement. pages 59 The ways to build an effective customer relationship;
The concept of customer-engagement marketing;
The concept of gaining value from customers; and
The customer relationship groups.
Engaging Customers and Managing Customer Relationship

The first three steps in the marketing process lead up to the fourth and most important step:
engaging customers and managing profitable customer relationships. We first discuss the
basics of customer relationship management. Then we examine how companies go about
engaging customers on a deeper level in this age of digital and social marketing.
Customer Relationship
Customer relationship are ways in which a company communicates and deals with existing
customers. It is the development of an ongoing connection between a company and its
customers. It involves marketing communications, sales support, technical assistance and Remember special occasions. Send regular customers birthday cards, anniversary
customer service. It is measured by the degree of customer satisfaction through the buying cards, holiday cards. We can name more of it. Gifts are excellent follow-up tools, too.
cycle and following receipt of goods or services. We don't have to spend a fortune to show our care; use our creativity to come up with
interesting gift ideas that tie into our business, the customer's business or his or her
This relationship between supplier and customer is not a personal relationship or a one-time recent purchase.
transaction relationship; for example, buying a refrigerator from a consumer’s outlet would not
be called as a relationship. Pass on information. If we read an article, see a new book, hear about an organization
a customer might be interested in, drop a note, or make a quick call to let them know.
Relationship between any two parties is actually the interaction or transaction done between
the two over-times or consists of a continuous series of synergetic episode of interaction many Consider follow-up calls business development calls. When we talk to or visit old
times. This relationship only exists when the two parties diverge from a state of autonomy to clients or customers, we will often find they have referrals to give us, which can lead to
mutual or interdependent. Occasionally having a cup of tea from a café does not mean that new business.
there is a relationship. If the customer returns to the café and orders the same tea again because
he likes the environment and taste or the method of making tea, it more looks like a With all those existing customers that can do for us, there is simply no reason not to stay in
relationship. regular contact with them. Use our imagination, and we'll think of plenty of other ideas that can
help us develop a lasting relationship.
When it comes in increasing profits, it is tempting to concentrate on making new sales or
pursuing bigger accounts. However, attention to your existing customers, no matter how small Stages of Customer Relationship
they are, is essential to keeping your business thriving. The secret to repeat business is
following up in a way that has a positive effect on the customer. There are several effective
ways to follow up that ensure your business is always in the customer's mind.
Let customers know what you are doing for them. This can be in the form of a
newsletter mailed to existing customers, or it can be more informal, such as a phone
call. Whichever method we use, the key is to dramatically point out to customers what
excellent service we are giving them.
Write old customers personal, handwritten notes frequently. “I was just sitting at
my desk, and your name popped into my head. Are you still having a great time flying
all over the country? Let me know if you need another set of luggage. I can stop by
with our latest models anytime.” On the other hand, if you run into an old customer at
an event, follow up with a note: “It was great seeing you at the CDC Christmas party.
I'll call you early in the new year to schedule a lunch.”
Keep it personal. Voice mail and e-mail make it easy to communicate, but the
personal touch is lost. We should not count these as a legitimate follow-up. If we are
having trouble getting through, we can leave a voice-mail message that we want to talk
to the person directly or will stop by his or her office at a designated time.
 Commitment - Commitment is a powerful stage when suppliers learn to adapting
business rules and goal to excel.
 Dissolution - Dissolution is a stage when customer requirement suddenly changes and

he looks for better perspectives. This sudden change is the end of relationship.
Relationship can end due to many reasons like – customer is not satisfied with the services of
supplier or customer diverges to other better brands and products. Suppliers can also prefer to
break relationships due to customer failing to be a part to increase sales volume or when the
suppliers are entangled with fraud cases.
Broadly, there can be two distinguished attributes of a developed relationship between supplier
and customer:
 Trust: Trust means confidence and security in any relationship and can be treated as
the biggest investment in building long term relationships. Trust is developed between
the two parties when they experience flawless and satisfied motives between each
other. As a result of knowing more about each other, all the doubts and risks are
minimized and leads to inevitably smooth business. Lack of trust on the other hand
weakens the relationship foundation and chances of uncertainty and conflicts increases.
 Commitment: Commitment is yet another milestone that should be achieved to set a

Relationship with customers can change from time to time because it evolved under long-term mutual relationship. Commitment can only be attained when there is mutual
distinguished situations. The following are the stages from where the relationship with trust and the two parties share each
customers can evolve.
 Values of Others. In a committed relationship both suppliers and customers strive to
 Exploration - Exploration is the process when customer investigates or tests the uphold the relationship and never want to exit which in turn results in building the
supplier’s capabilities and performance or cross verifies the product or brand’s relationship stronger and sharper. There is, in fact, huge cost which is incurred in
usefulness. If the test results fail to satisfy customer’s demands, the relationship can switching from committed relationships of one supplier and build new relationships
drastically end. with other suppliers from scratch.
 Awareness - Awareness is the process when the customer understands the Relationship is always mutual or reciprocal so it is important for both supplier and customers
motivational values of supplier or the products he sells. to stick to common guideline to attain better relationship among each other. There is lot of
involvement of cost, efforts and time in striving developed relationships between the two
 Expansion - Expansion is the process when the supplier wins customer’s faith and parties but the outcome is always inevitable.
customer falls under huge interdependence of the supplier. This is time when there are
more chances of business with that particular customer and expand business.
Customer Relationship Management (CRM)
Airways. However, a company doesn’t need to have over-the-top service to create customer
Customer relation management is a term that refers to practices, strategies and technologies delight. For example, Realme phones gains high satisfaction rate due to a quality product at an
that companies use to manage and analyze customer interactions and data throughout the affordable price, even though only its charger and ser manual are its inclusive accessory which
customer lifecycle, with the goal of improving business relationships with customers, assisting lessened the cost of their product. Realme’s very low pricing on good-quality products delights
in customer retention and driving sales growth. In the broadest sense, customer relationship customers and keeps them coming back. Thus, customer satisfaction comes not just from
management is the overall process of building and maintaining profitable customer service heroics but from how well a company delivers on its basic value proposition and helps
relationships by delivering superior customer value and satisfaction. It deals with all aspects of customers solve their buying problems.
acquiring, engaging, and growing customers.
Although a customer-centered firm seeks to deliver high customer satisfaction relative to
Relationship Building Blocks: Customer Value and Satisfaction competitors, it does not attempt to maximize customer satisfaction. A company can always
increase customer satisfaction by lowering its prices or increasing its services. But this may
The key to building lasting customer relationships is to create superior customer value and result in lower profits. Thus, the purpose of marketing is to generate customer value profitably.
satisfaction. Satisfied customers are more likely to be loyal customers and give the company a This requires a very delicate balance: The marketer must continue to generate more customer
larger share of their business. value and satisfaction but not “give away the house.”
However, attracting and retaining customers can be a difficult task. Customers often face Customer Relationship Levels and Tools
various products and services from which to choose. A customer acquires from the firm that
offers the highest customer-perceived value—the customer’s evaluation of the difference Companies can build customer relationships at many levels, depending on the nature of the
between all the benefits and all the costs of a market offering relative to those of competing target market. At one extreme, a company with many low-margin customers may seek to
offers. Importantly, customers often do not judge values and costs “accurately” or develop basic relationships with them. For example, P&G’s Tide detergent
“objectively.” They act on perceived value. does not phone or call on all of its consumers to get to know them personally.
Instead, Tide creates engagement and relationships through product
To some consumers, value might mean quality products at experiences, brand-building advertising, websites, and social media. At the
affordable prices. To others, however, value might mean other extreme, in markets with few customers and high margins, sellers want
paying more to get more. For example, Louis Vuitton bags to create full partnerships with key customers.
– any type of bags – costs a lot. But to those who own one,
Louis Vuitton’s bag is a great value. Louis Vuitton bags Marketers can use specific marketing tools to develop stronger bonds with customers. For
uses some of the finest materials and craftsmanship to example, many companies offer frequency marketing programs that reward customers who buy
create their designer bags. Mostly, they use coated canvas, frequently or in large amounts. Airlines offer frequent-flier programs, hotels give room
leather, and exotic skins. The hardware of the bag consists upgrades to frequent guests, and supermarkets give patronage discounts to “very important
or either brass or gold. customers.”
Customer satisfaction depends on the product’s perceived performance relative to a buyer’s Building an Effective Customer Relationships
expectations. If the product’s performance falls short of expectations, the customer is
dissatisfied. Otherwise, the customer is satisfied. If performance exceeds expectations, the Building relationships with customers is critical to our business's success. Thus, it is very
customer is highly satisfied or delighted. important to formulate effective strategies that will help customer value. Below are some
strategies that is effective in building customer relationship:
Other companies that have become legendary for customer delight and their service heroics
include Zappos.com, Amazon.com, Chick-fil-A, Nordstrom department stores, and JetBlue
 Interact directly with customers. This might mean putting on special events, calling The digital age has set a new customer-relationship building tools. Before, companies focused
a customer to let her know that the style she's looking for is now in stock or simply mostly on mass marketing in broad segment of customers at arm’s length. However, today’s
spending time chatting with customers about topics that aren't necessarily related to companies are using online, mobile, and social media to refine their targeting and to engage
business. customers interactively. The old marketing is involved in marketing brands, but new marketing
is a customer-engagement marketing – fostering direct and continuous customer-
 Vary the type of communications being sent to customers. All too often, the only involvement in shaping brand conversations, brand experiences, and brand community. Its goal
mail a customer receives from a company is promotional. Send emails and direct mail is to make the brand a meaningful part of consumers’ conversations and lives.
that provides notice of special events, helpful tips or that offer a reward or freebie. This
approach can help us get back on customers' radar when they've been feeling With the help of social media, consumers became more informed, more connected, and more
overwhelmed by too aggressive approach. empowered than ever before. The greater consumer empowerment means that companies can
no longer rely on marketing by intrusion. Instead, we practice marketing by attraction. creating
 Strive to genuinely improve our customers' lives. First Interstate Bank provides a market offerings and messages that engage consumers rather than interrupt them. Hence, most
good model for developing customer relationships. FIB employees will tell customers marketers now combine their mass-media marketing efforts with a rich mix of online, mobile,
where they can get the best loan, even if it is at a competing bank, according to a 2001 and social media marketing that promotes brand–consumer engagement, brand conversations,
report compiled by the U.S. Department of Health and Human Services. Progressive and brand advocacy among customers.
Insurance also follows this model. As a result, these companies enjoy plenty of return
business because they have cultivated an atmosphere of transparency and trust. Consumer-Generated Marketing
 Hire people who genuinely care about our company and customers. Frontline This is one form of customer-engagement marketing by which consumers themselves play role
employees, especially, will help a customer form an opinion about the company - in shaping their own brand experiences and those of others. This might happen through
including whether she wants to continue doing business with it. Cultivate an uninvited consumer-to-consumer exchanges in blogs, video-sharing sites, social media, and
environment in which customers experience consistent excellent customer service to other digital forums. But increasingly, companies themselves are inviting consumers to play a
facilitate ongoing relationships. more active role in shaping products and brand content.
 Solicit customer input when making changes to our products or services. This Some companies go directly to their customers for new product ideas and designs. An example
approach helps customers feel invested in the company and that their opinion is valued. to this is Nestle, which supports new ideas that can help that helps them address some of
Asking for customers' opinions and ideas is a trend that companies are well-advised to sustainability’s most difficult problems to bring innovations for social entrepreneurship. They
follow, as there are potentially large gains to be made, states management expert Bo do these in many ways. But the most common is through a survey from their social media nad
Edvardsson in his book, "Involving Customers in New Service Development." website.
 Use social media to stay on customers' radar. Offer specials available only to online Partner Relationship Management
followers or friends, interesting tidbits about our business and events in which our
business is participating. With their permission, take photos of customers and post When it comes to creating customer value and building strong customer relationships, today’s
them on our social media page. Customers will check in to see who's being featured, marketers know that they can’t do it alone. They must work closely with a variety of marketing
and our business will generate buzz. partners. In addition to being good at customer relationship management, marketers must also
be good at partner relationship management—working closely with others inside and
outside the company to jointly engage and bring more value to customers.
Customer-Engagement and Today’s Digital and Social Media
Capturing Value from Customers
In order to improve customer share, they can offer greater variety to current customers. Or they
The final step in the process of marketing involves capturing value from customer. The first can create programs to cross-sell and up-sell to market more products and services to existing
four step mainly focus in engaging customers and building customer relationships by creating customers.
and delivering superior customer value. This last step will be a return of efforts in the form of
sales, market share, and profits. Building Customer Equity
Creating Customer Loyalty and Retention The main goal of customer relationship management is to produce high customer equity.
Customer equity is the total combined customer lifetime values of all of the company’s
Customer satisfaction is created through good customer relationship management. In return, current and potential customers. As such, it’s a measure of the future value of the company’s
satisfied customers remain loyal and talk favorably to others about the company and its customer base. Customer equity may be a better measure of a firm’s performance than current
products. Studies show big differences in the loyalty between satisfied and dissatisfied sales or market share. Whereas sales and market share reflect the past, customer equity
customers. Even slight dissatisfaction can create an enormous drop in loyalty. Thus, the aim of suggests the future.
customer relationship management is to create not only customer satisfaction but also customer
delight. Building the Right Relationships with the Right Customers
Loyal customers spend more and stay around longer. Conversely, customer defections can be Companies have to view customers as assets that need to be managed and maximized.
costly. Losing a customer means losing more than a single sale. It means losing the entire But not all customers are good investments. Even if they are considered as loyal
stream of purchases that the customer would make over a lifetime of patronage. It is very because some loyal customers can be unprofitable, and some disloyal customers can be
important to put into notice the customer lifetime value – the value of the entire stream of profitable. Now, which customers should the company acquire and retain?
purchases a customer makes over a lifetime patronage.
Computation of Customer Lifetime Value (CLTV)
CLTV =PV × PR × RT
Where:
PV =average peso value of a sale to a particular customer or customer
Group
RP =number of purchases repeated in a year
RT =retention time in months or year
Growing Share of Customers

Customer Relationship Group
Aside from the retention of customers, good customer relation management can give help to
marketers to improve their share of customer – the share they get of the customer’s Butterflies are potentially profitable but not loyal. There is a good fit between the
purchasing in their product categories. company’s offerings and their needs. However, like real butterflies, we can enjoy them
for only a short while and then they’re gone. Efforts to convert butterflies into loyal
customers are rarely successful. Instead, the company should enjoy the butterflies for
the moment. It should create satisfying and profitable transactions with them, capturing
as much of their business as possible in the short time during which they buy from the
company. Then it should move on and cease investing in them until the next time
around.
Written Works 3.2.1
True friends are both profitable and loyal. There is a strong fit between their needs and
the company’s offerings. The firm wants to make continuous relationship investments
to delight these customers and engage, nurture, retain, and grow them. It wants to turn Direction: In a yellow paper, answer the following questions. Note, the back of the paper must
true friends into true believers, who come back regularly and tell others about their be clean. You can use multiple papers as you want. Write the question first in your paper
good experiences with the company. before writing your answer. WRITE LEGIBLY.
Barnacles are highly loyal but not very profitable. There is a limited fit between their
needs and the company’s offerings. Like barnacles on the hull of a ship, they create 1. When do consider ourselves as companies that provides customer value and why?
drag. Barnacles are perhaps the most problematic customers. The company might be
able to improve their profitability by selling them more, raising their fees, or reducing 2. How is customer acquisition and customer retention related to customer relationship
service to them. However, if they cannot be made profitable, they should be “fired.” management?
Strangers offer only low potential profitability, and also little projected loyalty because 3. Site a real-life example in a Philippine set-up of each of the customer relationship
the gap between the company’s offerings and the strangers’ needs is just too large. groups.
They simply do not fit the company’s offerings, and consequently are not profitable.
So, the relationship management strategy for strangers is rather simple: don’t invest 4. Compute for the CLTV: “An athlete spends P2,000.00 for every visit to a spa and goes
anything in them, which is to say that strangers should be dropped immediately. to the spa twice a month for an expected time period of five year.”
The point here is an important one: Different types of customers require different engagement CRITERIA FOR GRADING PERCENTAGE
and relationship management strategies. The goal is to build the right relationships with the Completeness and correctness
right customers. All requirements must be completely and correctly answered 35%
Relevance
Timeliness
TOTAL 100%
Source:
Kotler, Philip et.al (2017). Principles of Marketing 17 th Edition. Managing Customer

Relationships and Capturing Customer Value. pages 38-46 QUARTER III
Chapter 2 Lesson 2
AMAES Online Education. Principles of Marketing Module 003. Customer Relationship.
Pages 1-8 CUSTOMER SERVICE STRATEGIES
AMAES Online Education. Principles of Marketing Module 004. Relationship Development
Strategies. Pages 1-4 What is the most important thing we can do to improve relationships with our customers? The
answer is as obvious as it is overlooked: improve customer service. No matter how great our
Daguit, Maridel et.al. Principles of Marketing for Senior High School. Marketing Principles product is or how talented our staff is, one of the things that customers are most likely to
and Strategies. Page 23 remember is the direct interaction they have with our company.
Handbagholic. What are Louis Vuitton Bags Made Of?

https://www.handbagholic.co.uk/blog/what-are-louis-vuitton-bags-made-of/. January Learning Objectives:
27, 2022
Nestle. Supporting innovative ideas. https://www.nestle.com/csv/what-is-csv/nestleprize.
January 27, 2022 Ways to improve team’s customer service skills;
Different customer service strategies; and
Maximillian Claessens. Customer Relationship Groups: Building the Right Relationships with The customer care needed in the Philippine Business Enterprise.
the Right Customers. https://marketing-insider.eu/customer-relationship-groups/.
January 28, 2022
Overview
Andrew Kucheriavy. How to Calculate Customer Lifetime Value (CLV) to Market to High
Value Customers. https://www.intechnic.com/blog/how-to-calculate-customer-lifetime-value- A strong company will already have great customer relationships. But a smart company will
clv-to-market-to-high-value-customers/. January 28, 2022 always be asking “What is good customer service?” If we are not constantly on the lookout for
opportunities to improve our customer service, then our relationships will stagnate. Here are a
few customer-service tips for identifying ways to better serve customers.
Keys to Improve our Team’s Customer Service Skills

Strengthen customer service skills
First, it’s important to make sure that our customer service team has the right skills for our
managing customers’ needs. No amount of CRM software can compensate for shortcomings in
this area. But what skills should we be looking for in a customer service rep?
Empathy, patience and consistency. Some customers will be irate. Others will be full demonstrated consistently. Pay the most attention to key touch points, but make sure we have a
of questions. And others will just be chatty. We must know how to handle all of them full view of the customer experience, or we risk lapses in service that can really hurt business.
and provide the same level of service every time.
Improve our customer interactions
Adaptability. Every customer is different, and some may even seem to change week-to-
week. We should be able to handle surprises, sense the customer’s mood and adapt If our staff has the necessary skill set, that’s a good start. But they still need to relate to our
accordingly. This also includes a willingness to learn– providing good customer customers. Here are some tips for making sure customer service is both thorough and well
service is a continuous learning process. received:
Clear communication. Ensure we convey to customers exactly what we mean. We Ask reps to try to identify a common ground–like shared interests–with the people they
don’t want our customer to think he’s getting 50% off when he’s actually getting 50% help. Having this point of understanding makes conflict easier to overcome by
more product. Use authentically positive language, stay cheerful no matter what and humanizing the relationship, and it endears customers to our rep, and ultimately our
never end a conversation without confirming the customer is satisfied. company.
Work ethics. Customers appreciate a rep who will see their problem through to its Practice active listening so our customers feel heard. Clarify and rephrase what the
resolution. At the same time, we must have good time management skills and not customers say to ensure we understand them. Empathize with and reflect their feelings
spend too much time handling one customer while others are waiting. Stay focused on by saying things like, “That must have upset you” or “I can see why you feel slighted.”
our goals to achieve the right balance.
Admit our mistakes, even if we discover them before our customers do. This builds
Knowledge. Ultimately our customers rely on us for their knowledge of our product. trust and restores confidence. It also allows us to control the situation, re-focus the
Stay informed enough to respond to most inquiries and know where to turn if the customer’s attention and resolve the issue.
questions become too detailed or technical for us to answer. But don’t be afraid to say
“I don’t know” either. Customers will appreciate the honesty and our efforts to find the Follow-up after a problem is solved. Make sure the issue stays fixed and that our
right answer. customers were satisfied with the service. Sending an email, or even a feedback survey
is an excellent way to let the customer know we’re still on their side.
Thick skin. “The customer’s always right,” right? The ability to swallow one’s pride
and accept blame or negative feedback is crucial. Whether our team works directly Enhance our customer service strategy
with customers or looking for feedback on social media, they’ve got to keep the
customer’s happiness in mind. Our staff may have the skills and know-how to interact with our customers. But what
Not sure if our reps have the right customer service skills? Survey or interview our organizational strategies can we employ to please customers? Practice proactive customer
customers to understand whether our service team is showing each of these traits. service by making our customers happy before they come to us with problems. Here’s how:
Running a customer feedback survey through our CRM program, at the point of sale,
or when we send customers an invoice is a great way to see where our team’s skills do Get personal. Our customers want to feel like they have access to real people, not bots
and don’t measure up. and FAQs. Offer more than just automated email responses, and do not let our
telephone prompts or website send them down a rabbit hole. Take full advantage of
Look at every touch point social media, such as Facebook, Twitter and Help, and write responses when our
customers post on our page. Post photos and bios on our website. This shows our
A bad customer experience at any point in the customer lifecycle can ruin our relationship. In customers that we are real people working on their behalf.
addition to making sure the right skills are demonstrated, we need to be sure they’re being
Be available. Part of the personal touch is making sure our customers can reach us. For No matter how proactive we are, we’ll never be able to get in front of every customer issue. To
example, if our business is primarily online, meet in person occasionally with local make sure we learn about the good, the bad, and the ugly experience our customers have,
customers and offer video calls, such as Skype, for those farther away. Work early and create an easily accessible way for customers to give feedback.
late when needed, especially if our customers are in different time zones. Even
providing customers with our physical address helps build their trust and reminds them Whether it’s a phone survey at the end of a service call, an email survey sent directly from our
that our company exists off the internet as well. CRM tool, or a form on the “Contact Us” page of our website, creating a means for customers
to give feedback makes it easier for us to learn what needs improvement. It also helps keep
Cater to our customers. Make sure we are fully meeting our customers’ needs. unhappy customers from voicing their displeasure on highly visible places like our social
Consider assigning reps to specific customers so they can build a relationship. Offer media pages.
VIP treatment for our best customers to let them know they are appreciated. What
special services might our customers like? Set up focus groups, interview customers, or Whatever steps we choose to take, remember feedback’s importance to customer satisfaction.
run a survey to get ideas. Unsure what our strengths and weaknesses are? Don’t know why the numbers are dipping?
Make an effort to get closer both to our customers and our reps.
Create communities. Our customers will feel even more valued if we treat them as
important members of a community. We can bring various customers together in Not only will we discover touchpoints and skills that need improvement, but our customers
numerous ways, including webinars, interactive websites, social media, trade shows will see that are dedicated to providing top-notch, proactive customer service.
and conventions. And don’t forget that while our customers come to these forums to
learn from us, we can learn as much–if not more–from them.
Make sure our reps are engaged

Steps to Improve Customer Service
We can have the best customer service skills and the best training in the world, but if our reps
are checked out, it won’t matter at all. Improving employee engagement is another way to Give all our employees excellent product knowledge
make sure customers have a great experience. Dissatisfied employees are unlikely to come
forward with their problems, so consider an anonymous suggestion box or an employee When everyone in our company can act as support, customers can get their questions answered
engagement survey to see what makes our employees tick. promptly.
We’ll want to know how our customer service team feels about working conditions and Saving our customers a call to the help desk goes a long way toward making them happy.
compensation, opportunities for career advancement, training and their peers. Our employee
engagement template offers a good overview. We’ve also compiled benchmark engagement Train employees in customer empathy
data to help us understand how our employees’ engagement compares to other companies.
Customer interactions are emotional exchanges as well as factual ones, so give our employees
Since engagement can vary from industry to industry, we may also want to look at more the tools to share a happy customer’s enthusiasm or reduce a frustrated customer’s tension.
specific data through a service like SurveyMonkey Benchmarks.
When our staff members make customers feel truly listened to and not simply heard, customer
Give our customers a way to provide feedback satisfaction rises. We can try proven methods which have led to better customer empathy in
call centers.
Build infrastructure that supports great customer service
Setting things right quickly for our customer will go a long way toward restoring that low-
That means offering ticket tracking, streamlined self-help options on our website and call- effort experience our clientele prefers. If you give our customers the most effortless
backs instead of lengthy hold times. experience, they’ll choose us over the competition every time.
Customers perceive looking up a tracking number or reading frequently asked questions as less Effective, Long-Term Customer Service Strategies in a Philippine
effort than calling a customer care center, so offering these options increases satisfaction.
Business Setting
Resolve customer issues at their first point of contact
The immediate nature of customer service “I need a replacement part now!” — plus corporate
Harvard researchers noted that having to repeat a problem to a chain of customer service emphasis on quarterly profits — often results in companies’ failure to develop a long-term
representatives was intensely frustrating for customers. strategy for customer service. Pride, misplaced priorities, short-term profit orientation and a
failure to understand the realities of today’s competitive service economy are all reasons why
Improve first contact resolution by ensuring that the person who initially handles the call takes service strategies don’t get the serious attention they deserve.
full responsibility for it until the customer’s concern is resolved.
Even if customer service structures and tools are in place today, they’ll likely need to be
Offering live chat support on our website allows for more collaboration behind the scenes. different tomorrow. Customer service isn’t a quick fix or a policy to be implemented one time
Experienced agents can effectively mentor new hires by “whispering” answers to them as they that lasts forever. Instead, managers should view customer service as a long-term strategy on
chat with customers. par with other critical business functions — and worth the most advanced thinking. It requires
unremitting management commitment and employee enthusiasm over a long period, so that
Empower our employees to make customers happy outstanding service can continue to work its magic on customer loyalty.
To our customers, any member of our staff becomes the face of our company. When our Initiating a service program, giving it a noisy send-off, then publishing a quarterly motivational
employees have the power to please customers, they make our whole organization shine. article in the company newsletter, plastering the walls with posters, and sending an annual
letter to employees extolling the importance of service are all well and good. But don’t expect
Instead of focusing on speed and productivity, give our frontline employees permission to take employees will read the article and spontaneously deliver good service. They won’t.
the time they need to make each customer feel valued.
These three important service strategies are more than business initiatives; they’re attitudes that
Deliver on our promises should be embedded and celebrated throughout the organization.
Every package that arrives on time or product that works as intended reinforces our customers’  Service as a product. Most buyers don’t have the technical knowledge they need to
trust in us. Customers don’t want us to promise them the moon as much as they want us to make the best choices when they’re purchasing products such as electronics, software,
deliver it on time and with a smile. cars or home appliances. They want reassurance that support and service will be
available if problems arise. View service as yet another deliverable you offer, one with
Make it personal real value.
Apologize quickly and sincerely if we’re unable to meet our promises for any reason. Make the  The customer is the boss. One service-minded company, Bio-Lab, has a mission
apology personal and not just a form letter. statement that places the customer at the center of nearly every business function. The
statement reads:
“The mission of the customer service department is to retain and to encourage
increased business from customers by efficiently and courteously satisfying their needs Begin by analyzing these areas:
with respect to ordering, shipping, invoicing, handling claims and adjustments, and
responding to inquiries, complaints, and related activities.”  All policies and procedures — they must be customer oriented.
 Work flow — it should promote reliable delivery of customer orders.
This slogan — “The Customer Is the Boss” — appears on signs in every office of Bio- The company’s capability to react to unexpected events— create a contingency plan
Lab. But it’s more than a message; it’s grounded in the company’s very core. that ensures service to customers will continue uninterrupted when the computer blows
up or a tornado blows in.
 Strive for reliability. Reliability means consistent performance that meets the  Customer wants and needs — they must be considered at every step.
expectations of all our customers all the time. Admittedly, this is ideal. But a superior The goal of any service strategy should be to systematize — to institutionalize — a
service program will come very close to achieving the ideal. customer service program that’s well established, for the long term, in the culture of
the company.
Don’t Forget to Empower our Employees
Why customer experience is important?
Companies often throw up roadblocks — complicated approval processes, sales initiatives,
scripts that dictate customer communications — that hinder employees from exercising  Higher customer referral rates and customer satisfaction were reported by a study of
judgment and doing the right thing. It’s critically important to examine and to correct any 860 corporate executives who increased their investment in customer experience
policy or process that gets in the way of employee performance. Even in companies that are not (Strativity Group, 2009)
particularly customer-focused, most employees believe in — and take pride in — providing
excellent service. A company should instead offer guidelines that allow for flexible and  It eases customer acquisition, drives customer loyalty and improves customer retention
situationally appropriate decision-making to resolve customer problems. Companies that view (Beyond Philosophy, 2013).
service through a single lens — that of customer complaints—are missing the larger, longer-
term picture. Service isn’t just a game plan to satisfy unhappy customers; it’s an ongoing  Increases customer satisfaction. When a customer is wowed by the experience and has
strategy that makes every interaction between every employee and every customer at every their expectations exceeded, it increases customer satisfaction.
contact point a positive one.
 Reduces customer churn. People want to buy from places that make them feel good.
Watch this commentary, Starbucks CEO says, “Customers are Number Two.” [The effects of Creating an experience that is memorable and enjoyable for the customer will help to
employee satisfaction], to understand the necessity of employee-empowered satisfaction: keep them coming back for more and not churning away.
https://www.youtube.com/watch?v=KpuoDRuxkU4&t=147
 Create a competitive advantage and differentiation. No longer can we compete on
price, customers want more, and they want emotional connections with the companies
they deal with. Create that experience that keeps them coming back for more. This will
Develop a Service Strategy in a Philippine Setting create a point of differentiation that we can use as a competitive advantage.
Fortune magazine defines service strategy as “knowing exactly which customers you want to  A report by E-consultancy found that just 20% of companies have a well-developed
serve and figuring out what kind of service will loosen their purse strings.” customer experience strategy. Big opportunity for companies who are willing to invest
in the customer experience.
Strategy must be developed and implemented through impartial analysis, skilled people
management, intense concentration and commitment — along with serious spending. Customer Experience Strategies
We can sync Client Heartbeat up to most CRM’s, and measure exactly how happy (or
They found the leaders in customer experience to pursue three imperatives simultaneously. unhappy) our customers are. Use this data to analyze how effective our customer
experience strategies are, and make better business decisions using actionable
 Designing the right experience-focused value propositions customer feedback.
The companies delivering a truly outstanding customer experience divide customers  Developing the capabilities to do it again and again
into segments and design experience-focused value propositions for each one. They
tailor and design customer experiences for different customers. The 8% of companies who offer superior customer experience have developed their
capabilities to please customers again and again. They have systems in place to deliver
Vodafone offers a great example. Unlike traditional mobile a consistent customer experience over and over again.
phone companies who might segment users based on country
alone, Vodafone segments their customers into high-priority The leaders also know how to keep innovating and improving the experience. They
global segments: “young, active, fun” users, occasional users, have tools to help with customer-focused planning and executing; they know what
and a handful of others. customer-based metrics need tracking; and offer customer-focused management
incentives to keep their employees’ goals in line with the company’s goals.
In designing the value propositions for each segment, the entire customer experience
was at the forefront. The ‘young, active, fun’ users were offered Vodafone live!, a
state-of-the-art service that provided everything from games and pop-song ringtones to
new, sport and information (this was back in 2005). Occasional users were offers
Vodafone Simple, which provided an ‘uncomplicated and straightforward mobile
experience’.
 Delivering value to the customer
The best companies deliver these value propositions by focusing the entire company on
delivering them. An emphasis is put on cross-functional collaboration. For instance,
the marketing team and supply chain team are in line across the whole customer
experience; they know and deliver a consistent value proposition.
CRM tools can help with this. They offer a way to keep all customer data in one place,
and give multiple department’s access to that information. Sales people can add
information which can trigger specific actions. Customer support or supply chain can
jump in, know what segment the customer is in, and then deliver a customer
experience that has been defined for them.
Tracking the metrics behind delivering the customer experience can get tricky. It is
recommended measuring it using a Net Promoter Score or a customer satisfaction too
like Client Heartbeat.
Source:
Written Works 3.2.2 AMAES Online Education. Principles of Marketing Module 004. Customer Service Strategies.
Pages 1-9
Daguit, Maridel et.al. Principles of Marketing for Senior High School. Customer Relationship:
Direction: In a yellow paper, answer the following questions. Note, the back of the paper must Customer Service. Page 36
1. What is your stand about the statement, “The customer is always rights.”?
2. Why is it important to have an excellent customer service for your customers?
3. In what ways can employers empower their salespeople to provide excellent customer
service?
4. Compute for the CLTV: “An athlete spends P2,000.00 for every visit to a spa and goes
to the spa twice a month for an expected time period of five year.”

Completeness
All requirements are completely accomplished 35%
Relevance
Timeliness
TOTAL 100%
highest point in the past decade at 66 percent. But trust in social media platforms
languishes at around 43 percent, and in this era of fake news, fixed elections and
fraudulent data, regaining the public trust may be harder than ever.
Performance Task 3.2 Today we'll hear from Professor Bill George about his case entitled, Facebook
Confronts a Crisis of Trust. I'm your host, Brian Kenny, and you're listening to
COMPREHENSIVE READING: Read and understand the whole article below and write a Cold Call. Bill George is an expert on leadership, a topic that he teaches and
comment about Mark Zuckerberg’s strategy to rebuild the trust of Facebook users. Give also writes about extensively, including numerous books, articles, and business cases.
your insights about his strategy and give your idea as to whether this can be an effective He's also the former chairman and chief executive officer of Medtronic. Bill,
strategy for customer relationship or not. Write your answer in a yellow paper. Note, the back welcome.
of the paper must be clean. You can use multiple papers as you want. Write the question first in
your paper before writing your answer. WRITE LEGIBLY. Bill George: Thank you. Good to be here.
Can Mark Zuckerberg Rebuild Trust in Facebook? Kenny: I really appreciate you taking the time to talk about this case and we're
(Josefin Meyer, Harvard Business School) happy to have you today because you just taught the case this week. I'm sure we'll
hear some of the insights and observations that you have from discussing it with
Facebook CEO Mark Zuckerberg faced a crucible moment in 2018 after Cambridge Analytica students, but maybe you could start just by telling us what led you to write this
accessed data from 87 million Facebook accounts. Professor Bill George discusses his case, case.
Facebook Confronts a Crisis of Trust, including why Zuckerberg handled the crisis as he did,
the role of companies in protecting privacy, and the pros and cons of regulation.
George: Well, the Guardian last year broke the story on Facebook being invaded
by Cambridge Analytica and user data being compromised. At that time we were
preparing for a program with a group of CEOs, about 60, that came here in June. I
wanted to prepare a case to help kick off that one-day session. This seemed like
one that was something that everyone should be interested in, how you protect
data. There's been so much talk about cybersecurity and breach and also, people
are making a lot of money on use of information. So it became a very hot topic
and that's why I wrote the case.
Kenny: Do you use Facebook?

Brian Kenny: Here's a hypothetical for you. Imagine you're sitting at your favorite
coffee shop when a teenager pulls up a chair and asks you to share a bunch of
George: I do. I have about 30,000 followers on Facebook. I find the best site for
personal information. He wants to know your birthday, what kind of food you
me is LinkedIn because everyone discloses who they are in terms of their
like, where you go on vacation, who you voted for, who you hang around with.
educational background and their companies and the fact that they are there more
He promises he won't share that information with anyone. Really? Would you
to talk about leadership because they want to advance their own leadership.
trust him? Well, 2.3 billion Facebook users around the world do, but one thing we
know about trust is that it's hard to earn and even harder to keep. According to the
2019 Edelman Trust Barometer, the public's trust in traditional media is at its
Kenny: We're all using one platform and another and we're all giving away a lot in 2006 to the public. So it's still a relatively young company and one that's
of information about ourselves every day it seems in different ways. Facebook experienced tremendous growth.
becomes an example, good, bad or indifferent, about what people can learn about
their responsibility as business leaders. George: Well, it was spectacular. He started out as a dating site here at Harvard
when he was a freshman and then he saw an opportunity to move to the West
"WHY WOULD YOU GO INTO HIDING JUST AT THE TIME WHEN Coast to really expand Phenomenal success. There literally are millions of people
EVERYONE WANTS TO HEAR FROM YOU?" who want to be the next Mark Zuckerberg. The financial success has been
spectacular ; they've been able to grow this advertising model in ways that have
George: I led off the class yesterday asking the question, "If they've got over 2 exceeded anyone's expectation. And just think about it, there are 7.5 billion people
billion users, how many of those users know this information is being used and on the planet and a third of them [have used]on Facebook? I mean, wow, this is
being sold?" As we show in the case they’re being profiled right down to crazy.
minutiae. They can pretty much identify who you are.
Kenny: What were some of the pivotal decisions that they made along the way?
Kenny: Let's go back to the beginning of the case. What was sort of the pivotal
moment that you lead off with in the case? George: In terms of building the business, they expanded and gave everyone free
access. What people didn't know is that was in exchange for profiling the
George: What really struck me about this, and that I really wanted to ask students information. Now, in his defense, Mark wrote a defense recently in the Wall
about, is that Mark Zuckerberg is a very public figure. He's in every newspaper, Street Journalin which he said, "We don't sell your information." That's actually
every day. TV shows, media. He wants to be that public figure. All of a sudden he true, but they profile you to the point where maybe they had some personality
gets perhaps the greatest challenge he's ever faced in the media and he disappears profile of the fact that you're deemed as neurotic or you're deemed as someone
for five days. Well, first of all, I've taught a lot. I wrote a book called Seven who's very aggressive and you get profiled that way so that advertisers can buy it.
Lessons for Leading a Crisis. If you're a leader and you're in crisis, you go out Advertisers love it. They've now got a very narrow slice. They know exactly the
right away. Instantly. Howard Schultz did this along with Kevin Johnson at kind of customer they're looking at and they can go at them. Of course, this was
Starbucks when they had the incident in Philadelphia; two African American men subject then to other influences like the Russian influences, but I just felt that this
being escorted from the store. He flew out there that same day. How could Mark goes way beyond Cambridge Analytica. What went through my mind … was,
disappear for five days? As did his partner, Sheryl Sandberg. "This is not about Cambridge Analytica, this is about the heart of Facebook's
business model." That's the only reason you would go into hiding for five days.
And it even got worse because on the fourth day there was a town hall [with He didn't have an answer to that one.
Facebook employees], which he goes to every single month. It’s video streamed
all around the world. He sent his deputy general counsel. I thought these things Kenny: What are some of the problems are with the business model?
were odd. Why would you respond that way? Why would you go into hiding just
at the time when everyone wants to hear from you? And why would you send George: That [some amount of] of the two-plus billion people don't know they're
your deputy general counsel? being profiled… They're sharing very, very personal information and maybe you
don't want that information profiled about yourself and yet people are doing it.
Kenny: Even though he likes the limelight on his terms, he's been enigmatic as a That's the concern. Even if advertisers love it, and if that’s the model, shouldn't
leader. Let's remind people Facebook has only been around, I think they launched everyone explicitly know about it?
Kenny: It's a real lack of transparency. Kenny: Let's talk a little bit about Facebook's leadership model. You've got Mark
Zuckerberg, the founder and CEO. He's got Sheryl Sandberg. They're probably the
George: When I was writing the case I was in Europe, and the European two most public figures in the company. Who else is watching the store, as it
regulations, GDPR General Data Protection Regulations, came out. You had to were?
approve Google and Facebook if you wanted to use the sites. The Europeans
moved way ahead on regulation because they sensed this problem. George: Mark has absolute power. He has over 50 percent of the voting shares and
you remember Lord Acton said, "Power corrupts. Absolute power corrupts
Kenny: It seems like the US is starting to move in that direction, and this absolutely." And I think he has been caught up in something called hubris. Very
Facebook incident may have been the catalyst that moves the US down this path hard to define what that word means, but I think he got caught up in his own
more quickly than they would have otherwise. success and his own power and so he's not really listening to other people. I had
written in a book three-and-a-half-years ago that I thought he was listening to
George: I absolutely think so. We tend not to like regulations here, but I thought people like Don Graham of the Washington Post, but I think he shut out a lot of
what was particularly interesting, and that I feature tin the case, is that Tim Cook, those voices and is going off in his own way. And I think Facebook grew too fast.
the CEO of Apple, coming out and saying, "This is wrong." He actually said, A little bit like Frankenstein's monster grew out of control… I think he feels
"Privacy is a human right." I had the opportunity of meeting with him in a small trapped, but I don't think he's really listening. It's been said by board members at
group in June … and he was very clear, very passionate about it, "We have all Facebook, former board members, that normally the board is the boss. They're in
kinds of information from iPhones about you. We would never look at it. And charge. That's what we teach here at Harvard Business School. But in this case,
anyone who does look at it is terminated." So a whole different point of view that the board is an advisor because if Mark doesn't want to do it there's nothing the
Apple has. Now, you could argue Apple is selling a product but the only product board can do. They can take a vote. It doesn't mean anything because he controls
that Facebook has is its site. I would argue that the only product Apple has is trust, over half the voting shares. He has two class of voting stock. So there are
and if that trust is breached… So that's why we called it Facebook Confronts a questions being raised about that.
Crisis of Trust, because if you lose that trust you don't have anything.
Kenny: We've talked in the past … about crucible moments, which was one of the
Kenny: There are other companies with similar business models. If you look at ideas that you've written about. Is this kind of a crucible moment for Mark
Google, if you look at Amazon, they both have mounds and mounds of data about Zuckerberg?
their customers, their users. They haven't found themselves in the same kind of
situation. George: Huge. It's his biggest crucible. He's probably never experienced one like
this before. [His career until now] has been up, up and away, and here he is, in his
George: Two things. We had Google people in the classroom yesterday and early 30s, all of a sudden confronting something. And the question is, when will
Amazon. First of all, I buy a lot of books on Amazon; they help curate the kind of he acknowledge that he didn't handle this well? That's the question. A crucible is
books I might like, I actually like that service. And if I'm looking online at a something you can't get through until you acknowledge your own culpability. If
retailer for a particular shirt, I don't mind them sending me ads for shirts. That's you fire me from my job, I have to look myself in the mirror and ask, "What role
very, very different than when I'm looking for a therapist or my child is very ill. did I have in getting fired?" In a CNN interview that I showed in class, Mark puts
Do I want my employer to know all these things? That to me is in a whole all the blame at the hands of Aleksandr Kogan, a Russian living in England, who
different class of information. did the invasion on behalf of Cambridge Analytica. And I just think that's wrong. I
think if you’re a leader, you have to take responsibility for everything that simply not true. Everyone knew about these violations to the emissions test. So if
happens. you do the wrong thing you better acknowledge it because the cover-up is going
to hurt you a lot more, and you're going to lose the trust of the public. It's hurt
Kenny: What kind of effect is this having on other people at Facebook?. We know Volkswagen sales tremendously. If you're not upfront about these issues, it's going
this is a generation of people and millennials that want to belong to something, to hurt you greatly. General Motors is a good example of one that went the other
belong to a company that has meaning and purpose. They probably felt like that way [in a problem with faulty ignition switches.] (CEO) Mary Barra takes over.
when they signed on with Facebook. Does this affect them in some way? She said, "It's not only a problem we have with safety, which we're going to
correct, but we've got a cultural problem and we've got to correct it," And she has.
George: Yes, absolutely. He's lost some very visible figures, because you're right, Here we are, five years after she took over. She has changed that place
they were following the mission, the passion that Mark had, "Let's connect dramatically and now they're getting great results because of leadership.
everyone in the world." That's a valid mission, but if that mission turns into
almost a cult-like thing, it's very, very dangerous. I think maybe they haven't done I think it's time for Mark Zuckerberg and Sheryl Sandberg to step up to
that, but they're on the verge of it unless they pull back and they probably have to leadership. Industries do not do a good job of self-regulation, so we have
stop chasing stock price and shareholder value. Maybe they shouldn't have as regulatory bodies. We don’t let pharma regulate itself. They have to get FDA
many users. Maybe they have to expunge a lot of those users and clean up their approval on every product. That’s a good thing. It protects the public, just like
site a lot more. Medtronic had to get FDA approval on every product that helps protect the public.
I think it's time to have a regulation, a sound regulation, about use of [personal]
Kenny: You review that decision to go public. Was that a mistake? Is that driving information. The problem is that the field is moving much faster than regulators
some of the behavior we're seeing? can figure out what to do. With artificial intelligence, these issues are going to
mushroom by several orders of magnitude and be much more serious. If these big
George: I teach governance and serve on many corporate boards, and I can tell companies want to keep going they need to act in a very responsible manner.
you that once you make the decision to go from a wholly-owned private company
to go public, you're getting public money, you're getting investor money, pension "I THINK HE GOT CAUGHT UP IN HIS OWN SUCCESS AND HIS OWN
fund money, hedge fund, you're getting all kinds of public money. You have an POWER AND SO HE'S NOT REALLY LISTENING TO OTHER PEOPLE."
obligation to those investors and it's not up to you just do what you want to do.
You have a deep obligation that goes far beyond that. Kenny: It seems like you need to have some balance of regulation but also some
independence for business so they can continue to thrive.
Kenny: Let's assume that Facebook does want to regain trust. Are there examples
of other companies—I'm thinking of Volkswagen and what they went through a George: Exactly.
couple of years ago with the lies about emissions testing— other companies that
have been able to overcome something like this? Kenny: Consumers, by the way, have a vote in this. Nobody's forced to be on
Facebook. And a lot of people did jump off after they started hearing about this
George: Volkswagen hasn't fully overcome it. One of my students worked for issue. But over time these things seem to recede a little bit until they rear their
Volkswagen and said [it paid] $27 billion dollars in fines. Billion. That's a lot of heads again. You discussed it in class yesterday.
money. I remember the CEO of Volkswagen US testifying in front of Congress
that no one knew anything about this, it was just two rogue engineers. That's George: Yes.
Kenny: Maybe there'll be a B case on this one that we can talk about next year.
Kenny: I assume probably everybody in that class has been on Facebook at some
time or another? What were the themes that emerged in the discussion? George: Oh, I think there will be a lot of material for a B case, C case. It's an
ongoing saga. It's not ending now. It's just getting started.
George: Some people were very angry about what they felt was invasion of their
privacy. Others advocated for regulation. Others don't like regulation, but Kenny: Bill, thanks so much for joining us today.
acknowledged it had to take place. And some of them were generally perplexed
how somebody as successful as Mark Zuckerberg could fail to step up and lead in George: Thank you for having me. It's a real pleasure.
such a crisis. We talked about that in depth and we were able to compare and
contrast the leaders in some of these other high tech companies and why they've Kenny: If you enjoy Cold Call, you should check out HBR After Hours a podcast
had different outcomes. We talked to a much broader basis about what is the featuring Harvard Business School faculty dishing on the latest happenings at the
public responsibility of corporations when they have that much power? Because in crossroads of business and culture. Find it on Apple podcasts or wherever you
my experience, if corporations don't behave in a responsible manner, they’re not listen. Thanks again for listening. I'm your host, Brian Kenny, and you've been
only inviting regulations, they're inviting monopolization, breakup and antitrust listening to Cold Call.
suits. And a lot of other things. We talked about the addiction factor, particularly
for children. I see this in my own grandchildren. They want to be on those devices
all the time, and what are the impacts? And we're just starting to study this so it's
come on so fast.
But on the other hand, I'm a huge believer in social media. I have a total 180,000
people that I can connect with with a push of a couple of buttons. I love to do that. CRITERIA FOR GRADING PERCENTAGE
I love sharing my leadership ideas and what I think is important to be a good Completeness
leader. All requirements must be answered 35%
Relevance
Kenny: You mentioned the GM situation and how that's been turned around. Answers should be relevant to the topic 30%
Fundamentally, it turned around because a new leader came in and was able to Organization and Clarity
change the culture. Is that the only option that Facebook has? Is that the best
Comprehensiveness
option for Facebook?
The answer is based on comprehensive reading of the article 15%
TOTAL 100%
George: That's a really good question. Are you going to have to have new
leadership there? They certainly need a much stronger board. They need a real
board, not a group of advisors. I think they should open up their shareholding so
that Mark doesn't have full power. I doubt he'll do that. If Mark doesn't step up to Source:
it, I think he's going to have to bring in someone to run the company. I thought
Sheryl could do that, but she's faded into the background. I don't know why.
Josefin Meyer. Harvard Business School. Can Mark Zuckerberg Rebuild Trust in Facebook?.
https://hbswk.hbs.edu/item/can-mark-zuckerberg-rebuild-trust-in-facebook. January
28, 2022
QUARTER III
Chapter 3 Lesson 1
STRATEGIC AND TACTICAL MARKETING
In this chapter, we dig deeper into step two of the process: designing customer value–driven
marketing strategies. Here, we look at the organization’s overall strategic planning, which
guides marketing strategy and planning.
Define and distinguish between strategic and tactical marketing in terms of

objectives and processes;
Identify the process of strategic and tactical marketing; and
Understand the business portfolio analysis.
Strategic Marketing Process

Strategic marketing process is a process of planning to develop and to implement operations
so as to attain a competitive edge in a particular niche. It seeks to establish a clear and
concerted direction for all marketing activities of an organization. The strategic marketing
process is depicted in the following diagram as illustrated below:
This is the step in which we assess and evaluate the market, competitors, and the company’s
internal and external environment. The objective of this is to identify the company’s strengths
and weaknesses, as well as the available opportunities and threads. (See Business Portfolio
Analysis
Step 3: Objective Setting
Objectives are specific company targets that are Specific, Measurable, Attainable, Realistic,
and Time-bound (SMART). This enable a company to control its marketing plan and provide
a consistent focus all functions of an organization.
Step 1: Mission Identification
Step 4: Marketing Strategy Development
Mission statement is a statement of the organization’s purpose—what it wants to accomplish
in the larger environment. The company’s mission is articulated. A mission statement defines The development of marketing strategy involves market segmentation, identification of target
what an organization is, why it exists, its reason for being, its primary customers, the products market, market positioning, selection of broad marketing strategies, and the translation of
and services it produces, and its geographical area of operation. A clear mission statement acts strategies into action plans. It can be classified into three: cost-leadership, differentiation and
as an “invisible hand” that guides people in the organization. focused.
Mission statements should be market oriented and defined in terms of satisfying basic Cost Leadership
customer needs. Products and technologies eventually become outdated, but basic market
needs may last forever. Mission statements should be meaningful and specific yet motivating; This is a strategy primarily for achieving low cost leadership among industry
however, it should not be stated as making more sales or profits; profits are only a reward for competitors. It can be achieved through low cost supply contracts, overhead expense
creating value for customers. Instead, the mission should focus on customers and the customer control, economics of scale (or the cost advantages achieved by increasing
experience the firm seeks to create. production and lowering costs. As costs are spread over a larger number of goods,
the cost per single unit decreases), and comprehensive cost-cutting efforts, among
Samsung Philippines for example has the mission and others.
approach, “…to devote its talent and technology to
creating superior products and services that contribute McDonald’s is surely the most
to a better global society. To achieve this, Samsung sets famous fast-food restaurants around
a high value on its people and technologies.” the globe with its effective cost-
leadership strategy which lead them
Samsung indicated a specific statement about devoting to a competitive edge over its
their resources to creating high quality products. In competitor. McDonald’s optimized
order to accomplish this, it ensures to set high value to the processes of cooking food,
its customers and technologies. With this, Samsung was able to provide high-value devices for making them simple and easy to
their high-value customers. learn by all employees, reducing the
learning curve as much as possible.
Step 2: Situation Analysis It also has a division of labor strategy which allows it to recruit and train freshers as
opposed to hiring of already trained cook. This allows McDonald’s to pay low wages.
Lastly, compared to their competitors, it owns the facilities that produces the
ingredient mixtures for its products, further minimizing costs. Overall, McDonald’s Business Portfolio Analysis
managed to cut costs both in raw materials and human resource. The good thing is, it
also has high asset utilization. With the efficiency made, McDonald’s can serve more Guided by the company’s mission statement and objectives, management must plan its
customer as compared to its competitors. business portfolio—the collection of businesses and products that make up the company.
Differentiation The major activity in strategic planning is business portfolio analysis, in which management
evaluates the products and businesses that make up the company. The company will want to
Differentiation seeks to achieve superior product attributes and features that are put strong resources into its more profitable businesses and phase down or drop its weaker
different from industry competitors. This results in pronounced consumer preferences ones.
for company’s products.
Management’s first step is to identify the key businesses that make up the company, called
Apple made a product strategic business units (SBUs). An SBU can be a company division, a product line within a
differentiation by applying division, or sometimes a single product or brand. The company next assesses the attractiveness
higher prices than its of its various SBUs and decides how much support each deserves. When designing a business
competitors implying that portfolio, it’s a good idea to add and support products and businesses that fit closely with the
their products are of better firm’s core philosophy and competencies.
quality and incorporate the
latest technology. The purpose of strategic planning is to find ways in which the company can best use its
strengths to take advantage of attractive opportunities in the environment. For this reason,
Focused most standard portfolio analysis methods evaluate SBUs on two important dimensions: (1) the
attractiveness of the SBU’s market or industry and (2) the strength of the SBU’s position in
Efforts are concentrated on a relatively small but profitable market. The development that market or industry. The best-known portfolio-planning method was developed by the
of products and services primarily Boston Consulting Group, a leading management consulting firm.
ensures that the needs and want of this
addressed and that satisfaction is
provided. The Boston Consulting Group Approach
Chanel have competitive advantage for Using the Boston Consulting Group (BCG) approach, a company classifies all its SBUs
having highly recognizable brand image according to the growth-share matrix.
and brand equity. They sell luxurious
products that are only available to those
who are capable of buying. They ensure to provide a unique vibe towards their
customer giving them pride in their living.
Step 5: Strategy Evaluation and Control
After strategy development, periodic monitoring and evaluation are needed. This is necessary
to identify deviations and necessary detective, preventive and/or corrective controls.
maintain the stars so that they will become cash cows as their markets mature. Fortunately, it
has two good-sized cash cows. Income from these cash cows will help finance the company’s
question marks, stars, and dogs. The company should take some decisive action concerning its
dogs and its question marks.
Once it has classified its SBUs, the company must determine what role each will play in the
future. It can pursue one of four strategies for each SBU. It can invest more in the business
unit to build its share. Or it can invest just enough to hold the SBU’s share at the current level.
It can harvest the SBU, milking its short-term cash flow regardless of the long-term effect.
Finally, it can divest the SBU by selling it or phasing it out and using the resources elsewhere.
Tactical Marketing Process

Tactical marketing uses techniques that can help a company achieve its marketing goals. It
often involves performing individua marketing activities. It determines the means or tactics to
On the vertical axis, the market growth rate provides a measure of market attractiveness. On implement the strategies. It involves the identification of specific activities, timetables,
the horizontal axis, relative market share serves as a measure of company strength in the responsibilities, and budgets and their implementation. Its objective is to ensure that strategies
market. are implemented successfully. Below is the process of tactical marketing:
The growth-share matrix defines four types of SBUs:
 Stars. Stars are high-growth, high-share businesses or products. They often need
heavy investments to finance their rapid growth. Eventually their growth will slow
down, and they will turn into cash cows.
 Cash cows. Cash cows are low-growth, high-share businesses or products. These
established and successful SBUs need less investment to hold their market share.
Thus, they produce a lot of the cash that the company uses to pay its bills and support
other SBUs that need investment.
 Question marks. Question marks are low-share business units in high-growth markets.
They require a lot of cash to hold their share, let alone increase it. Management has to
think hard about which question marks it should try to build into stars and which
For example, the company wants to increase their sale by 15% by the end of the calendar year.
should be phased out.
After careful consideration, it selects market penetration as its strategy. The current task is to
 Dogs. Dogs are low-growth, low-share businesses and products. They may generate identify the tactics, or activities that it should undertake to ensure that the strategy will be
enough cash to maintain themselves but do not promise to be large sources of cash. successful. The firm may decide to increase selling prices. It may opt to do intensive
promotions, or it may invest in heavy products in heavy advertising.
The 10 circles in the growth-share matrix represent the company’s 10 current SBUs. The
company has two stars, two cash cows, three question marks, and three dogs. The area of each Once the tactics and activities are identified, they are developed into an action plan. An action
circle is proportional to the SBU’s dollar sales. This company is in fair shape, although not in plan is a sequential series of marketing activities. It includes timetables for each activity,
good shape. It wants to invest in the more promising question marks to make them stars and pinpointed responsibilities or accountability for each, and the corresponding budgets.
Oftentimes, it is necessary to utilize two or more action plans to ensure successful
implementation. These are monitored regularly to ensure effectiveness.
Strategic Marketing vs. Tactical Marketing

Strategic marketing and tactical marketing share similar goals, but they're not synonymous.
The strategic marketing process seeks to establish a clear and concerted direction for all
marketing plans of an organization while tactical marketing process determines the means or
tactics to implement the strategies. Strategic marketing typically focuses on a company's long-
term objectives. Marketers often create strategic plans in response to overarching business
targets. Tactics are often an important piece of strategic marketing plans because they describe
specific actions within a plan. Once we've established a larger goal, it's important to
brainstorm specific strategies, which is when companies tactically plan. Tactical marketing
and strategic marketing are plans that often work together to ensure teams design useful
strategies.
Sources:
Daguit, Maridel et.al. Principles of Marketing for Senior High School. Marketing Opportunity
Written Works 3.3.1 and Analysis. Page 45-48
Kotler, Philip et.al (2017). Principles of Marketing 17 th Edition. Company-Wide Strategic

Planning: Defining Marketing’s Role. pages 64-66
Direction: In a yellow paper, answer the following questions. Note, the back of the paper must
be clean. You can use multiple papers as you want. Write the question first in your paper Marketingtutor. Strategic Marketing Process. https://www.marketingtutor.net/strategic-
before writing your answer. WRITE LEGIBLY. marketing-process/. February 5, 2022
Meks. Top 7 Brilliant Cost Leadership Examples (in 2022). https://mktoolboxsuite.com/cost-

1. Make a Venn Diagram comparing and contrasting strategic marketing and tactical leadership-examples/. February 5, 2022
marketing.
Carlo M. Kopp. Product Differentiation.
2. Do you think it is right for strategic marketing and tactical marketing to work together? https://www.investopedia.com/terms/p/product_differentiation.asp#:~:text=Apple
Why or why not? %20differentiates%20its%20products%20by,clever%20marketing%20and
%20distribution%20strategies. February 5, 2022
3. Site example for EACH SBUs based on the real happening. Explain each.
Ukdiss.com. Case Study of Chanel's Brand Management. https://ukdiss.com/examples/brand-
management-of-chanel.php. February 5, 2022
Samsung. Our Mission and Values. https://www.samsung.com/ph/about-us/company-info/.

February 5, 2022
Indeed Editorial Team. What Is Tactical Marketing?

https://www.indeed.com/career-advice/career-development/tactical-
marketing#:~:text=Tactical%20marketing%20is%20the
%20implementation,generating%20leads%20and%20hosting%20events. February 5,
2022
CRITERIA FOR GRADING PERCENTAGE iEduNote. BCG Matrix: Definition, Chart, Explanation With Examples.
Completeness https://www.iedunote.com/bcg-matrix#:~:text=Using%20the%20Boston
All requirements are completely accomplished 35% %20Consulting%20Group,company%20strength%20in%20the%20market. February
Relevance 5, 2022
TOTAL 100%
Research, as a general concept, is the process of gathering information to learn about
something that is not fully known. Nearly everyone engages in some form of research.
QUARTER III For marketers, research is not only used for the purpose of learning, it is also a critical
Chapter 3 Lesson 2 component needed to make good decisions. Market research does this by giving marketers a
picture of what is occurring (or likely to occur) and, when done well, offers alternative choices
MARKETING RESEARCH & MARKETING that can be made. For instance, good research may suggest multiple options for introducing
ENVIRONMENT new products or entering new markets. In most cases marketing decisions prove less risky
(though they are never risk free) when the marketer can select from more than one option.
In this lesson, we will discuss about marketing research and its essentiality to preparing the Using an analogy of a house foundation, marketing research can be viewed as the foundation
marketing mix. This lesson will tackle as well the marketing environment. of marketing. Just as a well-built house requires a strong foundation to remain sturdy,
marketing decisions need the support of research in order to be viewed favorably by customers
and to stand up to competition and other external pressures. Consequently, all areas of
Learning Objectives: marketing and all marketing decisions should be supported with some level of research.
The learners are expected to learn the following: While research is key to marketing decision making, it does not always need to be elaborate to
be effective. Sometimes small efforts, such as doing a quick search on the Internet, will
Define marketing research; provide the needed information. However, for most marketers there are times when more
Understand the importance, purpose and the process of an effective marketing elaborate research work is needed and understanding the right way to conduct research,
research; whether performing the work themselves or hiring someone else to handle it, can increase the
Define and identify primary and secondary information; effectiveness of these projects.
Identify the types of marketing research and tools for marketing tools;
Understand the usage of secondary data and where it can be taken; and Purpose of Marketing Research
Understand the micro and macro-environment of marketing.
The purpose of market research is to examine the market associated with a particular good or
service to determine how the audience will receive it. This can include information gathering
Overview for the purpose of market segmentation and product differentiation, which can be used to tailor
advertising efforts or determine which features are seen as a priority to the consumer.
Market research is the process of assessing the viability of a new good or service through
research conducted directly with the consumer which allows a company to discover the target Process of Marketing Research
market and record opinions and other input from consumers regarding interest in the product.
Market research may be conducted by the company itself or by a third-party company that
specializes in the market research field. Test subjects are usually compensated with product
samples and/or paid a small stipend for their time.
Importance of Marketing Research
results of the market research to make adjustments to the product to bring it in line with
customer desires.
Types of Market Research

Using primary or secondary data, there are two types of research studies:
 Exploratory. Exploratory market research gathers lots of open-ended data from many
people to better understand a problem or opportunity. The goal is to gather perceptions
and opinions regarding an issue, so your company can decide how to address it. But
first you have to understand how your market sees the issue.
 Specific. Once you understand the larger market issues, or opportunities, you can use
specific questions to gather information that could lead to a new product or service.
A business must engage in a variety of tasks to complete the market research process. It needs Market research firms often use specific questions to gather feedback on a new
to gather information based on the market sector being examined. The business must analyze advertising campaign, or to refine a planned new product.
and interpret the resulting data to determine the presence of any patterns or relevant data
points that it can use in the decision-making process. Primary Market Research Tools
Primary and Secondary Information Primary research is more time-consuming and expensive; sometimes it’s the only way to get
the information you need. The most common primary research tools are:
Primary information is the data that the company has collected directly or that has been
collected by a person or business hired to conduct the research. Primary information generally  Surveys. Asking customers a series of questions to better understand how they feel
falls into two categories. Exploratory research is a less structured option and functions by about a product’s features, or about the experience they had during their hotel stay, for
asking more open-ended questions of those selected as part of the market research sample, and example, are two possible uses of a survey. Surveys consist of a list of questions that
it results in questions or issues being presented that the company may need to address. can be shared with an individual by phone, in person, on a card or paper, or online
Specific research obtains answers to previously identified issues that are often brought to using a survey software.
attention through exploratory research.  Focus groups. Bringing together groups of people with a common characteristic, such
as age, hobby, or buying habits, to better understanding their likes and dislikes is a
Secondary information is the data that an outside entity has already gathered. This can focus group. Focus groups typically consist of 8-12 people with a moderator who
include population information from government census data, trade association reports or poses questions for the group to discuss. They are a useful way of getting feedback on
presented research that another business operating within the same market sector has already a new product, new features, or new ad campaign.
gathered.  Observation. When the researcher gathers information simply by watching how a
subject interacts with a product, the technique is observation. This is often used in
Use of Market Research Results in Business comparing preferences for several types of products.
 In-depth interviews. Another market research technique is the one-one interview
A company that was considering going into business might conduct market research to test the with an individual, during which probing questions are posed to better understand that
viability of its product or service. If the market research confirms consumer interest, the person’s product preferences.
business can proceed confidently with the business plan. If not, the company should use the
Sources of Secondary Data Market research is therefore the business tool that helps us reduce the risk that a new idea will
fail, and helps reduce the risk of being in business. In short, it helps us both stay in business
When conducting market research to better understand industry trends and broader shifts, and build a more profitable business.
secondary research is often a good place to start. Some of the most useful sources include:
Marketing Environment
 Industry associations and trade groups – most associations publish annual outlooks
 Trade journals specific to your industry The marketing environment consists of internal and external forces which directly and
 Government reports - such as the Census or annual procurement results indirectly affects their decision to the company.
 Industry analysts – these individuals monitor the performance of public companies
in our space Environmental Contexts
 University faculty members – see what research reports they may have published
 Websites – while Wikipedia isn’t a reliable source, there may be others that lead us to Familiarity with the different types of markets helps marketers to better understand the
reputable sources and reports marketing environment they operate within.
 Competitor websites and materials – to convince potential customers to buy from
them, they may share useful statistics and reports The main types of customers are businesses, consumers, government bodies and employees.
Several transactions can occur between them, leading to the concept of consumer or B2C
Why conduct Market Research? markets, Business or B2B markets, export markets, government or G2C markets, with each
having their own specific profile.
Market research allows the identification of threats and opportunities in the market place and
Business to business (B2B) marketing represents the sales process between organizations or
provides the information on which we can make informed decisions. The more accurate the
institutions. Transactions in these markets are often more complex, the distribution channels
information - the better the decision. Market research therefore reduces the risk involved in
are shorter and more direct with stricter product standards and specifications.
making these decisions. It also reduces the risk of not being able to make decisions because
we did not have the information at hand (for example, a change in the market that catches us
Consumer markets (B2C) are represented by individuals who purchase goods, products or
by surprise).
services for their own consumption.
Market research helps us to:
They can be segmented into various groups taking into account factors such as age, education,
location, attitudinal values, income, etc., meaning that various marketing strategies can be
 Identify new products or services
applied.
 Spot or anticipate market trends or changes.
 Determine if customers are satisfied, and if not, what is wrong. G2C markets (government to citizen) develop when governmental institutions become
 Keep one step ahead of our competitors. sellers and citizens assume the role of buyers.
 Spot trends or warning signals in our own business.
 Decide which advertising medium works best for our business. These interactions are becoming increasingly more specialized. For example, we can have
 Keep up to date with new technology in our industry. B2E (business to employee), a transaction that reflects what businesses do attract and keep
 Tell us if a new idea is likely to be viable or not, and so on. their employees in terms of recruitment tactics, benefits and opportunities, plus E2B
(employee to business). Others from the digital arena include C2C (consumer-to-consumer) or
P2P (peer-to-peer), which represent the ability of online users to interact directly with each
other, without the need for an intervening organization other than to facilitate the (materials). These factors can be controlled by the firm as the factors are to do with how the
communication. firm decides to set itself up.
Marketing Micro-Environment Marketing Macro-Environment

The marketing micro-environment includes factors that are internal to the company or those Macro-environment marketing includes conditions or factors that are external to the
that are relevant to its operation. The factors include the company and its current employees, organization. These factors include social, economic, political and legal influences, together
its suppliers, marketing intermediaries, competitors, customers and the general public. These with demography and technological forces. These are sometimes referred to as the PESTLE
forces can sometimes be controlled or influenced and are explained in more detail in Porter’s 5 factors and are discussed in more detail in PESTLE analysis. The organization cannot control
Forces. The following are the micro-environment factors: these forces, it can only prepare for changes taking place. The following macro-environment
are:
The suppliers: Suppliers can control the success of the business when they hold the power.
The supplier holds the power when they are the only or the largest supplier of their goods; the Demographic forces: Different market segments are typically impacted by common
buyer is not vital to the supplier’s business; the supplier’s product is a core part of the buyer’s demographic forces, including country/region; age; ethnicity; education level; household
finished product and/or business. lifestyle; cultural characteristics and movements.
The resellers: If the product the organization produces is taken to market by third-party Economic factors: The economic environment can impact both the organization's production
resellers or market intermediaries such as retailers, wholesalers, etc. then the marketing and the consumer’s decision-making process.
success is impacted by those third-party resellers. For example, if a retail seller is a reputable
name then this reputation can be leveraged in the marketing of the product. Natural/physical forces: The Earth’s renewal of its natural resources such as forests,
agricultural products, marine products, etc. must be taken into account. There are also the
The customers: Who the customers are (B2B or B2C, local or international, etc.) and their natural non-renewable resources such as oil, coal, minerals, etc. that may also impact the
reasons for buying the product will play a large role in how we approach the marketing of our organization's production.
products and services to them.
Technological factors: The skills and knowledge applied to the production, and the
The competition: Those who sell same or similar products and services as our organization technology and materials needed for production of products and services can also impact the
are our market competition, and the way they sell needs to be taken into account. How does smooth running of the business and must be considered.
their price and product differentiation impact us? How can we leverage this to reap better
results and get ahead of them? Political and legal forces: Sound marketing decisions should always take into account
political and/or legal developments relating to the organization and its markets.
The general public: Our organization has a duty to satisfy the public. Any actions of our
company must be considered from the angle of the general public and how they are affected. Social and cultural forces: The impact the products and services our organizations bring to
The public have the power to help us reach our goals; just as they can also prevent us from market have on society must be considered. Any elements of the production process or any
achieving them. products/services that are harmful to society should be eliminated to show our organization is
taking social responsibility. A recent example of this is the environment and how many sectors
Marketing Internal Environment are being forced to review their products and services in order to become more
environmentally friendly.
The internal environment is made up of factors within the firm itself. Examples of this include
employees, company policy, capital assets, the firm's structure and the firm's products
Micro and macro environments have a significant impact on the success of marketing
campaigns, and therefore the factors of these environments should be considered in-depth
during the decision-making process of a strategic marketer. Considering these factors will
improve the success of our organization's marketing campaign and the reputation of the brand Written Works 3.3.2
in the long term.
Macro-environment: Elements of General Environment and of Specific Environment Direction: In a yellow paper, answer the following questions. Note, the back of the paper must
The general environment consists of all the background conditions in the external environment before writing your answer. WRITE LEGIBLY.
of an organization. The primary elements of the general environment include the following:
 Economic conditions –– health of the economy in terms of inflation, income levels, 1. Why is it necessary for marketers to conduct marketing research for a successful
gross domestic product, unemployment, and job outlook. marketing program?
 Sociocultural conditions –– norms, customs, and values on such matters as human
rights; trends in education and related social institutions; as well as demographic
patterns in society.
 Legal-political conditions –– prevailing philosophy and objectives of the political
party or parties running the government, as well as laws and government regulations.
 Technological conditions –– development and availability of technology, including
scientific advancements.
 Natural environment conditions –– nature and conditions of the natural
environment, including levels public concern expressed through environmentalism.
The specific environment consists of the actual organizations, groups, and persons with whom CRITERIA FOR GRADING PERCENTAGE
an organization interacts and conducts business. The primary elements of the specific Completeness
environment are the organization’s important stakeholders, which include the following: All requirements are completely accomplished 35%
Relevance
 Customers ––consumer or client groups, individuals, and organizations that purchase Answers should be relevant to the topic 35%
the organization’s goods and/or use its services. Organization and Clarity
 Suppliers ––providers of the human, information, and financial resources and raw Explanation should be well organized, arranged and must be unique 30%
materials needed for the organization’s operations. TOTAL 100%
 Competitors –– organizations that offer the same or similar goods and services to the
same consumer or client groups.
 Regulators –– government agencies and representatives, at the local, state, and
national levels, that enforce laws and regulations affecting the organization’s
operations.
 Investors/owners – individuals, groups, and other organizations/institutions that hold
an equity interest in the business.
Source:
AMAES Online Education. Principles of Marketing Module 007. Marketing Research and
Environment. Pages 1-14 QUARTER III
Chapter 3 Lesson 3
CONSUMER AND BUSINESS MARKETS
In this lesson, we will discuss about consumers and business markets.
Definition of consumer markets and business markets;

Difference of consumer markets and business markets; and
Characteristics of consumer markets and business markets.
Consumer Markets
The consumer market pertains to buyers who purchase goods and services for consumption
rather than resale. However, not all consumers are alike in their tastes, preferences and buying
habits due to different characteristics that can distinguish certain consumers from others.
These particular consumer characteristics include various demographic, psychographic
behaviorialistic and geographic traits. Marketers usually define these consumer characteristics
through market segmentation, the process of separating and identifying key customer groups.
Demographic Characteristics
Characteristics of consumer markets based on demographics include differences in gender,

age, ethnic background, income, occupation, education, household size, religion, generation,
nationality and even social class. Most of these demographic categories are further defined by
a certain range. For example, companies may identify the age of their consumers in the 18 to
24, 25 to 34, 35 to 54, 55 to 65, and 65+ age groups. Companies often identify these
demographic characteristics through market research surveys used to discover which
demographic groups comprise the majority of their customer base. Companies can then target
their advertising towards these demographic groups. For example, a new cell phone may be them. Business markets are characterized based on their market structure and demand, nature
targeted toward 18 to 24-year-olds with incomes between $25,000 and $50,000. of buying unit and the kinds of decisions and the decision process.
Market Structure and Demand

Psychographic Characteristics
Business markets contain fewer but larger buyers. When it comes to the customers in the
Consumer market characteristics can also be psychographic in nature. Psychographic business market, it has very few customers. Those business buyers won’t buy product or
characteristics of consumers include interests, activities, opinions, values and attitudes. These service in small quantities. They’ll buy in large quantities as it is expected for them to resell or
can be both specific or general. A company may better understand consumer opinions and reuse the product.
attitudes after conducting a focus group, and can use that information to tailor advertising or
marketing campaigns. Consumer values can pertain to how a group of individuals feels about Business customers are more geographically concentrated. People’s mind is accustomed to
certain social issues, which can be of interest to nonprofit or charitable organizations. the consumer market, where there’ll be shops in the market. They would visit the shop or the
market and they would buy stuff. But the business market doesn’t work that way, business
Behavioralistic Characteristics customers and buyers are concentrated at vast geographical distances.
Behavioralistic characteristics can also be garnered through marketing research. Business buyers’ demand is derived from final consumer demand. The only reason one
Behavioralistic characteristics of consumer markets include product usage rates, brand loyalty, business would buy the products and service from the other business is because its final
user status or how long they have been a customer, and even benefits that consumers seek. products are selling in the market. Once the final products stop selling in the market; then the
Companies like to know how often their consumers visit their restaurants, stores or use their business stops buying the products.
products. Company marketing departments usually try to distinguish between heavy, medium
and light users, whom they can then target with advertising. Marketers like to know which Demand in many business markets is more inelastic – not affected as much in the short run by
customers are brand loyalists, as those consumers usually only buy the company's brand. price changes. The good thing about the demand in the business market is that prices don’t
usually affect the demands. Prices don’t much change.
Geographic Characteristics
Demand in business markets fluctuates more quickly. Businesses usually prefer to buy
Consumer markets also have different geographic characteristics. These geographic products at a very low price, because they have to add a value in it to make the final product
characteristics are often based on market size, region, population density and even climate, for the end consumers. When the prices get higher because of number of reasons, the business
according to the article "Market Segmentation" at netmba.com, an online business reference would stop buying the products. It’s because they know that the final product would be costly.
site. A small retailer may find opportunities in a small market in which larger competitors High product price won’t sell in the market.
have no interest. Companies that sell beachwear will likely sell more products in warmer
climates. Consumers in different regions of the country also have different tastes in food and Nature of the Buying Unit
style.
Business purchases involve more buyers. When it comes to the purchases of business, then a
Business Markets business buys and sells at the same time to other businesses.
The business market is the process of selling the company’s product and services to other Business buying involves a more professional purchasing effort. The purchasing process of the
businesses, where those products and services will either be used as a raw material for the business market is very detail-oriented. Businesses prefer to buy products from those
manufacturing of other products. Or those businesses buy the products or services and resell businesses who deliver them the required product. It usually involves many technical
professionals who check the sustainability of the product, once they approve, then the specific finished goods and services; therefore, organizational consumers are less
company purchases the product. sensitive to price changes. As long as final consumers are willing to pay higher prices,
organizational consumers will not object to price increases.
Kind of Decisions & the Decision Process  Demand is volatile due to the accelerator principle, whereby final consumer demand
affects many levels of organizational consumers.
Business buyers usually face more complex buying decisions. Business buying decisions aren’t  There are fewer organizational consumers than final consumers.
really simple, because they’re usually long terms based. The company makes sure that the  Business market consumers tend to be geographically concentrated.
person they’re going to be in business with should be the right people. Businesses check the  Buying specialists are often used.
backgrounds and histories of each other business before signing the deal.  Distribution channels are shorter.
The business buying process is more formalized. Businesses usually follow the complete chain Based on Global Perspective
of command and the protocol of their organization before making the final decision. Since it’s
a long-term relationship, that’s why both businesses make sure that all sides are covered.  As with final consumers, there are many distinctions among organizational consumers
around the world and sellers must understand and respond to them.
Buyers and sellers work more closely to build a close long-run run relationship . When both
 Companies doing business in foreign markets must know how to deal with
companies know that they can be a good buyer-seller after verifying each other’s backgrounds,
organizational consumers in those markets.
then they prefer to collaborate to make the final decision. It’s because they both know that it’s
 Nations’ cultures have a large impact on the way their organizational consumers
in their interest to work together.
negotiate and reach decisions.
Difference between Business Markets (Organizational) and

Consumer Markets (Final)
Due to the Nature of Purchases
 Organizational consumers purchase capital equipment, raw materials, semi-finished

goods, and other products for use in further production or operations or for resale to
others, whereas final consumers usually acquire the finished items for personal,
family, or household use.
 Organizational consumers are likely to require exact product specifications. Final
consumers more often buy on the basis of description, style, and color.
 Organizational consumers often use multiple-buying responsibility, in which two or
more employees formally participate in complex or expensive purchase decisions.
Final consumers employ it less frequently and less formally.
On the Basis of Demand
 Derived demand occurs for organizational consumers because the quantity of items
they purchase is often based on the anticipated demand of their final consumers for
Sources:
Written Works 3.3.3 AMAES Online Education. Principles of Marketing Module 008. Consumer and Business
Markets. Pages 1-6
Marketingtutor. Business Markets – Definition, Characteristics, Types & Examples.

Direction: In a yellow paper, answer the following questions. Note, the back of the paper must https://www.marketingtutor.net/business-markets/. February 2, 2022
1. Define “market” in your own words.
2. Why do you think business markets are not generally affected by short-term price
changes?

Completeness
Relevance
TOTAL 100%
As of February 4, 2022, Nike reached a market capitalization of $230.7 billion, implying that
it reached into that amount if it will be traded in the stock market. It is even considered as a
QUARTER III mega cap as it reached in such variation, meaning, it is already a leading brand in the industry
Chapter 3 Lesson 4 it is classified. But how did Nike increase such a vast share? It is surely because of a
convincing strategy that consumers will surely buy their products.
BUYING BEHAVIOR & BUYER’S DECISION
PROCESS So, how did Nike ensure that customers will buy their product? Well, its definitely because of
its future focused concept. No matter what sport a customer is into, Nike will adopt to
customer wants. Customers can even choose the product they want. Competition from other
In this lesson, we will try to elaborate further the consumer buying behavior and how they brands leads Nike to focus on new innovations and new technology, with the goal of helping
decide in buying new product. athletes perform better. Nike even launched “Nike By You,” a type of shoes that can be
customized based on the customer’s liking. The more customers became more engaged and
surely provided customer satisfaction.
Buying Behavior
Buying Behavior is the decision processes and acts of people involved in buying and using
Definition of buying behavior; products.
Identification of the different factors influencing consumer buying behavior;
The decision process of buyers; and Consumer Buying Behavior refers to the buying behavior of the ultimate consumer –
The concept of organizational buying behavior, its characteristics and its process. individuals and households that buy goods and services for personal consumption. A firm
needs to analyze buying behavior for:
How Nike Convinced Customers to Buy their Products  Buyers reactions to a firms marketing strategy has a great impact on the firm’s success
 The marketing concept stresses that a firm should create a Marketing Mix (MM) that
NIKE, Inc. engages in the design, development, marketing, satisfies (gives utility to) customers, therefore need to analyze the what, where, when
and sale of athletic footwear, apparel, accessories, equipment, and how consumers buy
and services. It operates through North America, Europe,  Marketers can better predict how consumers will respond to marketing strategies
Middle East & Africa, Greater China, Asia Pacific & Latin
America, Global Brand Divisions, Converse, and Corporate. Factors Influencing Consumer Buying Behavior
The North America, Europe, Middle East & Africa, Greater
China, and Asia Pacific & Latin America segments refer to
the design, development, marketing, and selling of athletic
footwear, apparel, and equipment. The Global Brand Divisions represent its NIKE Brand
licensing businesses. The Converse segment designs, markets, licenses, and sells casual
sneakers, apparel, and accessories. The Corporate segment consists of unallocated general and
administrative expenses. The company was founded by William Jay Bowerman and Philip H.
Knight on January 25, 1964 and is headquartered in Beaverton, a City in Oregon.
Subculture
Subculture is a group of people with shared value

systems based on common life experiences and
situations. It comprises nationalities, religions, racial
groups, and geographic regions. Many subcultures make
up important market segments, and marketers often
design products and marketing programs tailored to
their needs. One example to this is Philippine Christian
Book Store – a store which sells specific products for a
certain “Christian Groups.”
Cultural Factors
Total Market Strategy
Cultural factors exert a broad and deep influence on consumer behavior. Marketers need to
understand the role played by the buyer’s culture, subculture, and social class. Beyond targeting with specially tailored
efforts, many marketers now embrace a
Culture total market strategy—the practice of
integrating ethnic themes and cross-cultural
Culture is the set of basic values, perceptions, wants, and behaviors learned by a perspectives within their mainstream
member of society from family and other important institutions. In the Philippines, we marketing. An example to this is a well-
are taught of the following values: pakikisama, hiya, utang na loob, close family ties, known Korean barbecue restaurant, K-Grill
bahala na, amor propio, bayanihan, hospitality, ningas cogon, and respect for elders. Korean Bbq Unltd. The store serves Korean
Every group or society has a culture, and cultural influences on buying behavior may Barbecue but their mainstream market is situated in the Philippines.
vary greatly from both county to county and country
to country. Marketers are always trying to spot Social Class
cultural shifts in order to discover new products that
might be wanted. One well-known example of this is Social class is a relatively permanent and ordered divisions in a society whose
Jollibee’s intent to push their products not only for members share similar values, interests, and behaviors. There are five identified
children but most specially for families. This kind of classification of social class in the Philippines namely: upper class/elites, upper
strategy encourages families to favor its products to middle class, lower middle class, working class and poor.
experience a unique orientation of Filipino value on
close family ties. Social class is not only determined by income but is also measured as a combination
of occupation, income, education, wealth, and other variables. In some social systems,
Try watching this heartfelt short film of Jollibee to understand how important a family members of different classes are reared for certain roles and cannot change their social
tie is for Filipino families and how Jollibee used it as a way to target Filipino families positions.
as their market segment: https://www.youtube.com/watch?v=fDHZkLeh6vw. Another
is a commercial video of Jollibee with Muhlach Family: Marketers are interested in social class because people within a given social class tend
https://www.youtube.com/watch?v=8O0rg7_aP_E to exhibit similar buying behavior. Social classes show distinct product and brand
preferences in areas such as clothing, home furnishings, travel and leisure activity, of his/her involvement with the group. A concrete example is when Honda
financial services, and automobiles. tries to disassociate from the "biker" group.
Social Factors The importance of group influence varies across products and brands. It tends to be
strongest when the product is visible to others whom the buyer respects.
A consumer’s behavior also is influenced by social factors, such as the consumer’s small
groups, social networks, family, and social roles and status. Word-of-mouth influence
Groups and Social Networks It is the impact of the personal words and recommendations of trusted friends,
family, associates, and other consumers on buying behavior. Most of this
Group is where two or more people interact to accomplish individual or mutual goals. happens naturally: Consumers start talking about a brand they use or feel
Many small groups influence a person’s behavior. strongly about one way or the other.
Reference Groups Opinion Leader
Individual identifies with the group to the extent that he takes on many of the Opinion leader is a person within a reference group who, because of special
values, attitudes or behaviors of the group members. It can be families, skills, knowledge, personality, or other characteristics, exerts social influence
friends, sororities, civic and professional organizations. Any group that has a on others. Some experts call this group the influentials or leading adopters.
positive or negative influence on a person’s attitude and behavior is a When these “influentials” talk, consumers listen. Marketers try to identify
reference group. opinion leaders for their products and direct marketing efforts toward them.
Membership groups (belong to) Buzz marketing involves enlisting or even creating opinion leaders to serve as
“brand ambassadors” who spread the word about a company’s products. Take
Affinity marketing is focused on the desires of consumers that belong to KFC Philippines for example. The company selected Kyle Anda as a brand
reference groups. Marketers get the groups to approve the product and ambassador for the company as he is an influencer with many followers in his
communicate that approval to its members. Groups that have a direct social media account and casted in difference TV commercials and short films
influence and to which a person belongs are called membership groups. such as Jollibee’s Valentine short form entitled, “Signs.”
Aspiration Groups (want to belong to) Online Social Networks
Aspiration group is one to which the individual wishes to belong, as when a Online social networks are online social communities—blogs, online social
young basketball player hopes to someday emulate basketball star LeBron media, brand communities, and other online forums—where people socialize
James and play in the NBA. or exchange information and opinions. These online forms of consumer-to-
consumer and business-to-consumer dialogue that have big a implications for
Disassociation Groups (do not want to belong to) marketers.
The degree to which a reference group will affect a purchase decision depends Family
on an individual’s susceptibility to reference group influence and the strength
Family is the most important consumer buying organization in society. Marketers are customer value by redesigning, repositioning, and repricing their products and
interested in the roles and influence of the husband, wife, and children on the purchase services.
of different products and services.
Lifestyle
Roles and Status
People coming from the same subculture, social class, and occupation may have quite
The person’s position in each group can be defined in terms of both role and status. A different lifestyles. Lifestyle is a person’s pattern of living as expressed in his or her
role consists of the activities people are expected to perform according to the people psychographics. It involves measuring consumers’ major AIO dimensions—activities
around them. Each role carries a status reflecting the general esteem given to it by (work, hobbies, shopping, sports, social events), interests (food, fashion, family,
society. recreation), and opinions (about themselves, social issues, business, products).
Lifestyle profiles a person’s whole pattern of acting and interacting in the world.
Personal Factors Consumers don’t just buy products; they buy the values and lifestyles those products
represent.
A buyer’s decisions also are influenced by personal characteristics such as the buyer’s
occupation, age and stage, economic situation, lifestyle, and personality and self-concept. Personality and Self-Control
Occupation Each person’s distinct personality influences his or her buying behavior. Personality
refers to the unique psychological characteristics that distinguish a person or group.
A person’s occupation affects the goods and services bought. Blue-collar workers tend Personality is usually described in terms of traits such as self-confidence, dominance,
to buy more rugged work clothes, whereas executives buy more business suits. sociability, autonomy, defensiveness, adaptability, and aggressiveness. Personality can
Marketers try to identify the occupational groups that have an above-average interest be useful in analyzing consumer behavior for certain product or brand choices.
in their products and services. A company can even specialize in making products
needed by a given occupational group. Brands also have personalities, and consumers are likely to choose brands with
personalities that match their own. A brand personality is the specific mix of human
Age and Life Stage traits that may be attributed to a particular brand. These brand personality traits are:
sincerity (down-to-earth, honest, wholesome, and cheerful), excitement (daring,
It is inevitable for people change the goods and services they buy overtime. Tastes in spirited, imaginative, and up-to-date), competence (reliable, intelligent, and
food, clothes, furniture, and recreation are often age related. Buying is also shaped by successful), sophistication (glamorous, upper class, charming), and ruggedness
the stage of the family life cycle—the stages through which families might pass as (outdoorsy and tough).
they mature over time. Life-stage changes usually result from demographics and life-
changing events—marriage, having children, purchasing a home, divorce, children Many marketers use a concept related to personality—a person’s self-concept (also
going to college, changes in personal income, moving out of the house, and called self-image). The idea is that people’s possessions contribute to and reflect their
retirement. Marketers often define their target markets in terms of life-cycle stage and identities—that is, “we are what we consume.” Thus, to understand consumer
develop appropriate products and marketing plans for each stage. behavior, marketers must first understand the relationship between consumer self-
concept and possessions.
Economic Situation
Psychological Factors
Marketers watch trends in spending, personal income, savings, and interest rates. In
today’s more value-conscious times, most companies have taken steps to create more
A person’s buying choices are further influenced by four major psychological factors:
motivation, perception, learning, and beliefs and attitudes.
Motivation
A person has many needs that has to be filled. It does not only rely on physiological
necessities but also social and even psychological. This psychological came with the
need for recognition, esteem or self-belongingness. The 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. Psychologists have
developed theories of human motivation. Two of the most popular—the theories of
Sigmund Freud and Abraham Maslow—carry quite different meanings for consumer
analysis and marketing.
Sigmund Freud assumed that people are largely unconscious about the real
psychological forces shaping their behavior. His theory suggests that a person’s
buying decisions are affected by subconscious motives that even the buyer may not
fully understand.
Abraham Maslow sought to explain why people are driven by particular needs at
particular times. Why does one person spend a lot of time and energy on personal
safety and another on gaining the esteem of others? Maslow’s answer is that human
A person tries to satisfy the most important need first. When that need is satisfied, it
needs are arranged in a hierarchy, as shown below:
will stop being a motivator, and the person will then try to satisfy the next most
important need. For example, starving people (physiological need) will not take an
interest in the latest happenings in the art world (self-actualization needs) nor in how
they are seen or esteemed by others (social or esteem needs) nor even in whether they
are breathing clean air (safety needs). But as each important need is satisfied, the next
most important need will come into play.
Perception
Perception is the process by which people select, organize, and interpret information
to form a meaningful picture of the world. All of us learn by the flow of information
through our five senses: sight, hearing, smell, touch, and taste. However, each of us
receives, organizes, and interprets this sensory information in an individual way.
People can form different perceptions of the same stimulus because of three
perceptual processes:
Selective Attention that they can build up demand for a product by associating it with strong drives, using
motivating cues, and providing positive reinforcement.
Selective attention is the tendency for people to screen out most of the
information to which they are exposed. Here marketers must work especially Beliefs and Attitudes
hard to attract the consumer’s attention.
A belief is a descriptive thought that a person holds about something. Beliefs may be
Selective Distortion based on real knowledge, opinion, or faith and may or may not carry an emotional
charge. Marketers are interested in the beliefs that people formulate about specific
Selective distortion describes the tendency of people to interpret information products and services because these beliefs make up product and brand images that
in a way that will support what they already believe. affect buying behavior. If some of the beliefs are wrong and prevent purchase, the
marketer will want to launch a campaign to correct them.
Selective Retention
Attitude describes a person’s relatively consistent evaluations, feelings, and tendencies
People also will forget much of what they learn. They tend to retain toward an object or idea. Attitudes put people into a frame of mind of liking or
information that supports their attitudes and beliefs. Selective retention means disliking things, of moving toward or away from. Attitudes are difficult to change. A
that consumers are likely to remember good points made about a brand they person’s attitudes fit into a pattern; changing one attitude may require difficult
favor and forget good points made about competing brands. Because of adjustments in many others. Thus, a company should usually try to fit its products into
selective attention, distortion, and retention, marketers must work hard just to existing attitude patterns rather than attempt to change attitudes. Of course, there are
get their messages through. exceptions. Repositioning or extending a brand calls for changing attitudes.
Learning Buying Decision Behavior

When people act, they learn. Learning describes changes in an individual’s behavior Types of Buying Decision
arising from experience. Learning theorists say that most human behavior is learned.
Learning occurs through the interplay of drives, stimuli, cues, responses, and
reinforcement.
A drive is a strong internal stimulus that calls for action. A drive becomes a motive
when it is directed toward a particular stimulus object. The consumer’s response is
conditioned by the surrounding cues. Cues are minor stimuli that determine when,
where, and how the person responds. The buyer might spot several brands in a shop
window, hear of a special sale price, or discuss cameras with a friend. These are all
cues that might influence a consumer’s response to his or her interest in buying the Complex Buying Behavior
product.
This occurs when consumers are highly involved in a purchase and perceive
If the experience is rewarding, the consumer will probably use that specific brand significant differences among brands. Consumers may be highly involved when the
more and more, and his or her response will be reinforced. Then the next time he or product is expensive, risky, purchased infrequently, and highly self-expressive.
she shops for a similar product, the probability is greater that he or she will buy a Typically, the consumer has much to learn about the product category. For example,
product of similar brand. The practical significance of learning theory for marketers is
someone buying a new car might not know what models, attributes, and accessories to
consider or what prices to expect. Variety-seeking buying behavior occurs when customers involve in situations
characterized by low consumer involvement but significant perceived brand
This buyer will pass through a learning process, first developing beliefs about the differences. In such cases, consumers often do a lot of brand switching. For example,
product, then attitudes, and then make a thoughtful purchase choice. Marketers need to when buying cookies, a consumer may hold some beliefs, choose a cookie brand
help buyers learn about product-class attributes and their relative importance. They without much evaluation, and then evaluate that brand during consumption. But the
need to differentiate their brand’s features in whatever ways possible. They must next time, the consumer might pick another brand out of boredom or simply to try
motivate store salespeople and the buyer’s acquaintances to influence the final brand something different. Brand switching occurs for the sake of variety rather than
choice. because of dissatisfaction.
Dissonance-Reducing Buying Behavior The Buying Decision Process
Dissonance-reducing buying behavior occurs when consumers are highly involved

with an expensive, infrequent, or risky purchase but see little difference among
brands. For example, consumers buying carpeting may face a high-involvement
decision because carpeting is expensive and self-expressive. Yet buyers may consider
most carpet brands in a given price range to be the same. In this case, because Need Recognition
perceived brand differences are not large, buyers may shop around to learn what is
available but buy relatively quickly. They may respond primarily to a good price or The buying process starts with need recognition—the buyer recognizes a problem or
purchase convenience. need. It can be triggered by either an internal stimulus (a personal perception
experienced by the consumer, such as hunger or thirst.) or external stimulus (include
After the purchase, consumers might experience post-purchase dissonance (after-sale outside influences such as advertising or word-of-mouth). At this stage, the marketer
discomfort) when they notice certain disadvantages of the purchased carpet brand or should research consumers to find out what kinds of needs or problems arise, what
hear favorable things about brands not purchased. To counter such dissonance, the brought them about, and how they led the consumer to this particular product.
marketer’s after-sale communications should provide evidence and support to help
consumers feel good about their brand choices. Information Search
Habitual Buying Behavior An interested consumer may or may not search for more information. If the
consumer’s drive is strong and a satisfying product is near at hand, he or she is likely
Habitual buying behavior occurs under conditions of low-consumer involvement and to buy it then. If not, the consumer may store the need in memory or undertake an
little significant brand difference. For example, take table salt. Consumers have little information search related to the need.
involvement in this product category—they simply go to the store and reach for a
brand. If they keep reaching for the same brand, it is out of habit rather than strong Evaluation of Alternatives
brand loyalty. Consumers appear to have low involvement with most low-cost,
frequently purchased products. Alternative evaluation is the stage of the buyer decision process in which the
consumer uses information to evaluate alternative brands in the choice set. This
evaluation depends on the individual consumer so it is necessary to for marketers to
have an extensive study of the buyers’ evaluation alternatives to come up with a
Variety-Seeking Buying Behavior marketing strategy fit for their taste.
 Demand fluctuations are high as purchases from business buyers magnify fluctuation
Purchase Decision in demand for their products.
 The organizational buyers are trained professionals in purchasing.
Purchase decision is a decision made by the buyer as to which brand he/she aims to  Several persons in organization influence purchase.
purchase. Two factors may come between purchase intention and purchase decision.  Lot of buying occurs in direct dealing with manufacturers.
The first factor is the attitudes of others. If someone thinks that he/she is important
that the consumers should buy the lowest-priced car, then the chances of that person
buying a more expensive car are reduced.
Organizational Buying Situations
The second factor is unexpected situational factors. The consumer may form a
purchase intention based on factors such as expected income, expected price, and Straight rebuy
expected product benefits. However, unexpected events may change the purchase
intention. In this buying situation, only purchasing department is involved. Then get an information from
inventory control department or section to reorder the material or item and they seek
Post-Purchase Behavior quotations from vendors in an approved list.
Post-purchase behavior is the stage of the buyer decision process in which consumers The "in-suppliers" make efforts to maintain product and service quality. The "out-suppliers"
take further action after purchase, based on their satisfaction or dissatisfaction. The have to make efforts to get their name list in the approved vendors' list and for this purpose
consumer will either be satisfied or not. Its determinant lies in the relationship they have to offer something new or find out any issues of dissatisfaction with current
between customer’s expectation and the product’s perceived performance. If suppliers and promise to provide better service.
expectation falls short, then dissatisfaction will be its result, otherwise, satisfaction
then. The larger the negative gap between expectations and performance, the greater Modified rebuy
the consumer’s dissatisfaction. This suggests that sellers should promise only what
their brands can deliver so that buyers are satisfied. In this buying situation, there is a modification to the specifications of the product or
specifications related to delivery. Executives apart from the purchasing department are
involved in the buying decisions. The company is looking for additional suppliers or is ready
Organizational Buying Behavior to modify the approved vendors list based on the technical capabilities and delivery
capabilities.
Organizational buying behavior is the decision-making process by which formal organizations
establish the need for purchased products and services and identify, evaluate, and choose New task buy
among alternative brands and suppliers.
In this situation, the buyer is buying the product for the first time. As the cost of the product or
Characteristics of Organizational Buying Behavior consumption value becomes higher, more number of executives are involved in the process.
The stages of awareness, interest, evaluation, trial, and adoption will be there for the products
 Consumer market is a huge market in millions of consumers where organizational of each potential supplier. Only the products which pass all the stages will be on the approved
buyers are limited in number for most of the products. list and price competition will follow subsequently.
 The purchases are in large quantities.
 Close relationships and service are required. Systems buy
 Demand is derived from the production and sales of buyers.
Systems buying is a process in which the organization gives a single order to a single This step involves getting quotations from different sellers and floating tenders. The offers
organization for supplying a full system. The buying organization knows that no single party received by various parties are then scrutinized against the previously developed criteria and
is producing all the units in the system. But it wants the system seller to engineer the system, few sellers are shortlisted who can satisfy all requirements.
procure the units from various vendors and assemble, fabricate or construct the system.
Evaluation and selection of suppliers
Steps in Organizational Buying Process
The shortlisted suppliers are then evaluated on the basis of:
Problem/Need recognition
 Past reputation
It starts with realization of need or problem within the organization. It may be need for new  Quality of product
computers, printers etc. or problem like inventory shortage and under-production which can be  Delivery and Payment terms
solved by procuring more stock and buying new machines in the latter case.  Guarantees, Warranties, Discounts, Assurance offered by the seller
 Price of the product
Definition of characteristic and quantity needed  After sale services etc.
This stage involves clearly defining then the problem in hand and laying down the general Suppliers are reviewed again and again and then one or more than one supplier may be
characteristics of a product or service that may solve the problem. For example, deciding the selected.
cost, type, quantity and quality computer, stock or machine to be bought. This may be done by
a purchase committee, production manager, technical manager or the top management. Selection of an order routine
Development of product specification At this stage the buyers place the final order with the chosen supplier or suppliers specifying
all the technical specifications, quantity needed, expected delivery time, payment and return
Once the general specifications have been laid down, the buyers look for information about terms, installation or after sale services etc. required.
various product alternatives and lays down well defined product specifications that is to be
bought. This is generally done by the department or group or individual who will use or Performance feedback and evaluation
distribute the product.
The last stage involves deciding whether to re-order, modify the order or drop the seller. The
Search and qualification of potential sources buyers evaluate their satisfaction with the product and the seller(s) and communicate the
response to the seller(s). An order schedule is prepared for a month, quarter or year and the
After product specifications have been laid down, the buyers enter the marketplace and make organization enters into a contract with the seller.
trails and collect samples. Buyers also conduct a value analysis and determine various cost
reduction and standardization techniques that will effectively solve the problem. The buyers Major Influences on Business Buyers
then determine various sellers that have the ability to provide the required quantity and good
quality of product needed. Environmental factors
Acquisition and analysis of proposal Expected demand for the product that the buying organization is selling, expected shortages
for the item, expected changes in technology related to the item etc. are the environmental
factors that will have an effect.
Organizational factors
Changes in purchasing department organization like centralized purchasing, decentralized

purchasing and changes in purchasing practices like long-term contracts, relationship Written Works 3.3.4
purchasing, zero-based pricing, vendor-performance evaluation are the organization factors of
importance to marketers.
Direction: In a yellow paper, answer the following questions. Note, the back of the paper must
Interpersonal factors be clean. You can use multiple papers as you want. Write the question first in your paper
These factors are the relationship between buyers and sales representatives of various
competitor companies.
1. Name the four major factors that influence consumer buyer behavior.
Individual factors
2. What is a total market strategy, and why do marketers use this approach? Provide a
These factors related to the buyer. What sort of ways of interacting and service are appreciated recent example of a product or service that uses the total market strategy approach and
by the buyers and what ways are considered as irritants? Marketers have to understand the discuss the components that make it effective or ineffective.
reactions of buyers.
3. How is the need recognition triggered in the buyer decision making process? Provide
examples of the two different types of triggers.

Completeness
Relevance
TOTAL 100%
Sources:
Kotler, Philip et.al (2017). Principles of Marketing 17 th Edition. Model of Consumer Behavior.
pages 158-175
AMAES Online Education. Principles of Marketing Module 009. Buying Behavior. Pages 1-
12
CNNBusiness. Nike Inc (NYSE: NKE). https://money.cnn.com/quote/profile/profile.html?

symb=NKE. February 5, 2022
Shobhit Seth. Market Capitalization. https://www.investopedia.com/investing/market-

capitalization-defined/. February 5, 2022
Michele Jurek. Why Are Nike Shoes So Darn Popular?

https://medium.com/@michelejurek16/why-are-nike-shoes-so-darn-popular-
fa3b5426730e, February 5, 2022
Core. Filipino Personality Traits and Values for Social Support. https://core.ac.uk/. February
7, 2022
What is social class? https://udel.edu/~cmarks/What%20is%20social%20class.htm. February

7, 2022
Boundless Marketing. The Consumer Decision Process.

https://courses.lumenlearning.com/boundless-marketing/chapter/the-consumer-
decision-process/#:~:text=or%20external%20stimuli.-,Internal%20stimuli%20refers
%20to%20a%20personal%20perception%20experienced%20by%20the,%2C
%20thirst%2C%20and%20so%20on.&text=External%20stimuli%20include
%20outside%20influences,or%20word%2Dof%2Dmouth. February 7, 2022
Narayana Rao. Management Theory Review.

http://nraomtr.blogspot.com/2011/12/organizational-buying-processes-
and.html#:~:text=Organizational%20Buying%20Situations&text=In%20this
%20buying%20situation%2C%20only,vendors%20in%20an%20approved%20list.
February 7, 2022
Bbamantra. Organizational Buying Process/Decision Making Process.

http://bbamantra.com/organizational-buying-process/. February 7, 2022
QUARTER IV
Chapter 3 Lesson 4
MARKET SEGMENTATION AND MARKET
POSITIONING

ACLC College Tacloban Marketing Principles

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ACLC COLLEGE TACLOBAN | P R I N C I P L E S O F M A R K E T I N G

CHAPTER 1 MARKETING PRINCIPLES AND STRATEGIES

Lesson 1 Marketing Principles and Strategies 3

Brief History of Marketing

o Related Diversification: The organization stays within a market they have

Marketing Management Orientations

Societal Marketing Concept

Traditional Marketing Strategies and the 4P’s–or Are there Five?

Advantages of Traditional Marketing

Traditional Marketing in 2013

Strategic Marketing Solutions Can Help

Identify your target audience.

Emerging Types of Marketing and its Application

 Giving customers an opportunity to participate means personalizing

Types of Contemporary Approaches of Marketing

Relationship Marketing/Customer Relationship Marketing

o Focus: On whole relationship between suppliers and customers.

Business Marketing/Industrial Marketing

CRITERIA FOR GRADING PERCENTAGE

Understanding the Marketplace and customer needs

Understanding Customer Needs, Wants and Demands

Market Offerings—Products, Services, and Experiences

Market offerings also include other entities, such as

Exchanges and Relationships

Written Works 3.1.3

2. Into what happening does marketing myopia occurs?

a. SEC/DTI-registered name of establishment (e.g. Coca-Cola Bottlers Philippines

CRITERIA FOR GRADING PERCENTAGE

Developments in the world of technology are transforming businesses in various

The learners are expected to learn the following:

Engaging Customers and Managing Customer Relationship

 Dissolution - Dissolution is a stage when customer requirement suddenly changes and

 Commitment: Commitment is yet another milestone that should be achieved to set a

Computation of Customer Lifetime Value (CLTV)

Growing Share of Customers

Kotler, Philip et.al (2017). Principles of Marketing 17 th Edition. Managing Customer

Handbagholic. What are Louis Vuitton Bags Made Of?

Keys to Improve our Team’s Customer Service Skills

Make sure our reps are engaged

Build infrastructure that supports great customer service

 Delivering value to the customer

2. Why is it important to have an excellent customer service for your customers?

CRITERIA FOR GRADING PERCENTAGE

Kenny: Do you use Facebook?

The learners are expected to learn the following:

Define and distinguish between strategic and tactical marketing in terms of

Strategic Marketing Process

Step 3: Objective Setting

Step 5: Strategy Evaluation and Control

Tactical Marketing Process

The growth-share matrix defines four types of SBUs:

Strategic Marketing vs. Tactical Marketing

Kotler, Philip et.al (2017). Principles of Marketing 17 th Edition. Company-Wide Strategic

Meks. Top 7 Brilliant Cost Leadership Examples (in 2022). https://mktoolboxsuite.com/cost-

Samsung. Our Mission and Values. https://www.samsung.com/ph/about-us/company-info/.

Indeed Editorial Team. What Is Tactical Marketing?

Importance of Marketing Research

Types of Market Research

Marketing Micro-Environment Marketing Macro-Environment

In this lesson, we will discuss about consumers and business markets.

The learners are expected to learn the following:

Definition of consumer markets and business markets;

Characteristics of consumer markets based on demographics include differences in gender,