Trinidad Municipal College

Poblacion, Trinidad, Bohol

COLLEGE OF AFFICE ADMINISTRATION

PRINCIPLES OF MARKETING 1
FIST SEMESTER -2022-2023

By: Edralin A Perez

Instructor
2nd Module
 COMPANY AND MARKETING STRATEGY PARTNERING
TO BUILD CUSTOMER RELATIONSHIPS

In the first module, we explored the marketing process, the process by which
companies create value for consumers in order to capture value from them in
return. In this second module, we dig deeper into steps two and three of that
process: designing customer-driven marketing strategies and constructing marketing
programs. First, we look at the organization’s overall strategic planning, which
guides marketing strategy and planning. Next, we discuss how, guided by the
strategic plan, marketers partner closely with others inside and outside the firm to
create value for customers. We then examine marketing strategy and planning —
how marketers choose target markets, position their market offerings, develop a
marketing mix, and manage their marketing programs.
Learning Objectives:
 Explain company-wide strategic planning and its four
steps.

 Discuss how to design business portfolios and develop

growth strategies

 List the marketing management functions

Strategic planning- the process of developing and
maintaining a strategic fit between the organization’s
goals and capabilities and its changing marketing
opportunities.

Strategic planning sets the stage for the rest of

planning in the firm. The strategic plan involves
adapting the firm to take advantage of opportunities in
its constantly changing environment.
1. The company starts 2. This mission is 3. Next, headquarters 4. In turn, each business and
the strategic planning then turned into decides what portfolio product develops detailed
process by defining detailed supporting of businesses and marketing and other
its overall purpose objectives that guide products is best for the departmental plans that
and mission. the entire company. company and how much support the company-wide
support to give each plan. Thus, marketing
one. planning occurs at the
business-unit, product, and
market levels.
 Defining a Market-Oriented Mission
Mission statement- A statement of the organization’s purpose—what it wants to
accomplish in the larger environment.

Forging a sound mission begins with the following questions:

 What is our business?

 Who is the customer?
 What do consumers value?
 What should our business be?
 Mission Statement
Some companies define their missions myopically in product or technology terms:

Ex. “We make and sell furniture” or “We are a chemical-processing firm”.

Mission Statement should be:

1. Market oriented and defined in terms of satisfying basic customer
needs.
Examples:  Under Armour’s mission isn’t just to make performance
sports apparel; it’s

“to make all athletes better through passion, science, and

the relentless pursuit of innovation.”

Chipotle’s mission isn’t to sell burritos. Instead, the restaurant promises

“Food with Integrity,” highlighting its commitment to the immediate
and long-term welfare of customers and the environment. Chipotle’s
serves only the very best natural, sustainable, local ingredients raised
“with respect for the animals, theenvironment, and the farmers.”
Several other examples of product-oriented versus market-oriented business definitions.
2. Should be meaningful and specific yet motivating. They should emphasize the company’s
strengths in the marketplace.

Example: Google’s mission statement isn’t something namby-pamby like “To

be the world’s best search engine.” It’s
“To organize the world’s information and make it universally
accessible and useful.”
That’s simultaneously inspirational, achievable, and completely graspable.

3. Should not be stated as making more sales or profits; profits are only a reward for
creating value for customers. Instead, the mission should focus on customers and the
customer experience the company seeks to create.

Ex. McDonald’s mission isn’t “to be the world’s best and most profitable quick-
service restaurant”; it’s
“to be our customers’ favorite place and way to eat.”
 Setting Company Objectives and Goals

Goals Objectives
• All business have a goals • Specific
to reach. • Measurable
• Goals are set by the upper • Achievable
management • Relevant
• Time-related
Example: Kohler makes and markets familiar kitchen and bathroom fixtures—everything from
bathtubs and toilets to kitchen sinks. But Kohler also offers a breadth of other products and
services, including furniture, tile and stone, and even small engines and backup power systems. It
also owns resorts and spas in the United States and Scotland.

Kohler ties this diverse product portfolio together under the This broad mission leads
mission of “contributing to a higher level of gracious living to a hierarchy of
objectives, including
for those who are touched by our products and services.” business objectives and
marketing objectives

Kohler’s overall objectives:

1. To build profitable customer relationships by developing efficient yet beautiful products that
embrace the “essence of gracious living” mission.
2. To improve company profits.
3. To increase its market share both in domestic and international.
Kohler’s overall objective is to build profitable customer relationships by developing
efficient yet beautiful products that embrace the “essence of gracious living” mission. It
does this by investing heavily in research and design. Research is expensive and must be
funded through improved profit, so improving profits becomes another major objective for
Kohler. Profits can be improved by increasing sales or reducing costs. Sales can be
increased by improving the company’s share of domestic and international markets.
These goals then become the company’s current marketing objectives. Marketing strategies
and programs must be developed to support these marketing objectives. To increase its
market share, Kohler might increase its products’ availability and promotion in existing
markets and expand into new markets. For example, Kohler is boosting production
capacity in India and China to better serve the Asian market.
 Designing the Business Portfolio
Business Portfolio -the collection of businesses and products that make up the
company.

The best business portfolio is the one that best fits the company’s strengths and weaknesses to
opportunities in the environment. Business portfolio planning involves two steps. First, the
company must analyze its current business portfolio and determine which businesses should receive
more, less, or no investment. Second, it must shape the future portfolio by developing strategies for
growth and downsizing.

Portfolio analysis- the process by which management evaluates the products and
businesses that make up the company.

Strategic Business Units (SBU)- can be a company division, a product line within a
division, or sometimes a single product or brand.
Growth-share matrix - a portfolio-planning method that evaluates a
company’s SBUs in terms of its market growth rate and relative market share.
1. Stars. Stars are high-growth, high-share businesses or products. They often
need heavy investments to finance their rapid growth. Eventually their growth
will slow down, and they will turn into cash cows.

2. Cash Cows. Cash cows are low-growth, high-share businesses or products.

These established and successful SBUs need less investment to hold their market
share. Thus, they produce a lot of the cash that the company uses to pay its bills
and support other SBUs that need investment.

3. Question Marks. Question marks are low-share business units in high growth
markets. They require a lot of cash to hold their share, let alone increase it.
Management has to think hard about which question marks it should try to build
into stars and which should be phased out.

4. Dogs. Dogs are low-growth, low-share businesses and products. They may
generate enough cash to maintain themselves but do not promise to be large
sources of cash.
Above is the Product/market expansion grid - a portfolio-planning
tool for identifying company growth opportunities through market
penetration, market development, product development, or
diversification.
Company growth by Company growth by Company growth by Company growth
increasing sales of identifying and offering modified or through starting up or
current products to developing new new products to acquiring
current market market segments for current market businesses outside the
segments without current company segments. company’s current
changing the product. products. products and markets.

Market penetration Market development Product Diversification

development
Four Marketing Management Functions
Managing the marketing process requires the four marketing management functions:

Marketing Analysis- Analyze the company’s

situation both in internal and external environment

Marketing Planning- Develops strategic plan and marketing plans.

Marketing implementation -Turning marketing strategies and plans into

marketing actions to accomplish strategic marketing objectives

Marketing control -Measuring and evaluating the results of marketing strategies

and plans and taking corrective action to ensure that the objectives are achieved.
 Marketing Analysis

The marketer should analyze the company’s situation through conducting SWOT
analysis.

SWOT analysis An overall evaluation of the company’s strengths (S), weaknesses (W),
opportunities (O), and threats (T).
 Strengths include internal capabilities, resources, and positive situational factors that may
help the company serve its customers and achieve its objectives.

 Weaknesses include internal limitations and negative situational factors that may interfere
with the company’s performance.

 Opportunities are favorable factors or trends in the external environment that the company
may be able to exploit to its advantage.

 And threats are unfavorable external factors or trends that may present challenges to
performance.
 Trinidad Municipal College
Poblacion, Trinidad, Bohol
COLLEGE OF AFFICE ADMINISTRATION

PRINCIPLES OF MARKETING 1
FIST SEMESTER -2022-2023

By: Edralin A. Perez

Instructor
3RD Module
Preview:

In module 1, you learned about the basic concepts of marketing and

the steps in the marketing process for building profitable relationships
with targeted consumers. In module 2, we’ll look deeper into the first
step of the marketing process— understanding the marketplace and
customer needs and wants.
Learning Objectives:
 Describe the environmental forces that affect the company’s
ability to serve its customers.
 Analyzing the Marketing Environment

In this module 3, you’ll see that marketing operates in a complex and changing
environment. Other actors in this environment—suppliers, intermediaries, customers,
competitors, publics, and others—may work with or against the company. Major
environmental forces—demographic, economic, natural, technological, political, and
cultural—shape marketing opportunities, pose threats, and affect the company’s ability to
build customer relationships. To develop effective marketing strategies.
 Marketing Environment
MACRO-ENVIRONMENT MICRO-ENVIRONMENT
- Economic - Customers
- Political - Employees
- Sociocultural - Suppliers
-Technological - Intermediaries
- Environmental - Competitors
- Publics
Since marketing is an outward-looking business philosophy, marketers need to understand and
adapt to changes in the business environment. Both macro- and micro-environmental factors
influence the marketing of a business.
 MACRO-ENVIRONMENT

 POLITICAL
The political direction of a country determines how consumers and commercial organizations
can act.
 Planning regulations (permission for building hotel, restaurant and leisure extensions or
developing new properties), which alter the industry capacity.
 Licensing laws, which regulate the opening times of licensed premises.
 Local, regional or national government taxes, which impact on prices (Value Added Tax
and General Sales Tax rates, and excise duty on alcoholic drinks) and therefore influence
the demand for hospitality products.
 Regulation of marketing communications.
 MACRO-ENVIRONMENT

ECONOMIC
The economic environment includes all those activities that influence the
wealth and income of the population. Examples of economic influence are:
 The state of the economy.
 The structure of employment and the level of unemployment.
 The rate of inflation.
 The exchange rate.
 MACRO-ENVIRONMENT

 SOCIOCULTURAL
The socio-cultural environment influences consumers’ purchase and consumption behavior. A country’s
socio-cultural environment is a complex mix of its geography, climate, history, religion, ethnic make up.
We are influenced by the values of our own culture, even though we are not aware of this all the time.
Demographic changes also make a significant impact on market demand in hospitality. Examples
include the following:
 The increase in the number of older people living in western countries is changing the demand
characteristics for holidays.
 The increase in the number of single people is changing the demand characteristics for eating out.
 Marketers need to be aware of socio-cultural and demographic trends to ensure their companies
understand changes in markets in order to remain competitive.
 MACRO-ENVIRONMENT

 TECHNOLOGICAL
The rapid development of ICT in the late 1990s and during the current decade has a major influence in the
industry. Improvements in the technological environment include:
• The growing sophistication of computerized reservation services.
• The development of global distribution networks.
• Increasing consumer and commercial use of the internet.
• The current rate of technological change is fast, and new developments are constantly altering the
technological environment.
 MACRO-ENVIRONMENT

 ENVIRONMENTAL
Environmental factors involves the natural resources that are needed as
inputs by marketers or that are affected by marketing activities.

 Impinges on natural habitats.

 Uses up scarce resources.
 Generates air and noise pollution.
 Creates waste disposal problems.
 MICRO-ENVIRONMENT

CUSTOMERS
Customers are the most important actors in the company’s
microenvironment. The aim of the entire value delivery network is to serve
target customers and create strong relationships with them.

Over time customers can change their needs and wants, so companies have
to monitor and respond to these changes.
 MICRO-ENVIRONMENT

EMPLOYEES
The local labor market is a key resource.

The availability and quality of skilled employees who have been educated
and can be easily trained is an important factor in delivering a quality
service.
 MICRO-ENVIRONMENT

SUPPLIERS
Suppliers form an important link in the company’s overall
customer value delivery network. They provide the resources
needed by the company to produce its goods and services

Most marketers today treat their suppliers as partners in creating

and delivering customer value.
 MICRO-ENVIRONMENT

 INTERMEDIARIES

Firms that help the company to promote, sell, and distribute its goods to final
buyers.

 Physical distribution firms help the company stock and move goods from their
points of origin to their destinations
 Marketing services- (marketing research firms, advertising agencies, and media
firms.)
 Financial intermediaries- (banks, credit companies, insurance companies, and
other that help finance transactions.)
 MICRO-ENVIRONMENT

 COMPETITORS
The competitive environment includes different kinds of competitors:
 Direct competitors- these are business offering a similar product or service,
which is aimed at the same customer group.
 Competitors offering substitute products- these are offers that potential
consumer can choose instead of a hospitality product and which satisfies the
same need
 Indirect competition- this includes all those companies and non-profit
organizations that are competing for consumers disposable income
 MICRO-ENVIRONMENT

PUBLICS
Any group that has an actual or potential interest in or impact on an organization’s ability to
achieve its objectives.
 Financial publics. This group influences the company’s ability to obtain funds.
 Media publics. This group carries news, features, and editorial opinion.
 Government publics. Management must take government developments into account.
 Citizen-action publics. A company’s marketing decisions may be questioned by consumer
organizations, environmental groups, minority groups, and others.
 Local publics. This group includes neighborhood residents and community organizations
END….