2nd QA POM

PRINCIPLES OF MARKETING
Module 4: Developing Marketing Mix
STUDY SCHEDULE OR GUIDE
LEARNING
WEEK TOPIC ACTIVITY
COMPETENCIES
Week 1-2 Developing Marketing Define a product and Activity 1:

Mix differences the
March 01-12, 2021 products, services Setting prices
and experiences
Activity 2:
Identify and describe Leaning Activity
the factors to
consider when setting
prices and new
Week 3-4 Activity 3:
product pricing and
March 15-26, 2021 its general pricing Advertisement
approaches
Discuss the structure

of distribution
channels, its
functions, and the
nature of supply
chain management
Define and identify

relevant promotion,
personal selling,
public relations, and
direct marketing to
create awareness and
persuade the target
market to buy the
product or patronize
the service
2nd Semester: Principles of Marketing Page 1

EXPECTED SKILLS
To do well in this module, you need to remember and do the following most
essential learning competencies (MELC)
 Define a product and differences the products, services and experiences

 Identify and describe the factors to consider when setting prices and new product
pricing and its general pricing approaches
 Discuss the structure of distribution channels, its functions, and the nature of
supply chain management
 Define and identify relevant promotion, personal selling, public relations, and direct
marketing to create awareness and persuade the target market to buy the product
or patronize the service
EXPLORE
LEARNING TARGET: Define a product and differences the products, services and
experiences
Product
The product is the first element in the marketing mix. After identifying a need in the
market, a company may already have a product that is capable of satisfying the need. The
following questions should be asked:
1. What is the product's function, appearance, quality, design, features, packaging, and brand?
2. What need does it satisfy?
3. What value does it offer to its customers?
4. What makes it unique?
5. What is its unique selling proposition (USP)?

All of these must be answered with the product's target market in mind. Any changes in
any of the product's features or attributes may necessitate a consequent change in one or all of
the other elements of the marketing mix (price, place, and promotion).
Physical products have several added components:

Packaging - The packaging serves to contain and protect, and, sometimes, identify and
promote the product. A product's packaging is different from its label. Product packaging has
several purposes:
• It protects the product en route to the consumer.
• It makes product storage and display more practical and
• It preserves the product for further customer use effective.
When deciding on product packaging, the following must be considered:

How much quantity of the product should be contained in the package?
Through surveys and observations, the marketer must determine the quantity of a
product preferred by the customer. This can be based on the usage and consumption habits of
the customer. The result would be the ideal number of pieces for a box of chocolates, milliliters
for shampoo, or fluid ounces for soda. Medicines designed to be taken several times a day
should consider the quantity of a prescribed dosage. For shampoos, it may contain quantity
sufficient for weeks of usage. For soda, it could be for a single consumption. In the Philippines,
single use packaging is popular as Filipinos have the habit of purchasing products on piecemeal
basis or tingi. This must be complemented with price affordability; hence, the customer's
financial capability must also be considered. An additional consideration is the frequency of
purchase.
Marketers must take into account that when products bought frequently are sold in
single use packages, the customer may need to buy the product every day. This increases the
possibility of the customer to switch to a competitor's brand. For this reason, some
manufacturers have resorted to large size packaging. Not only does this translate to relatively
lower costs to customers, it also minimizes the possibility of brand switching.
What physical attributes should the packaging have to facilitate customer use?
The design of the packaging must consider how the product is used. In order to do this,
marketers must determine how a product is used after purchase. Considering product handling,
storage, the nature of the product, and its shelf life, what type of package should be used?
Products that go through high heat sterilization process are packaged in bottles, cans, or tetra
bricks. Products like beer and some wines are packed in amber colored bottles to protect their
quality. Some products that require reheating, such as ready-to-eat meals, may be packaged in
microwavable containers.
How is the product opened and dispensed? For the convenience of consumers,
marketers should consider fitting canned products with easy open pull-tabs. Tear off packaging
usually has perforations for easier opening. Liquids such as milk may necessitate spouts that
fold to make pouring easier.
If the product is for multiple use, how can it be resealed and stored? Zip lock packaging
is one of the more popular ways to preserve the freshness of items, such as chips and other
salty and savory snacks. Almost all bottled products have resealable features. This is particularly
true for beverages that used to be sealed with bottle caps or "crowns," which have slowly
shifted to resealable plastic bottles.
What legal requirements must the package comply with?

Under the law, all product packaging must be secure, leak-proof, and safe for
customers. Legal requirements are particularly strict for pharmaceutical products. Tablets and
softgel capsules are packed individually in blister packs, while those sold in large quantities are
packed in child and tamper-proof containers.
What is the most appropriate shape of the product packaging?
Normally, product manufacturers consider functionality and storage in deciding on the

shape of their packaging. For these reasons, most products that come in rigid packaging are
square or rectangular in shape. This makes product handling, shipping, and storage efficient, as
these packaging shapes permit the greatest quantity of units in product cases and shipping
containers. Moreover, square and rectangular packaging also maximize the households' storage
space as large amounts of the product can be stored in cupboards and cabinets. The inherent
advantages of specific shapes have been taken to the extreme by some Japanese farmers who
have bred and developed square-shaped watermelons to allow produce to be stacked one on
top of another.
After studying consumer behavior and usage, some product manufacturers of personal
and hair care products like shampoos, conditioners, and cosmetics have discovered that their
bottle container are better received by consumers when they are relatively wide and flat. It is
common practice among Filipino consumers to invert containers when the contents of the bottle
become lesser. Wide and flat containers make the extraction of the last milliliters of the product
easier and more convenient. If visual inspection is critical, others may decide to use transparent
packaging to allow customers to see the product, e.g., food products. Others however, may
sacrifice some aspects of product utility for aesthetics by using unconventionally shaped product
packages to allow their products to stand out from retailer shelves and to create a unique brand
identity.
Labeling - is a display of information about a product on its container, packaging, or on the

product itself.
The following factors must be considered in deciding on the labeling of a product:
• Establish the image or personality of the product based on the tastes and preferences of the
target market.
• Determine the most important features of the product to the target market.
• Determine where the product will be sold and the applicable regulatory requirements, if any.
• Determine the placement of the product in relation to other products, particularly competitors.
Product labels play a vital role in a product's marketing. Because products are sold
through retailers, they are displayed in supermarkets or convenience store shelves. They are
expected to draw the consumers' attention and hopefully persuade them to purchase the
product. Labels are, therefore, a product's "silent salesman."This is no easy task considering
that there are many other competitive brands and products displayed on the same shelves, all
trying to attract the customer's attention. A brand or product label must be designed only after
a careful study of competitors' labels. Only then will the manufacturer decide on label's
material, size, shape, color, and textual content.
Legal requirements must also be considered in a product's labeling for foods and
beverages. All food products must contain the name of the manufacturer, country of origin, net
content, and its nutritional value table. It must also include the product expiration date and
applicable product handling and preservation requirements.
Some marketers include other facts on their package label that enhance marketability
and earn customer trust. Examples are: the Sangkap Pinoy seal, organizational endorsements
such as by the Philippine Dental Association or the Department of Health, ISO certifications,

free from animal testing, or if it conforms to the requirements of Muslim practices, the Halal
seal.
New Product Development
One of the most effective ways that companies can get ahead of competition is through
the introduction of new products. There are instances when customers are forced to buy
existing products and services in the market even if these only partially serve their needs. This
is because there are only limited product options available in the market.
History is full of successful new product launches that have changed the shape of entire
industries and created entirely new ones. The digital camera has rendered photographic films
obsolete; computers have completely replaced typewriters, the Internet has made telegrams a
thing of the past, and snail mail a non-preferred communication option. Smart phones are
slowly but surely phasing out basic feature phones.
Although product development and innovation may be a slow and expensive process,
the rewards it promises are worth the costs. Successful efforts at developing and launching new
products have catapulted companies to the top of their industries, and have driven complacent,
slow-moving firms to bankruptcy.
The Rationale Behind New Product Development
Why do companies introduce new products? Here are some reasons:
To defend its market share

Mondelez Philippines, Inc. (MPI), with its brand Tang, is the most dominant player in the
Philippine powdered juice market, having a 70.1% market share. In comparison, its two closest
competitors, Eight O'clock and Nesfruta, only has 16.8% and 10.6%, respectively. Despite its
wide market leadership, MPI has, within the last two years, decided to offer new flavors of
powdered beverage such as calamansi, dalandan and honey lemon, exclusively for the
Philippine market.
To position ahead of competition in a market segment

Filipino women have been using feminine hygiene soaps and washes for many years.
Sensing that similar products would eventually be demanded by the local males, Elev8 Trading
and Marketing Corp. launched Freshman Masculine Wash in June 2010. Since then, other
masculine hygiene wash brands have been introduced into the market, e.g., Naturacentials,
distributed locally by Alliance in Motion Global, and Intima, distributed in the Philippines by
Watson's.
To establish a foothold in a future market

Up until the late 1980s, Filipinos were drinking tap water. Recognizing the growing
public perception that tap water was unsafe for drinking, Metro Pacific Corporation in 1990
launched Wilkins Distilled Water, the first bottled water in the country. Being the first in a
previously non-existent market, Wilkins immediately dominated the market. At the end of 2013,
the Philippine bottled drinking water industry had ballooned to P66.4 billion, with 94 brands
competing against each other.
To take advantage of strengths in product distribution

Being a 125-year company, San Miguel Corporation (SMC) has built and cultivated an
extensive distribution network consisting of almost all of the country's supermarkets, groceries,
bars, restaurants, convenience stores, and sari-sari stores. This product distribution strength
has permitted the company to develop and launch its many different beer brands, San Miguel
Pale Pilsen, Gold Eagle, Red Horse Beer, San Mig Light, San Miguel Super Dry, Cerveza Negra,
San Mig Zero Beer, San Miguel Flavored Beers, and San Miguel Premium All-Malt Beer. Because
SMC has exclusive arrangements with some of these retail outlets, the company is able to
restrict the distribution of many of the competitors' brands.
THE NEW PRODUCT DEVELOPMENT PROCESS
Idea Idea screening Concept Business

generation Development & Analysis
testing
Product Marketing Product

commercialize- Testing Development
tion
Step 1: Idea generation - the initial stage of the new product development process where
any or all of several idea generation techniques (need/problem identification, attribute listing,
forced relationships, morphological analysis, brainstorming, etc.) are used to generate as many
new product ideas as possible.
Step 2: Idea screening - the stage where the ideas generated in the initial step are screened
using predetermined criteria to reduce them to a manageable few.
Step 3: Concept development and testing - where new product ideas are converted to
customer-centered product concepts and tested by a representative sample of consumers for
acceptability, believability, and potential intent.
Step 4: Business analysis - pencil-pushing stage where, based on concept development and
testing results, probable sales of the new product are calculated together with its costs and
potential profitability.
Step 5: Product development - the new product development stage where the product
concept is converted into a tangible working prototype.
Step 6: Market testing - the stage where the new product is marketed in a limited
geographical area to determine whether fine tuning of attributes, positioning, pricing,
advertising, and promotions program are necessary.
Step 7: Product commercialization - the final stage of the process where a new product is
launched.
FIRM-UP

LEARNING TARGET: Identify and describe the factors to consider when setting prices and
new product pricing and its general pricing approaches
Price
The price that a marketer charges for a product or service is a vital decision that has far
reaching consequences. From the point of view of the business, products and services are
offered with the intention of making a profit. However, the customer has a specific price in
mind that he/she considers as "fair" and "equitable." This is in relation to the value or benefit
that he/she expects to derive from the product or service. This makes pricing tricky and
challenging for marketers.
Product Cost Estimation

Before determining the price of a product or service, the total cost of production must
be computed. This is because it would make no business sense if the price is less than the cost
of production. With physical products, two types of cost are calculated: (1) unit variable cost,
and (2) unit share of operating and other expenses, or what is sometimes referred to as fixed
costs. The unit variable cost would be how much it would cost to manufacture one unit of the
product. This includes the cost of direct materials, direct labor, and direct overhead.
Direct materials used in the manufacture of a shirt may include the fabric, thread, and
buttons. For example, if two meters of fabric, five meters of thread, six buttons, and one
cardboard box for product packaging are used, its material cost would be:
Materials Cost Cost per Shirt
Fabric P100 per meter P200.00
Thread P4 per meter P20.00
Buttons P5 per piece P30.00
Cardboard P10 per piece P10.00
Total P260.00
The total direct material cost for producing each shirt would be P260.
Direct labor would include the wages of all workers directly responsible for making the
shirt. If, for example, workers are paid on a per-piece basis, its unit direct labor cost would be
as follows:
Process Labor Cost per piece
Fabric cutting P30
Sewing P25
Collar attachment P5.00
Button attachment P5.00
Total P65.00
The total direct labor per shirt would then be P65.

If workers are paid on a daily, weekly, or semimonthly rate rather on a per-piece basis,
the computation of labor cost would be more complex as the total unit output per period of
production would have to be included.
The unit's direct overhead is the amount that was spent in the manufacturing
overhead (energy, water, and other utility costs) for every shirt produced. This can be
computed by dividing the total factory manufacturing overhead in a month by the number of
units of shirt produced within the same month. If the total factory manufacturing overhead for
a particular month is P20,000, and the total number of shirts produced within the same month
is 4,000 pieces, the direct overhead cost per unit would be P5 (P20,000/4,000).
The sum of the three costs (direct materials, direct labor, and direct overhead which is P65) is
the product's unit variable cost, or how much it costs to produce one unit of the product.
The second type of cost is unit share of fixed costs. Fixed costs are expenses incurred
by the organization that are not related to the manufacture of the product. These include
executive and staff salaries, office rental, advertising and promotions, professional fees, and
other similar expenses. Total fixed costs incurred in a specific period must be shared by all units
of the product produced in the same period. This means that if in a particular month, the shirt
factory incurred total fixed costs of P400,000 and was able to produce 4,000 units of shirt for
the same month, each shirt would have to absorb P100 of fixed costs (P400,000/4,000).
Taking the entire costing example, therefore, the total unit cost of each shirt would be:
Cost Component Amount
Direct Materials P260.00
Direct Labor P65.00
Direct Overhead P5.00
Unit fixed cost P100.00
Total P430.00
Therefore, if the shirt factory is able to sell each of the 4,000 shirts it produced in a
particular month at its unit cost of P430, the company would make no profit but will also incur
no loss. This is called the break-even point. This is the lowest possible price the company can
set for its shirts (under normal circumstances).
If the company decides to sell its shirts at only P425, it will incur a loss of P5 per shirt. If
in a given month it is able to sell 4,000 shirts at this price, it stands to lose P20,000.
However, the shirt manufacturer may decide to price its shirts at P500. At this price, it
shall make a profit of P70 per shirt. If it sells its entire month's output at this price, the
company would make a profit of P280,000.
Service and experience costing are also computed, with unit variable costs represented
by the cost of the service/experience providers.
Pricing Strategies
The following are strategies that can be used in pricing a product:
• Markup pricing - is a pricing strategy that allows the seller a fixed markup every time the
product is sold.

The biggest weakness of this pricing strategy is the inclusion of unit sales in determining
the product's markup price. In reality, total unit sales is affected by the product's final markup
price.
See the example below to find out how to compute the markup price of a product
Where:
UC = Unit cost
VC/U = Variable cost per unit
FC = Fixed cost
US = Unit sales
Given:
VC/U = P10.00
FC = P300,000
US = 50,000 units
DMU (Desired Markup) = 20%
FC UC
UC = VC/U + UC =
US (1-DMU)
P300,000 = P16.00
= P10.00 +
50,000 (1 - 0.20)
= P16.00 = P20.00
Markup price is (MUP) is P20.00
 Target return pricing – is a pricing method that allows a product manufacturer to

recover a certain portion of his/her investment every year.
Because unit sales is also included in its target price determination, target from return
pricing has the same weakness as that of markup pricing.
The formula for obtaining a product’s target return price is as follows:
DR X IC
TRP = UC +
US
Where:
TRP = target price return
UC = unit cost
DR = desired return
IC = invested capital
US = unit sales
Given:
UC = P16.00
DR = 25%
IC = P1,000,000
US = 50,000 units

DR X IC
TRP = UC +
US
.25 X
= P16.00 + P1M
50,000
= P21.00
 Odd pricing or psychological pricing - a pricing method premised on the theory that
consumers will perceive products with odd price endings as lower in price than they actually
are. As such, consumers may find products priced at P99.95 closer to P99 than to P100. There
are about an equal number of research that say this is true, and those that say it is
inconclusive. that
• Loss leader pricing - a pricing strategy frequently utilized by supermarkets. It is based on

the practice of housewives using only a few selected essential products like sugar, coffee, eggs,
laundry detergents, and some canned good products as their sole basis for price comparison.
Supermarket retailers will deliberately price these “loss leaders" or comparison items low to
make their products appear more affordable than others. The markup lost on these loss leader
items are recovered from other items where markups are higher.
• Price lining - a pricing strategy designed to simplify a consumer's buying decision. This
method involves reducing the number of price points on merchandise to as little as possible, in
extreme cases to only one price point. Japan Home Center for example, prices all the
merchandise in their store at P66 or P88.
 Prestige pricing -a pricing strategy that disregards the unit cost of a product or
service. Instead, it capitalizes on the high value perception or positive brand reputation of a
product or service. It charges a price much higher than its unit cost. This is a pricing strategy
implemented by some fragrance and skin care products. Using prestige pricing, it would not be
unusual for a fragrance brand to have a unit cost of P1,300 and a selling price of P3,500.
 Marginal pricing - where a business organization prices its product at a range below
its unit cost but higher than its unit variable cost. This is in order to offer the lowest price in a
sealed bidding or other highly competitive situations. The failure to adequately cover some or
all of the company's fixed costs is justified by citing that these fixed costs are "sunk," or would
be incurred whether or not the order is acquired. The main objective of marginal pricing is to
outmaneuver competition, expand customer base, and increase market share.
• Predatory pricing - a pricing strategy is where the firm prices its product lower than unit
variable cost, initially resulting in short-term losses. The objective of this pricing strategy is to
price a new or persistent competitor out of the market. After its purpose is achieved, the
product's original selling price is restored and short-term losses recovered. Predatory pricing is
illegal in most countries including the Philippines (under Republic Act 8479).
• Going rate pricing - a pricing strategy where a company prices its product at the same
level as or very close to its competitors' prices. This effectively maintains the product's price
competitiveness in its market. The danger of going rate pricing is that it may result in price
wars, with each company trying to outprice another, to the detriment of all industry
participants.
• Promotional pricing - a pricing strategy involving a temporary reduction in the selling

price of a product/service in order to induce trial or to encourage repeat purchase. Almost all

companies, especially those involved in fast-moving consumer goods (FMCGs), implement
promotional pricing at one time or another.
When new products are introduced into the market, one of these two pricing strategies
can be used:
• Price skimming - where the product's selling price is way above its unit cost.
This allows the company to recover its research and development costs and expenses.
This is usually accompanied by intense expensive advertising and promotional campaign. This
pricing decision is usually effective with electronic products. This is especially true when similar
products are still non-existent in the market. There is hardly a way to compare prices.
Customers are usually left with little or no choice. This was the strategy employed by Motorola
when it launched its mobile phone in the Philippines in the early 1980s. The Motorola phone
was initially priced at almost P60,000. The price was reduced gradually when similar devices
were introduced in the country and initial advertising, promotions, and research and
development costs were recovered. The inherent weakness of the price skimming strategy is
that it makes the market very attractive for would-be competitors because of the appeal of
large price markups.
• Penetration pricing -a pricing strategy where the new product is priced only marginally
above its unit cost. The objective of this strategy is to capture a large part of the market at an
early stage by making the product affordable to the greatest number of people. An advantage
of this strategy is that it can discourage would-be competitors from entering the market
because of low price markup. The major disadvantage of this pricing method is that it can
prolong the recovery period for research and development, advertising, and promotion costs.
PRICING STRATEGY SELECTION
The choice of pricing strategy depends almost exclusively on a company’s objectives.

The correspondence between pricing strategy and objective is illustrated below.
Pricing Objective Pricing Strategy
Maximum Revenue Penetration pricing
Marginal Pricing
Going rate pricing
Promotional Pricing
Maximum market share Penetration pricing
Marginal Pricing
Going rate pricing
Promotional Pricing
Maximum profit Price skimming
Prestige pricing
Survival Marginal pricing

Activity 1: Setting Prices
Direction: Compute for the selling price of the product using the following information.
Write your answer on the activity sheet provided at the back of your module.
The company was able to produce 1,000 units using the amounts provided.
Total variable cost P200,000
Total Fixed Cost P300.000
Desired markup 20%
DEEPEN
LEARNING TARGET: Discuss the structure of distribution channels, its functions, and the
nature of supply chain management
PLACE
How can a company deliver its products to its customers effectively and efficiently? This
is the next vital marketing decision. Similar to the first P (product), product distribution
decisions are almost permanent, as distribution channels do not change on a daily basis. The
product type is also a major consideration in deciding the type of distribution channel or
intermediary. Mass market or a fast-moving consumer goods may require intensive distribution,
while products like expensive fragrances may necessitate only selective, if not exclusive,
distribution.
The Need for Marketing Intermediaries

Because most companies today serve relatively large markets and their consumers are
geographically dispersed, they rarely sell their products directly to the consumer. Instead, they
utilize marketing intermediaries, also called distribution channels, to bring their products to the
customer. Although most marketing intermediaries, i.e., wholesalers and retailers, are
independently owned, some product manufacturers may decide to own a few, if not all, of their
retail outlets, or sell their products online.
Intermediaries provide access and convenience for the product's consumers. The
following are other key functions of intermediaries:
 Information collection and dissemination - marketing intermediaries, particularly

retailers, provide product manufacturers with vital marketing research information on
consumer profiles and product movements. These are valuable for decision-making.
 Product storage and movement - manufacturers' warehousing facilities are relieved
of large amounts of merchandise. Intermediaries or channels take care of storage and
transport of products to the customer.
 Operational financing - distribution channels that take care of storage and transport
assume the costs of these activities.
 Product promotion - intermediaries, particularly retailers, help in the development and
implementation of communications programs to enhance product sales.
 Risk taking- most marketing intermediaries eventually pay for merchandise they carry.
They assume financial risk if the product does not sell as expected.
The use of marketing intermediaries increases the price of the product. However, the absence
of intermediaries would result in greater expense for the customer. A customer wanting to drink
a bottle of soda will have to go to the bottling plant because the soda is not available in the
convenience store (a marketing intermediary). A customer has to buy a piece of candy from the
manufacturer because it cannot be purchased at the sari sari store (another marketing
intermediary).
Supply Chain
A supply chain is the network of all the individuals, organizations, resources, activities,
and technology involved in the creation and sale of a product. The chain starts from the
delivery of materials from the supplier to the manufacturer, to the eventual delivery of the
finished product to its user. The supply chain segment involved in the delivery of the product
from the manufacturer to the consumer is known as the distribution channel.
With supply chain management, partnerships and collaborative efforts are established
among product material suppliers, the labor force, warehousing, shipping and transportation
companies, and product intermediaries. The objective is to optimize the supply chain that
results in better product manufacturing and distribution. This also leads to overall cost reduction
and higher sales.

Product Distribution Types
There are three general ways on how a product can be distributed using marketing
intermediaries:
• Exclusive distribution - distribution is limited to a select number of dealers, usually one or
a few.
The objective of exclusive distribution is to have more control over how a particular
brand is priced, displayed, and promoted. Products that are distributed exclusively usually enjoy
higher markups and better brand equities. The major disadvantage of this type of product
distribution is that brands are not very accessible to customers. Customers need to travel long
distances to get to where the product is available. OshKosh B'gosh, a popular and upscale
children's apparel brand, for example, is exclusively distributed in the Philippines by Cinderella
Marketing Corporation.
• Intensive distribution - This product distribution type, used mostly by fast-moving

consumer goods and convenience goods, involves making a product available in as many retail
outlets as possible.
This type of product distribution gives consumers the highest level of place utility and
convenience. However, product manufacturers have very little control on how the product is
priced, displayed, or promoted. When the Coke Sakto was launched in the market to compete
against lower-priced soft drinks, the bottler implemented an extensive advertising campaign,
promoting a low promotional price of P7 price to consumers (compared to SRP of P8). However,
few sari-sari stores sold Coke Sakto at the P7 promotional price. The stores continued to sell
the product at P8. This reduced Coca Cola's efforts to erode competitors brands' market share.
Some examples of products sold via intensive distribution are bottled drinking water, candy,
and snack foods, etc.
• Selective distribution - positioned between exclusive and intensive distribution, this type of
product distribution involves the use of more than one but not as many dealers as in intensive
distribution.
This allows adequate manufacturer control over retail prices, displays, and promotions.
However, it permits selected product distributors some level of independence. Products
commonly sold through selected distribution are brands of canned foods, seasonings, and
personal care products. Wholesaling and Retailing Wholesalers and retailers are two of the most
crucial distribution intermediaries, most especially in providing place utility for a product's
customers.
Wholesaling
Wholesaling is the sale of goods to others to be resold. Wholesaling is an important
product distribution function. Without wholesalers, product manufacturers would have to deliver
goods directly to retailers. Because wholesalers perform a valuable distribution function,
manufacturers allow them a markup for the goods distributed. Wholesalers perform the
following key functions:
1. Information collection and dissemination
2. Bulk-breaking
3. Assortment-building
4. Product storage and transportation
5. Financing
6. Risk-taking

Retailing
Retailing is defined as the sale of goods or services to the final customer for his or her
personal consumption. Typical examples of retailing establishments are drug stores, sari-sari
stores, restaurant, movie house, convenience stores, and supermarkets.
ACTIVITY 2: Learning Activity
Direction: Select an item that you frequently use; your mobile phone, ballpen or pencil,
wristwatch, hair brush, alarm clock, eyeglasses, etc. Study the product and its packaging.
Consider also the manner by which you use the product. Identify and describe in detail
how you would innovative this product to satisfy your needs and wants better. Write your
answer on the activity sheet provided at the back of your module.
TRANSFER
LEARNING TARGET: Define and identify relevant promotion, personal selling, public
relations, and direct marketing to create awareness and persuade the target market to buy
the product or patronize the service
PROMOTION
For the initial step, the advertiser first encodes his/her message. He/She does this by
incorporating signs, images, language, words, colors, sounds, personalities, and characters that
best capture the message that he/she intends to communicate to the customer. Before this, the
advertiser must identify his/her target market. Different consumer geographic, demographic,
and psychographic profiles require different messages. For example, a message intended for
the elderly needs to be subdued as compared to a message intended for teenagers. Messages
for the younger market can be colorful, loud, and exciting. The advertiser then decides on the
medium to be used to transmit the message. Radio, for example, is unable to present visuals,

making its advertising copy, i.e., advertising textual content and voiceover, more critical and
important. Television, on the other hand, is effective with visuals.
The advertising message is sent to the intended customer through a selected medium
(e.g., television or newspaper). The advertiser expects that the customer (1) sees/hears the
advertising message, (2) decodes/understands and interprets the message accurately as
intended, (3) remembers and/or recalls the message, and (4) is affected by the message and
acts on it by making a purchase. However, barriers in message transmission may cause the
customer not to receive or not to understand the intent of the message. For example, in
television advertisements, the video signal and sound reception are poor, or there is
background noise while the advertisement is being aired.
Advertising
Advertising is defined as any paid and public presentation of products, services, or
ideas, by an identified sponsor through a medium. The most common objectives of advertising
are:
1. To build
2. To inform
3. To persuade
4. To remind
Brand awareness is the extent to which consumers are familiar with the distinctive
qualities or image of a particular brand of goods or services. Achieving a high level of
awareness provides the brand the following advantages:
• Learning advantages which heavily influence the formation and strength of associations
that comprise the brand's image.
• Consideration advantages - which increase the likelihood that the brand will be included
in the consumer's "consideration set," or the set of brands that receive serious consideration for
purchase.
• Choice advantages which can affect choices among brands included in the consideration
set, despite the fact that there may be no other associations to those brands.
Advertising Campaigns
Before launching advertising campaigns, companies go through the following steps:
1. Identifying the target market
All marketing efforts always begin with the identification of the target market of the
product/service. This is the preliminary step to identify the type of message, the
medium to be used, the advertising appeal to create, and the celebrity endorsers (if
any) to be selected.
2. Establishing advertising objectives After the target market is determined, the

company formulates the objectives of the advertising campaign. If the purpose is to create
awareness, the desired level of awareness should be identified. Targets with high level of
awareness require multiple advertising placements with greater frequency of exposures.
3. Determining advertising message

The message is the most important component of the advertisement. It varies
depending on the objective. Objectives can be to inform, to create awareness, to
persuade, or to remind. Examples of advertising message styles are as follows:

• Functional attempts to provide a product brand as the solution to a current
consumption problem experienced by customers (see http://www.youtube.com/ watch?
v=eEb4x18HLy4) (Skinwhite deodorant). Symbolic - attempts to associate brand
ownership with an aspirational group. It addresses other abstract need states that
involve aspects not addressed by functional product benefits (see
http://www.youtube.com/watch?v=yB_XhkuN-8) (San Miguel beer).
• Experimental – attempts to promote brands using high sensory value. It satisfies
customers' desire for products that provide sensory pleasure (see http://www.youtube.
com/watch?v=n--uEXICou) (Myra-E).
4. Selecting media
After determining the content of the message, the company now selects among
available media vehicles (i.e., television, radio, print, or web). Media vehicles vary in
cost, with distinct advantages and disadvantages, and varying levels of reach.
5. Managing and coordinating the marketing communication process

With various media vehicles available, the company may utilize multiple vehicles
(e.g., process television and radio advertising, public relations, and publicity) to deliver
the message to its target market. These efforts must be coordinated to ensure unity of
message. This is referred to as integrated marketing communications (IMC). At the
conclusion of the advertising campaign, the company evaluates the effectiveness of the
program by determining its return on marketing investment (ROMI).
Types of Media and Techniques Used in Advertising
Traditional Media and Techniques

 Radio - A viable advertising vehicle in the Philippines since 1922, radio is the most
accessible media. Philippine radio stations broadcast in either the AM or FM bands, with
AM stations broadcasting mostly talk, news, or opinion programs. On the other hand,
FM stations primarily broadcast music, with each radio station specializing on a
particular type, such as classical, hip-hop, rock, or pop.
 Print - The first magazine in the Philippines was printed in 1840s, while the first
English newspaper was published and circulated in 1898. Many advertisers still favor
newspapers as their vehicle of choice because of their national circulation, population
penetration, and pass-on readership.
 Television (TV) - The three largest television stations in the Philippines are ABS-CBN
GMA7, and TV5. Television has a very strong influence in Philippine society since its
introduction in the 1950s. Television networks and stations broadcast through both free
and cable channels. Similar to radio, some television stations select programming
content to be exclusively public affairs, entertainment, children's programs, or
educational TV.
Alternative Media and Techniques
 Cinema - The first motion picture in the Philippines appeared in 1904. Since then, a
large number of cinema houses and movie theaters sprouted in major metropolitan
cities, particularly in Metro Manila. During a low period in the local film industry, most
movie theaters folded up. At present, the most extensive network of movie theaters is
owned by the SM (Shoemart) group. Every year, the local film industry receives a boost
during the Metro Manila Film Festival, where only locally produced films are shown.
 Billboard - Relative low cost and exposure to heavy traffic along major thoroughfares
have led to the popularity of billboard advertisements. Despite increasing rental costs

and the imposition of government regulations on this type of outdoor advertising,
billboards continue to thrive and has technologically evolved from traditional billboards
to the use of light-emitting diodes (LED).
 legal restrictions Websites - Almost all legitimate companies have developed
websites that customers can access for product information and services. Websites have
become highly interactive However, the medium suffers from clutter due to the sheer
number of websites currently online. In 2014, the number of websites in the world hit
one billion, with thousands of new websites being created every hour.
 Social Networking Sites -- The large number of social media users all over the world
has led to the popularity of social networking sites as media for advertising. Statistics
indicate that there are currently over 1 billion active monthly users of Facebook, 200
million of Twitter, with 187 million members on LinkedIn.
 Directory Advertising - More commonly known as the "Yellow Pages," this medium
has been declining rapidly. This is brought about by an increasing number of households
discontinuing landline subscriptions. Moreover, the availability of online search engines
has made the search for specific products and services more convenient.
 Product Placement - Product placement is an advertising technique used by
companies to promote products subtly through a nontraditional advertising technique,
e.g., appearances on film, television, or other media. Perhaps the most memorable
product placements would be Pierce Brosnan's use of a BMW automobile in his James
Bond films, or a brief scene insertion of John Lloyd Cruz taking a Biogesic tablet to
relieve him of his headache in a movie. Advantages
 E-mail Advertising - There are currently 2.2 billion e-mail users worldwide,
transmitting 144 billion e-mails daily. The biggest downside to e-mail advertising is that
68.8% of it is classified as "spam" and is often unopened and unread by the recipient.
 Transit Advertising - Buses and jeepneys in the Philippines ply the same route every
day. An advertising signage on the side or back of a bus, a jeepney spare tire cover, or
perched atop a taxicab can create good brand recall for the market.
 Online Ads - In the 2.4 billion Internet users worldwide, 1.1 billion are from Asia.
These figures have led to the popularity of Internet advertising, which permits target
marketing through the use of cookies generated by a web page server.
 Direct Response Advertising - Used extensively on television during specific periods
of the day. Usually presented in telemarketing programs, direct response advertising
mostly showcases products not available through conventional retailers. Characteristics
of direct marketing messages are dramatization and the use of incentives to solicit early
response. This type of advertising, however, suffers from poor image as customers
complain of products not being faithful to how they were represented in the
advertisement.
 Point-of-Purchase, Signs, Posters, and Leaflets - These are relatively inexpensive
ways to advertise and promote a product. For example, point-of-purchase materials,
e.g., shelf talkers, and retailer floor signs, are effective in persuading a customer to
prefer one brand of product over another
Promotions
Promotions are activities or a series of activities that are intended to boost the sales of a
product or service, usually short-term. These are actions a company can take to stimulate
customers to buy immediately than later."
There are essentially two types of promotions:
• Trade promotions - Trade promotions are intended for marketing intermediaries such as
retailers. The purpose of trade promotions is to encourage the intermediaries to increase

purchases, to stock a particular product, to accelerate purchases or payments for purchases, or
to extend preference toward a particular brand. Some examples of trade promotions are 10+1
(if a retailer orders ten cases of a product, the manufacturer delivers 11 cases but does not
charge for the extra case), giving retailers free store signages to carry a specific product brand,
and contests among participating retailers. Trade promotions "push" products to the retailer or
trade outlet
• Consumer promotions - Consumer promotions, on the other hand, are intended for
consumers. The purpose of consumer promotions is to induce product trial, to encourage brand
switching, or to reward consumer patronage. Examples of consumer promotions include the
distribution of product samples, consumer contests, sweepstakes, coupons, and raffles.
Consumer promotions "pull" consumers to brand retailers or trade outlets to see, try, and/or
purchase the product.
Personal Selling
Personal selling occurs when an individual salesperson sells a product, service, or

solution to a client. Personal selling is necessary in the marketing mix when products/services
are highly technical, fairly complex, durable, expensive, or not actively sought out by
customers, especially when its customers are institutional in nature. The success of personal
selling depends on company salespersons understanding customer needs and their ability to
build long lasting client relationships. Personal selling is a very expensive method of product
promotion where product/service pricing is often negotiated Products and services most
commonly promoted and sold through personal selling are institutional products such as
equipment, recurring supplies, motor vehicles, homes, financial services, and unsought goods
such as life insurance and memorial plans.
Public Relations
Public relations is creating and maintaining goodwill of an organization's various publics

(customers, employees, investors, suppliers, etc.) through publicity and other nonpaid forms of
communication. These efforts may also include the support of the arts, charitable causes,
education, sporting events, and other civic engagements." Public relations looks after the
public's perception of a company or its brand's reputation, with the end of influencing opinion
and behavior. A lot of companies engage in public relations efforts. Jollibee, for example, has a
toy giving program for indigent children. Other companies support one or more charities such
the Hospicio de San Jose, Tahanang Walang Hagdanan, Inc., and have given valuable logistical
and financial support during natural calamities, e.g., typhoon Yolanda.
Publicity
Publicity is a communication written and produced by public relations professionals

intended to create a favorable public image for a client. Publicity usually takes the form of text,
audio and video news releases about an individual or organization. They are distributed to
newspapers, magazines, radio and television stations, Internet sites, and other forms of media.
Many regard publicity as a more effective promotional tool compared to advertising.
Publicity reaches a wider audience, making it more cost-effective and may have a longer recall
by the general public than advertisements. Because publicity is often published or circulated by
third party entities such as magazines and newspapers, it has a higher level of credibility as
compared to advertising.

In the early 1980s, rumors spread that a Philippine hamburger fast food chain was using
earthworms, instead of beef, for its hamburger patties. In response, the chain launched a
publicity campaign through third parties. It convinced the public that it does not make business
sense to use earthworms, as earthworms are more expensive than ground beef. Soon, the
public realized that the allegation was not logical and the rumor died.
ACTIVITY 3: Advertisements
Direction: Choose two examples of advertisements of traditional media and techniques and
three examples of alternative media and techniques used in advertising. Provide a brief
description of the advertisements and cite the advantages and disadvantages of using these
media and techniques. Refer to the discussion as a reference. Write your answer on activity
provided at the back of your module.
Format:
Type of media The Brief Advantages Disadvantages

and technique Advertisement Description

PRINCIPLES OF MARKETING
Module 6: Managing the Marketing Effort
STUDY SCHEDULE OR GUIDE
LEARNING
WEEK TOPIC ACTIVITY
COMPETENCIES
Week 5 Managing the Explain the Activity 1:

Marketing Effort relationship between
March 29 – April 2, market analysis, Sharing an
2021 planning, Experience
implementation,
implementation, and
Week 6 control Activity 2:
April 5 - 9, 2021 SWOT Analysis
Analyze the
company’s situation,
Activity 3:
markets, and the
environment Performance Task –
Mini Marketing Plan

EXPECTED SKILLS
To do well in this module, you need to remember and do the following most
essential learning competencies (MELC)
 Explain the relationship between market analysis, planning, implementation,

implementation, and control
 Analyze the company’s situation, markets, and the environment
EXPLORE
LEARNING TARGET: Explain the relationship between market analysis, planning,

implementation, implementation, and control
THE MARKETING PROCESS
The marketing process is the process of discovering unfulfilled customer needs. It

involves identifying opportunities, targeting markets. Designing and planning marketing
strategies and programs, and organizing implementing, monitoring, and controlling the results.
Analyzing marketing Selecting Target Designing Marketing

opportunity Market Strategies
Organizing, Planning marketing

Implementing, and programs
controlling the
marketing effort
Let us understand the process by using the following example:

Metro Corporation is a Filipino company established in 2010. It is a participant in the local hair
care industry. It currently offers two types of shampoo for the female segment of the market:
 An anti-dandruff shampoo
 An anti-split ends shampoo
Vision and Mission
The vision of Metro Corporation is: "To be the leading company in developing innovative
consumer goods and services.
Its mission statement reads:
"We are a consumer goods marketing company making quality and innovative products
designed to improve the well-being of our consumers.
Now, the company intends to develop one of two new products to augment its hair care
line: a hair damage-repair shampoo or an aromatherapy shampoo.
Analyzing Marketing Opportunities
The Microenvironment To decide between the two shampoo variants, Metro Corporation
first needs to evaluate the company's microenvironment.
The internal organization or the company is assessed. This is to determine the

availability of resources tor a new product development. Relationships among the functional
areas are reviewed to ensure support. Among others, the following questions should be
answered:
 Does company research and development possess the technical expertise and know how
to develop the new product?
 Does manufacturing have the necessary equipment, machinery, and manpower to
produce the new product?
 Does the company employ sufficient qualified and well-trained personnel to handle the
marketing of the new product
 Will top management consolidate necessary human and financial resources to see the
project to its completion?
Although the successful launch of new products in the market can be profitable, there
are inherent risks. The product development process is expensive and time consuming. The
development of the Concorde, the first supersonic commercial aircraft, is an example. A
business analysis was made only after the prototype of the aircraft was manufactured. The
manufacturer discovered that it will not be able to recoup its product development costs over
the service life of the aircraft.
It should be noted as well that other participants in the industry may also be developing
similar products. They could be doing so at a faster and more efficient rate. The extent of the
competition and their resources should also be evaluated. A new product's competitive position
in the market can be determined through the use of marketing tools.
The ability of suppliers to provide necessary raw materials at the required quantity,
price, and time should also be considered. The firm should evaluate the availability of market

intermediaries, distribution system, and network. This is to ensure that the new product will be
accessible to the customer. Publics are important in order to anticipate societal expectations.
Finally, a detailed study of the product's potential customers shall confirm the need f the
new product. This can be determined through market research, e-g, focus group discussions
and consumer surveys.
A study of microenvironmental factors can generate areas ot strengths and weaknesses

for the company. Some possible strengths are superior financial resources, wide distribution
coverage, and a strong market need for the new product. On the other hand, possible
weaknesses are: a not so ideal company's reputation, the lack ot marketing personnel, etc.
The Macroenvironment
The macroenvironment is next to be evaluated. The economic situation is reflective of

the general business climate. The shifts in the political-legal scene would project political
stability and anticipate the effects of legislations on the hair care industry.
A careful study of the demographics will pinpoint areas where the product will provide
the greatest benefit. In some cases, failure to consider sociocultural factors affects the success
of a product. One example is tampons. Metro Corporation would have to make sure that the
product does not conflict with societal norms.
Research on the technological environment may lead to innovative production processes

or new packaging ideas. These can be incorporated to reduce cost and enhance the product's
aesthetic and utility. Possible effects on the natural environment should not be ignored.
Package design of the new product should be environment-friendly.
A study of macroenvironment factors will lead to the discovery of opportunities and

threats. Opportunities may emerge from the increasing consumer disposable income, the
growing teenage female population or the premium placed by the youth market on sweet
smelling hair. Threats may arise from pending government regulation banning the use of
harmful chemicals in hair-repair shampoos.
Let us assume that after evaluation of the microenvironment and macroenvironment,

Metro Corporation decided to develop an aromatherapy shampoo. This is because it satisfies a
real need, has a relatively large and growing market, capitalizes on the company's extensive
distribution network and the population's increasing disposable income, has fewer competitors,
and the company has access to advanced product technologies that are unavailable to
competitors.
FIRM-UP
LEARNING TARGET: Explain the relationship between market analysis, planning,

implementation, implementation, and control
Selecting Target Markets
After identifying marketing opportunities, Metro Corporation will select its target market.
The objective is to select the most logical and most probable customers of the new product.

They are the ones who will purchase the product most frequently and at the greatest volume.
To identify the target market, a perceptual map can be used to determine the specific segment
it should target, in comparison to existing competitors. It may select a segment that may have
one or more competitors that do not seem to be serving its market well. It may also consider
an unoccupied segment unserved by any brand competitor.
For our example, Metro Corporation now decides to serve the medium-priced, high
fragrance aromatherapy market because it is currently unoccupied. It proceeds to determine
the size of the market, its purchasing power in terms of price, frequency, and amount of
purchase, its scent preferences, and general usage habits. The target market for the new
aromatherapy shampoo product is now identified as:
"Image- and hygiene-conscious female teenagers from Metro Manila and major urban
centers nationwide, who shampoo their hair on a daily basis, and are willing to pay average
prices for an aromatherapy shampoo that is capable of keeping their hair fragrant throughout
the day."
For this new product in its initial year in the market, the company may have decided on the
following marketing objectives:
 Achieve an awareness level of 65% by the end of calendar year 2019.

 Attain new product sales revenues of P45 million by December 31, 2019
 Realize new product net profitability of P3.8 million by the end of 2019.
Designing Marketing Strategies
After selecting the target market, Metro Corporation must select the marketing
strategies to employ. These are selected with the objective of increasing awareness, revenue,
and profits. For this particular case, the selected strategies can be applied during the product's
introduction into the market. However, they are usually modified as the product enters the
growth stage.
Marketing strategies can be defined as comprehensive programs of action involving the

use of organizational resources to achieve marketing objectives.
To achieve new product revenues of P45 million, the company may propose three
strategies: (1) product development, (2) product differentiation, and (3) market penetration.
Next is budget. The company would decide on the funds needed for the implementation
of the strategies. The budget will be allocated to the implementation of the four elements (4Ps)
of the marketing mix: product, price, place, and promotion.
Planning Marketing Programs

The planning of marketing programs involve developing and implementing action plans
Or tactics under each strategy. Action plans or tactics conventionally use the marketing mx as
the foundation of implementation.
For example, for implementing product development, the company may decide to utilize
several variables under the first product. It may choose to develop a high quality shampoo
(quality) and name this new product Bouquet (brand), which suggests s value proposition. The
company may decide on three size variants tor the shampoo (sizes), 100 ml, 50 ml, and sachet,
and package the 100 ml and 50 ml sizes with a retractable spout (packaging).
For product differentiation, the company may use various product variables. The
company may decide to infuse their new shampoo with long-lasting scent ingredients (features)
and give a money back guarantee if the consumer is not satisfied with the product (warranties).

For market penetration, this strategy may involve price variables. The company may
decide that the ideal selling price for the new product is P120 for the 100 mi size, P65 for the
50 ml, and P6 for the sachet (list price). lo induce retailers to carry the new product, Metro
Corporation may offer them a 10+1 deal (allowances) coupled with a 60-day payment
Place variables may also be involved. The company may decide to utilize its existing
distribution network (coverage), but include the use of independently owned local dealers
(channels) who shall be responsible for stocking the product (17ventory) to service various
product retailers and eliminate stock outs.
The fourth F (promotions) assumes a major role in the implementation of the company's
market penetration strategy. Product advertising (advertising) may be released and broadcast
in advance to create and sustain new product awareness. There will be product sampling
(consumer promotion) during the first three weeks of the product launch in 87 major
supermarkets nationwide. Both a company website, and a Facebook account will be created
(social networking) to harness the influence of the Internet on the new products target market.
Billboards will be erected by the second month, shelf talkers and mobiles placed in major
supermarkets (point-of- purchase) shortly thereafter
Separate budgets would be allocated to these marketing mx variables. There are

limitless possible combinations and budgetary allocations for each marketing mix variable. To a
large extent, the success of the company's marketing program would depend on the proper
selection of the variables to be used, and the financial support extended to each o the variable.
Activity 1: Sharing an Experience
Direction: Share your own experience using a specific product and kindly discuss
whether you are satisfied or not. Moreover, cite your reasons why you are satisfied or
unsatisfied. Write your answer on the activity sheet provided at the back of your module.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________
DEEPEN

LEARNING TARGET: Analyze the company’s situation, markets, and the environment
Organizing, Implementing, and Controlling the Marketing Effort
A good marketing program by itself does not necessarily guarantee sustained success
for an organization. The business organization must be operated and structured in a manner
that will ensure that the time, effort, and resources spent in the preparation of good marketing
programs are not wasted.
The job description of the marketing officer must be defined clearly. The company's
president or chief operating officer (COO) must ensure that there is effective collaboration
among the heads of all other functional departments. The manufacturers must produce the
product as required by the customer while finance must adequately fund planned marketing
activities. Human resources must ensure that there is a stable pool of qualified, well-trained,
and highly motivated personnel.
Adequate monitoring and control systems should be in place to ensure that marketing
programs do not miscarry. Monthly, quarterly, and semiannual benchmarks can be established
as advance warnings that performance results are not going according to plan. Marketing
programs may be tweaked or adjusted so that performance targets are met. In some cases,
situational conditions may have dramatically changed necessitating adjustment of goals.
Internal systems must measure the effectiveness of specific marketing activities. This is
to accurately determine return on marketing investment (ROOMI). Moreover, accountabilities
must be assigned for each of the activities to ensure that they are implemented with a singular
purpose.
The entire marketing process is embodied in the company's marketing plan, which it
usually prepares annually, A marketing plan is a document describing the current market
position of a business and strategies designed to accomplish its objectives, It serves as one of
the major roadmaps for a business enterprise in achieving its financial, operational, and societal
goals.
ACTIVITY 2: SWOT Analysis
Direction: Think of a product and kindly discuss its strengths, weaknesses, Opportunities
and Threats. Write your answer on the activity sheet provided at the back of your module.
Format:
Strengths Weaknesses

Opportunities Threats
TRANSFER
ACTIVITY 3: Performance Task – Mini Marketing Plan
Direction: Prepare a short marketing plan. Include only important information in your paper
such as:
a. A brief history of the company

b. The brand that you have made a mini-marketing plan of
c. Opportunities and threats facing your company and selected brand
d. Strengths and weaknesses of your company and selected brand
e. Market size and needs
f. Market trends
g. Marketing objectives
h. Your brand’s target market
i. Your brand’s positioning
j. Your proposed marketing strategies for your selected brand
k. Your proposed marketing budget
l. Financial Projections
Rubrics for the Mini-Marketing Plan:
20 15 10

Originality The learner’s output is The learner’s output is The learner’s total
authentic and did not copy authentic, but copied output is copied
from any sources. some part from the from other sources.
other source
Completeness The learner’s output shows The learner’s output The learner’s
all the requirements. shows some of the output does not
requirements, but did show any of the
provide all. requirements.
Content The learner’s output has a The learner’s output The learner’s
substantial content. has a good but not output has no
really substantial substantial at all.
content.
Total Score
REFERENCES
Book references:
Go, J. & Escareal-Go, C. (November 2017). Principles and practices in marketing in the
Philippines setting. Josiah and Carolina Go Foundation, Inc.
Ilano, A.B. (2016). Principles of marketing. Rex Printing Company, Inc.
Torres, O.G. & So,R.C. (2019). Principles Of marketing. Vibal Group, Inc.

PARENT’S/GUARDIAN’S EVALUATION ON CHILD’S PERFORMANCE
Dear Parent/Guardian,
Kindly evaluate your child’s performance in accomplishing the activities in this module.
Please put a check on the line before the indicator that is applicable. May God Bless you always.
Truly yours,
The GPC Family
In the activities for this module, my child/ward…
___finished the activities entirely on his/her own;
___needed a little help from me;
___needed much help from me; or
___depended on me the whole time
Other remarks:
_____________________________________________________________________________
____________________________________________________________________

_____________________________________
(Parent’s/Guardian’s Name and

Signature)

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PRINCIPLES OF MARKETING

Module 4: Developing Marketing Mix

STUDY SCHEDULE OR GUIDE

Week 1-2 Developing Marketing Define a product and Activity 1:

Discuss the structure

Define and identify

2nd Semester: Principles of Marketing Page 1

 Define a product and differences the products, services and experiences

2nd Semester: Principles of Marketing Page 2

Physical products have several added components:

When deciding on product packaging, the following must be considered:

What legal requirements must the package comply with?

2nd Semester: Principles of Marketing Page 3

What is the most appropriate shape of the product packaging?

Normally, product manufacturers consider functionality and storage in deciding on the

Labeling - is a display of information about a product on its container, packaging, or on the

The following factors must be considered in deciding on the labeling of a product:

2nd Semester: Principles of Marketing Page 4

New Product Development

The Rationale Behind New Product Development

Why do companies introduce new products? Here are some reasons:

To defend its market share

To position ahead of competition in a market segment

To establish a foothold in a future market

To take advantage of strengths in product distribution

2nd Semester: Principles of Marketing Page 5

THE NEW PRODUCT DEVELOPMENT PROCESS

Idea Idea screening Concept Business

Product Marketing Product

2nd Semester: Principles of Marketing Page 6

Product Cost Estimation

Fabric P100 per meter P200.00

Thread P4 per meter P20.00

Buttons P5 per piece P30.00

Cardboard P10 per piece P10.00

Process Labor Cost per piece

Fabric cutting P30

Collar attachment P5.00

Button attachment P5.00

The total direct labor per shirt would then be P65.

2nd Semester: Principles of Marketing Page 7

Cost Component Amount

Direct Materials P260.00

Direct Labor P65.00

Direct Overhead P5.00

Unit fixed cost P100.00

2nd Semester: Principles of Marketing Page 8

Markup price is (MUP) is P20.00

 Target return pricing – is a pricing method that allows a product manufacturer to

The formula for obtaining a product’s target return price is as follows:

2nd Semester: Principles of Marketing Page 9

• Loss leader pricing - a pricing strategy frequently utilized by supermarkets. It is based on

• Promotional pricing - a pricing strategy involving a temporary reduction in the selling

2nd Semester: Principles of Marketing Page 10

PRICING STRATEGY SELECTION

The choice of pricing strategy depends almost exclusively on a company’s objectives.

Pricing Objective Pricing Strategy

Maximum Revenue Penetration pricing

Going rate pricing

Maximum market share Penetration pricing

Going rate pricing

Maximum profit Price skimming

Survival Marginal pricing