PRELIMINARY EXAMINATION REVIEWER

Marketing Concept

• is a business philosophy, which holds that the key to achieving organizational goals consists of
determining the needs and wants of target markets and delivering the satisfaction more
effectively and efficiently than competitors do.
• emphasizes customer orientation and coordination of marketing activities to achieve the
marketing goals and objectives.

1. MARKETING MUST BE CUSTOMER ORIENTED

• The planning and operation must be directed towards customer orientation.
• Focused on determining what will satisfy the needs and wants of the target customers.
2. MARKETING MUST BE COORDINATED ACTIVITIES
• Activities must start in the product planning process.
• Product is the key element that the customer wants to buy that is worth his money.
• The place of distribution must be within his reach and the promotional activities must be
appealing for him to decide which product to purchase.
3. MARKETING MUST BE ABLE TO ACHIEVE THE PERFORMANCE TARGET GOALS AND
OBJECTIVES.
• Customer-oriented and coordinated marketing aims to achieve its profit, objectives and goals.
• These goals and objectives hinge on the increase in sales volume and customer’s patronage.
When product planning, price, promotion and distribution and properly coordinated, it will result
in the most effective way of satisfying the customer’s needs and wants.
• The sales volume and profit objective will be realized.

FACTORS FOR DEVELOPING MARKETING CONCEPTS

1. Capturing Marketing Insights
• must focus on its vision and mission
• must be directed towards the creation of value to its customers
• must be the inherent philosophy of the marketing organization
• The functional areas in the marketing organization must be focused towards its ultimate set of
tasks in the building of long-lasting relationship with its target market.
2. Effective financial management system
• procurement of quality and affordable materials for processing of the product is a vital
component in effective operation of the marketing system
• competition in the market is based on affordable quality products where labor and materials
interplay in their production
• Marketing program will develop effective sales program that will bring in sustainable
profitability.

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3. The value of human resources
• business activities need human resources in their operation
• employees must be committed in the production of quality products and the delivery of quality
service
• must develop work ethics and strong commitment to the marketing efforts of the organization
4. THE PRODUCTION PROCESS
• process must conform to standards in terms of product quality.
• race to economic profitability is the production of products that shall satisfy the customer’s
wants and needs
• The role of marketing is to sell more products, but it must conform to customer demand.
• Production may produce so many products, yet they are useless inventory when they fail to
reach their target market
• Marketing efforts will turn them into profitable inventory
5. THE PRESENCE OF COMPETITORS
• products become interesting with the presence of competitors
• marketing strategies must develop customer loyalty to the brand or the product
• Product improvement and pricing strategies with sustained promotional and advertising
program are important components in the competitive market.
TRADITIONAL CONCEPT MARKETING
• Uses to determine if it can produce a viable product consumer want or need, whether the
company can produce enough products to fill the need, and the marketing method by which
the need can be filled
SEVERAL DISTINCT TRADITIONAL APPROACHES
Production concept - focuses on the internal potentials of the company and not based on the
desires and needs of the market.
Marketing concept - organization must try hard to find out and satisfy the needs and wants of
consumers while at the same time accomplishing the organizational goals.
Sales concept - refers to the idea that people will buy more goods and services through personal
selling and advertising done aggressively to push them in the market.
Relationship concept/marketing - an approach that centers on maintaining and improving value-
added long-term relationships with current customers, distributors, dealers and suppliers.
Societal marketing concept - views that organizations must satisfy the needs of consumers in a
manner that gives for society’s benefit.

THE GOALS OF MARKETING AND THEIR SOCIAL EFFECTS:

1. Maximize the Consumption of Goods
• marketing strategies and policies had increased the consumption of goods and services
• demand of the market is tremendous
• sellers face many challenges on what products to offer

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2. The Marketing Job
• stimulate greater product consumption
• requires consumption of material inputs and more goods in the market that create more
employment
• more jobs are created, and more people enjoy economic wealth
• maximum consumptions generate economic development for the nation

3. Maximize Consumer Satisfaction

• market demand is varied, and customer satisfaction is the challenge of the marketing
organization
• measurement of customer satisfaction is difficult
• embraces careful analysis of the market demand which varies with the time and the social
development of society

4. Maximize the Quality of Life

• improvement of the quality of life is the target of marketing people
• Easy communications access satisfies not only social needs but also business
requirements
• The quality of life is difficult to measure
• Life satisfaction is more than the physical comfort

KEY PERFORMANCE INDICATORS

• are used to check that the marketing activities of a company are on track
• used to track performance to make sure the firm is on track to meet specific objectives
Traditional Marketing
• may include print media, billboard and TV advertising, flyer and poster campaigns and radio
broadcast advertising
• not necessarily outdated, however, research has shown those companies that have
abandoned simply using these channels, and adopted contemporary marketing channels
proposed in this article, have remained prosperous and in fact seen an increase in leads, a
higher quality of leads, sales and traffic to web content.
• a theory that proposes products/services fall into one of four categories depending on the
market and the product released.
New Product - New Market
• considered as diversification
• This theory recommends that businesses should try to diversify their product portfolio to
spread risk amongst their product range
Contemporary marketing
• refers to marketing strategies that are consumer focused
• offers products and services based on what the target market desires rather than what the
company wants them to have, thereby, offering greater support for their customers and
becoming able to take advantage of more advanced marketing funnels to track progress.
• is concerned with pulling customers and does not really consider the customer's diverse
needs.
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 • aims for customers satisfaction in order to build a relationship with them
• concerned with the needs of customers
1. Search engine optimization - is majorly concerned with increasing a business’ visibility and
rankings on search engine result pages. It is a simple way of attracting organic traffic of potential
customers to a website. IT can be maximized with paid adverts (Google AdWords), strategic content
marketing and social media networks.
2. Pay per click advertising - This is advertising presented on search engine result pages or web
pages where the advertiser is only charged based on the number of times someone clicks on the ads
to go to the advertiser's targeted website.
3. Email marketing - is a type of marketing based on the distribution of messages through emails.
Email marketing provides direct contact with customers and allows businesses to create relationships
with their customers. Updates, exciting news, and call to actions can be sent directly to customers
4. Referral marketing - is a type of marketing where an individual or customer pleased with the
results gotten from a product refers the product to another person. It's a very subtle form of marketing
that can provide great results especially when the person referring is an Influencer in that industry.
5. Affiliate marketing - is a prominent type of internet marketing where a third party promotes a
product and earns commission, or a piece of the profit gotten from every sale made through that
referral.
6. Video Marketing - Videos act as one of the most interactive types of online marketing and can
prove to be a great way to raise awareness about a business or product. In fact, according to
Mushroom networks, YouTube is the second biggest search engine.
7. Inbound Marketing - is a very powerful contemporary marketing strategy that focuses on different
tactics to draw consumers in and convince them to buy goods. It is one the result-oriented types of
marketing that uses content to drive results.
Green marketing - refers to the process of selling products and/or services based on their
environmental benefits. Company a reselling products and/or services by first promoting its benefit that
is environmentally friendly or produced in an environmentally friendly way.
For green marketing to be effective, there are three things that needs to be done:
1. Being genuine
a. The company is doing what it claims to be doing in its green marketing campaign and;
b. The rest of the business policies are consistent with whatever the firm is doing that’s
environmentally friendly.

2. Educating the customers isn’t just a matter of letting people know that the company is doing
whatever it doing to protect the environment, but also a matter of letting them know why it matters.
3. Giving customers an opportunity to participate means personalizing the benefits of the company’s
environmentally friendly actions, normally through letting the customer take part in positive
environmental action.
PRICE
• is the amount of money charged for a product or service.
• is the sum of all the values that consumers exchange for the benefits of having or using the
product or service
• set by negotiation between buyers and sellers
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 • the only element in the marketing mix that produces revenue
• also one of the most flexible elements of the marketing mix.

FACTORS AFFECTING PRICE DECISIONS

Internal factors

• Marketing Objectives
• Marketing-mix strategy
• Costs
• Organization for pricing

External factors
Nature of the market and demand
• Competition
• Other environmental factors (economy, resellers, government)

Marketing-mix Strategy

Price
• only one of the marketing-mix tools that a company uses to achieve its marketing objectives
• must be coordinated with product design, distribution, and promotion decisions to form a
consistent and effective marketing program
• is a crucial product-positioning factor that defines the product’s market, competition, and design

Costs
• set the floor for the price that the company can charge for its product

Types of Cost
Fixed costs
• also known as overheads
• do not vary with production or sales level.

Variable costs
• vary directly with the level of production
• costs tend to be the same for each unit produced, their total varying with the number of units
produced.

Total costs
• are the sum of the fixed and variable costs for any given level of production

Organizational Considerations
• management must decide who within the organization should set prices.
• handle pricing in a variety of ways
• this department reports to the marketing department or top management

EXTERNAL FACTORS AFFECTING PRICING DECISIONS

The Market and Demand

• Whereas costs set the lower limit of prices, the market and demand set the upper limit
• Both consumer and industrial buyers balance the price of a product or service against the
benefits of owning it
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 • Pricing in different types of market the seller’s pricing freedom varies with different types of
market

Under Pure Competition

• consists of many buyers and sellers trading in a uniform commodity such as wheat, copper, or
financial securities.
• If price and profits rise, new sellers can easily enter the market
• marketing research, product development, pricing, advertising, and sales promotion play little or
no role
• sellers in these markets do not spend much time on marketing strategy.

Under Monopolistic Competition

• market consists of many buyers and sellers that trade over a range of prices rather than a single
market price
• range of prices occurs because sellers can differentiate their offers to buyers.
• each company can create a quasi-monopoly for its products because buyers see differences in
sellers’ products and will pay different prices for them
• sellers try to develop differentiated offers for different customer segments and, in addition to
price, freely use branding, availability, advertising and personal selling to set their offers apart

Under Oligopolistic Competition

• market consists of a few sellers that are highly sensitive to each other’s pricing and marketing
strategies
• product can be uniform (steel, aluminum) or non-uniform (cars, computers)
• difficult for new sellers to enter the market
• never sure that it will gain anything permanent through a price cut

Pure Monopoly
• consists of one seller
• seller may be a government monopoly (a postal service), a private regulated monopoly (a power
company) or a private non-regulated monopoly
• Pricing is handled differently in each case
• In a regulated monopoly, the government permits the company to set rates that will yield a ‘fair
return’, one that will let the company maintain and expand its operations as needed
• Non-regulated monopolies are free to price at what the market will bear. However, they do not
always charge the full price for several reasons: a desire not to attract competition, a desire to
penetrate the market faster with a low price, or a fear of government regulation

Government is another important external influence on pricing decisions.

New Product Pricing Strategies

• Pricing strategies usually change as the product passes through its life cycle
• Distinguish between pricing a product that imitates existing products and pricing an innovative
product that is patent protected
• Plans to develop an imitative new product faces a product-positioning problem

Premium Pricing Strategy

• Producing a high-quality product and charging the highest price
• These strategies can coexist in the same market if the market consists of at least two groups of
buyers, those who seek quality and those who seek price.

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Good-Value Strategy
• represents a way to attack the premium pricer

Cost-Based Pricing
• is the practice of setting prices based on the cost of the goods or services being sold
• a profit percentage or fixed profit figure is added to the cost of an item, which results in the price
at which it will be sold

Cost-Plus Pricing
• The simplest pricing method is cost-plus pricing – adding a standard mark-up to the cost of the
product

Value-Based Pricing
• means that the marketer cannot design a product and marketing program and then set the price
• price is considered along with the other marketingmix variables before the marketing program
is set

Relationship Marketing
• is about forming long-term relationships with customers, rather than trying to encourage a one-
time sale, relationship marketing tries to foster customer loyalty by providing exemplary products
and services
• it is a strategy designed to foster customer loyalty, interaction and long-term engagement. It is
designed to develop strong connections with customers by providing them with information
directly suited to their needs and interests and by promoting open communication

Customer Satisfaction and Loyalty

Customer Satisfaction
• Comes after the product or service
• Prerequisite for customers loyalty.
• Willingness to buy again and recommend the products/services to others

Customer Loyalty
• Comes after the repeat of purchase
• Indicator of customer satisfaction.
• Unwillingness to switch brands when there is an out-of-stock situation

Customer Service
• is the act of taking care of the customer's needs by providing and delivering professional, helpful,
high-quality service and assistance before, during, and after the customer's requirements are
met
• customer service is all about treating customers how they expect to be treated

Characteristics of Good Customer Service

• Promptness - Promises for delivery of products must be on time.
• Politeness - For any business, using good manners is appropriate whether the customer makes
a purchase or not.
• Professionalism - All customers should be treated professionally, which means the use of
competence or skill expected of the professional.
• Personalization - Customers like the idea that whom they do business with knows them on a
personal level.

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Value of Customers
• the satisfaction the customer experiences (or expects to experience) by taking a given action
relative to the cost of that action
• The given action is traditionally a purchase, but could be a sign-up, a vote or a visit, while the
cost refers to anything a customer must forfeit in order to receive the desired benefit, such as
money, data, time, knowledge.

Four Brand Benefits

1. Functional Benefit - This refers to the diversity of the delivery of products and services that
firms may offer. It can be achieved by identifying the weak points in the firms and launching new
techniques to address these
2. Emotional Benefit - This can be seen when firms create an emotional connection with the
consumers. It uses emotions and not just marketing to persuade the customers
3. Social Benefit - It takes into consideration how customers want to be perceived by others when
using a product or service
4. Economic Benefit - To the consumers, the right price is no more than the perceived value with
the difference between customer value and customer cost known as surplus.

Relationship Development Strategies

1. Technology
• Many businesses whether huge firms or starting businesses take advantage of the advent of
technology. With these advancements, firms attract more customers even without interacting
physically and personally. Social media is also part of this development strategy wherein small
business owners use of these platforms to advertise their products. Online selling also exists
because of technology

2. Value Chain Excellence

• Company employees must always be aware that the satisfaction of the customers is the job of
everyone in the company because this can create an effect with other customers. Also they
should provide immediate response for any arising problems with the customers

3. Frontline Excellence
• Happy and empowered employees make happy customers. It is vital for a company to bring
positive effects on their customers and feel at ease when transacting with the business. If
customers are satisfied with the services that the firms provide, they can also attract or
recommend other customers.

4. Account Segmentation
• In business-to-business transactions, account segmentation defines the service level.
Partnership marketing for top-tier clients may be practiced where the engagement with
customers is beyond the delivery of what they ordered, and is also focused on helping clients
grow revenues and profit.

5. Co-opetition
• A variation of strategic alliance is among the competition to create value for the customers.
Known as Co-opetition, the aim is to increase the overall satisfaction of each competitor’s
customers, as well as for cost-efficiency. An example is the ATM, which was introduced in
response to the customers’ changing lifestyles, such as increased mobility, urbanization, and
convenience sampling.

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