Principles of Marketing

Market Analysis
Market Environment, Segmentation
and Consumer Analysis
Quarter 3
Module 2

Learner’s Packet
 HOW TO USE THIS MODULE

The module is designed to suit your needs using the IDEA instruc-
tional process . This will help you achieve the Most Essential Learning
Competencies. This will be the source of information that will enable you
to acquire the knowledge and skills in a particular lesson independently
at your own pace or with minimum supervision outside the normal class-
room setting.

To get the most from this Module, do the ff:

 Read the Learning Outcomes or MELC. These tells you what you
should know and be able to do at the end of this Module.
 Find out what you already know by answering the given activity.
 Walk through all the topics that contains important notes on basic
information on what you need to know.
 Engage yourself with different Activities that will develop your critical
thinking and analytical skill as well as connect with the real life situa-
tion.
 At the end of this module, is a Reflective Learning Sheet. This will
enable you to process your personal reflection on the knowledge,
skills, attitude and values on what you have read, seen, done and
learned in the lesson.
In case, you have difficulty and have questions regarding the lesson,
your teacher is more than willing to facilitate and assist you.
 Suggested references are included to supplement the materials pro-
vided in this module.

2
 WEEKS

6-7
Principles of Marketing
Grade 11
Quarter 3

Strategic Marketing Process

and
Marketing Environment

School Division Office Management Team: Rosemarie Blando, August M

Jamora, Merle B. Lopez
Writer: Dolor B. Aguilar, MBA
Malaya Integrated National High School
Illustrator: Julius Burdeos
Evaluator: Wendyrica G. Bañares

Principles of Marketing
Quarter 3
First Edition, 2021

Published by: Department of Education SDO—Rizal

Schools Division Superintendent: Cherrylou D. Repia
Assistant Schools Division Superintendents:
Gloria C. Roque and Babylyn M. Pambid

3
 Strategic Marketing Process and WEEKS
Marketing Environment
Lesson 6-7
I
The marketing concept states that an organization should strive to
satisfy the needs of consumers . A successful organizations do something to have
a competitive advantage over their competitors. It is the aim of strategic and mar-
keting planning to determine what to do , that is something better than their
competitors do.

What I Need to Know

Content Standard:
 Demonstrate an understanding of the importance of information, the market
characteristics affecting consumer behavior, and the bases of market segmen-
tation
Performance Standard:
 Conduct marketing research, interpret market buying behavior on product or
service, and identify the product or service target market
Most Essential Learning Competencies
 Distinguish between strategic and marketing planning in terms of objectives
and processes
 Analyze the elements of macro and micro-environment and their influence to
marketing planning

D
What I Know

Activity 1: PRETEST
WORD-POOL
Direction: Choose the appropriate word or group of words in the Word Pool that
describes the sentences. Write the answer before the number.
Microenvironment Strategic Planning Differentiation Strategy

Macroenvironment Marketing Process Cost Leadership

Mission Statement Marketing Environment Niche Strategy

Strategy

______________________________1. It consist of actors and forces outside marketing

that affects marketing management’s ability to build and maintain successful
relationships with target customers.

4
______________________________2. Includes forces that are internal to the
company that affects the ability to serve its customers.
______________________________3. It is the process of developing and main-
taining a strategic fit between organization goals and its changing market
opportunities.
______________________________4. A broad plan of action for pursuing and
achieving the company’s objective and satisfying its mission
_____________________________5. The continuous process of developing and
implementing marketing strategies to achieve specific marketing objectives
______________________________6. It includes factors that are external to the
organization that may have a direct impact on the company.
______________________________7. It is the organization’s purpose, what it
wants to achieve in the larger environment
_____________________________8. It involves offering a unique product or ser-
vices in a restricted market .
_____________________________9. A strategy primarily for achieving low price,
high volume and low profit margins on each item
_____________________________10. It seeks to achieve superior product fea-
tures which offers a high priced , high quality and superior service.

D
What’ s New

A broad plan of action for pursuing and achieving the company’s objective
and satisfying its mission is what we call a Strategy. It is based on strategic
thinking. Any organizations needs a strategy for Quality and Competitiveness.
The strategic marketing process seeks to establish a clear direction for all
marketing activities of an Organization.
A company’s strategy and approach to operations must also be aligned with
the limitations of its external and internal business environment

5
 D
What Is It?
What Is It?

Strategic Planning is the process of developing and maintaining a strategic

fit between the organization’s goals and capabilities and its changing marketing
opportunities..
Marketing Planning is the continuous process of developing and imple-
menting marketing strategies to achieve specific marketing objectives which in
turn lead to the achievement of an organization’s overall objectives.

MISSION SITUATION OBJECTIVE

IDENTIFICATION ANALYSIS SETTING

MARKETING
STRATEGY EVALUATION
STRATEGY
AND CONTROL
DEVELOPMENT

The Strategic Marketing Process

D
STEP 1: Mission Identification
Mission is an organization’s basic purpose and scope of operation. It describes
what the organization does, whom it does for its good and service and its value.
The mission statement is a public pronouncement of the company’s
what is trying to become and what differentiates it from other company.
Example of a Mission Statement
Mc Donalds:

“ To be our customer’s favorite place and way to eat”

Jollibee :

“To serve great tasting food, bringing the joy of eating

to everyone”

6
STEP 2: SITUATION ANALYSIS
This step assess and evaluates the market, customers, competitors and the
company’s internal and external environment. The objective is to identify the
company’s strength and weakness as well as the opportunities and threats.

STEP 3: OBJECTIVE SETTING

Objectives are marketing targets that are Specific, Measurable, Attainable, Real-
istic and Timebound . (SMART)
Examples of Marketing Objectives:
• Increase market share,
• Improve profitability
• Increase productivity
• Improve customer service

STEP 4: MARKETING STRATEGY DEVELOPMENT

The development of marketing strategy involves market segmentation , identifi-
cation of target market, positioning, and the translation of strategies into action
plans.
Market development is a growth strategy that identifies and develops new mar-
ket segments for current products.

Strategies can be classified into three categories:

Differentiation Strategy
A strategy that builds competitive advantage by being unique. It seeks to
achieve superior product features which offers a high priced , high quality and su-
perior service.
Cost Leadership
A strategy primarily for achieving low price, high volume and low profit mar-
gins on each item.
Niche Strategy
Involves offering a unique product or service in a restricted area.

STEP 5: STRATEGY EVALUATION AND CONTROL

After the strategy is developed, periodic monitoring and evaluation are needed.
This is necessary in making adjustments and corrections.

7
Marketing Environment What Is It?
The components of business environment are External environment which con-
sist of the actors and forces outside marketing that affect the company’s ability
to build and maintain successful relationship with target customers.
Marketing Environment consist of:
1. Microenvironment includes the actors close to the company that affect its
ability to serve its customers -- the company, suppliers, marketing intermediar-
ies, customer markets, competitors, and publics
2. Macroenvironment includes factors that are external to the organization that
may have a direct impact on the company.

ELEMENTS OF
MICROENVIRONMENT

1. The Company : Marketing department may be a lifeblood of an organization,

the functions of marketing management area in the organization must be
aligned with organization’s goals and strategies. Hence, marketing manager
must work closely with other departments.
2. Suppliers : An important factor that serves as partners . They provide re-
sources needed by the company such as raw materials, utilities, labor, capi-
tal and equipment. The performance of suppliers can directly impact an or-
ganization’s ability to continuously satisfy its consumers. To reduce risks
and uncertainty business firms prefer to keep multiple suppliers .
3. Customers: The people who create the demand for product and services.

8
They can either be end-users, business or organizations. Companies must attract
and maintain customers through products and services that meet and exceed
customer expectations.
4. Market Intermediaries: Intermediaries are channels that link the organization
to its customers. It helps the company promote , sell, and distribute its products
to final customers. The most common intermediaries are distributors, wholesal-
ers, and retailers.
5. Competitors: A competitor is critical to the success of the firm. Monitoring the
movement of competitors is essential because competition is very volatile. They
may introduce new products in the market, they may implement price changes
and launch advertising and promotional campaigns.
6. Publics: Finally publics are an important force in external microenvironment.
They may include any individual or entity with an actual or potential interest in
the company and its products or services. These include shareholders, financial
institutions, government, community , society and social media. The existence of
various types of publics influences the working of business firms and compels
them to be socially responsible.

ELEMENTS OF
MACROENVIRONMENT

1. Economic Macroenvironment
These includes those forces which have an economic impact on business.
Examples of these are inflation rate, foreign exchange rate, consumer spending
habits among others. Economic factors are significant because they indicate the
cost of doing business as well as consumer buying power.

9
2. Political-legal Macroenvironment
These includes both political and legal factors. Political factors such as un-
certain political situations , new administration, political unrest. Legal factors in-
clude law passed recently, legislative bills that could be enacted into law.
3. Sociocultural Macroenvironment
Social and cultural environment also influences the business environment
indirectly. These include people’s attitude to work , health, ethical issues , role of
family, marriage, religion and education.
4. Demographic Macroenvironment
These consist of changes in population which includes population rate,
gender , age, income composition, civil status and family size. All these demo-
graphic features have an important bearing on the functioning of business firms.
5. Technological Macroenvironment
These is composed of current technological change. Business makes it pos-
sible for technology to reach the people. Technology is vital for competitive ad-
vantage. Examples of this factor are internet which can spurs productivity and
living standards. Technological advancements which involve the use of varied
types of electronic gadget.
6. Natural Macroenvironment
This refers to natural resource inputs and environmental concerns, includ-
ing the nature and conditions of the changing natural environment. For example,
during this time of pandemic, manufacturers tend to produce more bicycles since
there is no public transportation available.

10
E
What ‘s More?

Activity 2: “ Analyzing the concept”

Direction: Identify the Strategic Marketing Process involved in the following.
Choose your answer from the box.

Mission Identification Situation Analysis

Objective setting Marketing Strategy Development
Strategy evaluation and control

1. A company has to open a store and need to declare the purpose of the busi-
ness why it exist and the scope of their operation.
2. The company need to identify the strength , weaknesses as well as the oppor-
tunities and threats.
3. The company has to set the goals for the sales revenue and the profit margin.
4. The company identify and develops market segment for the current products.
5. The company monitor and evaluate the developed strategy and make neces-
sary adjustments and corrections.

What I can do?

Activity 3: ESSAY:
Answer the questions below. Write your answer on your notebook.
1. Distinguish between Macro environment and Microenvironment. How do they
influence the marketing planning of an organization.
2. Why do you think its important to meet customer’s needs or even exceed cus-
tomer’s expectation?
3. Give your own example of sociocultural environmental influence on a business
organizations.
4. Assuming you want to start putting up a business. Can you list down at least
two possible marketing objectives you want to achieve?
5. After the strategic planning, why do you think it is needed to be monitored
and evaluated.?
 What I can do?

Activity 4: Independent Activity

During pandemic , there are business opportunities arise in your locality .

Assume you have to operate a family business . You may choose the busi-
ness that you want to put up .Create a Mission statement for your newly
opened business. Write your answer in a sheet of paper

A
What I have learned ?

Activity 5: IDENTIFICATION
Direction: Determine the elements of Macro and micro –environment based on
its influence to the marketing planning.
1. The unstable supply may affect the company’s ability to provide superior val-
ue to customers.
2. Aside from the distribution, it also helps in the promotion of products.
3. They create demand for products and services, so a concern for customers
satisfaction is essential.
4. They may actively implement price changes and launch promotional cam-
paign, so companies must be ready to respond to these movements.
5. Shareholders expects a reasonable returns on their investments to which they
have potential interest in the company’s product or services.
6. Changing values of customers preferences such as being health conscious
and so social responsiveness of business is necessary.
7. Rules and regulations implemented by local officials may influence the plan-
ning agenda.
8. Floods, earthquakes and natural calamities are the environmental concerns
to consider for sustainability.
9. Increased population in a certain locality can predict a higher demand of a
product or services.
10. Social media platforms such as Facebook, Twitter and the like have de-
creased the usage of traditional media.

12
 What I can achieved?
Activity 6: POST TEST
MATCHING TYPE: Match the letter of the correct answer in Column B with the
statement in Column A.
Column A Column B

1. A broad plan of action for pursuing A. Marketing Environment

and achieving the company’s ob-
B. Microenvironment
jective and satisfying its mission
2. Environment consist of actors and C. Macroenvironment
forces outside marketing that af- D. Niche Strategy
fects marketing management’s
ability to build and maintain suc- E. Cost Leadership
cessful relationships with target
customers. F. Differentiation Strategy

3. Includes forces that are internal to G. Strategy

the company that affects the abil-
H. Marketing Planning
ity to serve its customers.
4. It is the process of developing and I. Strategic Planning
maintaining a strategic fit between J. Mission Statement
organization goals and its chang-
ing market opportunities.
5. The continuous process of develop-
ing and implementing marketing
strategies to achieve specific mar-
keting objectives.
6. It is the organization’s purpose,
what it wants to achieve in the
larger environment
7. It involves offering a unique prod-
uct or services in a restricted mar-
ket .
8. A strategy primarily for achieving
low price, high volume and low
profit margins on each item
9. It includes factors that are external
to the organization that may have
a direct impact on the company.
10. It seeks to achieve superior prod-
uct features which offers a high
priced , high quality and superior
service.

13
 REFLECTIVE LEARNING SHEET

Direction: After reading and answering the exercises in this module, Write
two or three sentences to complete the following

I realized that ___________________________________

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________
I learned that
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
__________________________________________________________________
__________________________________________________________________

Answers Key

Activity 1– PRETEST

1. Marketing Environment 6. Macroenvironment

2. Microenvironment 7. Mission Statement

3. Strategic planning 8. Niche Strategy

4. Strategy 9. Cost Leadership

5. Marketing Planning 10. Differentiation Strategy

Activity 2 Activity 4: Independent Activity

1. Mission Identification Rubrics for checking;

2. Situation Analysis Customer focused—30%

3 Objective Setting Achievable 20%

4, Marketing Strategy Development Specific 20%

5. Strategy evaluation and control Responsive 30%

Activity 3:

Answers may vary

14
Activity 5
1. Supplier 6. Socio-cultural

2. Marketing Intermediaries 7. Political-legal

3. Customers 8. Natural

4. Competitors 9. Demographic
5. Public 10. Technological

References

Websites

https://kimberleyjonesphotography.wordpress.com/2013/03/27/exercise-3-
colour-relationships/

Books

So, R , & Torres O. (2016). Principles of Marketing , Vibal Group, Inc.

15
 WEEK

8
Principles of Marketing
Grade 11
Quarter 3

Marketing Research

Schools Division Office Management Team: : Rosemarie C. Blando, August

Jamora, Merle D. Lopez
Writer: Dolor B. Aguilar,MBA
Malaya Integrated National High School
Illustrator: Julius Burdeos
Evaluator: Wendyrica G. Bañares

Principles of Marketing
Quarter 3
First Edition, 2021

Published by: Department of Education SDO—Rizal

Schools Division Superintendent: Cherrylou D. Repia
Assistant Schools Division Superintendents:
Gloria C. Roque and Babylyn M. Pambid

16
 WEEK
Marketing Research
Lesson 8
I
What I Need to Know

Most Essential Learning Competencies (MELCS)

• Define marketing research, its importance to a business enterprise and

identify the steps in marketing research

D
What I know?

Activity 1– PRETEST

Direction: Determine whether the statement is true or false

1. Market Research is primarily concerned with getting to know the mar-
ket.
2. Market Research can anticipate market trends and changes.
3. The use of surveys is a qualitative research.
4. When the questionnaires is administered, it is in the part of data col-
lection.
5. Sampling plan addresses the sampling size.
6. Observational type of research is where there is laboratory experi-
ments
7. When results from the two sets of sample are compared it is Experi-
mental type of research
8. In data analysis, data is summarized and generalized.
9. The purpose of the research is to address information gaps.
10. Presentation of reports may use tables , graphs and charts

17
 D
What Is It?

Marketing Research is the function responsible for acquiring and evaluating

market and consumer-based information for decision making and determination
of marketing strategic direction.
It is a challenge for the companies to know what happens to their product after it
was purchased. Thus, for new products, or new markets, the company may not
be completely certain whether the product will be accepted by the market. The
value of the product to the consumer is difficult to measure because perceptions
of the value are subjective. Important information can only be obtained by con-
ducting a good market research.
Market research simply mean “getting to know the market” . The more you know
about your market, the better you will be able to determine the customer needs
and wants.
Importance of Marketing Research
Marketing Research can address the following issues
 Identify viable new products and services
 Determine the level of customer satisfaction
 Identify market opportunities and threats
 Anticipate market trends and changes
 Determine consumer price awareness and sensitivity
Steps in the Marketing Research Process
Step 1—Research need determination
 The problem situation has to be assessed initially to determine if marketing
research is needed.
Step 2—Problem/opportunity definition
 The problem or opportunity must be defined to set the direction of the re-
search.
Step 3—Establishment of Research Objectives
 The purpose of the research is to address information gaps. So objectives must
be specific, clear, detailed and operational
Step 4—Research design determination
 At this step, methods and procedure for the data collection and analysis must
be determined.
There are four major types of marketing research designs:
1. Observational—social phenomenon is observed and can be made at any one

18
 D
time or within a period of time.
2. Experimental—This includes laboratory experiments and test marketing. Re-
sults from the two sets of sample are compared.
3. Qualitative– includes focus groups, interviews, and projective techniques. This
is effective in extracting consumer and non-consumer experiences regarding the
products.
4. Quantitative –Example of this is the use of surveys. It is used to test observa-
tions
Step 5– Information source identification
 Primary and secondary information are gathered and used to determine con-
sumer needs , behavior and buying habits.
Step 6– Determination of data access methods
 Data access in consumer surveys is through person-administered surveys.
This could either be administered through face to face or telephone interviews.
Step 7—Data collection forms design
 The most common form used in data collection is the survey questionnaire
which must be carefully and meticulously prepared. The respondents are
asked a variety of questions which are often about their personal information,
their behavior .
Step 8– Sampling plan determination
 In order to achieved 100% accuracy in the conduct of consumer surveys, it is
ideal to give questionnaires to every member of the target population. This type
of survey is called a census. A viable alternative to this survey is through a
sample where only a representative portion of the target population is gath-
ered. After the sample size has been calculated, the sampling plan is deter-
mined.
Step 9– Data collection
 This is the stage in the process where the questionnaires are administered to
the selected respondents.
Step 10– Data analysis
 At this stage , collected data is summarized and generalized. The differences
and relationship among data are determined. Some common statistical tools
used in data analysis are percentage, mean, range, standard deviation , and
hypothesis tests.
Step 11– Report preparation and presentation
 The last steps in the process is the preparation and presentation of the report
findings. interpretations, conclusions and recommendations to marketing deci-
sion makers. Tables , graphs and charts must be incorporated for the user to
visualize the results and findings.

19
E
What ‘s More?
Activity 2: “ Analyzing the concept”
Direction: Answer the following questions base on your understanding of the con-
cept. Write your answer in your notebook.
1. What is Marketing Research ?
2. Why is the Market research being done?
3. Identify the steps in Marketing research.
Activity 3: “Getting to know the Market”
Direction: Assuming that you are going to conduct a market research for a new
soap product that you are going to launch. This soap is made of organic ingredi-
ents
Answer the following basic questions in preparation for your major market re-
search. By this, you can apply the steps in Marketing research.
Why? State your purpose and objective for conducting the market research
Apply step 1 to 3
Who? Identify who are your typical buyers?
How? Determine the methodology to be used for the market research.
Apply step 4 to 6.

What I can do?

Activity 4: Independent Activity

Direction: You are about to prepare a survey questionnaire for the new
product which is an organic bath soap.
Perform Step 7-9, the Data collection by administering the survey question-
naire to your chosen 10 respondents in your neighborhood. You may print
or copy the sample questionnaire on the next page to be answered by your
respondents.

20
E
What I can do?

21
A
What I can achieve?

Activity 5: “Selling Hotdogs”

Direction: Using the information below, the data can be arranged chronologi-
cally from 7am- 6pm otherwise known as data array. The hotdogs customers
can be further classified into male and female. They can be sub-classified into
small children (12 y.o and below.) , teenagers (13 to 19 y.o ) and adults (20 y.o
and above). Fill– in the table that follows. Present graphically.

A researcher observed and recorded the following data in a store selling hotdogs
1. Boy , aged 10, bought two hotdogs at 2 pm
2. Girl, aged 8 bought one hotdog at 4pm
3. Man , aged 26 bought three hotdogs at 1 pm
4. Couple man and wife , aged 30 bought two hotdogs at 8am
5. Boy, aged 14 bought 5 hotdogs for friends at 3pm
6. Three girls , aged about 18,bougth six hotdogs at 6pm
7. Girl, aged 5, asked mom to buy her one hotdog at 11am. Mom aged 27,
bought one for herself
8. Twin boys, aged 7, asked their older brother to buy them four hotdogs at 12
noon, Older brother, aged 14,bought two hotdogs fpr himself
9. Two teenagers, Boy and girl , aged 15, bought two hotdogs at 1pm
10. Five children, two girls, three boys, about nine years old, bought five hotdogs
at 12 noon
11. Man, aged 27, bought two hotdogs at 9am
12. Woman, aged 30, bought three hotdogs at 10am
13. Three boys, aged 13, bought rive hotdogs at 4pm

TIME Hotdogs Bought

7-8 am
9-10 am
11-12 am
1-2 pm
3-4 pm
5– pm

22
 REFLECTIVE LEARNING SHEET

Direction: After reading and answering the exercises in this module, Write
two or three sentences to complete the following

I realized that ___________________________________

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
I learned that
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

Answers Key

Activity 1– PRETEST Activity 2 & 3: Answers may vary

1. TRUE 6. FALSE
2. TRUE 7. TRUE
3. FALSE 8. TRUE
4. TRUE 9.TRUE
5. TRUE 10.TRUE
6.

Activity 4: Independent Activity Answer may vary

Sample Questionnaire answered by the respondents shall be submitted to
your teacher

23
 Answers Key

Activity #5

TIME Hotdogs Bought Graphs and chart may be presented

7-8 am 2 Teacher will facilitate the preparation of the
9-10 am 5 graphs /chart using the given table.

11-12 am 13
1-2 pm 7
3-4 pm 11
5– pm 6

References

Websites
https://www.slideshare.net/nirajmandelia/a-structural-question.
Books

So, R , & Torres O. (2016). Principles of Marketing , Vibal Group, Inc.

Morato, E. Jr. (2016). Entrepreneurship, Rex Book Store, Inc (RBSI)

24
 WEEK

9
Principles of Marketing
Grade 11
Quarter 3

Consumer Behavior
Market Segmentation
and Positioning

Schools Division Office Management Team: : Rosemarie C. Blando, August

Jamora, Merle D. Lopez
Writer: Dolor B. Aguilar,MBA
Malaya Integrated National High School
Illustrator: Julius Burdeos
Evaluator: Wendyrica G. Bañares

Principles of Marketing
Quarter 3
First Edition, 2021

Published by: Department of Education SDO—Rizal

Schools Division Superintendent: Cherrylou D. Repia
Assistant Schools Division Superintendents:
Gloria C. Roque and Babylyn M. Pambid

25
 WEEK
Consumer Behavior
Market Segmentation and Positioning 9
I
What I Need to Know

Most Essential Learning Competencies (MELCS

• Differentiate the buying behavior and decision making of individual cus-

tomer versus the business (organizational ) customer.

• Identify and segment the market for a product or service.

D
What I know?

Activity 1– PRETEST

WORD-POOL
Direction: Choose the appropriate word or group of words in the Word Pool that
describes the sentences. Write the letter of the correct answer before the number.

A. Market Segmentation B. Consumer Behavior C. Consumer Market

D. Positioning E. Organizational Market F. Target Market

_______1. Refers to the actions and decisions processes of consumer when buy-
ing a product/service.
_______2. They are individuals and /or households who purchase products and
services for personal consumption
_______3. They are individual and companies who purchase goods and services
for some use other than personal consumption
_______4. The process of dividing the market into homogeneous parts of groups.
_______5. The process of communicating the image of a brand into the minds of
the consumer.
_______6. The most probable and most logical consumer and likewise the most
heaviest consumers of a product or service.

26
 D
What Is It?

Before businesses can develop marketing strategies to satisfy consumers,

they must understand consumer’s buying behavior.
Consumer Behavior refers to the actions and decisions processes of con-
sumer when buying a product/service. It is important for marketers to know this
process to understand how consumer buy.
Business offer products and services to both consumer and organizational
markets. Consumer Markets include individuals and /or households who pur-
chase products and services for personal consumption. Organizational Markets
are all the individual and companies who purchase goods and services for some
use other than personal consumption. Consumers normally make purchases in
smaller quantities, on the other hand organizational market buy less frequently,
but in greater volume.
The Consumer Buying Process

Need/Problem Information Evaluation of

Recognition Search
Alternatives

Post –Purchase Purchase decision

Decision

Need/Problem recognition
The consumer buying process begins when a buyer recognizes a need or a prob-
lem. Example a person might think it is time to buy a new cellphone.
The marketer must focus on making the consumer aware of existing but un-
known goods or services that offer a solution

Information search
After recognizing the need/problem, consumer seeks out information on how to
satisfy it. It can focus on product features, prices, warranties and other factors.

Evaluation of alternatives
At this point, the consumer compares the features, prices and attributes of the
product or services which address the recognized need /problem.

27
 D
Purchase Decision
After evaluating the product/service that will address the need/problem, the con-
sumer shall proceed to make the purchase.
Post-purchase behavior
After the purchase, the consumer shall make a judgment of the product/service’s
ability to satisfy customer’s recognized need/problem.

The Organizational Buying Process

Problem Need Product/service Supplier Search

Recognition Description Specification

Performance Audit Purchase Order Supplier Selection Proposal Solicita-

tion

Problem recognition
The organizational buying process begins with the recognition of a problem by
purchase of a machine, equipment ,or merchandise.
Need description
As soon as the need for a specific purchase is confirmed, technical personnel are
consulted to provide specifications and details of the requirement. This involves
describing in general the specific need, the features to be incorporated and the
quantity needed.
Product specification
Technical personnel are engaged in this process in order to provide the specific
technical details for the needed product or service.
Supplier Search
The company search and considers possible suppliers of the required product/
service. They may conduct plant visits on potential suppliers to verify their capa-
bilities to fulfill the order.
Proposal Solicitation
Qualified suppliers are asked to submit supply proposal or price quotation that
conform to the specification of the required product/service. Some suppliers may
be asked to make presentations.

28
 D
Supplier Selection
The buying company's technical experts evaluate the proposals. Suppliers are
not only interested in making sales but also in helping the buying company
address its problem or need.
Purchase Order
Once supplier is selected, a purchase order is issued with unit price , total cost,
terms of payment , delivery dates, service terms and warranties.
Performance Audit
Both the product and the relationship with the supplier are evaluated in order to
determine whether to establish business relationship with the supplier or may
get an alternative supplier on the next round.

Buying Behavior of Consumer Market

Consumers are influenced by different factors when buying a product/service. The
following are the factors that tend to have an effect on consumer behavior:
1. Culture—culture , sub-cultures and social classes . This refers to the overall
culture of a group of people. Product and services must “fit” to the cultural
background of the potential buyer. Subcultural factors includes once nation-
ality mix (example Tsinoy). Chinese –Filipinos are very practical in their spend-
ing habits, and Ilocanos have been known to be thrifty. Social class is a sta-
tus hierarchy in which individuals and groups are classified through economic
success.

2. Social Factors– - reference groups, family roles and status. This is all about
the norms of behavior among even smaller groups. Reference groups include
individuals or groups that influence the consumer opinions , beliefs , attitudes
and behavior. Generally the more promising a product is the more likely refer-
ence groups will influence the consumer’s brand decisions.
3. Personal factors– age, life cycle stage, occupation and economic capability.
These play a sizeable influence in buying behavior of consumers. Peoples
needs and wants change as one ages, Men and women tend to look for differ-
ent things on many types of product. Economic capability also dictates buying
behavior of consumer market. The more money that is available the greater the
amount and quantity of purchase.
4. Psychological factors– motivation, perception, learning , beliefs and attitudes

29
 D
Motivation addresses the issue of why a consumer buys a product or what
needs he is trying to satisfy. Perception is the process by which people select,
organize, and interpret information inputs and give them meaning. Learning is
a relatively lasting change in behavior that is the result of the experience.
A belief is a confidence in the truth of existence of something. Attitude is a
settled way of feeling about someone or something, that is reflected in a per-

Types of Organizational Buying decisions

There are three types of organizational buying decisions.
 New Task— involves the purchase of products or service that the organiza-
tion has never bought before. Suppliers who have some brand recognition will
have an advantage over the other.
 Straight Rebuy—refer to routinized purchases. It is almost always result in
automatic reorders. Existing suppliers enjoys a hold on the organizational
buyer.
 Modified Rebuy– Here, the company has already purchased the product in
the past, however the specification of the previous orders have changed
which needs a new round of searching. Existing supplier has to rework the
supply terms and convince the buying organization of the merits of their
product or service

MARKET SEGMENTATION
Market Segmentation is the process of dividing the market into homogeneous
parts of groups. A segmentation variable is a characteristics of individuals or
groups that marketing managers use to divide the total market into segments.
Segmentation variables for consumer market can be grouped into four categories:

DEMOGRAPHIC GEOGRAPHIC PSYCHOGRAPHIC BEHAVIORAL

• Age • Climate • Lifestyle • Usage
• Sex • Region • Personality • Perception of
• Income • Density • Social Class brand quality
• Education • Traffic condi-
• Application
tion
• Family size

30
D
Demographic –refers to factual statistics of the population . Marketers use
these demographic characteristics to segment market because they can be easily
measured. The broad range of demographic variables includes age, income, gen-
der , education, occupation, civil status and ethnic background.
Example: Hapee Toothpaste began by appealing to kids using bright tooth-
pastes with fruity flavors and cartoon imagery.
Geographic—pertains to where the population is located. Geographic segmenta-
tion divides the market by region, cities, urban and rural areas or by areas of
the country with either relative temperature or hot temperature among others.
Psychographic—these are variables that represent the psychological profile of
consumers. It refers to how consumers see and feel about themselves. It in-
cludes elements such as social class, lifestyle and personality. Nike products
has used psychographic in designing its communications ,, appealing primarily
to people with competitive advantage.
Behavioral—the segmentation variable most indicative of purchase behavior.
This includes issues such as when the customers typically buy the product,
what they look for when buying the product, how loyal they tend to be to a
brand, how often and how much do they buy, what price they are comfortable
with and to whom the customers buy the product for.
Jollibee originally differentiated its burgers by proclaiming them to be “langhap-
sarap” appealing to a typical Filipino behavior of smelling food to fully appreciate
it before eating it.

POSITIONING
Positioning is the act of establishing a strong brand image for a product. This
includes telling the market exactly what your product is, who it is for , what
product category it belongs to , what its most essential attributes or benefits
are .

Communicating Brand Position

The brand positioning of a product/service must be consistent and com-
municated effectively to its target market.

31
 D
Some of the elements to be considered in communicating brand positioning are:
• Packaging
• Labeling
• Selling price
• Advertising
• Brand endorser
• Tagline

E
What ‘s More?
Activity 2: “Analyzing the concept”
Answer the following in your notebook.
1. What is the difference between Consumer Market and Organizational Market
2. Enumerate the ff: a) Consumer buying process
b) Organizational buying process
3. What are the different types of organizational buying decisions?
4. Enumerate the factors that affect the consumer in buying product or services.

Activity 3: “Creative thinking”

1, Describe who you think the market is for the following products and services
(just your opinion). Write your answer in a clean sheet of paper
A. EAT BULAGA noontime TV shows:
B. Alaska Fortified Powder Milk
C. Bear Brand adult plus
D. Kopiko Blanca
2. Give three products that you would buy without much thinking. Give reason?

32
 E
What I can do?

Activity 4: Independent Activity

Give three examples of popular products with very clear benefits.

Example 1:

Example 2:

Example 3:

2. List down two products that you recently bought . What factors
led you to select that product?
1.

2.

A
What I have learned?

Direction: Identify what is referred to by each statement below. Write your an-
swer in a sheet of paper.
1. The process of dividing the market into homogeneous parts of groups.
2. The act of establishing a strong brand image for a product.
3. Segmentation variable that includes age, income, gender and education.
4. Segmentation variable that includes elements such as social class, lifestyle
and personality.

33
 A
5. Segmentation variable most indicative of purchase behavior.
6. Buying decision of organization that involves the purchase of products or ser-
vice that has never bought before.
7. Segmentation variable that divides the market by region, cities, urban and ru-
ral areas
8. They are individuals and /or households who purchase products and services
for personal consumption
9.They are individual and companies who purchase goods and services for some
use other than personal consumption
10. Factors in consumer buying behavior that includes motivation, perception,
and learning

REFLECTIVE LEARNING SHEET

Direction: After reading and answering the exercises in this module, Write
two or three sentences to complete the following

I realize that ___________________________________

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
I learned that
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

34
 Answers Key

Activity 1– PRETEST
1. B 4. A

2. C 5. D
3. E 6. F

What I have learned

1. Market Segmentation 6. New task

2. Positioning 7. Geographic

3. Demographic 8. Consumer Market

4. Psychographic 9. Organizational Market

5. Behavioral 10. Psychological factors

References

Books

So, R . & Torres O. (2016). Principles of Marketing , Vibal Group, Inc.

Ilano, A. (2016). Principles of Marketing, Rex Book Store, Inc (RBSI)

Morato, E. Jr. (2016). Entrepreneurship, Rex Book Store, Inc (RBSI)

35
Para sa mga katanungan o puna, sumulat o tumawag sa:

Department of Education Division Rizal Office

Address: DepEd Bldg.,Cabrera Rd.,Bgy. Dolores,Taytay,Rizal 1920

36