Principles of Marketing

1st
Quarter – 2nd Semester

Marketing – is a form of communicating or promoting the value of a product, service or brand to the consumers.
“Word of Mouth” marketing is the simplest, oldest, and most natural way of marketing a service or a product for
profit or non profit purposes. Marketing for a profit aims to increase sales of products or a service while marketing
for non profit purposes aims to communicate messages for social purposes, such as health and public safety
information.

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

Marketing - is a science and a profession guided principally by the universal principles of ethics, corporate citizenship,
and corporate social responsibility.

PRODUCT, SERVICES AND EXPERIENCES

PRODUCTS – An idea, a physical entity (a good), a service, or any combination of the three that is an element of
exchange to satisfy individual or business objectives.

LEVELS OF PRODUCTS
• Formal Product – includes factors that could effectively differentiates automobiles.
• Core or Generic Product – houses its main or core function.
• Augmented Product – warranties, installments, maintenance, free installations.

CLASSIFICATIONS OF PRODUCT – GOODS

• According to USE:
o CONSUMER GOODS – purchased for personal consumption/household use
o INDUSTRIAL GOODS – purchased in order to make other goods, to serve as a raw material or input in
the production of other goods

• According to DIFFERENTIATION:
o UNDIFFERENTIATED GOODS – identical products, that are impossible to identify
o DIFFERENTIATED GOODS – varied products, in terms of characteristics and features that make them
distinguishable
▪ BRANDING – ability of manufacturers to successfully distinguish their products from other
competitors
▪ BRAND EQUITY – appreciation on the brand’s value from the point of view of customers

• According to DURABILITY:
o CONSUMABLE – used by consumers for a short period of time
o SEMI – DURABLE – used by consumers for a longer period of time, spanning for months
o DURABLE – manufactured to last a long time

• According to TYPE:
o CONVENIENCE – purchased frequently
o SHOPPING – purchased less frequently, relatively more expensive, requires information search and
evaluation prior to purchase
o SPECIALTY – require an unusually large effort on the part of consumers to acquire
o UNSOUGHT – usually purchased for extraordinary reason, consumers seldom actively look for.

SERVICES:
***FOUR MAJOR ATTRIBUTES OF SERVICE***
• Intangibility – services can only be felt thus, cannot be seen nor touch physically.
• Variability – service providers render services differently thus, delivering services from one another differs
from
• Inseparability – services cannot be separated from its provider
• Perishability – services can and be easily expire thus, it cannot be stored or warehoused.
Ms. Camille Nuñez-Panaga
ABM – POM – sy – 19 – 20
 o Capacity Management – achieving a proper balance between service demand (customer needs) and
service supply (service availability). If SD exceeds SS, the excess demand cannot be accommodated by
supply, potential revenues are lost. On the other hand, if SS exceeds SD, the excess supply perishes
and represents unrecoverable revenues.

NEEDS, WANTS, AND DEMANDS

Needs – defined as psychological necessities required for human survival.
Wants – Indicating preferences that can improve the consumer’s life condition.

TRADITIONAL APPROACHES IN MARKETING

• The Production Concept – customers prefer products that are inexpensive, affordable and widely available.
The objective is to lower production costs resulting in lower prices.
• The Product Concept – customers will always prefer and patronize products of high quality. The objective is
giving the product an emphasis other than the changing needs of the customers.
• The Selling Concept – emphasizes aggressive selling and promotional efforts. The objective is to sell what is
manufactured rather than manufacture what the market wants.

CONTEMPORARY APPROACHES IN MARKETING

• The Marketing Concept – considers the needs of both the customer and the product offered. The objective is
to provide the customer’s actual and perceived problem.
• The Relationship Marketing Concept – believes that all marketing activities are for the purpose of establishing,
maintaining, and strengthening meaningful long – term relationships with customers. The objective is to
ensure that customer needs are fulfilled and relationship with them are maintained.
• The Societal Marketing Concept – similar to marketing concepts but includes considerations that protect the
customer’s well-being and interests as well as the interests of the environment and society.

MARKET – group of individual or organizational customers who have both the willingness and financial capability to
purchase a particular product or a service.

MARKET DEMAND – is the total demand of all potential customers for a specific product/service over a specific period
in a specific market area.
• PRIMARY DEMAND – refers to the total demand for all brands of a particular product and a service.
• SELECTIVE DEMAND – is the demand for a specific brand of a product or service.
o Potential Demand – emerges when there is no demand yet for a particular product/service but there
exists a market with sufficient financial capability to purchase.
o Latent Demand – results when customers in a market are unable to satisfy specific desires because
no products/services exist in the market that can be satisfy.
o Current Demand – number of a particular market at a percent that would actually purchase the
product or service offered.

UTILITY – refers to the total satisfaction consumers can receive from the consumption of a product or service.

VALUE – the perception a customer place on a product or a service.

SATISFACTION – measure of how well customer expectations from a purchased product or a service have been met.

CUSTOMER – PERCIEVED VALUE – is the qualitative difference between the expected benefits and costs of a particular
product or service in comparison to a similar product or service.

CUSTOMER VALUE PROPOSITION – is a comparison of the benefits offered by a company’s products to its customers
in relation to the amount it is asking customers to pay.

COMPETITOR – is any company in an industry or a similar industry that offers a similar product or a service.

Ms. Camille Nuñez-Panaga

ABM – POM – sy – 19 – 20