MARKETING REVIEWER

By: Mikaela Shayne E. Aguirre

Definition of Marketing
- “Lifeblood” of the business
- Refer to activities undertaken by a company to promote the buying or selling of a product or service
- Form of communication or promotion of the value of a product, brand or service
- Includes advertising, selling and delivering products to consumers or other businesses
- Not limited to profiteering alone but driven by core intention of improving the society
- Driven by the core intention of improving society
- Marketing for:
o Profit
 Aims to increase sales of products or services
o Non-Profit Organizations
 Aims to communicate messages for social purposes such as health and public safety information
disseminated by the government
- American Marketing Association:
o Activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings
that have value for customers, clients, partners, and society at large
o Emphasizes value
o Creation, communication, and the delivery of value to customers
- Philippine Marketing Association:
o Science and a profession guided principally by the universal principles of ethics, corporate citizenship, and
corporate social responsibility
o Adherence to ethical principles, corporate citizenship, and social responsibility
o Avoid marketing products and services that may be harmful to one’s health and well-being or promote
violence and immorality
o Products or services that serve no purpose or contribute nothing to individual and societal well-being should
not be marketed

Goals of Marketing
1. Understand the market and its consumers. And satisfy their changing needs and wants (ex. Nokia)
2. Introduce and innovate products and services that improve human condition and the quality of life (ex. Angkas)
3. Design and implement effective customer-driven marketing strategies (ex. Nestea)
4. Develop marketing programs that deliver superior value to customers (ex. Starbucks)
5. Build and maintain mutually beneficial and profitable customer relationships (Brand Loyalty ; ex. Shakeys Supercard)
6. Capture customer value to create profits (make the product worth buying)
7. Promote value transactions with full regard to society’s well-being (insurance, bring your own container for discount)

Marketing Process
The Situation Analysis Marketing Strategy Marketing Mix Decisions Implementation &
Formulation Control
 Microenvironmental  Product
 Macroenvironmental  Market Segmentation  Price  Implementation
 The market  Target Market  Place  Monitoring
 Customers Selection  Promotion  Marketing Mix
 Competition  Value Proposition Adjustment
 SWOT  Product Positioning
1. Conduct thorough analysis of the external environment, the market, its competitors and customers. And incisive audit
of its internal operating characteristics
2. Formulation of relevant marketing strategies coupled with a calibrated response using the elements of marketing
(commonly known as the 4Ps)
3. Regular monitoring takes place in order to identify deviations and make necessary adjustments

*crucial part of every marketing action

*cannot be ignored in marketing
*continuous process done repeatedly until satisfactory results are achieved

Product Levels
- Core or Generic Product:
o Purpose for which a product was created
o Similar products have the same core function
o “What is the product”
o Ex. Watch  to tell time ; automobiles  to transport
- Formal Product:
o Manufacturer use special feature to sell the products
o Enhances product through features, price, styling, color
o Ex. Waterproof, Glow-in-the-dark
- Augmented Product:
o Necessary for products that have relatively high process such as condominium units, motor vehicles and major
household appliances
o Offers credit terms, installment terms, installation, warranty, service, repairs and maintenance, etc.

Classification of Products or Goods

- According to Use: (still depends on how an item is used despite its physical characteristics)
o Consumer Goods
 Goods that can be purchased for consumption
 Ex. Drinks, Cars, Phones, Books, etc.
o Industrial Goods
 Purchased in order to make other goods
 Raw materials or input in the production of other goods
 Ex. Aluminum
- According to Differentiation:
o Undifferentiated Goods
 Products whose physical characteristics are difficult to distinguish when buying from different vendors
 These products are usually sourced from nature
 Ex. Rock salt
o Differentiated Goods
 Varied in their features and characteristics so they are easily distinguishable from one another
 Branding – ability of manufacturer to successfully distinguish their products from other competitors
 Brand Equity – appreciation in a brand’s value from customer’s point of view
 Ex. Shoes, Cars, Phones
- According to Durability:
o Consumable
 Product whose benefit can only be used for a short period of time
 Usually lasts days or weeks
 Ex. Food, Drinks, detergents, toiletries
o Semi-durable
 Products that lasts for months
 Ex. Clothes, shoes, belts, etc.
o Durables
 Products that last for years
 Are usually expensive and are usually augmented products
 Ex. Automobiles, houses, major household appliances, etc.
- According to Type:
o Convenience
 Products that are purchased frequently, usually inexpensive and do not require must purchase effort
and evaluation
 Available in any store
 Ex. Newspapers, gum, candy
o Shopping
 Purchased less frequently than convenience goods, more expensive, require a bit of information
search and evaluation
 Consider feature, evaluate attributes and compare prices
 Ex. Clothes
o Specialty
 Products that are limited and can be bought in only a specific place or store
 Ex. Branded luxury merchandise, works of art, automobiles. Homes
o Unsought
 Consumers seldom actively look for
 Purchased for extraordinary reasons such as fear or adversity, rather than desire
 Ex. Investments, memorial plans, life insurance

Marketing Services
- Intangibility:
o Physical products can be examined or sampled before a customer can purchase but it is not possible for
services to be sampled since they are intangible
o Service marketers resort to the practice of making their services tangible
 Retain large, luxurious offices manned by smartly dressed staff
 Maintain expensive and updates legal and medical libraries that can be readily viewed by visitors
 Displays diplomas, certifications, and other business evidence of their training and expertise
 Readily give out professionally prepared business cards with their Latin titles after their names
 Professional in attire and conduct
 Give clients the perception of their competence and capability to render the service required
- Variability:
o No service provider can render the same service exactly the same way every single time
 o Due to this customers sometimes exhibit apprehension when purchasing or paying for services
o The solution is to develop and implement standard operating procedures on how the service should be
rendered
o Ex. Fast food clerk (follows a script in greeting customers, asking orders, etc.)
- Inseparability:
o Service provider must be present each and every time the service is provided
o Limits the ability to render the service to large number of people since the presence of service is provider is a
necessary component in the production of the service
o Service companies institute a combination of standardized systems and procedures and service franchising
o Ex. Mr. Quickie is able to render handbag, footwear repair and key duplication services in its hundreds of
facilities with the same quality
- Perishability:
o Unconsumed services cannot be stored or warehoused
o Ex. Unreserved rooms in a hotel, unsold seats in a plane
o They represent lost revenues for the day that can never be recovered
o Capacity Management – achieving a proper balance between service demand (customer needs) and the
service supply (service availability)
 If service demand exceeds service supply, the excess demand cannot be accommodated by supply ;
potential revenues are lost
 If service supply exceeds service demand, the excess supply “perishes” and represents unrecoverable
revenues
o Application of capacity management is the changing rates of prices of airplane tickets

Needs, Wants, and Demands

- Needs: physiological necessities required for human survival (ex. Food, shelter, clothing)
- Wants: more psychological  indicates preferences that can improve the consumer’s life condition (ex. Gadgets)

Market and Market Demand

- Market:
o Group of individual or organizational customers who have both the willingness and financial capability to
purchase a particular product or service
- Market Demand:
o Total demand of all potential customer for a specific product / service over a specific period in a specific
market area
- Measuring Market Demand:
o Primary
 Total demand for all brands of a particular service or product
 Also called industry demand
 Ex. Demand for cellphones
o Selective
 Demand for a specific brand of product or service
 Ex. Demand for Samsung phones

Potential, Latent, and Current Demand

- Potential:
o There is no demand yet for a particular product or service, but there exists a market with sufficient financial
capability to purchase
o Ex. Avengers 5, IPhone 11
- Latent:
o When customers in a market are unable to satisfy specific desires because there exists no product/service in
the market that can satisfy the,
o Also can be a result of the availability of product/service but priced beyond their reach
o In order to satisfy latent demand…
 Introduce goods currently unavailable that are desired by customers
 Influence and persuade customers to relocate their expenditures towards the company’s product
 Offer credit, installment, or similar terms to make the product affordable to customers
- Current:
o Number of people of a particular market at present that would actually purchase the product or service
offered
o Usually measure through “intent to buy” surveys

Utility Value, Satisfaction

- Utility:
o Total satisfaction consumers can receive from the consumption of a product or service
- Value:
o Value customers place on a product or service
o Perception of value is affected by the cost required to acquire the product or service
- Satisfaction:
o Measure of how well customer expectations from a purchased product or service have been met
- Tips to ensure maximum customer value and satisfaction:
o Balance product or service quality and price
o Establish consistency among product availability, level of customer service and efficiency
o Create buying atmosphere and deliver purchase convenience

Customer Perceived Value

- Quantitative difference between the expected benefits and costs of particular in comparison to a similar product or
service
- Customers make purchases based on their perception on its ability to satisfy his or her needs and requirements
- Marketers advertise aggressively and invest heavily in highlighting product features
- Personal care products, products invest heavily in packaging and labeling
- Marketing research to identify the perceived values consumers attach to specific products / services

Customer Value Proposition

- Comparison of the benefits offered by a company’s products to its customers in relation to the amount it is asking
customers to pay
- “What’s in it for me?”
Competition
- Definition:
o Any company in an industry or a similar industry that offers a similar product or service
- Levels:
o Desire
 An example is eating which is a desire or need that a customer wants to satisfy at particular time or
occasion
o Generic & Form
 “indirect competitors”
 These 2 levels of competitions serve different types and forms of food items
 If a customer chooses one product over the other, the chain not chosen will not be able to generate
revenues from customers because:
1. The “desire” or “need” of the customer has already been satisfied and he is no longer (for the
moment) interested in food
2. If the customer is on a limited budget, he or she may have already spent his or her monetary
allocation for food
o Brand
 “most direct” competitors
 Offer the same type of product the customer has finally decided to consume

Approaches to Marketing
- Traditional Approaches:
1. Production Concept
 Assumes that customers prefer products that are inexpensive, affordable, and widely available
 Efforts are concentrated in expanding distribution, and improving production efficiency
 Lower production costs resulting in lower prices
 This concept is relevant only if customer tastes and preferences are stable and product demand is high
2. Product Concept
 Assumes that customers will always prefer and patronize products of high quality
 Resources focused on product improvement and innovation
 Preoccupation on product quality may neglect the customers’ changing needs
3. Selling Concept
 Emphasizes aggressive selling and promotional efforts
 Assumes that customers are generally timid and must be persuaded into buying
 Objective is to sell what is manufactured rather than manufacture what the market wants
- Contemporary Approaches:
1. Marketing Concept
 Considers the needs of both the customer and the product offered
 Objective is to provide a solution to the customer’s actual or perceived problem
 One must be more effective in the creation, communication and the delivery of this value to customers
2. Relationship Marketing Concept
 Believes that all marketing activities are for the purpose of establishing, maintaining and strengthening
meaningful long-term relationships with customers
  Customer databases are created, maintained and updated
 Ensure the customers’ needs are fulfilled and the relationship with them is maintained
3. Societal Marketing Concept
 Providing customers while considering the protection of the customers’ well-being and interests
 Includes the interests of the environment and society
 There is a benefit from associating a business

Customer Relationship: Customer Service

- Customer-Driven Marketing:
o A customer is a person or organization that transacts with businessperson or business organization to buy
goods or services for monetary or other valuable consideration
o Difficult to implement when the business is expanding
o Customers have the willingness and financial capability to buy or purchase goods and service
o Organizations must be able to offer products and services at the time when customers need them
o Company can’t force customers to buy thus, companies must predict customer needs in order to adequately
satisfy customers
o Competitors
 Companies must outdo each other in terms of value offering
 Everything must be done to ensure that the customer is kept and retained
o Influential Power of Customers
 The experience they receive can have a domino effect when they share it to their peers
 Adjustment of companies to customer trends
- Customer Service:
o Process of ensuring customer satisfaction with a product or service
o Forms – salesperson assistance, product delivery, technical advice, help desks, or other means
o Involves activities designed to enhance customer satisfaction, or the perception that a product has met or
exceeded expectation
o As business expand, resources are strained and spread thinly. It becomes easier to ignore customer service
which is crucial at this stage to ensure the sustainability of the business.
o Technology provides alternatives to customer service – help desks, contact center, company websites, social
media, etc.
 o Advantages
 Easy for small business
 Addresses customer concern on problems
 Addresses product problems
 Provides platform for customer feedback
o Disadvantages
 Easily ignored by bigger businesses
- Customer Service Programs:
o Customer service includes the experience a customer gets from the store
o Sample Features
 Interiors & Facilities  Customer-Friendly Employees
 Additional Amenities  Employees
o Disadvantage: Increase in Price & Exclusivity of Store
o Example
 Budjiwara (costs Php 300 for a trim)
 Luxurious interiors & facilities  Entertained customers while
 Offered refreshments & magazines background music played
 Rustan’s Department Store (premium prices for stress-free shopping)
 Highly-trained employees to avoid  Give customers space when
“hard-selling” shopping
 Gift-wrapping w/ no additional cost
- Managing Customer Service Quality:
o Customer service quality should be consistent through the mindset that one is willing to serve
o Conduct rigid customer service training and assessment of the services delivered
o Identification of customer service problems, improvements and current level of satisfaction
o It is better to exceed customer service expectations that to simply fulfill or underachieve them
o Manage service quality by…
 Establishing service objectives with specific and measurable targets
 Committing sufficient organizational resources towards the achievement of these targets
 Collecting customer feedback regularly
 Review target accomplishment
 Identifying customer service weakness
- Managing Customer Differentiation:
o Physical product differentiation can be protected through patent
o Development and training of competent customer contact personnel
 Understanding customer needs and wants
 Streamline internal procedures (review or improve)
o Implementing a superior service delivery environment and process
 Store layout (ergonomic)
 Merchandise and interior display
o Popular customer services in the Philippines
Customer Service Program Practicing organizations
Free Delivery Most Restaurants and Fast Food Chains
Automated In-Home Ordering Rustan’s Supermarket, Mercury Drug
 Free Gift Wrapping or Plastic Book Jacket Rustan’s Department Store, Fully Booked
Merchandise or Document Pick-up DHL and Other Selected Courier Services
Free Parking Some Churches and Religious Organizations
Valet Parking Some Hotels and Resorts
Reservations, Installment Plan Some Large Department Stores, Bookstores
Complimentary Refreshments, Waiting Lounge Most Car Dealerships
Help Desks, Touch Phone Access, 24-hour Telecommunication and/or Technical Firms, Most
Customer Hotline Utility Firms
Free Appliance Installation Anson’s, Abenson’s, and Shoemart Appliance
Center, etc.
Scheduled Floral Bouquet Some Flower Shops
Drive-Through Most Fast Food Outlets
Free Alteration on Garments Wrangler and Other Selected Apparel Retailers
Complimentary Massage Some Barbershops and Salon
- Customer Relationship Management: (CRM)
o Process of managing an organization’s interaction with current and future customers
o Rationale is the recognition that companies can sustain long-term profitability by attracting and maintaining
customers
o Maintain databases – customer names, birthdates, contact numbers, physical and email address, buying
history, behavior, etc.
o Strategies to Get Information
 Shopper’s Club ; Membership Card
 Customers leave business cards
 Incentives by raffles
 Customer Service Feedback
- Customer Lifetime Value:
o Forecasted sales or profits that a company can derive from the entire span of the future relationship with a
particular customer
o Based on potential value and profitability
o Implications
 Considers a longer-term perspective of a company’s relationship with the customer in contrast to a
short term view of “take the customer’s money and run”
 Calculates and compares cost of acquiring and keeping customers
 Acquisition costs – cost for getting new customers
 Retention costs – costs for maintaining existing customers
 Importance of market segmentation = some customer groups are more profitable than others
o Formula
Customer Lifetime Value
Average peso of a sale to a particular customer or customer group
X Number of repeat purchases in a year
X Average retention time in months or years
= Customer Lifetime Value
o Example
 An athlete who spends Php 2000 for every visit to a spa and goes to the spa twice monthly for an
expected timer period of 5 years.
 Customer Lifetime Value
Php 2,000 Average peso of a sale to a particular customer or customer group
X 24 Number of repeat purchases in a year
X 5 Average retention time in months or years
= Php 24,000 Customer Lifetime Value
o If gross profit is used instead of sales, the result will show the total profit that can be generated from a
customer in his entire lifetime
o Advantages
 A company can focus its resources in attracting and keeping the “right” type of customers
 Improves Customer Relationship Management efforts
 Positions the company for innovation and growth
o Disadvantages
 Exercise care in favoring high-value over medium-value customers
 High-value customers can become saturated and limit future purchases
 Medium-value customers can be converted into high-value customers through marketing
programs designed to increase usage, usage frequency or usage per occasion
o Innovators or early adapters are valuable CLV targets
 Quick to buy new products or try new service
 Opinion leaders and are capable of substantially influencing demand
- Successful Customer Relationship Management Strategies:
o Adopt the right mindset towards customer service
 Investment in customer service will not strain, but will instead improve a company’s finances over
time
 Customer service is provision of service to the customer before, during, and after a purchase
 May be in a form of innovation, pricing, scheme, extra services, customer feedback mechanism, staff
trainings that aims to promote customer satisfaction
 Excellent customer satisfaction rating enhances product or service’s features
o Purchase or develop CRM Software
 CRM helps the company interact with its customers with ease
 Involves the use of technology to organize, automate, and synchronize sales and marketing with
customer service and technical support
 Service-oriented features should be included in the software based on the customer needs
 Creating and maintain customer databases is necessary and essential
o Quantify customer acquisition and retention costs
 Total cost for acquiring or retaining a customer calculated and determined through CLV
 CLV can be a guide for selective product discounting
o Develop and implement a customer service training program
 Customers are life-blood of any business
 Customers expect to get what they pay for ; Satisfaction is key
 Customer Service Skills program (training program) can be developed to instill a customer-driven
behavior among employees
 Make every functional department understand their vital role in CRM
 Skills such as listening skills, conflict resolution, customer needs anticipation and empathy
o Empower salespersons to make decisions
  Salesperson is the most responsible for sealing the deal with a customer
 Should be empowered to make instantaneous decisions while accommodating a customer
 Set parameters for salesperson in order to address customer problems
o Establish communication lines between your customer and customer contact staff
 Communication is key
 Personalize and humanize the business and its atmosphere
 Customers prefer living and breathing salespeople over cold and robotic ones
 Customers prefer salesperson that have already gained their trust
o Shop your competition
 Keep track of what your competition is doing
 Adopt their good practices to stay ahead
o Keep innovating customer service
 Never be satisfied with your level of customer service
 Discover how the organization can make experience of customers better
 Keep customer service costs in check by occasionally doing cost-benefit analysis
o Promote genuine customer service with passion
 Customers can easily discern if customer service is insincere
 Customer contact personnel must internalize that the customer is the actual source of their livelihood