UNIT 1

MARKETING
PRINCIPLES AND
STRATEGIES
This unit introduces the students to the world of marketing.
Marketing has become synonymous with advertising, promoting, and
selling. Some people mistake marketing for the selling of goods, a piece of
material needed for a campaign or promotion, or even the buying and
selling of goods in the marketplace or palengke. Contrary to these
misconceptions, marketing encompasses the whole process of exchanging
goods and services to satisfy customer’s needs and wants—from the
conception of an idea until the delivery of the final output to the customers.
This begins with the definition of marketing and the characteristics
of a marketing organization. To better understand the characteristics, they
are discussed through the Cs of marketing. Lesson 2 delves into the goals
of marketing. The traditional and contemporary approaches to marketing
are discussed in Lesson 3.

At the end of this lesson, the students will

able to
Marketing and 1. Define and understand marketing,
its Traditional 2. Illustrate the utility concept of
marketing’
Approaches 3. Identify the characteristics of a
marketing organization, and
4. Describe the traditional
approaches to marketing.
LET’S DISCOVER

Procter & gamble’s Tide: A Marketing Success Story

Procter & Gamble (P & G) is one of the leading manufacturing companies

which has developed over 100 products brands that are among the most
recognizes in the world. Some of P&G's product are Crest toothpaste. Gillett
razors, Ivory soap and tide detergent. In particular, tide detergent is recognized
as a top brand and an important household name in many countries.
The Origins of Procter and Gamble
Procter & gamble was established in 1837 when William Procter, A candle
maker, and his brother in law William Gamble, who was a soap maker, decided
to become business partners and combined their professions to establish a
family- run business. During the first half of the 20th century. Procter & Gamble
became one of several manufacturing companies that were recognized as leaders
in the industry. At that time P&G strove to increase the company's lead over its
competitors by developing new and more effective household products.

Introducing Tide: The Washday Miracle

In the 1930s, the company's scientists worked on developing a heavy-duty
laundry detergent that would clean heavy stains without leaving clothes hard
and stiff. Their efforts, however, were unsuccessful and the company shifted its
focus to other project. Despite the seatback, one of the company's researchers,
David Byerly, continued with developing the detergent as a side- project called
Project X. In 1994, Byerly finally succeeded in creating a prototype cleaning
agent and in 1946, Procter and gamble launched the product with the brand
name Tide. Tide was launched with the slogan “Oceans of Suds" and was
marketed as “The Wash Day Miracle".

Marketing efforts
Procter & Gamble put much effort in building the tide brand as an effective
cleaning agent. At that time, consumer were looking for a detergent that easily
dissolves in water and can wash well. Tide was developed as a cleaning agent
which dissolved well in water compared to soaps; it also made a lot of suds,
which aided the cleaning process. These characteristics were used by the
company as the main selling point of product.
 One significant factor which aided marketing efforts was the tide logo
which was developed to be eye catching and memorable. The logo used the bright
yellow and orange color for the concentric circles that formed the target on the
tide logo. The brand name was colored blue to symbolize calmness, and was a
perfect complement to the bright colors of the logo. The logo is so effective that
through the years, the company has not made any significant changes to it; it
retains the color combination and the concentric ring design.
With the advent of washing machines in the 1950s, Procter & Gamble
made sure that a box of tide was provided free with every purchase of a washing
machine. This partnership continued until 1970s, and resulted in Americans
becoming accustomed to using Tide detergent market in the United States.
Over the years, Procter & Gamble continued to innovate the tide product
to meet the various needs of its customer. In 1968, Tide XK was launched, which
was designed to remove tough stains such as blood and food stains. In 1984,
liquid tide was introduces. Four years later the company launched tide with
bleach which was effective for both white and colored clothes. In 2005, a variant
of tide which can be used in cold water was introduced, along with the compact
Tide stain remover which came as pen. The company also effectively utilized
advertising through multiple platforms such as television, radio, print, billboard
ads, and the internet.

Marketing Dominance
The marketing efforts of Procter & Gamble eventually established Tide as
a leading detergent product in many countries throughout the world. Tide has
become a household name in the United States. In 2009 a US consumer survey
included Tide as one of three products that consumers would be unwilling to
give up despite difficult economic conditions trough about by the recession in
2007. Tide has captured around 30 to 40 percent of the worldwide detergent
market and has sold twice as much as the next leading detergent brand. This is
despite the fact that tide costs twice as much as other competing products in the
market.

Discussion Questions
1. What consumer need was addressed with the introduction of Tide
detergent in the market?
 2. Describe the marketing efforts implemented by Procter & Gamble with
regard to Tide. Which of them, in your view, had the most significant
impact on the popularity of Tide?

3. How does P&G maintain Tide’s “staying power” in the market?

4. What proof can you cite regarding the effective marketing for Tide?

LET’S LEARN

The goal of marketing should not be confined to just making a sale; it

should also be about satisfying costumers, needs and wants. According to
Theodore Levitt, the ultimate purpose of a business is to “find and keep
customers”. Marketing plays an important role in achieving this purpose.

It is a dream of any business owner to maintain loyal costumer. However,

this will not be possible if the business does not have a marketing program that
helps in identifying, satisfying and retaining costumer who will avail of its
product and services no matter what is being offered in the market.

Marketing Defined
 A marketer is a person who identifies the
goods and services needed or wanted by
In July 2013, the
customers and markets them. American Marketing
 A customer is a person of a business that Association approved its
buys goods or avails of services produced or latest definition of marketing
offered by a firm. as “the activity, set of
 A consumer refers to a person who acquires
institutions, and processes
goods and services for direct use and had
and intention of availing them or using them for customers, clients,
to create another good or service. partners, and society at
large.”

Though the years, the definition of marketing has included non-profit

institutions like education and health care providers. It has also emphasized that
the business’ responsibility goes beyond the survival of the firm; the betterment
of society should also be taken into account. Marketing activities apply not only
to profit- oriented businesses (e.g., Jollibee, Mercury Drug, SM) but also to non-
profit organizations (e.g., Philippine Red Cross, Philippine Tuberculosis Society,
Inc.),
The production and selling of goods and services are the main functions in
most organizations. These functions take on the supply and demand function
which are essential in the discipline of economics. As a core function selling is
one aspects of marketing. With this, marketing takes its roots from economics.

Marketing is now being supported by other disciplines, namely psychology

and sociology, to further explain how consumers make purchase decisions.
Marketing also uses mathematics for marketing research and information
technology for the promotion and distribution of goods and services.

More often than not, marketing is critical to any business’ success.

However, its importance an extent depend on the perspective of the owner, the
size of the business, and the kind of products and services being offered. Large
organization such us san Miguel corporation, globe, Procter & Gamble, and the
Unilever a lot a large slice of budget for marketing expenditures and use
multimedia ads and extensive sales efforts to achieve their sales target.
Companies like real estate property developers and travel agencies utilize
brochures and websites to market their services. Small businesses, meanwhile,
meanly rely on word-of-mouth advertising.

Utility Concept of Marketing

Marketing has also use the concept of utility, which is power of a
good or service to satisfy a particular need and want of customer. It is also the
term for the benefit that consumers derive from acquiring and using a particular
good or service.
In marketing, a firm creates and distributes a good to create a
particular value for the consumers. Marketing uses four kinds of utility.
1. Form Utility. It refers to the conversion of raw materials into products that
suit the preferences of consumers so that they do not have to create their
desired products themselves. For example, a clothing company like Bench
and Levi’s uses fabric, buttons, zippers, and other accessories to produce
garments so the consumers need not assemble the materials together. To
 make sure it can cater to different types of customers, clothes in different
colors, designs, shapes, and sizes are offered.

A similar utility called task utility refers to offering services which

consumers may not be capable of doing or may not like to do themselves.
A woman may go to a salon to get a haircut because she does not want to
do it herself. A man may contact a professional plumber to fix faucet
because he lacks the skill to do it. A mother may not have time to do the
laundry so she brings the clothes to a nearby laundry shop.

The marketer should be able to communicate well with the consumers so

he or she can identify and consolidate their preferences and ensure that
the product or service meets their expectations.

2. Place Utility. It refers to the availability of the product or service at

accessible locations. Marketers devise ways to provide value through
availability, ensuring that consumers can easily have the goods or use the
service. Delivery service is popular in restaurants.

Online shopping gives consumers the convenience to shop and receive

their purchases at the comfort of their houses. Automated Teller Machines
(ATMs) revolutionized the way people deposit and withdraw money. Paying
for utilities such as electricity, water, and telephone can now be done
online. Government agencies such as the National Statistics Office has
allowed the issuance of birth certificates, marriage contracts, and other
documents through customer service centers in malls or through delivery.

3. Time Utility. It refers to the satisfaction derived by customers in availing

of products or services on time. Restaurants promise prompt delivery,
sometimes with a guarantee of giving the orders free of charge if they are
delivered late. They also offer free appetizers to dine-in customers so they
will not feel impatient while waiting for their orders. Banks have also
improved the processing of loans and cut the waiting time for clients.

4. Possession Utility. It refers to ensuring that consumers have full

possession of the product or service at the right time, so this overlaps with
time and place utilities. Marketers facilitate this utility through fast
payment processing and delivery. They can also offer credit facilities for
products that customers cannot afford to buy in cash at the moment. Easy
transfer of ownership such as transfer of title for a house and lot is another
way of creating value for the customer
 Marketing Terms
The Marketing Organization
Exchange is the process of offering
something to another and then being offered Marketing organization refers to
something in return.
the department in a corporation that
Transaction is an agreement between a ensures the smooth flow of marketing
buyer and a seller to exchange goods or
plans, policies, and programs that monitor
services. The exchange should involve money
or some other resource that is of value to the all sales activities, customer services, and
organization offering the need-satisfying distribution and promotion efforts. The
product or service.
marketing organization can be best
described with the Cs of marketing which
describe six aspects of the organization: consumer content, company capabilities,
communication, competition, cross-functional contact, and community content.

Consumer content. The exchange process has changed dramatically in recent

years as consumers are now able to study a wide array of choices before they
make the actual purchase.
Consumers access the Internet to obtain Information about products and
services they would like to avail of. Therefore, businesses rely on their marketing
organizations to keep customers loyal to the products and services they offer.

Any organization that employs marketing should keep customers informed

about what they offer and should always be in constant contact with them.
Marketers should be updated on their customers’ behaviors, values, interests,
and other factors that influence their purchases. A consumer-oriented firm
works toward satisfying customers’ needs before creating products or offering
services.

Texas Instruments, a global semiconductor design and manufacturing

company, is known for its calculators, microcontrollers, power products, and the
like. In June 1979, it launched its home computer caller 99/4. The product was
dubbed as one of the worst machines ever introduced in the market at that time.
There was nothing spectacular about the computer as it could only be used for
playing games. The keyboard did not even have the question mark, arrow,
backspace, and tab keys.
 In short, the computer was produced first and marketers tried to sell it
without identifying what consumers needed and wanted. No prototype was
shown to the public so the company missed the opportunity to let others point
out flaws of the product before its actual production and launching. This is a
classic example of consumer negligence.

Company Capabilities. To be on a par with competitors, marketing

organizations need to strengthen their capabilities in production and operations
to develop and produce goods that will meet consumer needs.

In order for Toyota to reach and satisfy the generation of consumers aged
25 and below, it introduced the Toyota Celica in 1970. It is a small vehicle that
can carry up to four people and was noted for its speed. Toyota evidently
considered young consumers’ preference for small sports cars as well as their
personality in creating the Celica. The sports car became popular especially in
the United States and the United Kingdom. Toyota reached unprecedented sales
for Celica, selling 4, 129, 626 units from 1970 to 2006.

However; Toyota, even with its strong production capability, was aware of a
downtrend among sports car buyers. It discontinued production of the sports
car in the summer of 2004 in the US. Also, the tougher new emission regulations
in the United Kingdom proved to be uneconomical for the company. In 2006,
production of the Celica ceased officially in Japan.

Communication. A marketing organization must have a positive, long-

lasting relationship with its customers because they constantly look for cues
provide by the organization as they make their purchase decisions. A negative
brand image results in low sales.
Around 2009, Domino’s Pizza gained notoriety for the quality its pizza.
Consumers found their pizzas subpar with regard to taste and ingredients. This
resulted in poor sales and negative brand image and recall among consumers,
becoming the least preferred brand among pizza lovers. The company resolved
to solve this problem and launched the Pizza Turnaround Campaign. The
company released a documentary which showed how they acknowledged their
weaknesses and made improvements to their recipes and choice of ingredients.
This campaign was a success and the company recovered, posting a 16% profit
increase in 2014 with the company value rising about 30%.
Competition. The real challenge for any organization is to face its strongest
competitor head on. It should know the competitor’s strengths and weaknesses
and determine the best way to respond.
Jollibee faced and eventually beat its stiffest competitor, McDonald’s,
which entered the Philippine market in 1981. One reason for Jollibee taking the
lead in the fast-food market is its menu which is tailored for Filipinos. It has
captured the Filipino taste which is langhap-sarap (smells good, tastes good)
quality. The distinct Filipino flavor of Jollibee meals is likened to home cooked
meals and is appealing to children.
Many marketing organizations fail to distinguish the real meaning of
competition when they watch out only for similar companies. For example, if
Jollibee competed only against McDonald’s and other fast-food restaurants
offering burgers (e.g. Burger King, Wendy’s), it would limit its scope of
competitive strategies.
Fortunately, Jollibee looked beyond burgers. It also acknowledged
restaurants that offered other types of food to the same target market who might
look for alternatives to burgers and fries. The company saw formidable
competitors in the likes of Chowking, Greenwich, and Mang Inasal, as they ate
up a substantial portion of Jollibee’s market. And so, Jollibee bought Greenwich
in 1984 and Chowking in 2000. Eventually, it acquired 70% of Mang Inasal in
2008 and late on, the remaining 30% in 2016. Jollibee also acquired Red Ribbon
in 2005, making the company a complete package for special occasions. Today,
Jollibee is also the leading venue for birthday parties, beating McDonalds.
Cross-Functional Contact. A marketing organization cannot work alone
without the support and assistance of other departments. For instance, an
effective and creative advertising team cannot assure good sales without an
equally reliable and dependable sales force. The composition of the sales team is
made possible through the efforts of the recruitment personnel in the human
resource department. A creative advertisement idea will not be realized without
a budget, which is managed and approved by the finance department. Of course
the production unit takes care of making products. All departments of an
organization must work together to successfully meet its target and objectives.
Community Contact. A marketing organization is updated with local,
international, and community news. It has constant contact with different
agencies and organizations within its surroundings. It also personifies corporate
social responsibility by integrating sustainability and ethics in conducting
business. The organization also acknowledges the contributions of its
stakeholders.
Traditional Approaches in Marketing Marketing Term:
Personal selling is a promotional
There are three traditional approaches in
tool wherein a salesperson uses
marketing, which focus less on customers’ needs and selling techniques to persuade a
wants and more other factors such production, customer to purchase a good or
products, and sales. avail of a service. It is the use of
sales skills to build a personal
Production Concept. It starts with the relationship with a customer.
production and ensures that the firm produces high
quality goods. Then the next task is to find people who
will buy the products. The philosophy of this approach is that consumers favor
companies that produce high-quality and affordable goods, so it is necessary to
maintain efficiency in production and distribution. This was the prevailing
practice in Western Europe and North America during the early 20th century,
and was exemplified by Ford’s production process.
Henry Ford’s motor company pioneered in the mass production of cars. At
that time, automobiles were new in the market and many people were wary of
riding in and even operating this vehicle. Man did not see a need to purchase an
automobile. However, through improve production and an extensive marketing
campaign, the Ford motor company was able to convince consumer to buy
automobile. Soon, more types of vehicles such as trucks and sports cars were
also developed.
Product Concept. In this approach, it is believed that a product should
be a high quality, of excellent performance, and with innovated features.
Manufacturers who use this approach emphasize the importance of innovation
as the key to business success. Cellphones and clothing companies use product
concept to continuously create and develop the features of their product to
attract customer. Car manufacturers also develop new car makes and features
from time to time.
Sales Concept. Production techniques became more elaborate and
sophisticated in the 1950s. High-quality products and services continued to be
provided but companies had difficulty selling them to customers. Buyers were
unwilling to purchase goods and avail of services that they thought were not
essential, especially when companies were not exerting extra effort to promote or
inform them about what they were selling. This convinced companies to employ
a sales force to persuade customer to buy. Personal selling became the name of
the game. The sales force had to entire consumer to purchase goods and services.
Sales personnel use-the art of persuasion to influence consumers’
purchase decisions. In this approach marketing becomes synonymous with
selling. People do not recognize all the other activities of marketing except selling.
Insurance agents, for example, have to provide potential customers all the
information they can give to persuade them to get an insurance plan.
 >>SUMMARY<<

 Marketing aims not only to earn profit but ultimately satisfy customer
needs and wants. The definition of marketing encompasses profit and non-
profit organizations and includes sustainability and corporate social
responsibility.
 Marketing uses the concept of utility, which is the power of good or service
to satisfy a particular need and want. Marketing uses five kind of utility:
form, time, place, and possession.
 The marketing organization can best be described using the Cs of
marketing, namely customer content, competition, cross-functional
contact, community content, company capabilities, and communication.
 The traditional approaches to marketing are production, product, and
selling concepts.

LEARNING TASKS
MARKETING VOCABULARY
Identify the terms being described in the statements.

___________1. It refers to converting raw materials into products that suit the
preferences of consumers so that they do have to create their desired products
themselves.
___________2. It is a traditional approach wherein the sales force have to entice
consumers to purchase goods or services.
___________3. It is defined as the activity set of institutions, and processes for
creating, communicating, delivering, and exchanging offerings that have value
for customers, clients, partners, and society at large.
____________4. It is the process of offering something to another and then offering
something in return.
____________5. In this approach, it is believed that a product should be a high
quality, of excellent performance, and with innovative features.
____________6. It refers to ensuring that consumers have full possession of the
product or service at the right time.
Identify the C of marketing in each statement.
__________1. A marketing organization must have a positive, long-lasting
relationship with customers because they constantly look for cues provided by
the organization as they make their purchase decisions.
__________2. A marketing organization cannot work alone without the support
and assistance of other departments.
__________3. A marketing organization should know the competitor’s strength
and weaknesses and determine the best way to respond.
__________4. A marketing organization must keep customers informed about
what they offer and always be in constant contact with them.
__________5. A marketing organization needs to strengthen its capabilities in
production and operations to develop and produce goods that will meet customer
needs.
__________6. A marketing organization should personify corporate social
responsibility by integrating sustainability and ethics in conducting business.

MARKETER IN ACTION
Discuss or explain what is being asked.
1. Explain briefly why marketing is not mere selling.
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2. Discuss the concept of utility by using a specific product or service.
________________________________________________________________________
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3. Explain how marketing has evolved from production to product-to-selling
orientation.
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