MARKETING PROCESS

 1
The Marketing PLAN PREPARATION
SWOT ANALYSIS

STRATEGIC OPTIONS

STRATEGIC DECISIONS

ANSOFF GROWTH STRATEGY MATRIX

MARKETING PROCESS

 2
BRAND COMMUNICATION

PRIMARY TARGET MARKET

CONSUMER INSIGHT

VALUE PROPOSITION

BRAND DNA

BRAND POSITIONING

BRAND TAGLINE

 3
For me, this is the best definition of Marketing…:

What Is Marketing ?

It is the process of continuously and

profitably satisfying target customer’s
needs, wants and expectations better
(more superiorly) than competition.
(Josiah Go)
 4
IS MARKETING SELLING?
“Managers sometimes think of marketing as “the art of
selling products,” but many people are surprised when they
hear that selling is not the most important part of marketing!
Selling is only the tip of the marketing iceberg.”

Philip Kotler/Kevin Lane Keller

 5
MARKETING IS MUCH MORE THAN SELLING

“There will always, one can assume, be need for some selling.
But the aim of marketing is to make selling superfluous
(unnecessary). The aim of marketing is to know and
understand the customer so well that the product or service fits
him and sells itself. Ideally, marketing should result in a
customer who is ready to buy. All that should be needed then is
to make the product or service available.”
Peter Drucker

 6
MARKETING VS. SELLING

 Selling
 Product-centered
 Marketing
 Pre-occupied with
converting the product
into cash
 Persuading
 Can only start when the
product becomes available
 Customer-centered
 Pre-occupied with
satisfying the customers
 Convincing
 Starts even before the
product exist

 7
THE MARKETING SYSTEM

3) Develop/Improve & Sell the Product

1) Gather information

Marketer Market

2) Provide Information

4) Buy the Product & Provide Revenues

 8
MARKETING SUCCESS =

(STP) + (THE BASE P) + (THE 3 SUPPORT PS)

The Best of Marketing Rx

Ned Roberto w/ Ardy Roberto
 INTEGRATING THE MARKETING MIX
MARKETING NOW: SEQUENCE OF 3 PROCESSES

 1. Process of STP (Segmenting > Targeting > Positioning)

“Start marketing from where our target consumers are, that is, with their
priority values, and not from where we are as marketers”

 2. Process of creating the “Base P” (Product)

“That’s the product created to embody the uncovered consumer priority
values”

 3. Process of delivering the product via the “Support

Ps” (Price, Placement and Promotion)
“…all in support of bringing and delivering the base P to the target
consumers”

Dr. Ned Roberto & Ardy Roberto

Marketing Rx, Inquirer, 06 Feb 09

 10
 Targeting Consumer
Segmenting Profiling
(PTM) Insighting

Product Product Value

Packaging
Development Conceptualization Offering

Brand
Promotion
Positioning

Branding Pricing

Placement
The Marketing Process
Traditional Organization Chart

Top CUSTOMERS
Manage-
ment C
C
U
Middle Frontline People U
Management S
S
T T
Middle
O Management O
Frontline People
M M
Top
E Manage- E
R ment
CUSTOMERS R
S S

Modern Customer-oriented Organization Chart

 12
WHO SHOULD BE YOUR MARKET?

 People who have the need for your

product/service
 People who have the money to purchase your
product or service
 People who have access to buy your product
or service

 13
ESTIMATING MARKET SIZE
 Industry data audit (IMS, Pulse, AC Nielsen,
SEC, etc.)
 Extrapolation
 Using internal data
 Using store off-take data
 Using population size and assumed usage volume
potential
 Example:
10 million teenagers consuming 4 times a year a 200mL
bottle shampoo that is priced at 100 pesos for bottle.
Total market size is?

 14
SEGMENTATION: MARKET FOCUS
 Definition: Dividing the total market into different
groups that have their respective homogenous
character traits
 Market Segment: consists of a group of customers
who share a similar set of needs and wants.

 Micromarketing: segments, niches, local areas,

individuals (ethical pharma marketing)
 15
WHY SEGMENTATION ?
 Better serving customers needs and wants
 People have different needs and/or changing needs

 The computer manufacturer Dell, for instance, does not organize its website by
product groups (desktops, notebooks, servers, printers etc), but by customer
groups (privates, small businesses, large businesses, public/state
organizations).

 Companies have limited resources

 Opportunities for growth  16

BASES FOR SEGMENTATION

 Geographic Segmentation
 Nation, states, regions, cities, neighborhood
 Demographics
 gender, age, income, occupation, education, religion, race,
social class
 Psychographics/personality
 Attitude, behaviors
 Introvert, extrovert, pessimist, optimist
 Active, adventurous, outgoing, experimental
 Naïve, conservative, cautious, studious

 17
IN CHOOSING THE PTM/SEGMENT

 The segment should be big enough to be

profitable
 There should be a “distinct” segment need for
the product or service
 The segment can identify themselves with
the product/brand– segment owning the
brand
 The segment is “vulnerable” to switch to
another brand/product
 18
IDENTIFYING THE RIGHT SEGMENT:
THE MORE SPECIFIC THE BETTER

A single, self-driven junior

executive within the age
bracket of 25-35 years old who
likes to wear signature
apparels and engages in
outdoor sports and socializes
at night with friends and
associates

 19
 MORE EXAMPLES

 Luxury Cars
 Mercedez Benz
 Senior Top Executives

 BMW
 Young Achievers/Businessmen

 Volvo
 Conservative Senior Executives/Businessmen

 Axe Deocologne
 Young men
 Secret Deodorant

 20
CONSUMER INSIGHT IS THE KEY
 What is Customer insight ?

Knowledge about customers needs, characteristics,

preferences and behaviours based on analysis of qualitative
and quantitative data. Specific insights can be used to inform
marketing tactics directed at groups of customers with
shared characteristics
 From Dictionary.com

1. an instance of apprehending the true

nature of a thing, esp. through intuitive
understanding

2. penetrating mental vision or

discernment; faculty of seeing into
inner character or underlying truth.
Insight is a great word. Marketing insight sounds valuable. Good to have, and
worth paying a consultant or agency if we can’t find one ourselves. An insight is
going to help us succeed, to beat the competition. But what is an insight? How can
you be sure you’ve got one?

Next time you think you’ve got an insight, check it againsst this definition :

An insight is a fresh and unexpected perspective.

“It gets the following reaction from those involved:
‘Wow, yes, you’re right. ‘ I’d never thought of it
like that before, but you’re absolutely right. You
really understand What’s going on here.”
From BuildBrands

Achieving that kind of reaction is not easy. It means you have to think of something
that no one has thought of before. Or. More accurately, that no one else in your
market has thought of before.

It requires that you look at things differently. For that reason, most of the great
sources of ‘insight inspiration’ are from outside of your category, and often outside
of your (geographic) marketplace
SOURCE OF CONSUMER INSIGHT
 Need
 Want What is lacking in a
 Desire current product/service?
 Aspiration
 Perfection

More than what is

 Un-realized need expected

 25
The Marketing research Process.
Marketing research is gathered using a systematic approach. An
example of one follows:
Define the problem. Never conduct research for things that you would 'like' to
know. Make sure that you really 'need' to know something. The problem then
becomes the focus of the research. For example, why shoppers are not buying in
our stores?
How will you collect the data that you will analyze to solve your problem? Do we
conduct a telephone survey, or do we arrange a focus group?
Select a sampling method. Do we us a random sample, stratified sample, or
cluster sample?
How will we analyze any data collected? What software will we use? What
degree of accuracy is required?
Decide upon a budget and a timeframe.
Go back and speak to the managers or clients requesting the research. Make
sure that you agree on the problem! If you gain approval, then move on to step
seven.
Go ahead and collect the data.
Conduct the analysis of the data.
Check for errors. It is not uncommon to find errors in sampling, data collection
method, or analytic mistakes.
Write your final report. This will contain charts, tables, and diagrams that will
communicate the results of the research, and hopefully lead to a solution to your
problem. Watch out for errors in interpretation.
 Primary - Marketing Research

Primary marketing research is collected for the first time.

It is original and collected for a specific purpose, or to solve
a specific problem. It is expensive, and time consuming, but
is more focused than secondary research. There are many
ways to conduct primary research. We consider some of
them:

1. Interviews
2. Mystery shopping
3. Focus groups
4. Projective techniques
5. Product tests
6. Diaries
7. Omnibus Studies
 Secondary - Marketing Research.

Secondary marketing research, or desk research, already exist in one

form or another. It is relatively cheap, and can be conducted quite
quickly .However, it tends to have been collected for reasons other than for the
problem or objective at hand. So it may be untargeted, and difficult to use to
make comparisons (e.g. financial data gather on Australian pensions will be
different to data on Italian pensions). There are a number of such sources
available to the marketer, and the following list is by no means conclusive:

 Trade associations
 National and local press Industry magazines
 National/international governments
 Websites
 Informal contacts
 Trade directories
 Published company accounts
 Business libraries
 Professional institutes and organisations
 Omnibus surveys
 Previously gathered marketing research
 Census data
 Public records
MARKET RESEARCH HELPS YOU TO:
 Know about your market size, segmentation and industry drivers
 Determine which way the market is heading
 Be aware of recent industry trends or key events
 Reach the most suitable target market
 Learn about your competitors and their market strategies
 Increase sales by in-depth into your clients’ needs, values, lifestyles,
or your consumers’ buying behavior, or demographics
 Screen new market niches for business opportunities
 Decide on diversification, expansion in other countries or new
distribution channels
 Gain crucial, customized information so as to make firm decisions
VALUE PROPOSITION

VALUE = BENEFIT/COST

VALUE

RELEVANT UNIQUE/DISTINCT

 30
PART 6: BRAND DNA
Characteristics of Brand DNA
 Brands seem like complex organisms, partly because each
one of these basic attributes can act in a different way on
each customer or group in the brand's environment (the
Brandscape.)
 But, like a biological organism, Brand DNA must exhibit a
certain baseline simplicity in order to be intelligible to
customers and to evolve by rapid transmission from host to
host.
 In other words, there must be a compelling story to be told
about the brand if people are gong to talk about it.
BrandSequencing™ makes sure not only that the story is
compelling, but that it's the right story in the first place.
 Brand DNA attributes are inextricably
linked and constantly replicate and mutate -
in a way, a brand is always a moving target.
 But since Brand DNA attributes come
exclusively from the minds of customers,
you need to get accurate customer feedback
in order to evolve your brand competitively.
 Brand Sequencing helps you exert greater
control over this seemingly random process
of replication.
BRAND DNA

 Unique genetic profile

 Made up of specific attributes,
intricately balanced which act
instantaneously on the minds of the
customers
 5 DIMENSIONS OF BRAND DNA

Brand Category: What exactly is it? What

category does it fit to?
Brand Character: What’s it look and feel like?
Brand Benefit: What’s the primary benefit to me?
Brand Difference: What makes it stand out against
competitors?
Brand Credibility: What allows me to believe the
claims made about the brand?
 A Typical Brand DNA Diagram

Category

Difference Character
Brand

Credibility Benefit
 A Typical Brand DNA Diagram

Category
Luxury
Car
Difference Character
Powerful Sleek &
Engine
? Sporty

Credibility Benefit
German Status
Technology Symbol
INDIVIDUAL EXERCISE 1:
DESCRIBING THE BRAND DNA FOR A POSSIBLE
NEW PRODUCT

 Think of any new product preferably under

the category you are managing
 Think of a new brand name
 Describe the brand DNA using the DNA
diagram

 38
Exercise:

Penetrate the hotdog market by Positioning Strategy. Do the following

1. Identify the Primary Target Market

2. Uncover Consumer Insight

3. Define the Value Proposition

4. Indicate the Positioning Statement

5. Describe the product concept

6. Provide brand name

7. Prepare brand diagram

 39
 POSITIONING
 Brand Position in the mind. What step in the
brand ladder in the mind?
 Top-of-mind exercise
 Soft drinks
 Cellphone
 Search engine
 Alcohol
 Lap top computer
 Airline
 40
POSITIONING
 What you want your target market to perceive about
your product.

 Your target market’s understanding and acceptance of

your product value proposition.
HOW TO POSITION YOUR PRODUCT
 According to target segment
 Secret (Exclusively for women)
 SanMig Light
 Unique product offering (USP)
 Johnson Baby Shampoo (For everyday shampoo)
 Versus Competition (Repositioning)
 Avis rent a car (We’re no.2 so we try harder)
 Volkswagen (Small is beautiful)
 Pepsi (The Taste of the New Generation)
 7-up (The Uncola)
 C2 (The healthy alternative to soft drinks)

 42
HOW TO POSITION YOUR PRODUCT

According to
target segment

 According to
 Product Benefit
 (USP)

Versus Competition
(Repositioning)
BRAND POSITIONING
REFERENCE: SCOTT M. DAVIS,
BRAND ASSET MANAGEMENT : DRIVING PROFITABLE GROWTH THROUGH YOUR BRANDS

A well-crafted brand positioning has three

primary components:
 A definition of the target market you wish to pursue
 A definition of the business your company is in or
the industry or category it competes in
 A statement of your point of difference and key
benefits
DEVELOPING A POSITIONING STATEMENT

 The language of a well-crafted positioning usually

takes this general form: To (target market), Brand
X is the (definition of business) that provides you
with (stated point of difference/key benefit).
 For example, "To computer manufacturers, Intel is
the chip maker that provides the fastest and most
reliable microprocessors available." Or, "To
homemakers, Tide is the detergent that gets their
clothes the whitest and brightest."
ONE SENTENCE POSITIONING STATEMENT
 For___________________ who
 (PTM demographic) __________________
(PTM psychographic)
 _____________ is the ____________________
 (brand) (competitive category)
 that provides/makes/gives/offers/brings/etc.
___________________________
(distinct benefit)

 46
EXAMPLES

For upper middle-class men who

demand the most of themselves,
Boardroom is the fitness center that
provides personal trainers who bring
the most vigorous work-outs directly
to office or home

 47
TARGET SEGMENT QUESTIONS
 Would the customers we seek recognize
themselves as part of this target market?
 Is the target market both identifiable and
reachable?
 Is it clear why this target market would be
interested in our point of difference?
 If we have not served this target market
before, why do we want to serve them
now?
DEFINITION OF BUSINESS QUESTIONS

 What is the category, industry, or business

we compete in?
 How has this changed over time?
 Is the business we are in internally-driven
or externally-driven?
 Will the marketplace value and believe our
participation in this business?
 POINT OF DIFFERENCE QUESTIONS
 Is the key benefit important to our customer?
 Can we deliver the benefit?
 Can we own this point of difference over
time?
 Is this point of difference sustainable over
our competition and their directions?
BRAND POSITIONING GUIDING PRINCIPLES
 A brand's positioning should be updated every three
to five years, or as often as needed to update the
company's overall growth strategy.
 Positioning should drive all of an organization's
brand strategies, as well as revenue and profit
streams.
 Senior management has to lead the charge in
implementing a brand's positioning.
 Employees, not advertising agencies, bring a brand
positioning to life.
 A strong brand positioning is customer driven and
fits with customer perceptions of the brand.
The marketer would draw out the map and decide
upon a label for each axis. They could be price
(variable one) and quality (variable two), or
Comfort (variable one) and price (variable two).
The individual products are then mapped out next
to each other Any gaps could be regarded as
possible areas for new products.
Trout and Ries suggest a six-step question
framework for successful positioning:

1. What position do you currently own?

2. What position do you want to own?
3. Whom you have to defeat to own the
position you want.
4. Do you have the resources to do it?
5. Can you persist until you get there?
6. Are your tactics supporting the
positioning objective you set?
 Positioning Map for Cars
The six products are plotted upon the positioning map. It can be concluded that
products tend to bunch in the high price/low economy(fast) sector and also in the
low price/high economy sector. There is an opportunity in the low price/ low
economy (fast) sector. Maybe Hyundai or Kia could consider introducing a low cost
sport saloon. However, remember that it is all down to the perception of the
individual.
PRODUCT STRATEGY

 55
PRODUCT LEVELS

 Core Benefit: the value to the customer

 Basic Product: the tangible product
 Expected Product: attributes and conditions of
the product
 Augmented Product: exceeds customer
expectation
 Potential Product: future product to satisfy
future demand

 56
PRODUCT DECISIONS
 Product type (what need to address/satisfy?)
 Product line (what form or category?)
 Product depth (what variances?)
 Branding
 Packaging
 Container/Pack Design
 Container/Pack Shape and Size
 Container Material
 Label Design/Text/Color

 57
TYPES OF PRODUCTS
 Consumer: used/consumed directly by the
customer
 Durable
 Non-durable
 Fast moving consumer goods
 Commodities: price and availability
 Can you brand commodity
 Industrial: use to produce consumer goods

 58
WHAT IS A BRANDNAME?
 Product name
 Product Identity
 Equity
 Franchise
 Company/Organization

 59
CONSIDERATIONS IN BRANDING

 Easy to pronounce
 Easy to remember
 Easy to write
 No “bad” meaning in other language
 Should convey or connote the product’s:
 Use (Mr. Clean)
 Advantage (Havit All)
 Benefit (Safeguard)
 60
BRANDING STRATEGIES
 Uni-branding - One brand for several products
 Company name branding
 Family/Mother Branding
 Brand Extension

 Multi-branding
 Distinct brand per product

 61
WHICH IS BETTER?
 Uni-branding
 Effective if there is a strong common attribute among
the products

 Multi-branding
 Different product line
 Different attribute or benefit
 Different image

 62
EXAMPLES

 Not Quite Effective Uni-branding

 Green Cross (alcohol to bath soap)
 What else?

 Effective Uni-branding
 Johnson & Johnson (Baby-care line)
 San Miguel (beer line)
 Dove (mild personal care product line)
 Betadine?

 63
PART 5:
SPTPC EXAMPLES: FAST-FOOD CHAIN RE-LAUNCH

 64
SPTPC: A SHORT CUT TO MARKETING PROCESS

 SEGMENTING
 PROFILING

 TARGETING

 POSITIONING
 COMMUNICATING

 65
SPTPC PROCESS
 Segmenting
 Identifying all possible segments
 Profiling
 Ranking segments according to Usage Volume, Usage Frequency,
Attitude
 Targeting
 Selecting the most profitable target segment (primary target market -
PTM)
 Consider the market trend and competition
 Positioning
 Developing the most powerful message
 The most significant consideration in preferring the brand
 Communicating
 Target audience
 Theme/Message
 Media to be used
 66
 SPTPC FOR A FAST-FOOD CHAIN
Segments Volume Frequency Attitude Total

Kids/GS

Teens/HS

College

Yuppies

Executives

Family

Elderly
 67
WHICH SHOULD BE THE PRIMARY TARGET
MARKET (PTM) FOR THE FAST-FOOD CHAIN?

ARE YOU SURE?

LET’S REVIEW.

 68
PRICING
WHY DO WE PRICE A PRODUCT?
 To maximize profit

Profit = Sales – Expense

Sales = Units x Price

70
WHAT IS PRICING?
 The amount we pay for the over-all value we
derived from consuming/using the product or
experiencing the service
 Why is it that the a glass of coke in the cafeteria
is much cheaper than the glass of coke in a 5-star
hotel? Isn’t it the same cola?

71
MAJOR PRICING METHODS
 Cost Plus Pricing
 Cost + Margin
 Profit Objective Pricing
 Market Demand
 Competitive Advantage
 Price Skimming
 Distinctiveness
 Demand Size and Potential

72
MAJOR PRICING STRATEGIES
 Higher Pricing: better quality
 Premium Pricing (Signature Brands; Mercedez)
 Image Pricing, ex.?
 Parity Pricing: same price
 At least one added value
 Lower Pricing:
 At least the same quality

73
MARK-UP PRICING
 Unit cost = Variable Cost + (Fixed Cost/Unit Sales)
 Markup Price = Unit Cost/(1-Desired Return on
Sales)
 Example:
Variable Cost Per Unit: P10.00
Fixed Costs : P300,000.00
Expected Unit Sales :50,000
Markup Target :20%
Unit Cost = 10 +(300,000/50,000) = P16.00
Mark-up Price = 16/(1-0.2) = P20.00

74
TARGET-RETURN PRICING

 Yields target ROI

 Formula: Target-return Price = Unit Cost + (Desired
Return x Invested Capital/Unit Sales)
 Example
ROI Target: 20%
Total Investment: P1,000,000
Unit Cost: P16.00
Unit Sales: 50,000

Target-return Price = 16+(0.20 x P1,000,000/50,000)

= P20.00

75
BREAK-EVEN VOLUME
 Total Revenue = Total Cost
 Break-even Volume Formula = Fixed Cost/(Price-
Variable Cost)
 Example
FC: P300,000
Price: P20.00
Variable Cost: p10.00
Break-even Volume = 300,000/(20-10) = 300,000/10 =
30,000 units

76
INDIVIDUAL EXERCISE 2: COMPUTING FOR BREAK-EVEN

 Assume the following for Manila Ocean Park

 Cost of Developing and Constructing the Manila Ocean
Park: 500 million pesos
 Operating overhead cost in 1 year: 50 million pesos
 A&P and other fixed cost sales expense per year: 100
million pesos
 Variable cost per customer: 100 pesos

 Entry price per head: 400 pesos

 Compute for the break-even quantity
 How long will it take for Ocean Park to recover its
investment?

 77
PERCEIVED VALUE PRICING
 Customer’s perceived value is made up of several
elements:
 Product Performance Image
 Channel Deliverables
 Warranty Quality
 Customer Support
 Softer Attributes (supplier’s reputation, trustworthiness and
esteem)
 Companies must deliver the value promised by their
value proposition
 Marketing-mix elements, such as advertising and
sales force, are used to communicate and enhance
perceived value
78
 PERCEIVED VALUE PRICING
 Example: Sony Television Pricing is P20,000 vs. P15,000
price of TLC
 Rationale:
 15,000 is the Sony TV’s price if it is only equivalent to TLC TV
 3,000 is the price premium for Sony’s superior durability
 2,000 is the price premium for Sony’s superior reliability
 1,500 is the price premium for Sony’s superior service
 1,000 is the price premium for Sony’s longer warranty on parts
 22,500 is the normal price to cover Sony’s superior value
 - 2,500 discount
 20,000 final price
 The customer actually only pays 5,000 for 7,500 extra
value

79
VALUE PRICING
MOST IDEAL PRICING STRATEGY

 Charging a fairly low price for a high-quality offering

 It is not simply setting lower prices
 It is a matter of reengineering the company’s
operations to become a low-cost producer without
sacrificing quality
 Hence, attracting a large number of value-conscious
customers
 Examples: Toyota, Southwest Airlines
 Types: Everyday Low Pricing (EDLP) and High-low
Pricing

80
GOING RATE PRICING
 Price is based largely on competitor’s price, charging the same,
more or less than major competitor(s)
 In oligopolistic industries that sell a commodity such as paper,
fertilizer, LPG, etc., all firms normally charge the same price.
 The smaller firms follow the leaders changing their prices
when the market leader’s prices change rather than when their
own demand or costs change.
 Some firms might change a slight premium or discount but
they contain the amount of difference, e.g. oil dealers
 The key in going rate pricing is of course managing the cost
via efficient production and/or good sourcing

81
AUCTION-TYPE PRICING
 Primary purpose is to dispose of excess inventories or used goods
 It is growing more popular especially with the growth of internet
 English Auction (ascending bids)
 One seller, many buyers.
 Starts with low price
 On sites such as yahoo and ebay
 Dutch Auction (descending bids)
 One seller, many buyers or one buyer many sellers
 Starts with high price
 On sites such as FreeMarket.com
 Sealed Bid Auction
 Would be suppliers can submit only one bid and cannot know the other
bids.
 A supplier will not bid below its cost but cannot bid too high for fear of
losing the sale.
 Highly advantageous for the seller since it can choose the price for
maximum profit
 Effective for contract selling

82
ANALYZING COMPETITOR’S PRICING

 Demand
 Worth to the customers
 Superior or inferior value
 Price cut objectives:
 Steal the market
 Company is doing poorly and wants to boost its
sales
 Reduce price to stimulate total demand
83
PRICING STRATEGY
 Pricing Strategies for New Products
 Pricing Strategies for Established Products
 Price Flexibility Strategy
 Price Leadership Strategy
1. PRICING FOR NEW PRODUCTS

 Skimming Pricing Strategy

 Penetration Pricing Strategy

SKIMMING PRICING STRATEGY
 Setting a relatively high price during the initial
stage of the product’s life
 Objectives:
 To serve customers who are not price conscious while
the market is at the upper end of the demand curve
and competition has not entered yet the market
 To recover a significant portion of promotional and
research & development costs through a high margin
SKIMMING PRICING STRATEGY
 Requirements:
 Heavy promotional expenditures to introduce product,
educate customers, and induce early buying
 Relatively inelastic demand at the upper end of the
demand curve
 Lack of direct competition and substitutes
PENETRATION PRICING STRATEGY
 Setting relatively low price during the early stage of the
product’s life
 Objectives
 To discourage competition from entering the market by quickly
taking a large market share and by gaining a cost advantage
through realizing economies of scale.
 Requirements
 A product must appeal to a market large enough to support the
price advantage
 Demand must be highly elastic in order for the firm to guard its
cost advantage
2. PRICING FOR ESTABLISHED PRODUCTS

 Maintaining the Price

 Reducing the Price

 Increasing the Price

MAINTAINING THE PRICE
 Objectives:
 To maintain position in the market place (i.e., market share,
profitability, etc.)
 To enhance public image
 Requirements:
 Firm’s served market is not significantly affected by changes in
the environment
 Uncertainty exists concerning the need for or result of a price
change
 Firm’s public image could be enhanced by responding to
government requests or public opinion to maintain price
REDUCING THE PRICE
 Objectives:
 To act defensively and cut price to meet the
competition
 To act offensively and attempt to beat competition
 To respond to a customer need created by a change in
the environment
REDUCING THE PRICE
 Requirements:
 Firms must be financially or competitively strong to
fight in a price war if that becomes necessary
 Must have a good understanding of the demand
function of its product
INCREASING THE PRICE
 Objectives:
 To maintain profitability during inflationary period
 To take advantage of product differences, real or
perceived
 To segment the current served market
INCREASING THE PRICE
 Requirements:
 Relatively low price elasticity but relatively high
elasticity with respect to some other factor such as
quality or distribution
 Reinforcement from the other ingredients of the
marketing mix
PRICING FLEXIBILITY STRATEGY
 One Price Strategy
 Flexible Pricing Strategy
ONE PRICE STRATEGY
 Charging the same price to all customers under
similar conditions and for the same quantities
 Objectives:
 To simplify pricing decisions
 To maintain goodwill among customers
ONE PRICE STRATEGY
 Requirements:
 Detailed analysis of the firm’s position and cost structure as
compared with the rest of the industry
 Information concerning the cost variability of offering the
same price to everyone
 Knowledge of economies of scale available to the firm
 Information on competitive prices; information on the price
that customers are ready to pay
FLEXIBLE PRICING STRATEGY
 Charging different prices to different customers
for the same product and quantity
 Objective:
 To maximize short-term profits and build traffic by
allowing upward and downward adjustments in price
depending on competitive conditions and how much
the customer is willing to pay for the product
FLEXIBLE PRICING STRATEGY
 Requirements: Have the information needed to
implement the strategy
 Usually this strategy is implemented in one of
four ways:
 By market
 By product
 By timing
 By technology
FLEXIBLE PRICING STRATEGY
 Other Requirements include:
 A customer-value analysis of the product
 An emphasis on profit margin other than just volume,
and
 A record of competitive reactions to price moves in
the past
4. PRICE LEADERSHIP STRATEGY
 This strategy is used by the leading firm in an
industry in making major pricing moves, which
are followed by other firms in the industry.
 Objective: To gain control of pricing decisions
within an industry in order to support the leading
firm’s own marketing strategy (i.e., create
barriers to entry, increase profit margin, etc.)
4. PRICE LEADERSHIP STRATEGY
 Requirements:
 An oligopolistic situation
 An industry in which all firms are affected by the
same price variables (i.e., cost, competition, demand)
 An industry in which all firms have common pricing
objectives
PLACEMENT

 103
PLACEMENT

Placement or Distribution

Ensuring availability of products where the target

market has access to buy

 104
CHANNELS OF DISTRIBUTION
 Third-party Distributor
 Wholesalers
 Key Accounts (Chained Outlets)
 Retailers
 Supermarkets
 Department Stores
 Convenience Stores
 Market Stalls
 Variety Stores

 105
STRATEGIC DISTRIBUTION

Identifying non-traditional distribution channel(s)

where a product can be strategically placed.
Example:
Toothpaste (where?)
Vitamin products (where?)

 106
NEW CONCEPTS
 Channel Marketing
 Accessibility to the product
 Making the product readily available when needed
 Ex. Soft drinks distribution
 Trade Marketing
 Availability (Trade Inventory Management)
 Visibility (Trade Merchandising)
 Movement (Trade/In-store Promotion)

 107
PROMOTION

 108
OBJECTIVES OF PROMOTION
 To inform the market about the brand/product
 To convince the market to prefer the
brand/product
 To create recall about the product
 To influence the market to make on the spot
buying decision
 To establish good company/brand goodwill or
image

 109
PROMOTION MIX
 Personal Selling
 Industrial or Durable products
 Advertising
 Fast moving consumer goods (FMCG)
 Sales Promotion
 Public Relations/Publicity
 Direct Marketing
 Special Events

 110
6 MS IN ADVERTISING

1. Message
2. Market
3. Material
4. Media
5. Money
6. Measure

 111
MESSAGE
 The most important element in the advertising
campaign
 It is what the audience should comprehend and
believe after getting exposed to the ad
 Product Positioning
 What you want your target market to
perceive about your product
 The most significant consideration in
preferring your brand or product over
competitor(s)
 112
MARKET
 The target audience for the ad who should
comprehend and believe your message and
influence the decision to buy
 The target can be any or combination of the
following:
 Product user
 Decision maker
 Decision influencer
 Buyer

 113
MATERIAL
 How the advertisement should be executed
 Story line
 Copy/Text
 Design/Lay-out
 Over-all aesthetics
 Should creatively convey the message to
achieve AIDA
 Should be appealing to target audience
 Should consider celebrity endorser only if
“necessary”—stress a message

 114
AIDA

 Attention : depends on how creatively

executed the ad is (material)
 Interest : depends on the value proposition of
the product (message)
 Decision: depends on how significant the
product offer to the audience (positioning)
 Action: depends on the level of need of the
target market and competitiveness of the
product

 115
 MEDIA

 Traditional Media = Tri-media (TV, radio, print)

 New Media: (web space, cellphone, outdoor space)
 Considerations in Media Selection:
 Placement cost
 Reach
 Optimal number of target audience exposed to the medium
 Frequency
 Number of exposure needed to achieve AIDA
 Impact
 Level of awareness/recall that an ad material would create
due to its impact creative execution)
 The right media for the target audience
 Maximize exposure only to primary target audience

 116
EXERXCISE:
CHOOSING THE MEDIA MIX EFFICIENTLY & APPROPRIATING MEDIA BUDGET

 Assume the following:

 You will advertise your cologne for middle-age female
 Target sales is 50 million pesos in one year
 1 million PTM population
 Price per bottle is 100 pesos
 Average purchase is twice a year
 Exposure in print only for three months
 What should be the right print media mix and how
much should you budget?
 What should be the conversion rate or how many
should you convince to buy?

 117
MONEY
 Budget Decision:
 As percentage of sale
 Established brand
 5%; 10%
 Share-of-voice
 Head-oncompetition
 Example?

 Advertising Objective
 New product; re-launch product
 Pre-emptive marketing assault

 118
MEASURE
 Awareness level
 Brandname survey
 Message survey
 Recall level
 Brandname survey
 Message survey
 Attitude level
 Survey, FGD, observation
 Sales and Profit
 Internal figures
 Shelf off-take
 Industry Sales Audit (Vs. competition)

 119
ASSESSMENT OF TV ADS
 Winner corned beef
 Family Sardines
 Bench (Richard Gomez)
 Solmux
 Fibisco

 120
SALES PROMOTIONS
 Consumer promotion
 Benefits the consumers
 On-pack promo; dry sampling; discount coupons; raffle
promo, etc.
 Trade promotion
 Benefits the trade channels
 Volume discount; Off-take contest; etc.

 121
WHEN TO DO SALES PROMOTIONS?
 Product Launch (part of integrated marketing
communication)
 When there is strong challenger
 To pre-empt any strong competitive move
 To capture in-store buying decision

 122
TRADE MARKETING
 Availability
 Stock inventory monitoring
 Visibility
 Merchandising
 Facing; display; collaterals
 Movement
 In-store promo
 Push program (push girls; promodizers)

 123
PUBLICITY
 To create company/brand goodwill with the customers
 To establish favorable company/brand image
 To develop customer emotional attachment with the
company/brand
 To sustain company/brand patronage
 To indirectly solicit government/public support
 What to publicize:
 CSR activities
 Sports sponsorships
 Company advocacies (R&D, Clean Environment, Green Marketing)

 124
INTEGRATED MARKETING
COMMUNICATION (IMC)
 Promo Mix done under one theme
 Advertising message :
 Publicity :
 Special Events :
 Sales Promo :
 Personal Selling :
 Employee Communication and Attitude :

Example : Clear Shampoo

 125
PRODUCT LIFE CYCLE
AND THE
4 PS

 126
 Sales

Profit

INTRODUCTION GROWTH MATURITY DECLINE

S Target Market
T
R Product
A
T Price
E
G Placement
I
E Promotion  127
S
 Strategies in the Different Stages of the Product Life Cycle

Introduction Growth Maturity Decline

Stretch market Maintain loyal users
  Focus on the primary Enter new segments convert non-users  
Target Market target segment   enter new segments  
      attract competitors' customers  
Improve quality, styling Start to develop new product for Obsolete the product with
Product Differentiate Introduce new variants any emerging market a new promising one
      Stay competitive in quality and Sell the product if there are
      attributes interested to acquire it
Objective pricing Lower price to reach Lower to be more competitive Optimize to maximize profit
Price Price Skimming out to more segments Increase to maximize profit  
  Competitive pricing   Offer trade discounts  
  Saturate distribution channels Limit to outlets where there is
Placement Primary outlets Expand channel coverage Strengthen partnership with movement
      the channels  
Product awareness Product Preference Reinvest if new market or new No investment
Promotion Informative Competitive usage created is big enough  
      Rechannel investment to new  
      promising product(s)  

 128
 NEW MARKETING REALITIES
 Network information technology (e-marketing)
 Globalization (international marketing)
 Deregulation
 Privatization
 Heightened competition (national vs. multinational brands;
brands vs. generics; concessionaire brand vs. house brands)
 Industry convergence (communication and entertainment)
 Consumer resistance (negative opinion about advertising and
marketing)
 Retail Transformation (mega retailers, specialty retailers,
direct-mail firms, home shopping TV, e-commerce on the
Internet)

 129
NEW CONSUMER CAPABILITIES

 A substantial increase in buying power

 A greater variety of goods and services
 A great amount of information about
practically anything
 Greater ease in interacting and placing
receiving orders
 An ability to compare note on products and
services
 An amplified voice to influence peer and
public opinion
 130
 NEW COMPANY CAPABILITIES
 Can use the internet as powerful information and sales
channel
 Researchers can collect fuller and richer information
about markets, customers, prospects and competitors
 Managers can facilitate quick communication with
internal and external customers (internet connection)
 Target marketing and two-way communication are
easier (internet connection)
 Companies can establish customer network without
physically organizing them (internet connection)
 Companies can reach customers on the move with
mobile marketing (GPS technology)

 131
INTERNET AND MOBILE PHONES
 Selling media
 Advertising media
 Sales promo media
 Market research media
 Network marketing media
 Marketing strategy feedback media

 132
 BASIC MARKETING PLAN OUTLINE FOR NEW PRODUCT
 STV
 Market Segments and Corresponding Profile
 Primary target market segment (PTM)
 Estimated Market Size
 Strategic insight about the PTM
 Competitive Offering
 Value Proposition
 Base P
 Product concept, description and attributes
 Packaging (size, container, label design and copy)
 Brand name
 Brand DNA
 Brand Positioning
 Support Ps
 Pricing strategy
 Distribution strategy
 Promotion strategy
 Action Plans
 Financial Outlook
 133
 BASIC MARKETING PLAN OUTLINE FOR EXISTING PRODUCT

 Performance Review
 Sales Growth; Market Share; Gross Profit; Marketing Contribution
 STP Review
 Primary target market penetration rate
 Consumer brand perception vs. positioning strategy
 Base P
 PTM product acceptance
 Performance vs. competitors
 Support Ps
 Pricing competitiveness
 Distribution level
 PTM product awareness and understanding
 Objectives
 Growth Opportunities/Issues/Action Plans
 Action Plans and Results
 Financial Outlook
 134
 Competitor Competitor Competitor
1 2 3
Product      
     
Competitive      
Analysis Packaging      
     
     
Price      
       
       
Promotion      
       
       
Placement      
       
       
Target Market      
       
       
 135
 Growth Growth   Action
Area Opportunities Issues Plan
Usage Frequency    
       
       
New Usages      
       
       
New Users      
       
       
New Channels      
       
       
New Products      
       
       

 136
ACTION PLANS AND EXPECTED RESULTS
2010 2011 2011/2010
Projection Carry-Over Budget Increment Increase
87,447 45,472 90,459 44,987 3,012

2011 Action Plans and Estimated Results 2011/2010

Action Plan Cost Maintained Sales CSR Increase
Continue Display Rental 9,000 22,860 36.73% 1,640
Continue Display Allowance 1,100 1,250 82.11% 90
Continue In-store Promo 750 4,168 16.79% 299
Continue On-pack Promo 750 1,258 55.63% 90
Print Ads for Splash 875 1,691 48.28% 121
LCD Billboards, Bannering, Blitz 650 1,068 56.79% 77
Merchandising Highlight 750 1,245 56.21% 89
Consumer Sampling 530 1,932 25.60% 139
Events 500 1,585 29.43% 114
New Products in Outlets 1000 1,785 52.27% 128
Packaging improvement of Splash 3,133 0.00% 225
TOTAL 15,905 41,975 3,012