Module 3. The Marketing Plan complications.

Your value proposition has to target your

Business Plan
- a comprehensive paper that details the situation
analysis, objectives, strategies, and tactics, and
how to monitor and control the enterprise.
Marketing Process
- in a nutshell, marketing is all about knowing the
customers.
- the marketing process starts with identifying the
customers’ needs where you are tasked to create a
meaningful value proposition.
- you study what the customers want or desire for
you to build a unique selling proposition.
Value Proposition (VP)
- simply states why customer should buy a certain
product or service.
- Customers are very specific when it comes to their
needs and their desired benefits, so the value
proposition should cater to those particular needs.
- a value proposition has to be direct in addressing
the problems of the customer, should have
quantifiable benefits, and should differentiate
itself from the competitors.
Tips to create an effective value proposition to the
target customers:
major objective.
3. Highlight the value of your product or service so that
customers will easily get what benefits you can provide.
4. Adapt to the language of your market. Ensure that your
target market understands clearly what you are trying to
say and avoid putting unnecessary in explicable places.
5. Add credibility-enhancing elements such as actual
testimonials from customers, partners, and other
stakeholders, putting specific assurance elements and
social acceptability metrics from in social media and press
materials.
6. Differentiate your value proposition with your
competitors.
Unique Selling Proposition (USP)
- refers to how you will sell the product or service to
your customers.
- It addresses the customers’ wants and desires.
Tips to create an effective unique selling
proposition to the target customers:
1. Identify and rank the uniqueness of the product or
service attribute.
2. Be very specific.
3. KISS (keep it short and simple).
- Therefore, no budding entrepreneur should
establish a business without undergoing the
marketing research process or else the business
will surely fail.
Marketing research
- aims to scrutinize the target market, their specific
requirements, and the market size where the
business operates.
Market size
- is simply the size the arena where the
entrepreneur’s business will play.
- It is the approximation of the number of buyers
and sellers in a particular market.
Steps to estimate the potential market:
1. Market Space
- this is the total market
- the approximate number of customers that will
buy the product or avail the service
2. eliminate the customers who are probably
unlikely to buy the product or avail the service
3. Estimate the Market Share
- the plotting and calculation of the competitors’
market share to determine the remaining portion
for the new venture.

1. Prepare a situation analysis that details the problem
(s) of the customers.
2. Make your value proposition straight to the point,
simple, and specific; in short, there should be know
Know your customers!
Marketing research
- a comprehensive process of understanding the
customers’ intricacies and the industry they
revolve in.
- one of the most critical tasks of an entrepreneur.

Customer
- are said to be the lifeblood of the business
- These are the people who buy the products or
avail the services of the entrepreneur
- Thus, the phrase “the customer is always right” is
a mantra that most successful entrepreneur follow
- The customer is the voice of every business that
every entrepreneur should listen to.
Customer requirements
- are specific features and characteristics that the
customers need from a product or a service.
- It is in these customer requirements that business
opportunities originate
Market intelligence
- which includes customer profiling, drives the
entrepreneur on what correct strategies and
tactics to employ. This can only be obtained
through a meticulous market segmentation
process.
Market segmentation
- the process of grouping similar homegeneous
customer according to demographic,
psychographic, geographic, (location), and
behaviour.
- It is a necessary activity in marketing because it
gives the entrepreneur a holistic and general view
of the market group that he or she is serving.
Customers Groups:
 primary target market
 secondary target market
o also necessary to spread out the capital
expenditure and risks as well.
o the customers who don’t have enough
purchasing power or have fewer demands.
o They may not be your primary target
market, but they can be converted once
effective marketing strategies are
implemented.
4 kinds of Market Segmentation:
1. Demographic Segmentation
- also called socioeconomic segmentation,
- the process of grouping customers
according to relevant socioeconomic
variables for the business venture.
- the socioeconomic variables include:
Income range and social class theses represent the
purchasing power of the market.
Occupation be considered not just to determine the
customer’s income but also their daily routine where
goods and services can be properly positioned.
Gender and age are data that must be mined because the
life cycle of customers and their gender influence their
buying behavior.
Religion and ethnicity should be taken to account
because these affect the way they buy products or avail of
services.
2. Psychological Segmentation
- is a process of grouping customers
according to their perceptions, way of life,
motivations, and inclinations.
Perceptions is a process wherein an individual receives
external stimuli using the five senses of hearing, touching,
smelling, seeing, and tasting.
Physiological motivations involve the needs of the person
( e.g., food, clothing, shelter); they seek to avoid pain and
give pleasure. Also involve customer’s preferences (what
the customer likes or dislikes)
 motivations
o are also affected by their aspirations and
deprivation.
 aspirations
o are what the customer wants to achieve
( e.g., inner peace, financial stability, work-
life balance).
- deprivations
- involves the customer’s recognition of
certain voids to fill (e.g., lack of financial
security, lack of love, lack of knowledge).
Incilations involve preferring one product over another
because of gaining a refreshing experience when using the
product, possibly due to the product’s unique features or
due to it giving more value than other products.
3. Geographical Segmentation
- is simply grouping customers according to
their location.
 - This is critical in the analysis of the target
market as this encompasses the cultures,
beliefs, preferences, politics, and lifestyle
of a certain geography.
4. Behavioral Segmentation
- is the process of grouping the customers
according to their actions.
- These behaviors are instigated by
occasions, desired benefits, loyalty, and
usage of products or availment of services.
Occasions drastically affect the customers’ buying
behavior.
Loyalty is the result of maintaining satisfied customers.
Usage of the products or avail of service is also a
behavior segmentation factor that describes to the
entrepreneur how often a product is being used or the
service is being availed.
Talking to your customers
- the best way to fully understand the customers is
to ask them about their specific thoughts and
desires.
Marketing Research
- conducting marketing research in a methodical
way will bring the entrepreneur a substantial
bunch of relevant ideas that can be used to
effectively run the business.
- a marketing research should first have a solid
objective, which states the research’s purpose.
Qualitative Research
- includes identifying the written or spoken opinions
of customers, whereas quantitative research
involves analyzing the customers’ preferences by
using relevant statistics ( such as those in surveys )
- In the succeeding discussion, you will be
familiarized with the four most common methods
of collecting data from the target customers:
interview, focus group discussion, observation,
and survey.
Interview
- is one of the most reliable and credible ways of
getting relevant information from the target
customers.
- The drawback though is that interviews are often
expensive, especially if the number of respondents
is large.
- The solution is to apply sampling which is the
selection of respondents that statistically
represent the total population.
2 types of interviews:
1. unstructured interviews
- is an informal type of interview and does not
follow specific set questions.
- hours.
checklist of high–level issues the he /she
wants to clarify with the respondent.
- a preparatory interview to gather ideas about
the problem(s) that will be solved, so that
these issues will be considered in the formal
survey questionnaire to be presented to the
respondents later.
2. structured interviews
- employs a specific set of questions and
produces quantitative data.
- A prearranged questionnaire with specific
questions usually answerable by yes or no
(closed-ended), forced ranking, multiple
choice, or choose-the-best will be answered
by the respondents.
Challenges in doing interviews:
 setting an appointment with an interviewee,
which includes asking the respondent’s
permission.
 respondent’s indifference to how they share their
opinions.
 getting unbiased answers from the respondents.
o 1st factor is the limited memory or
forgetfulness of the respondents.
o 2nd factor is the difficulty of the questions,
giving the respondents a hard time to
answer relatively.
o 3rd factor is the environment they are in.
Focus group discussion or FGD
- is commonly used by market research to capture
qualitative results from target customers.
- It is a process of mining customer and
noncustomer experience and insights about a
specific product or service.
- focus group session usually lasts from one to two
- People included of FGD: moderator, and
participants.
As compared to the interview, the FGD has some
advantages as follows:
1. The researcher can get combined insights from the
participants.
2. The participants are more spontaneous and enthusiastic
because of the interaction with coparticipants, thereby
sharing more insights to the researcher.
3. It can be observed by various spectators.
It also has some disadvantages as follows:
1. It obtains only qualitative data
2. Examination of the focus group session is difficult and
requires more time
3. There are potentially biased answers from the
participants because they will encounter peer pressure.
There may also be instances that one or two among the
eight participants will dominate the discussion, resulting in
biased responses.
Traditional and Online Surveys
- It is the process of getting answers from a sample
of respondents derived from a particular
population. ( you can also survey the whole
population if needed. )
- Depending on the objective of the survey, the
respondents will be given a questionnaire asking
about their awareness level (e.g., no idea, has little
idea, or familiar), their profile, preferences, and
behaviors.
- These questionnaire can be distributed and
answered verbally, by writing , or through the
internet
In preparation for the survey, the researcher must identify:
1. Sampling Techniques
Sample
- is a percentage of a specific population carefully
chosen by the researcher to generally represent
the whole population.
Sampling error
- is a range of inaccuracy to which a sample might
vary from the particular population.
- always reflected in the research results inferred
from the population.
Sampling techniques:
Probability sampling is a technique wherein samples are
given equitable chances or nonzero chances of being
selected from a population.
Nonprobability sampling does not give the samples
equal chances of being selected, because samples are
instead selected according to their accessibility or personal
choices of the researcher.
2. Sample size.
- The researcher must be able to calculate
first the appropriate sample size in
conducting the survey; otherwise, if the
sample size that is too large, he/she will
waste his/her capital and time, whereas a
sample size that is too small will lead to
imprecise results.
3. Questionnaire blueprint.
Here are some tips on how to create a blueprint
for the questionnaire.
a. Be specific and direct with the question and
the answer required.
b. Be flexible with the respondents’ convenient
way of answering the questionnaires ( mail,
telephone, face-to-face, or online). Therefore,
the researcher must be ready with any of
these four formats.
c. Ensure that each question is necessary and
not repetitive.
d. Always put yourself in the shoes of your
respondents. The questionnaire should be
simple but should also meet the objectives.
The composition and type of questions
(multiple choice, dichotomous, open-ended)
should also be geared toward their
convenience.
e. Make sure that questions are arranged in a
coherent order that will lead to answers
required. At the onset, qualifying questions
are positioned, followed by general questions,
and then specific questions.
f. The questionnaire should look professional, be
divided into strategic parts, and be properly
numbered.
Marketing mix is a widely accepted strategic marketing
tool that combines the original 4Ps (product, place, price,
promotion) with the additional 3Ps – people, packaging,
and process – in formulating marketing tactics for a
product or service.
Entrepreneurs must use the 7Ps model to do following:
 conduct a situation analysis
 set objectives
 conduct a strength, weakness, opportunity, and
threat (SWOT) or competitive analysis
 ultimately come up with marketing strategies and
tactics.
A challenge to a budding entrepreneur is to ask the
following key questions at the onset:
• Product – What product or service is the most
appropriate for the opportunity, and why will customers
buy or avail them?
• Place – What location is best suited for business where
there are more potential customers? Can they
conveniently transact on-site or online? How is the process
of distribution of products or performance of services?
• Price- What is the most appropriate price, and what
pricing strategies will be used for the target customers?
• Promotion – What is the most effective advertisement
or combination of advertisements, and which advertising
tool should be used to drive awareness and increase sales?
• People – What type of people needed to be hired? What
are the basic skills needed for the job? What leadership
style will be applied by the entrepreneur?
• Packaging – What is the best packaging for product that
is attractive enough to customers and cost efficient at the
same time? What physical evidence does the
entrepreneur need to set up so as to sell the service?
• Processing – What is the most compelling feature of the
product or the business that will make a difference in the
lives of the customers? What sets the product or service
from the rest?
The 7P’s:
1. Product is any physical good, service, or idea that
is created by an entrepreneur or an innovator in
serving the needs of the customers and addressing
their existing problems.
Three-level concept of product:
Level 1: core benefits of a product or service are the
major factors why a customers buys a product or avails of
a service.
Level 2: Physical characteristics of the product or
service. A better packaging for products or a better
physical evidence or customer experience for services.
Level 3: Augmented benefits of a product or service
2. Place refers to a location or the medium of
transaction.
servicescape was used to refer to the overall
ambiance of the place where the service is
performed.
3. Price is the peso value that the entrepreneur
assigns to a certain product or service after
considering its costs, competitions, objectives,
positioning, and target market. It is only P in the
7ps that generates revenue for the business.
Here are the most common pricing strategies:
1. Bundling- this refers to two or more products or
services in one reduced price
2. Penetration pricing- this refers to setting low prices to
increase the price once the desired market share is
achieved
3. Skimming- this is the opposite of penetration pricing
where prices are initially high and then they are lowered
to offer the product or service to a winder market
4. Competitive pricing- this refers to benchmarking prices
with the competitors
5. Product line pricing- this refers to pricing different
products or services within a parallel product array using
varying price points
6. Psychological pricing- this considers the psychology
and positioning of the price in the market
7. Premium pricing- this refers to setting a very high price
to reflect elitism and superiority
8. Optional pricing- this refers to adding an extra product
or service on the top of the original to generate more
revenue
9. Cost-based pricing- the basis of markup is the cost of
sales.
10. Cost plus pricing- the markup is based on a certain
percentage of cost
There are two classification of costs:
1. Variable costs or controllable cost- these cost are
directly proportional to number of products manufactured
or the number or services performed.
2. Fixed costs or uncontrollable cost- these are costs not
directly proportional to the manufacturing of a product or
to the performance of the service.
The entrepreneur must follow these general pricing
guidelines to make the business sustainable and
thriving:
1. Do not price the product or service below its cost.
2. Monitor competitors’ prices, and ensure that your
prices are at par with them unless the product or service is
really way superior for the competitors.
3. Align prices with the other 6ps (product, place,
promotion, people, packaging, and processing)
4. Implement price strategies that are relevant to your
market segment.
4. Promotion involves presenting the products or
services to the public and how this can address
the publics’ needs, wants, problems, or desires. In
promotion, the primary target market should be
identified because it will become the main
audience. The main goal of promotion is to gain
attention.
Key marketing messages for promotion can be the
following:
(1) value proposition or unique selling proposition of the
product or service;
(2) product or service image;
(3) business image;
(4) business values and philosophy.
The entrepreneur can choose one or combination
of the following promotional tools:
1. Advertising – this is a type of communication
that influences the behavior of a customer to
choose the product or service of the entrepreneur
over the competitors. The challenge for the
entrepreneur is to choose which is the most cost-
effective and targeted channel to relay the key
marketing message to the target market.
The objectives of advertising include the following:
(1) informing, educating, and familiarizing the public with
the product and service offerings;
(2) building a trustworthy image;
(3) increasing sales.
The entrepreneur can choose to advertise through the
following:
• Television- regular channels, cable TV
• Radio- AM and FM radio
• Internet- e-mails, web sites, blogs, social media, search
engines, podcasts
• Mobile phones- text messages, mobile application,
mobile internet
• Print- newspapers, magazines, flyers, directories,
signages, posters
• Out-of-home- billboards, buses, bus stops, trains, train
station, taxis, street advertisement
2. Selling- this is the act of trading a product or
service for a price or a fee. The entrepreneur must
identify the target customers who were likely but
the product or service.
3. Sales promotions- these are short-term
promotional gimmicks wherein practical incentives
and appealing activities are incorporated to entice
the customers to buy the product or avail of the
service. These are called “below-the-line”
promotions.
Here are common examples of sales promotions in the
Philippines
• Sales discounts or discount coupons
• Raffles
• Contests and games
• Promo items
• Product or service bundles
• Trade fairs or exhibits (e.g., wedding expo)
• Sample distribution or free taste/free trials • Premiums
(e.g., free toys for fast food meals)
• Point-of-purchase promotions (e.g., display stands in
grocery stores)
• Advertising specialties (e.g., pens, notebook, umbrellas,
bags, calendars)
• Rewards (e.g., reward cards)
4. Public relation- these are image-building
initiatives of the entrepreneur to make the name
of the business reputable to stakeholders, such as
the target customers, governments agencies,
business partners, media, and the public.
Examples of PR strategies are as follows:
• Press conferences
• Launching events
• Strong media relations through press kits
• Social responsibility events (e.g., charitable or
community events)
• Lobbying (e.g., good relations with government officials)
• Web public relations (e.g., blogs, social media, e-mails,
word-of-mouth)
5. People is one of the three additional Ps in the
marketing mix. In today’s marketing arena, people
play a vital role in servicing customers even
through the entrepreneur sells only physical
goods.
6. Packaging is how the product or service is
presented to customers. It is the overall
identification (look and feel) of the product or
service. Packaging’s ultimate goal is to entice • Can describe a product category
customers to purchase the product or services. • Can describe concrete qualities
• Positive and inspiring
7. Process is the last addition in the marketing mix The brand is the marketing element that sticks to the
as marketers began to realize the importance of mind of the target customers and the public. Therefore,
the internal or external operations of the business the entrepreneur must think critically on how to position
to serve customer better. Process is define as step- the brand and be able to sustain it.
by-step procedure or activity workflow that the
entrepreneur or employees follow effectively and
efficiently serve customers. Its components
include input, throughput, and output.
Brand management is the super product vision of the
tangible and intangible elements of the brand. The
tangible elements include the itself, its packaging, its
price, and its location. The intangible elements, on the
other hand, include the perception and relationship of the
customers with the brand.
Branding is the process of integrating the strategies
formed from the marketing mix to give an identity to
product or service.
The goals of branding include the following:
(1) establishing to target customers that the business is
reliable and trustworthy and that the product of service is
the superior solution to their current problem;
(2) differentiating with competitors;
(3) driving customer loyalty and retention.
To be different and catchy, a brand name must possess the
following characteristics:
• Unique
• Extendable
• Easy to remember
• Can describe the benefits of the product or service
• Can be converted to other dialects or languages in case
the entrepreneur expands to other territories