Republic of the Philippines

UNIVERSITY OF EASTERN PHILIPPINES

LAOANG CAMPUS
Laoang, Northern Samar
Web: uep.edu.ph

Engineering Management
 Module 11: MANAGING THE MARKETING FUNCTION

Overview
Engineer managers are engaged in the production of tangible or intangible goods.
Some of these engineer managers are directly responsible for marketing the company's
products or services. With this module, students will be able to learn about operation and
operation management as applied in managing production, it will discuss the types of
transformation involved in the process. It also provides ideas on the type of services and
manufacturing processes as well as the important parts of production systems.

Learning Outcomes

1. Define the term operation and operation management

2. Determine the types of transformation process
3. Explain service process and manufacturing process
4. Identify the important parts of productive systems

THE MARKETING CONCEPT

Marketing is a group of activities designed to facilitate and expedite the selling of goods
and services.
The marketing concept states that the engineer must try to satisfy the needs of his
clients by means of a set of coordinated activities. When clients are satisfied with what the
company offers, they continually provide business.

THE ENGINEER AND THE FOUR P’S OF MARKETING

The engineering organization will be able to meet the requirements of its clients (or
customers) depending on how it uses the four P's of marketing which are as follows:

1. Product. In the marketing sense, the term "product" includes the tangible (or
intangible) item and its capacity to-satisfy a specific need. When a customer buys a
car, he is actually buying the comfortable ride he anticipates to derive from the car.
This is not to mention the psychological benefits attached to the ownership of a car.
The services provided by the engineer manager will be evaluated by the client on the
basis of whether or not his or her exact needs are met. When a competitor comes into
the picture and sells the same type of service, the pressure to improve the quality of
services sold will be felt.
When improvement is not possible, "extras" or "bonuses" are given to clients. An
example is the construction company that provides "free estimates" on whatever
inquiries on construction are received.
2. Price. Price refers to "the money or other considerations exchanged for the purchase
or use of the product, idea, or service." Some companies use price as a competitive
tool or as a means to convince the customer to buy.
 When products are similar in quality and other characteristics, price will be a strong
factor on whether or not a sale will be made. This does not hold true, however, in the
selling of services and ideas. This is because of the uniqueness of every service
rendered or every idea generated.
Figure 11.1 The Engineer Manager and the Four P's of Marketing

When a type of service becomes standardized, price can be a strong competitive tool.
When a construction firm, or instance, charges a flat 10 percent service fee for all of
its construction services, a competitor may charge a lower rate. Such action, however,
will be subject to whether or not the industry will allow such practice.
3. Place. If every factor is equal, customers would prefer to buy from firms easily
accessible to them. If time is of the essence, the nearest firm will be patronized.

It is very important for companies to locate in places where they can be easily reached
by their customers. Not every place is the right location for any company.

When a company cannot be near the customers, it uses other means to eliminate or
minimize the effects of the problem. Some of these means are:
1. Hiring sales agents to cover specific areas;
2. Selling to dealers in particular areas;
3. Establishing branches where customers are located,
4. Establishing franchises in selected areas.

Manufacturing companies can choose or adapt all of the above-mentioned

options. Service companies like construction firms adapt the modified versions. An
example is the engineer manager of a construction firm who gives commissions to
whoever could negotiate a construction contract for the firm.
4. The Promotion
When engineer managers have products or services to sell, they will have to convince
buyers to buy from them. Before the buyer makes the purchasing decision, however,
he must first be informed, persuaded, and influenced. The activity referred to, in this
case, is called promotion.
There are promotional tools available and the engineer manager must be familiar with
them if he wants to use them effectively. These tools are as follows:
a. Advertising. It could be a paid message that appears in the mass media for the
purpose of informing or persuading people about particular products, services,
beliefs, or action. If the engineering manager wants to reach a large number of
people, he may use any of the mass media depending on his specific needs and
 his budget. Each of the public advertising carriers, i.e., radio, television,
magazines, and newspapers, has their own specific audiences and careful analysis
must be made if the engineering manager wants to pick the right one.

b. Publicity. The promotional tool that publishes news or information about a product,
service, or idea on behalf of a sponsor but is not paid for by the sponsor is called
publicity. The mass media is also the means used for publicity. If the engineer
manager knows how to use it, publicity is a very useful promotional tool. His
message may be presented as a news item, helpful information, or an
announcement.
An example of a publicity release is shown in Figure 11.2.
c. Personal Selling. A more aggressive means of promoting the sales of a product
or service is called personal selling. It refers to the oral presentation in a
conversation with one or more prospective purchasers for the purpose of making
a sale.

Personal selling may be useful to the marketing efforts of the engineer manager.
If, for instance, he is the general manager of a firm manufacturing spare parts, he
may assign some employees to personally seek out spare parts dealers and big
trucking companies to carry their product lines.

d. Sales Promotion. Any paid attempt to communicate with the customers other than
advertising, publicity, and personal selling, may be considered sales promotion.
This includes displays, contests, sweepstakes, coupons, trading stamps, prizes,
samples, demonstrations, referral gifts, etc."

Contests and sweepstakes are very popular sales promotion tools. An example is
shown in Figure 11.3.
STRATEGIC MARKETING FOR ENGINEERS
Companies, including those managed by engineer managers, must serve markets that
are best fitted to their capabilities. To achieve this end, a very important activity called strategic
marketing is undertaken.
Under this set-up, the following steps are made:
1. Selecting a Target Market
A market consists of individuals or organizations, or both, with the desire and
ability to buy a specific product or service. To maximize sales and profits, a company
has the option of serving entirely or just a portion of its chosen market. Within markets
are segments with common needs and which will respond similarly to a marketing
action. Figure 11.4 shows an example of the various segments of a given market.
Figure 11.4. The construction Market and its Segments

An analysis of the various segments of the chosen market will help the
company make a decision on whether to serve all or some of the segments. The
segment or segments chosen become the target market.
In selecting a target market, the following steps are necessary:
1. Divide the total market into groups of people who have relatively similar product or
service needs.
2. Determine the profit potentials of each segment.
3. Make a decision on which segment or segments will be served by the company.
 As shown in Figure 11.4, a company may choose any or all of the residential,
industrial, and government segments. This decision will depend, however, on the profit
potentials of each segment and the capability of the firm.
A smaller company may find it most profitable to supply only the construction
material needs of the residential segment. A bigger company, however, may find it
more profitable to perform actual construction in addition to selling construction
materials.

2. Developing a marketing mix

After the target market has been identified, a marketing mix must be created
and maintained. The marketing mix consists of four variables, the product, the price,
the promotion, and the place (or distribution).

Given a marketing environment, the engineer manager can manipulate any or

all variables to achieve the company’s goals. As such, the quality of the product may
be enhanced, or the selling price made a little lower, or the promotion activity made a
little more aggressive, or a wider distribution area may be covered. Any or all of the
foregoing ma be undertaken as conditions warrant.
As shown in figure 11.5, all marketing activities are focused on the target
market.

Figure 11.5. The Company, The marketing mix and the target market
 You’ve got a problem! Module 11

Instruction: Answer the following questions thoroughly.

11.1 QUESTIONS FOR REVIEW AND DISCUSSION

11.1.1 How may the engineer manager meet the threat of a competitor's product?
11.1.2 Why is price said to be a strong competitive tool?
11.1.3 What are some of the possible measures to make products easily available to
customers?
11.1.4 How may the engineer manager convince the buyer or client to patronize the firm?
11.1.5 May the engineer manager use publicity in promoting his firm? Cite an example.

11.2 RESEARCH WORK

Choose an engineering firm with an existing marketing unit. Draw the organization
chart of the firm showing the marketing unit and its relationship with other units.

Feedback

At this moment, you’ve already finished module 11 of our subject. Looking back on the
discussion, do you have difficulty understanding the topics? Which part is unclear? Tell me
about it.

SUMMARY
To survive, companies must continuously generate income. Tb be able to do so, they
must be able to sell enough quantity of their products or services. Engineering firms are no
exception.
The proper management of the marketing function helps the engineer manager
convince customers to patronize the firm. Specifically, the engineer manager must know how
to use effectively the four Ps of marketing which are the product, the price, the place, and the
promotion.
An activity called strategic marketing is designed to make sure that the marketing
objectives of the firm are achieved.

References:

Max Fajardo, (2000), Project Construction Management Second Edition, 5138 Trading,
Filinvest Holes II, Quezon City.
Roberto G. Medina, (2002), Engineering Management, Rex Bookstore Inc., Nicanor Reyes,
Sr. St., Sampaloc, Manila.