Week 1: Chapter 1.1.-1.2.

WEEKLY STUDY AND ASSESSMENT GUID

E

TOPIC ACTIVITIES OR TASKS

Chapter I: Marketing Principles Read and venture on the motivation activity given prior the lessons.
and Strategies
1.1. Defining Read and study the lessons on defining marketing for the 21st century.
Marketing for the 21st
Century
1.2. Goals of Read and study the lessons on the goals of marketing.
Marketing

For this week of this term, the following shall be your guide for the different lessons and
tasks that you need to accomplish. Be patient, read it carefully before proceeding to the tasks
expected of you.

Chapter I: Marketing Principles and Strategies

1.1. Defining Marketing for the 21st Century
Content
1.2. Goals of Marketing

At the end of the lesson, you should be able to:

Learning • define marketing principles; and
Competencies • determine the goals of marketing.

• Take a Position! (Motivation Activity)

Activities
 • How is good marketing not just a mere accident?
• How important is marketing?
Essential Questions
• How are marketing goals distinct from other marketing objectives of the or

• “Your most unhappy customers are your greatest source of learning.”

Value Statement - Bill Gates

Textbooks:
• 3G Learning (2018). 2nd Edition Principles of Marketing. 3G Learning.

• Ligaya, E., et. al. (2017). Principles of Marketing. Fastbooks Educational Sup

• Serrano, A. (2016). Principles of Marketing. Unlimited Books Library Serv

Publishing Inc.
References
• Illano, A. B. (2016). Principles of Marketing. Rex Book Store Inc.

• Kotler, P., et. al. (2016). 14th Edition Marketing Management. Pearson Ed

Online Reference:
· Waracle (2021). Greatest Source of Learning. Waracle

LEARNING CONTENT

Hello, future professional! If you’ve reached this part already, I’m quite sure that you’re
oriented on how we’re going to do our class this way. I’ve mentioned earlier that I’m
hoping that we work together in exploring the exciting and effervescent realm of
marketing. Well, buckle up as this marks the start of our thrilling adventure!

LET’S GET THIS CRACKING!

Every day, we go on with our lives and make the most out of it. More often than not, we
get used to things that we almost not notice about how marketing affects all of us. Before
I proceed with the lecture proper, I’d like to ask you to take a stand and select which
position you are in.

With your insights, let’s see if you’ve got a strong stand. Without further ado, let’s have
more fun in this week’s lesson. Read on!
 CHAPTER I: MARKETING PRINCIPLES AND
STRATEGIES

How does good marketing not just a mere accident?

It may look simple or even a product of “natyempuhan lang” but good marketing is no
accident as it is a result of careful planning and execution and using state-of-the-art tools
and techniques. It becomes both an art and a science as marketers strive to find creative
new solutions to often-complex challenges amid profound changes in the 21 st century
marketing environment.

For our subject Principles of Marketing, we’ll learn how marketers balance discipline and
imagination to address these new marketing realities. In this week’s lessons, we lay the
foundation by discussing essential marketing concepts, tools, frameworks, and issues.

DEFINING MARKETING FOR THE 21ST CENTURY

How important is marketing?

The first decade of the 21st century challenged firms to prosper financially and even
survive in the face of an unforgiving environment. Marketing is playing a key role in
addressing those challenges. Finance, operations, accounting, and other business
functions won't really matter without sufficient demand for products and services so the
firm can make a profit. In other words, there must be a top line for there to be a bottom
line. Thus, financial success often depends on marketing ability.

To prepare to be a marketer, you need to understand what marketing is, how it works,
and what is marketed.

What is marketing?

Marketing is about identifying and meeting human and social needs. The American
Marketing Association offers the following formal definition:
Marketing is the activity, set of institutions, and processes of creating, communicating,
delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large.

We can distinguish between a social and a managerial definition of marketing.

A social definition shows the role marketing plays in society; for example, one marketer
has said that marketing's role is to “deliver a higher standard of living". Here is a social
definition that serves our purpose:

Marketing is a societal process by which individuals and groups obtain what they need
and want through creating, offering, and freely exchanging products and services of
value with others.

LOGIC TIME!
One of the shortest good definitions of marketing is "meeting needs profitably”.

What is marketed?

Marketers market 10 main entities: goods, services, events, experiences, persons,

places, properties, organizations, information, and ideas. Let's go and venture on the said
entities!

1. Goods
• Physical goods constitute the bulk of most countries'
production and marketing efforts.

2. Services
• Services include the work of airlines, hotels, car rental firms,
barbers and beauticians, maintenance and repair people,
and accountants, bankers, lawyers, engineers, doctors,
software programmers, and management consultants.

3. Events
• Marketers promote time-based events, such as major trade
shows, artistic performances, and company anniversaries.

4. Experiences
• By orchestrating several services and goods, a firm can
create, stage, and market experiences. There is also a
market for customized experiences, such as a week at a
baseball camp with retired baseball greats, a four-day rock
and roll fantasy camp, or a climb up Mount Everest.

5. Persons
 • Artists, musicians, CEOs, physicians, high-profile lawyers
and financiers, and other professionals all get help from
celebrity marketers. Some people have done a masterful job
of marketing themselves —David Beckham, Oprah Winfrey,
and the Rolling Stones.

6. Places
• Cities, states, regions, and whole nations compete to attract
tourists, residents, factories, and company headquarters.
Place marketers include economic development specialists,
real estate agents, commercial banks, local business
associations, and advertising and public relations agencies.

7. Properties
• Properties are intangible rights of ownership to either real
property (real estate) or financial property (stocks and
bonds). They are bought and sold, and these exchanges
require marketing.

8. Organizations
• Organizations work to build a strong, favorable, and unique
image in the minds of their target publics. Universities,
museums, performing arts organizations, corporations, and
nonprofits all use marketing to boost their public images and
compete for audiences and funds.

9. Information
• The production, packaging, and distribution of information
are major industries. Information is essentially what books,
schools, and universities produce, market, and distribute at a
price to parents, students, and communities.

10. Ideas
• Every market offering includes a basic idea. Products and
services are platforms for delivering some idea or benefit.
Social marketers are busy promoting such ideas as "Friends
Don't Let Friends Drive Drunk" and "A Mind is a Terrible
Thing to Waste".

What are the different core marketing concepts?

1. Needs
• Needs are the basic human requirements such as air, food,
water, clothing, and shelter. Humans also have strong needs
for recreation, education, and entertainment.
• Some customers have needs of which they are not fully
conscious or that they cannot articulate. We can distinguish
five types of needs:

1.
1.
 a. Stated needs (The customer wants an inexpensive car.)
b. Real needs (The customer wants a car whose operating
cost, not initial price, is low.)
c. Unstated needs (The customer expects good service from
the dealer.)
d. Delight needs (The customer would like the dealer to include
an onboard GPS navigation system.)
e. Secret needs (The customer wants friends to see him or her
as a savvy consumer.)

2. Wants
• These needs become wants when they are directed to
specific objects that might satisfy the need. Further, wants
are shaped by our society.

3. Demands
• Demands are wants for specific products backed by an ability
to pay. Companies must measure not only how many people
want their product, but also how many are willing and able to
buy it.
• Marketers are skilled at stimulating demand for their
products, but that's a limited view of what they do. Just as
production and logistics are responsible for supply
management, marketers are responsible for demand
management. They seek to influence the level, timing, and
composition of demand to meet the organization’s objectives.
Eight demand statements are possible:

1.
1.
a. Negative demand – Consumers dislike the product and may
even pay to avoid it.
b. Nonexistent demand – Consumers may be unaware of or
uninterested in the product.
c. Latent demand – Consumers may share a strong need that
cannot be satisfied by an existing product.
d. Declining demand – Consumers begin to buy the product
less frequently or not at all.
e. Irregular demand – Consumer purchases vary on a
seasonal, monthly, weekly, daily, or even hourly basis.
f. Full demand – Consumers are adequately-buying all
products put into the marketplace.
g. OverfuIl demand – More consumers would like to buy the
product than can be satisfied.
h. Unwholesome demand – Consumers may be attracted to
products that have undesirable social consequences.

In each case, marketers must identify the underlying cause(s) of the demanding state and
determine a plan of action to shift demand to a more desired state.
 GOALS OF MARKETING

To make the most of precious and often scarce marketing pesos, business owners must
develop and implement effective marketing strategies. Any strategy employed should be
designed with a certain goal in mind. In order to be of maximum value, the goals should
be sync with the goals of the business.

What is the nature of marketing goals?

Marketing goals are statements of what results in the company wants to achieve with its
marketing efforts. Just like any other goal, marketing goals should be clear. Goals must
be credible and realistic as well.

Setting realistic marketing goals contributes to marketing success. Making goals too easy
isn't realistic. Easy goals require no stretch. Stretching will produce the best results. But
setting goals that are unreasonably high will cause the firm to become frustrated,
discouraged, and defeated.

The company's marketing goals should be recorded. This allows for tracking, evaluating,
measuring, and managing. There's nothing better than scratching an item off a to-do list.
The completion of simpler goals is the foundation of loftier more challenging goals.

How are marketing goals distinct from other marketing objectives of the organization?

Goals are different from objectives. They should not be used interchangeably because it
will create confusion.

1. Marketing Goals
• Goals are the broad aims used to shape strategy. They
describe how marketing will contribute to the business in key
areas of growing sales, communicating with the audience,
and saving money.

2. Marketing Objectives
• Objectives are the SMART targets for marketing which can
be used to track performance against target. The SMART
mnemonic helps as a test or filter which the firm can use to
assess the quality of measures. SMART is:

1.
1.
a. Specific – the detail in the information sufficient to pinpoint
problems or opportunities
b. Measurable – a quantitative attribute to be applied to create
a metric
c. Actionable – the information be used to improve performance
d. Relevant – the information be applied to the specific problem
faced by the marketer
 e. Time-bound – objectives be set for different time periods as
targets to review against

3. Marketing KPIs
• Key Performance Indicators (KPIs) are used to check that
the marketing activities of a company are on track, KPIs are
specific metrics that are used to track performance to make
sure the firm is on track to meet specific objectives.

What are the essential areas to consider in setting the goals of the organization?

It is vital to consider all functional areas in setting the goals of the organization. In
formulating goals for a marketing plan, it is vital to bear in mind that goals must be
attainable, consistent, comprehensive, and a bit intangible. Goals might become
ineffective and dysfunctional if these things are not given focus.

1. Attainability
• Goals must be realistic so that important parties who will be
reaching them must see each goal as reasonable.
Assessment of the internal and external environment is
essential in order to determine if a goal is realistic. An
unrealistic goal is demotivational because it reflects that
management is irrational. Given that one of the chief benefits
of formulating goals is to motivate employees in the direction
of better performance, setting unrealistic goals can cause
chaos.

2. Consistency
• Besides being realistic, management should exert to set
goals that are consistent with one another. Goals across and
within functional areas should also fit together. This is a
major concern, especially in big organizations. It emphasizes
the necessity for a great deal of information sharing during
the goal-formulation process.

3. Comprehensiveness
• The process of goal-setting must be comprehensive. It
simply means that each functional area must be able to
formulate its own goals that relate to the organization's goals.
The roles of all parties in the organization should be clarified
by goals. Functional areas that do not go with any of the
organization's goals should inquire about their need for future
resources and their ability to obtain them.

4. Intangibility
• Goals should be intangible. Planners often confuse goals
with strategies, objectives, and even tactics. A goal is not an
action the firm can take. It is an outcome the organization
wishes to realize.

What are possible goals of marketing?

Companies may add other goals, but they must be thought of carefully. Here are some
examples of noteworthy goals:

1. Identifying target market

• Target market is the segment of the market most likely to
purchase the firm's products or services. The marketing goal
can be to use market research to pinpoint specific
demographic characteristics, such as age, gender, income,
and educational level that help identify the ideal customer.
• For instance, the company may determine that its ideal
customer is a college-educated male; aged 25 to 30 who
earns between ₱35,000 and ₱40,000 per year. This allows
the firm to gear its marketing strategy to appeal to this group
instead of wasting time and money trying to attract
customers who have no interest or need for what it offers.

2. Increasing sales and profits

• One major goal of any company's marketing strategy is
increasing sales and profits. Most firms want to maximize
their financial return from investments as high as possible.
The first step in increasing sales and profits is to set a target
and time frame for increasing them.
• For example, the firm may want to increase sales and profits
by 5% each in the current quarter. Subsequently, the
company will need to determine how to increase sales and
profits by 5%. There is a need to set higher quotas for the
sales representatives. Another option is increasing
advertising expenditures by a certain percentage. For
instance, a firm's records may indicate that it usually earns
₱4 for each peso spent on advertising. Therefore, the firm
could calculate how much more it needs to spend on
advertising to achieve the 5% increase in sales and profits.

3. Increasing brand awareness

• Another goal of marketing strategies is increasing awareness
of the company or brand. Consumer products companies
often run far-reaching advertising campaigns to build brand
awareness or consumers' awareness of the names of their
products.
• There are two types of brand awareness which are aided
and unaided.

1.
1.
a. Aided brand awareness means consumers recognize a
brand name when someone mentions it.
b. Unaided brand awareness is when consumers think of a
particular brand when they need a product.
• Use advertising, coupons, and small giveaways to build the
consumers' awareness of the brand. The goal should be to
make consumers think of the brand first when they need the
products the firm sells.
4. Increasing market share
• Companies also create various marketing strategies to
increase market share, which is the percentage of unit and
peso sales a company handles in their industry.
• One way to build market share is by using a lower pricing
strategy, especially when introducing new products. The goal
of a lower pricing strategy is to get as many customers as
possible to try the product. After that, the company offers the
best quality and service possible to retain them.
Consequently, the firm can establish itself in the market with
lower pricing and gain market share. It will sooner or later
have to raise prices to increase its profit margins.
• However, gradual pricing increases will still draw customers,
and the firm may have earned many loyal customers by that
time. Too many companies aim to collect as many customers
as possible. However, more market share often means
picking up more unreliable customers. These companies
would be smarter to focus on nurturing loyal customers,
getting to know them better, and finding more goods and
services they may need or want.

5. Countering competitive strategies

• There are times when the marketing goal will be to counter a
competitive strategy.
• For example, a plumbing competitor may be aggressively
adding lots of new lavatories and vessels to its product line
to gain more exposure in kitchen and bath showrooms.
Consequently, the firm will need to combat its competitors’
strategies by adding its own new products. Monitor
competitors on a continuous basis. Encourage sales
representatives to report any new competitive activity in the
market. Keep abreast of news in the industry so the
company has time to create its own counter-strategies.

6. Reputation
• Companies should strive for a good reputation. A company's
main reputational goals should be fourfold which are to be:

1.
1.
a. the supplier of choice to customer
b. the employer of choice to employees
c. the partner of choice to distributors, and
d. the company of choice to investors
• Its reputational capital will contribute to its primary goal,
earning a higher return than the cost of capital.

7. Increasing distribution channels

• Distributions are the methods used to get the company's
products into the hands of consumers, such as selling them
through retail outlets or making them available online. The
more distribution channels available, the more ways
customers have to make a purchase and the greater
chances are of making a sale.
 • An example of a distribution marketing goal would be to add
new channels each month for an entire year.

GENERALIZATION

Marketing is an organizational function and a set of processes for creating,

communicating, and delivering value to customers and for managing customer
relationships in ways that benefit the organization and its stakeholders.

Marketers are skilled at managing demand: they seek to influence its level, timing, and
composition for goods, services, events, experiences, persons, places, properties,
organizations, information, and ideas.

Marketing is not done only by the marketing department. It needs to affect every aspect
of the customer experience. To create a strong marketing organization, marketers must
think like executives in other departments, and executives in other departments must
think more like marketers.

MIDTERM: WEEK 2
Continue

Week 2: Chapter 1.3.-1.4.

WEEKLY STUDY AND ASSESSM

ENT GUIDE
TOPIC ACTIVITIES OR TASKS

Chapter I: Marketing Principles Read and venture on the motivation activity given prior the lessons.
and Strategies
Read and study the lessons on the traditional approaches in marketing.
1.3. Traditional Approaches in
Marketing
Read and study the lessons on the contemporary approaches to marketing
1.4. Contemporary
Approaches to Accomplish and submit your 1st Performance Task (Mark-A-Thing Goal).
Marketing

For this week, the following shall be your guide for the different lessons and tasks
that you need to accomplish. Be patient, read it carefully before proceeding to the tasks
expected of you. GOD BLESS!
 Chapter I: Marketing Principles and Strategies
Content 1.3. Traditional Approaches in Marketing
1.4. Contemporary Approaches to Marketing

At the end of the lesson, you should be able to:

Learning Competencies• describe the traditional approaches to marketing; and
• identify and explain contemporary marketing approaches.

Activities • Mark-A-Thing Goal (Performance Task #1)

Essential Questions • Why are there various approaches in marketing?

• "The aim of marketing is to know and understand the customer so well the produc
and sells itself."
Value Statements
- Peter Drucker

Textbook:
• 3G Learning (2018). 2nd Edition Principles of Marketing. 3G Learning.
• Ligaya, E., et. al. (2017). Principles of Marketing. Fastbooks Educational Supply,
• Serrano, A. (2016). Principles of Marketing. Unlimited Books Library Services & P
References • Illano, A. B. (2016). Principles of Marketing. Rex Book Store Inc.
• Kotler, P., et. al. (2016). 14th Edition Marketing Management. Pearson Education
Online Resources:
• Irinyuik, V. (2020). Understanding Customers. Quora

LEARNING CONTENT

Hello, future professional! Last week, you were tasked to study about the marketing
definition for the 21st century, various entities that are marketed, core marketing
concepts, and the goals of marketing. For this week, we will be discussing several
approaches in marketing, particularly the traditional and contemporary. After which, you
will be tasked to accomplish your first performance task.

LET’S GET THIS CRACKING!

 Source: https://www.salesforlife.com/wp-content/uploads/2019/10/why-social-selling-tips-are-just-the-tip-of-the-iceberg.jpg

With your current knowledge of all things business, you might be assuming that
marketing is all about selling products and making offerings. If that’s true to you, I won’t
blame you for thinking that way since businesses were primarily built to earn profit.
However, for our class, it is my duty now to inform you that marketing is not just selling.
For you to understand better, imagine an iceberg or look into the photo above and
continue reading.

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. Peter Drucker, a leading
management theorist, puts it this way:

There will always, one can assume, be need for some selling. But the aim
of marketing is to make selling superfluous. 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.

Before we start with our discussion, let us reflect on our value statement.

"The aim of marketing is to know and understand the customer so well the product or
service fits him and sells itself." - Peter Drucker

Marketing is, indeed, heavily based on targeting the right audience and nudging
the idea of buying your product or service to them. In fact, if you want to actualise your
product and sell it as an effective solution to the problem your customers are facing, you
need to discover their pain points first. That means you need to do your research and get
your target audience characteristics down. However, it’s not always true. The
aforementioned is intrinsic to market-oriented marketing. It involves creating goods and
services solely to please the market and act as a solution to their issues. You identify your
customers’ needs and provide them with what they desire. Sometimes their needs are
obvious, sometimes - less so. One way or another, however, you appeal to those and
 base your final product off of the actions it has to perform to be of relevancy to your
audience.

And with that, let’s try to explore the different approaches to marketing!

CHAPTER I: MARKETING PRINCIPLES AND

STRATEGIES

Why are there various approaches in marketing?

There have been many players in various industries; hence, companies needed
to come up with ideas to attract customers and offer products that are better, tastier,
healthier, safer, more nutritious, and promised more value and satisfaction. Further,
advertisers and advertising companies, public relations outfits and media companies
practiced their craft. These "developments" are now part of the steps or activities in the
marketing process such as payments, remittance companies, packaging, shipping,
warehousing, logistics, trade and financial transactions, market research, and product
testing/ evaluation.

TRADITIONAL APPROACHES IN MARKETING

What is traditional marketing?

Traditional marketing refers to any type of promotion, advertising, or campaign that
has been in use by companies for years, and that has a proven success rate. Methods of
traditional marketing can include print advertisements, such as newsletters, billboards,
flyers, and newspaper print ads.

• Mid-sized and large businesses often use all forms of traditional marketing in one way or another.
Entrepreneurs and small businesses, who may have limited marketing budgets, most often use
print marketing in newspapers or newsletters to advertise to local customers. Many also place
local radio advertisements.

What are the forms of traditional marketing?

There are different forms of traditional marketing, namely, print, broadcast, direct
mail, and telephone marketing. We’ll discuss it one by one below.

1. Print Marketing
 Loosely defined as advertising in paper form, it is the oldest form of traditional
marketing and has been in use since ancient times, when Egyptians created sales
messages and wall posters on papyrus. Today, print marketing usually refers to
advertising space in newspapers, magazines, newsletters, and other printed materials
intended for distribution.

2. Broadcast Marketing
  This includes television and radio advertisements.

1.
a. Radio broadcasts have been around since the 1900s, and the first commercial broadcast, a
radio program supported by on-air advertisements, aired on November 2, 1920.
b. Television, the next step in entertainment technology, was quicker to adopt advertising, with
less than ten years between its inception and the first television commercial in 1941.

3. Direct Mail Marketing

 It uses printed material like postcards, brochures, letters, catalogs, and fliers sent
through postal mail to attract consumers.
 One of the earliest and most well-known examples of direct mail is the Sears Catalog,
which was first mailed to consumers in 1888.

4. Telephone Marketing
 Finally, telephone marketing, or telemarketing, is the practice of delivering sales
messages over the phone to convince consumers to buy a product or service. This form
of marketing has become somewhat controversial in the modern age, with many
telemarketers using aggressive sales tactics.

What are the different traditional approaches to marketing?

Traditional concept marketing is a marketing strategy a company uses to
determine if it can produce a viable product consumers want or need, whether the
company can produce enough products to fill the need, and the marketing method by
which the need can be filled.

There are several distinct traditional approaches that organizations have

experienced in the life of their firms.

Societal
Concept Production Sales Marketing Relationship
Marketing

Long-term
Creative Products
relationships
selling and must be for
with
A good advertising Find a need the best
Prevailing customers
product will will and satisfy interests of
Attitude and other
sell itself. persuade it. consumers
partners will
customers and the
lead to
to buy. society.
success.

Approximate Prior to Prior to Since Since Since

Time Period 1920’s 1950’s 1950’s 1990’s 2000’s

1. Production Concept
 A production concept focuses on the internal potentials of the company and not
based on the desires and needs of the market.

•
• In most Asian countries in the early times, buyers were eager to buy any goods that were
manufactured due to scarcity. During this time also, products were basic and simple. Due to
scarcity and simplicity of products, most companies focuses on production and not marketing.
The essential idea was that products would sell themselves.

•
• In situations like when competition is weak or when demand goes beyond supply, a production-
focused company can survive and even flourish.
 For example, when Henry Ford introduced the horseless carriage, people were still
afraid of motor vehicles. Motor vehicles during those times caused all types of accidents
and disruptions despite running at the speed of 7 miles per hour. Early salespeople tried
it so hard to market and create widespread need for this product. Eventually people's
mind changed and the rest is history. Nowadays, traffic is everywhere because most
people have a need to possess one or several cars. This need was refined to become
wants for different types of cars including SUVs, convertibles, and trucks.

2. Sales Concept
 A sales concept refers to the idea that people will buy more goods and services
through personal selling and advertising done aggressively to push them in the market.

•
• Failure to understand the needs and wants of customers is one of the risks of this concept. The
usual solution is to hire competent salespeople and advertisers who will persuade customers to
buy the product or the service. However, despite the quality of the sales personnel and
advertisers, most companies using this concept fail to convince buyers to buy the items that they
neither need nor want especially for non-essential goods and services.
 During the early 1930s most companies began to build their production facilities.
Competition also started and soon supplies surpassed demands that products were hard
to sell. This experience happened to Matsushita which manufactured electrical
components and appliances like light fixtures, motors and electric irons. During and after
World War 2, the company competed with Sanyo. Matsushita decided to travel to the
United States to meet with American dealers to sell its products. Under the Panasonic
brand, it became successful to sell its washing machines to the US market.

3. Marketing Concept
 Marketing concept is a philosophy which states that organization must try hard to find
out and satisfy the needs and wants of consumers while at the same time
accomplishing the organizational goals.

•
• The recipe for success is delivering the desired satisfaction of customers more effectively and
efficiently than competitors. Companies that apply this concept should integrate marketing ideas
into the production cycle at the beginning of the product design rather that when the product is
completed.
 The success of Google is attributable to the use of marketing concept in every aspect
of their business. Google always design its products with advantages and levels of quality
well-matched with customer requirements. Often, Google would ask soon-to-be
employees how they would change the world employing the company's resources. It is
not a tricky question but the company intentionally wants to know.

4. Relationship Concept
 Relationship marketing is an approach that centers on maintaining and improving
value-added long-term relationships with current customers, distributors, dealers and
suppliers.
•
• This customer-driven marketing comes in the form of alliances and partnerships among
manufacturers, retailers and suppliers.
 A good example is the United Laboratories Inc. (UNILAB) which continues to practice
relationship marketing with drugstore personnel. The company also has maintained to
use this approach with physicians, dentists and other allied health professionals in the
drug industry. This way, UNILAB is able to build solid, dependable, mutual and trusting
win-win relationships with treasured clientele.

5. Societal Marketing Concept

 The essence of societal marketing concept views that organizations must satisfy the
needs of consumers in a manner that gives for society's benefit.

•
• The exchange between buyer and seller engages many ethical problems. Some problems
actually affect the society as a whole. Ideally all organizations must be accountable to a larger
society when it comes to the issue of social responsibility. In generating marketing decisions for
the organization, marketer should not forget the welfare of the society in general.
 A good example is the fast-food industry. People patronize fast-food because of the
combination of tasty and convenient food and reasonable pricing. Although, fast-food
industry has a lot of criticisms coming from customers and the environment groups.
Hamburgers, fried chicken, French fries and most food being sold in fast-food restaurants
have high fat and salt content. The packaging being used though convenient causes
waste and pollution. Highly successful fast-food chains are no doubt able to satisfy
customers but are endangering consumer health and the environment. As observed, most
fast-food restaurants in the Philippines are now avoiding the use of styro and plastic in
serving food to customers.

CONTEMPORARY APPROACHES TO MARKETING

Marketing has evolved over time and underwent the consequent changes. The
earlier marketing approaches slowly gave way to the newer approaches, corresponding
to the changing trends in the consumer’s buying behaviors, perceptions and expectations
about the products and services.

At this point, let me share first the marketing process as introduced by Kotler and
Armstrong. After which, I’ll also give you a short glance of strategic marketing, and
eventually, the contemporary approaches to marketing.

What is the marketing process?

Kotler & Armstrong emphasized that "the marketing process begins, continues,
and ends with customers. As a first step, marketers need to understand customer needs
and wants, and marketplace within which they operate". They present the following model
or steps of the marketing process.

1. Understand the marketplace and customers’ needs and wants.

2. Design a customer-driven marketing strategy.
3. Construct a marketing program that delivers superior value.
4. Build profitable relationships and create customer delight.
5. Capture value from customers in return to create profits and to ensure repeat business.

In response to this, Handlin (2015) offered the 5-Step Strategic Marketing Process to
complement Kotler's model.

What is strategic marketing and its steps?

Strategic marketing is a planning process that seeks to establish a clear direction
and unified purpose for all marketing efforts. Its conclusions are documented in a
marketing plan that is regularly updated.

The five steps in strategic marketing are identifying a mission, analyzing the
situation, setting objectives, developing a marketing strategy, and planning for evaluation.

1. Mission
 The first step in strategic marketing is to articulate the reason why the enterprise exists
and how it can benefit target consumers over the long term. In particular, this mission
statement is intended to anticipate the future and describe an ongoing role for the
organization's product, service, or expertise.

2. Situation Analysis
 Organizations conduct a situation analysis, also known as a SWOT, to evaluate and
prioritize their strengths, weaknesses, opportunities, and threats. This second step in the
strategic marketing process helps managers understand the resources they can build on
and the challenges they face.

3. Objectives
 The third step in strategic marketing is to set marketing objectives. These are clear,
measurable goals that give decision makers a basis for making choices and assessing
progress. Objectives are typically expressed in terms of one or more quantitative targets
like revenue, profit, sales, or market share. Importantly, each objective must be
achievable within a fixed period of time.

4. Strategy
 The fourth step in strategic marketing is strategy development. This involves selecting
a target market, a distinct group of consumers who are highly likely to buy the firm's
product. Planners must also choose implementation tactics, specifically, effective ways
to use the marketing mix tools of product, promotion, price, and distribution to reach and
influence prospective buyers.

5. Evaluation
 The fifth step, evaluation, means specifying how, when and by whom these tactics
are to be monitored and assessed over time.

What are the contemporary approaches to marketing?

Today, marketing is no longer traditional. It is recognized as a universal need and
an important factor for success for both profit and non-profit organizations. The
 application of marketing has been extended far beyond the creation of goods and
services.

The following are the contemporary approaches to marketing, namely, not-for-

profit organization, person, place, cause, event, and green marketing.

1. Not-For-Profit Organization Marketing

 A not-for-profit organization is a type of organization that does not earn profits for its
owners. All of the money earned by or donated to a not-for-profit organization is used in
pursuing the organization's objectives.

•
• Not-for-profit organizations include churches, public schools, public charities, public clinics and
hospitals, political organizations, legal aid societies, volunteer services organizations, labor
unions, professional associations, research institutes, museums, and some governmental
agencies.

•
• The following are the characteristics of a not-for-profit organization:

1.
1.
a. generate as much revenue as possible to support their causes
b. compete with other organizations for donors' pesos
c. market to multiple publics
d. often possess some degree of monopoly power in a given geographic area

•
• Here are some of the not-for-profit organizations in the Philippines:

1.
1.
a. ABS CBN Foundation – Outreach programs for children, their families, the environment, and
community.
b. Gawad Kalinga – Promotes alternative solution to housing problems in poverty-stricken areas,
Originated by Couples for Christ.

2. Person Marketing
 Person marketing entails endeavors aimed at cultivating the attention, interest and
preferences of a target market toward a celebrity or authority figure. These celebrities
could be real individuals or fictitious ones.

•
• A good example of person marketing is a political candidate who promotes his candidacy for a
particular position. Authors use person marketing to promote their books is another example.
Celebrity endorsement is another instance where person marketing could be applied.

•
• Based on AC Nielsen's study covering from January to June of 2015, the top 5 celebrity
endorsers in the Philippines are:

1.
1.
a. Kris Aquino with 10 endorsements
b. John Lloyd Cruz with 8 endorsements
c. Carmina Villaroel, Zoren Legaspi, Ryan Agoncillo, Sarah Geronimo and Vic Sotto with 7
endorsements each
d. Anne Curtis, Marie Lozano, Michael V and Sharon Cuneta with 6 endorsements each
e. Judy Ann Santos and Kim Chiu with 5 endorsements each

3. Place Marketing
 Place marketing or place branding attempts to exert a pull on customers to particular
areas. Cities, provinces and regions here in the Philippines make known their beautiful
tourist spots to attract locales and foreigners. They also promote their places as good
sites and nice choice for businesses. Place marketing is significant for tourism,
businesses and recruit of workers.

•
• In recent years, the Philippine Department of Tourism (DOT) has been aggressively marketing
the country as a top tourist destination, most notably with the "it's more fun in the Philippines"
campaign launched in 2012. The slogan quickly became a hit on the Internet, encouraging
individuals to create their own "memes" with photos that show exactly why it's more fun in the
country. Some examples include photos of boats with the tagline "Commuting. More Fun in the
Philippines." or of Bohol's Chocolate Hills with "My Humps. More Fun in the Philippines."

•
• Along with the campaign, the DOT branded several destinations to highlight what makes them
one-of-a-kind. For example:

1.
1.
a. Boracay as "Asia's 24/7 Island"
b. Manila as the "Capital of Fun"

4. Cause Marketing
 Cause marketing is the identification and marketing of a social issue, cause or idea to
selected target markets. It covers a broad sort of issues like literacy, physical fitness,
awareness of child obesity, environmental protection, elimination of birth defects, child-
abuse prevention and preventing drunk-driving. A common practice now is for profit
organizations to pair their products to social causes.

•
• Cause marketing is not just about giving, it requires a company to publicize its philanthropic efforts
as well. An example of well-executed cause marketing is Coca-Cola's work in the Philippines. The
beverage company is suspending brand advertising in the country to direct the money toward
typhoon relief aid. In addition to the money diverted from advertising expenditures, Coca-Cola
has also donated millions in cash and kind. As expected, the company is being praised by the
media and consumers alike for its generosity. After all, consumers cannot support a company and
its goodwill efforts if they do not know about them.

•
• Clearly, great cause marketing isn’t black and white, nor is there only one right way to implement
such efforts. In fact, there are a great number of ways to execute such initiatives successfully.
Nevertheless, there are some general guidelines to consider before diving into a cause marketing
campaign.

1.
1.
a. Understand marketing – Before a firm can do great cause marketing, it must first have to
understand the essential elements of marketing to its specific target audience.
b. Support reputable causes – If the company is going to give large amounts of money, resources
or time to a philanthropic cause, it must first do its homework.
c. Maintain transparency – If the firm wants consumers to join its cause, it has to make it easy and
transparent for them to do so.
d. Think mainstream – Great cause marketing serves its target audience first and foremost.
 e. Stay consistent – If the company wants to be known as a company that gives generously, then it
will need to repeatedly give in a consistent manner.

5. Event Marketing
 Event marketing is the marketing of sport, culture and charity activities to selected
target markets. It consists of sponsorship by companies of different events related to
these activities to seek public awareness and reinforce their images by partnering their
products to the events.

•
• Here are the essential features of event marketing:

1.
1.
a. Wide range of events – Event marketing encompasses a wide range of event types such as
mega events and local events, exhibitions, trade shows, publicity stunts, themed and created
events, corporate entertainment, and award ceremonies.
b. Goal oriented – If the event and advertising objectives are not achieved through the event, then
no matter how much people enjoyed the event or how much popularity the event got, it is a
complete failure on a commercial level.
c. Effective promotion and communication – It is important to get the message across to the target
audience, and therefore enough research about the profile of the attendees is important to be
able to communicate effectively about the product.
d. Proper evaluation – Event evaluation is necessary to make the team more efficient and
effective, the next time it organizes an event. It helps in finding mistakes and learning from
them. Event evaluation should be done immediately after the event is over or the next day. A
meeting should be conducted with the team members to evaluate the event.
e. Feedback from clients – One good way of getting feedback is through a feedback form. To get
feedback from the target audience/ guests, make the feedback form a part of the gift voucher. A
guest can redeem the gift voucher only when he/ she fills the feedback form and give it back to
an attendant. These tactics are required to get feedback, as people are generally reluctant to
give any feedback in writing.
f. Location – The location chosen for the event is perhaps the most important aspect. The most
ideal locations in any exhibition areas are found at the entryway to the event and near the
pathway to the food stations and restrooms.

6. Green Marketing
 Green marketing refers to the process of selling products and/or services based on
their environmental benefits. Such a product or service may be environmentally friendly
in itself or produced and/or packaged in an environmentally friendly way.

•
• Green or Environment Marketing consist of all activities designed to generate and facilitate any
exchanges intended to satisfy human needs or wants, such that the satisfaction of these needs
and wants occurs, with minimal detrimental impact on the natural environment.

•
• For green marketing to be effective, there are three things that needs to be done which are be
genuine, educate customers, and give customers the opportunity to participate.
a. Being genuine means that:

1.
1.
1.
i. the company is actually doing what it claims to be doing in its green marketing campaign; and
ii. the rest of the business policies are consistent with whatever the firm is doing that's
environmentally friendly.
b. Educating the customers isn't just a matter of letting people know that the company is
doing whatever it is doing to protect the environment, but also a matter of letting them
know why it matters. Otherwise, for a significant portion of its target market, it's a case
of "So what?" and the green marketing campaign goes nowhere.
c. Giving customers an opportunity to participate means personalizing the benefits of
the company's environmentally friendly actions, normally through letting the customer
take part in positive environmental action.

GENERALIZATION

Traditional concept marketing is a marketing strategy a company uses to

determine if it can produce a viable product consumers want or need, whether the
company can produce enough products to fill the need, and the marketing method by
which the need can be filled.

There are several distinct traditional approaches that organizations have

experienced in the life of their firms, particularly, production, sales, marketing,
relationship, and societal marketing concepts.

Marketing has evolved over time and underwent the consequent changes. The
earlier marketing approaches slowly gave way to the newer approaches, corresponding
to the changing trends in the consumer’s buying behaviors, perceptions and expectations
about the products and services.

Today, marketing is no longer traditional. It is recognized as a universal need and

an important factor for success for both profit and non-profit organizations. The
application of marketing has been extended far beyond the creation of goods and
services. The contemporary approaches to marketing are not-for-profit organization,
person, place, cause, event, and green marketing.
 MIDTERM: WEEK 3
Continue

Week 3: Chapter 2.1.-2.2

WEEKLY STUDY AND ASSESSM

ENT GUIDE

TOPIC ACTIVITIES OR TASKS

Read and venture on the motivation question given prior the lessons.
Chapter II: Customer Relationship
– Customer Service Read and study the lessons on relationship marketing.

2.1. Relationship Marketing Read and understand the lessons on customer value.
2.2. Customer Value
Accomplish and submit your 1st Written Work (Mini-Case Review).

For this week of this term, the following shall be your guide for the different lessons and
tasks that you need to accomplish. Be patient, read it carefully before proceeding to the tasks
expected of you. GOOD LUCK!

Chapter II: Customer Relationship – Customer Service

Content 2.1. Relationship Marketing
2.2. Customer Value

At the end of the lesson, you should be able to:

Learning
Competencies • define relationship marketing; and
• describe the value of customers.

Activities • Mini-Case Review (Written Work #1)

• Is the customer always right?

• How do we employ and/or handle customer relationship management?
Essential Questions
• How do we deliver customer value?
• How can we improve customer value?
 • "The customer expects you to have knowledge of their stuff, not just your stuff."
Value Statement
- Jeffrey Gitomer

Textbooks:
• 3G Learning (2018). 2nd Edition Principles of Marketing. 3G Learning.
• Ligaya, E., et. al. (2017). Principles of Marketing. Fastbooks Educational Supply, Inc.
• Serrano, A. (2016). Principles of Marketing. Unlimited Books Library Services & Pub
References • Illano, A. B. (2016). Principles of Marketing. Rex Book Store Inc.
• Kotler, P., et. al. (2016). 14th Edition Marketing Management. Pearson Education.
Online Reference:
• Telephone Doctor (2021). Is the Customer Always Right? Telephone Doc

LEARNING CONTENT

Hello, future professional! Last week, you were tasked to study about the several
approaches in marketing, particularly the traditional and contemporary. For this week,
we will be moving on to the second chapter of our subject which tackles the customer
relationship. Specifically, we will be learning about relationship marketing and the
customer value.

LET’S GET THIS CRACKING!

Source: https://www.memecenter.com/fun/1249955/the-customer-is-always-right

Do you agree to the saying “the customer is always right”?

This has been a debate for centuries and up until now, the pros and the cons would come
head to head to defend their respective sides. If you are excited to know if the saying is
right or wrong, well, I’m sorry to burst your bubble but this isn’t what I intend to do now.
Instead, let’s shift on what you should do if in case you are confronted with a situation
between you and your client.

As far as what I’ve learned in all my experiences as well as all the learnings I’ve acquired
since undergrad studies, I’m going to share this quote I always remember whenever I am
asked if the customer is always right:

"No. The customer isn't always right. But you want to make her feel like she is.
'Right' and 'wrong', even in situations much more than a mere customer service
misunderstanding, are hard to sort out. Think of the sworn – but completely
 disremembered – eyewitness testimony that has convicted so many innocent
people. So in working with customers, your goal needs to be the polar mouth
opposite of trying to play detective, by and large. It's not your goal to make it clear
to the customer how inaccurate their position is. Instead, focus on putting yourself
in your customer’s shoes, their eyes in your sockets, until you understand why they
feel, and in fact, "are… right". They're your customer, after all." (Stan, 2002)

A key point to keep in mind is that the customer is always right, in their own mind, although
not necessarily in reality. It’s critical not to disagree with the customer because that makes
them angry and argumentative. It’s not in anyone’s best interest to tell a customer they
are wrong.

Bottom line is, don’t tell the customer what you can’t do. Tell them what you can do. Strive
to find a way to satisfy the customer. Don’t focus on the negative. Don’t even say the
word, “no.” Don’t waste time focusing on who’s right or wrong in a situation. Instead, focus
on the positive – on what you can do to help the customer.

CHAPTER II: CUSTOMER RELATIONSHIP – CUSTOMER

SERVICE

Before we continue, let's look at the definition of a customer and how some leading
business people view customers.

"A customer is an individual or business that purchases the goods or services

produced by a business. The customer is the end-goal of businesses since it is the
customer who pays for supply and creates demand. Businesses will often compete
through advertisements or sales in order to attract a larger customer base...
Businesses often follow the adage "the customer is always right', because happy
customers will continue to buy goods and services. Companies closely monitor the
relationships that they have with their customers, eliciting feedback to see if new
products should be created or adjustments be made to what is currently
offered... (Investopedia - Sharper Insight. Smarter Investing)

"There is only one boss. The customer. And he can fire everybody in the company,
from the chairman, own down, simply by spending his money somewhere
else." (Sam Walton, founder of Wal-Mart)

"For many companies, 20% of the customers generate 80% of the profits. These
companies would be better off by focusing more on that 20%, and by searching for
other customers similar to that 20%, and focusing less on the other 80% of their
current customers." (Tom Murcko, Founder & CEO of WebFinance, Inc.)

The American Marketing Association has these definitions. "Traditionally, a

consumer is the ultimate user or consumer of goods, ideas, or services. However,
the term also is used to imply the buyer or decision maker as well as the ultimate
consumer. A mother buying cereal for consumption by a small child is often called
the consumer although she may not be the ultimate user." On the other hand, AMA
stated this: "A customer is the actual or prospective purchaser of products or
services."
 For purposes of our discussion in this module, we will consider "consumers" and
“customers” as referring to the same subject. However, know that customers and
consumers are two different terminologies in the field of business/ marketing.

RELATIONSHIP MARKETING

Today, most organizations turn to view customers as equal partners in the buying and
selling transaction. Through encouraging customers to enter a long-term relationship with
repeat purchases or buy multiple brands at a time from the firms, marketers are able to
get an apparent understanding of customer needs.

What is relationship marketing?

Relationship Marketing includes activities aimed at developing and managing trusting and
long-term relationships with larger customers. In relationship marketing, customer profile,
buying patterns, and history of contacts are maintained in a sales database and an
account executive is assigned to one or more major customers to fulfill their needs and
maintain the relationship.

• It is a strategy designed to foster customer loyalty, interaction and long-term engagement. This
customer relationship management (CRM) strategy focuses more on long-term customer
retention than acquiring large numbers of new and potentially single-transaction customers.

• It is also designed to develop strong connections with customers by providing them with
information directly suited to their needs and interests and by promoting open communication.
This approach often results in increased word-of-mouth activity, repeat business and a willingness
on the customer's part to provide information to the organization.

Relationship Marketing marks a significant paradigm shift in marketing, a movement from

thinking solely in terms of competition and conflict toward thinking in terms of mutual
interdependence and cooperation. It recognizes the importance of various parties such
as suppliers, employees, distributors, dealers, retailers that are cooperating to deliver the
best value to the target customers. Here are the main characteristics of relationship
marketing:

1. It focuses on the long-term rather than the short-term.

2. It focuses on partners and customers rather than on the company's products.
3. It puts more emphasis on customer retention and growth than on customer acquisition.
4. It relies on cross-functional teams rather than on departmental-level work.
5. It relies more on listening and learning than on talking.
6. Relationship marketing calls for new practices within the 4Ps.
a. Product
•
• More products are customized to the customers' preferences.
• New products are developed and designed cooperatively with suppliers and distributors.
b. Price
•
• The company will set a price based on the relationship with the customer and the bundle of
features and services ordered by the customer.
• In business-to-business marketing, there is more negotiation because products are often
designed for each customer.
c. Place
•
• Relationship marketing favors more direct marketing to the customer, thus reducing the role of
middlemen.
• Relationship marketing favors offering alternatives to customers to choose the way they want to
order, pay for, receive, install, and even repair the product.
d. Promotion
•
• Relationship marketing favors more individual communication and dialogue with customers.
• Relationship marketing favors more integrated marketing communications to deliver the same
promise and image to the customer.
• Relationship marketing sets up extranets with large customers to facilitate information exchange,
joint planning, ordering, and payments.

What are the benefits of relationship marketing?

Retaining customers for the long-term offers many benefits. The aim is for the company
to obtain life time customers. In the world of business and management, the cost of
retaining a customer is at least eight times lesser as compared to acquiring a new one.
Thus, this marketing capitalizes on the same fact and is beneficial to the company in
several ways.

1. Understanding customer characteristics – Relationship marketing helps the company

understand its customers better. The company can segregate its customers into groups
based on their characteristics like purchasing power, frequency and volume of sale
transactions.

2. Delivery and meeting expectations – If the company knows what its customers' needs
are, it will help reduce wastage due to trial and error methods. When required product
features and specifications are known, it is easier to make modifications that will please
customers and increase sales turnover.

3. Repeat business – People would not be interested in getting involved in any business
transaction with a seller who appears rude or indifferent to their needs. People buying
wouldn't feel any special need to resist switching sellers if they are not given an incentive
to stay bounded. Here, relationship marketing steps in and provides a positive
reinforcement for them to make a repeat purchase.

4. Prevents negative transition – Trust and loyalty go hand in hand and it is super
beneficial for all business. It will help prevent customers from turning to competitors.
Enhancing and maintaining relationship with existing customers will prevent the tendency
of customers to switch to other products/services for a better offer.

5. Word-of-mouth marketing – A happy customer will always promote business by telling

ten other people about the amazing services or performance received from a company.
They will be excited to recommend the business to other people around them so they can
try it too. Also, research suggests that people are more motivated to try a product/service
based on reviews from an existing customer they know than they will be from persuasion
by advertisements.
6. Increasing customer base – It is no secret that a happy customer will bring in new ones.
In fact, a satisfied existing customer is 100% more likely to recommend a product/service
to a prospective customer. Apart from customer referrals, there are several other ways to
increase customer satisfaction by employing methods of utilizing social networking
websites, blogs, informal surveys, benefits on loyalty cards, timely response to complaints
and requests as a constant reminder of its presence around customers through consistent
communication.

7. Reduced marketing costs – Benefits also include lesser marketing costs and more
value creation. This can be explained by stating the following statistics: Every 5%
increase in customer retention can increase a company's annual profits from at least 25%
to as much as 125%, while simultaneously leading to a reduction of 10% in marketing
costs. An existing customer will spend 33% more than a new customer to buy a
company's product/service. Most businesses spend as much as 80% of their budget for
marketing expenditure to make new customers.

8. Minimization of customer price sensitivity – A happy customer will be willing to pay

more for a product if there is a guaranteed satisfaction of products and after sales services
attached to the price. Hence, a company will gain repeat business from its existing
customers in the long term even if there is a rise in prices at which it sells its products and
services. However, quotation for a premium price must come with benefits of value
addition. Customer loyalty and satisfaction are proven major contributors to profit
maximization.

9. Identification with the company – The benefits are reaped both by the company and
the customers. It helps customers identify more with the company. Staying in touch with
customers makes them feel like they are important to the company. It will keep customers
coming in and build brand equity for the company in the long run.

10. Product market expansion – This one is tricky and most companies fail to recognize
this benefit. The company's employees must be ready to deliver beyond the company's
boundaries on customer demand. Customers play an important role in value generation
process. They are the ultimate consumers of products and services, thus, they can help
identify potential profitable fields for expansion and diversification. A company that is
willing to venture outside its set boundaries, can constantly grow with the support of its
customers through this marketing.

How do we employ and/or handle customer relationship management?

Broadly defined, Customer Relationship Management is the overall process of building
and maintaining profitable customer relationship by delivering superior value and
satisfaction to customers and the general buying public. The aim of customer relationship
management is to produce high customer equity which is the worth or value of the
satisfaction received by the customer. The key to building strong, lasting relationships is
the creation of superior customer value and satisfaction, which may be illustrated by the
following:
• Poor product, goods, or service
• Below average performance
• Shoddy workmanship, etc. DISSATISFIED CUSTOMER
• Rude employees, bad service
• Unfulfilled promises

• Good product or service

• Performance fulfilled expectations SATISFIED CUSTOMER
• Courteous employees

• On-time delivery, etc.

• Performance exceeded expectations
• Going "the extra mile" DELIGHTED CUSTOMERS
• Pleasant buying experience
• Consistently good performance by everybody

Obviously, a company wants more "satisfied" customers and "zero" or minimal

dissatisfied ones. There will be instances of course when the company falls short on its
promises and delivers wrong or faulty products. The company should not "give up" on
dissatisfied customers—it should find out the reasons for the dissatisfaction and try to
correct the situation right away in order to win back the disaffected customer.

At the same time, it should also attempt to convert the satisfied customers to delighted
ones, bearing in mind that highly satisfied customers buy more and return to the stores
often, talk favorably about the company—they make the best 'spokespersons' for the
company—and remain loyal longer.

CUSTOMER VALUE

Customers now have an overwhelming abundance of choice. They are accustomed to

competition, and the fragmentation of the market because of the choices this provides.
They have high expectations and little loyalty to spare if they are not met. Today it is a
buyers' market.

This means that companies must try even harder to create and communicate value in
everything they do. To do that, they have to understand what value really is, and more
importantly, what it is not.

What is customer value?

People make buying decisions every day. In every buying decision, a consumer asks the
same question about the worth they will receive and the worth they will give up in order
to get a certain product/service. The gain the consumer receives for the benefit is weighed
 against the cost the consumer must pay to acquire the benefit. The value the individual
consumer places on a product or service becomes the customer value for that offering.

Customer Value is the relationship between benefits and the costs including money,
stress, and time to sacrifice that is necessary to get those benefits. Or simply stated in a
mathematical equation:

Benefits - Cost = Customer Value

Customer value is not simply about high quality. It is also not about pricing alone.
Customers value products and services that are of quality they expect and that are sold
at prices they are able and willing to pay.

In essence, customer value entails extraordinary delivery of four value-points or

components known also as SQIP:

1. Service – the intangible value offered to customers

2. Quality – customers' perception of how well a company's products and services meet
expectations.
3. Image – customer's perception of the company or business they interact with
4. Price – the price a company can command for its products and services and that its customers
are able and willing to pay

Each of these four components contributes to customers' perception of value or definition

of value and affects their levels of dissatisfaction or satisfaction with a product, service,
or business. Thus, in order to design and deliver superior customer value, each of these
components must be treated with equal attention and importance.

• Service, quality, image, and price are what constitutes customer value in terms of conferred
benefits, meeting customers' needs, wants, and expectations, and hence affecting and
determining customer satisfaction, company performance, market share, competitive advantage,
profits, revenue, market position, brand loyalty, and ultimately company success and survival.
Basically, everything that a company does ultimately funnels into customer value, and this
translates into the bottom line that is so important to measuring and defining business success in
the globally competitive economy of the 21st

Customer value encompasses the total experience of the customer regarding the
organization, its products and services, purchase and post-purchase services, and
customer support, as well as the overall impact of the interaction between consumer and
product, the benefits conferred, and how these affect well-being and are perceived by
influential others

How do we deliver customer value?

Customers are the lifeblood of all businesses. They are the source of current profits and
the foundation of future growth.

There are three ways a company can establish customer value to its customer base:

1. Provide the consumer with the best cost

•
• Companies can choose to focus their efforts on providing a reliable product at a reasonable price.
The low price helps to increase the value of their offering to their consumers even if it is weighed
against a low benefit.
• For instance, a person might place a high customer value in a meal at a McDonald's restaurant
because he knows he will receive a consistent, satisfactory meal at a low price.

2. Provide the consumer with the best product

•
• Companies that offer top quality products increase the customer value of their offerings to their
consumers by providing a high benefit which exceeds the high cost.
• Lexus, for instance, makes a luxury car that many consumers consider to be top quality. Lexus,
along with other luxury car manufacturers, is able to charge a premium price for their cars, since
they consistently produce cars of this high quality in the minds of their consumers.

3. Provide the consumer with the best service

•
• Companies that provide a high level of service to their consumers increase the customer value of
their services by providing a high benefit which exceeds the cost for many consumers. Consumers
who buy from these companies are willing to pay more to be treated with exceptional service.
• The retailer Nordstrom, for instance, has legendary customer service that is unmatched in the
retail industry. Nordstrom employees are provided great lengths in order to keep existing
customers happy and forge relationships with new customers. The company gives employees the
autonomy to make their own decisions instead of having to send questions up the ubiquitous
corporate flagpole.

What is the importance of customer value?

The strategic and overall importance of customer value can be summarized in ten salient
points made by Professor Art Weinstein in his book, Superior Customer Value: Strategies
for Winning and Retaining Customers (Third Edition, 2012).

1. Designing and providing superior customer value are the keys to successful business strategy in
the 21st century.
2. Value reigns supreme in today's marketplace and market-space.
3. Customers will not pay more than a product is worth and will reward excellence.
4. A customer-centric culture provides focus and direction for the organization, ensuring that
exceptional value will be offered to customers.
5. Designing and delivering superior customer value propels organizations to market leadership
positions in today's highly competitive global markets — absolute advantage.
6. Providing outstanding customer value has become a mandate for management.
7. In choice-filled arenas, the balance of power has shifted from companies to value-seeking
customers.
8. Managing customer value is even more critical to organizations in the new service and
information-based economy.
9. Firms not providing adequate value to customers will struggle or disappear — customer value is
a key ingredient in building competitive advantage.
10. Today's customers are quite smart and sophisticated and are looking for companies that create
maximum value for them based on their needs and wants, and demonstrate that they value their
business.

How can we improve customer value?

With great importance of customer value in marketing, companies must think about ways
to improve customer value to grow their businesses. Here are steps a company can
pursue:
1. Understand what drives value for customers – Talk to them, survey them, and watch
their actions and reactions. In short, capture data to understand what is important to
customers and what opportunities the company has

2. Understand value proposition – The value customers receive is equal to the benefits
of a product or service minus its costs. What value does the company product or service
create for them? What does it cost them—in terms of price plus any ancillary costs of
ownership or usage (like how much of their time do they have to devote to buying or using
the product or service?).

3. Identify the customers and segments where the company can create more value
relative to competitors – Different customers will have varying perceptions of value
relative to competitors, based on geographic proximity, for instance, or a product attribute
that one segment may find particularly attractive.

4. Create a win-win price – Set a price that makes it clear that customers are receiving
value but also maximizes the "take" of the company. Satisfied customers that perceive a
lot of value in the company's offering are usually willing to pay more, while unsatisfied
customers will leave, even at a low price. Using "cost-plus" pricing (pricing at some fixed
multiple of product costs) often results in giving away margin unnecessarily to some
customers while losing incremental profits from others.

5. Focus investments on the most valuable customers – Disproportionately allocate sales

force, marketing pesos, and R&D investments toward the customers and segments that
the company can best serve and will provide the greatest value in return. Also, allocate
growth capital toward new products and solutions that serve best customers or can attract
more customers that are similar to those best customers.

GENERALIZATION

Relationship marketing is about forming long-term relationships with customers. Rather

than trying to encourage a one-time sale, relationship marketing tries to foster customer
loyalty by providing exemplary products and services. This is different than most normal
advertising practices that focus on a single transaction. Relationship marketing, by
contrast, is usually not linked to a single product or offer. It involves a company refining
the way they do business in order to maximize the value of that relationship for the
customer.

Customer value is the satisfaction a consumer feels after making a purchase for goods
or services relative to what she must give up to receive them. A consumer doesn't
consider value just in terms of money spent, but can also consider the time it takes to
obtain a purchased product and interactions with customer service personnel.
Week 4 - Chapter 2.3.-2.4.

WEEKLY STUDY AND ASSESSM

ENT GUIDE
DATE TOPIC ACTIVITIES OR TASKS

Chapter II: Customer Relationship – Read and venture on the motivation questi
Customer Service given prior the lessons.
2.3. Customer Relationship
February Development Strategies Read and study the lessons on custo
relationship development strategies.
15-19, 2.4. Customer Service Strategy in the
2021 Philippine Business Enterprise Read and study the lessons on customer serv
strategy in the Philippine Business Enterprise

For this week, the following shall be your guide for the different lessons and tasks
that you need to accomplish. Be patient, read it carefully before proceeding to the tasks
expected of you. GOD BLESS!

Chapter II: Customer Relationship – Customer Service

Content 2.3. Customer Relationship Development Strategies
2.4. Customer Service Strategy in the Philippine Business Enterprise

At the end of the lesson, you should be able to:

Learning Competencies• explain the value of customers.
• determine the best customer service strategies of business enterprises in t

Activities • Synchronous Assessment (Written Work #1)

• How can we develop strategies in developing customer relationships?

Essential Questions • What is a customer service strategy and how does it work?
• How is the customer service strategy employed in the Philippines?

• "Customer service should not be a department. It should be the entire com

Value Statements
- Tony Hsieh

Textbook:
References
• 3G Learning (2018). 2nd Edition Principles of Marketing. 3G Learning.
 • Ligaya, E., et. al. (2017). Principles of Marketing. Fastbooks Educational S
• Serrano, A. (2016). Principles of Marketing. Unlimited Books Library Servic
Inc.
• Illano, A. B. (2016). Principles of Marketing. Rex Book Store Inc.
• Kotler, P., et. al. (2016). 14th Edition Marketing Management. Pearson Edu
Online Reference:
• Telephone Doctor (2021). Is the Customer Always Right? Telephone Doctor

LEARNING CONTENT

Hello, future professional! Last week, you were tasked to study about the customer
relationship, specifically, the relationship marketing and the customer value. For this
week, we will be discussing the last two topics of chapter two which are the customer
relationship development strategies and customer service strategy in the Philippine
business enterprise. After which, you will be tasked to accomplish your first written
work.

LET’S GET THIS CRACKING!

When was the last time you went to the market or simply purchase from vendors? Do you
have your favorite seller or your “suki”? If none, maybe your parents have their suki?

How about online selling? Are you fond of Facebook live selling? Do you often comment
“mine” to a looooot of items presented? Or are you the type who likes to comment “hm,
sis” first before purchasing?

You may have often purchased your essentials or even your wants from your favorite go-
to sellers but have you ever considered why do you often go to them? On the other hand,
if you don’t have a regular shop you visit, have you ever thought of the reason why you
won’t stick to one seller alone?

If you can’t think of any reason now, perhaps I can help you figure out your purchasing
behavior. With that, let’s try to explore this week’s topic encompassing customer
relationship and service! Turn on the next page!

CHAPTER II: CUSTOMER RELATIONSHIP – CUSTOMER

SERVICE
 CUSTOMER RELATIONSHIP DEVELOPMENT STRATEGIES

When it comes in increasing profits, it's tempting to concentrate on making new sales or
pursuing bigger accounts. But attention to existing customers, no matter how small they
are, is essential to keeping any business thriving. The secret to repeat business is
following up in a way that has a positive effect on the customer.

What are the benefits of developing customer relationships?

Customer relationship is a marketing approach that focuses on creating an ongoing and
long-term relationship with customers. It is geared toward building and nurturing strong
consumer/ customer connections and affiliations, rather than pushing sales or purchases.

Building a strong customer relationship is not rocket science. All a company needs to do
is to take into consideration the little things that matters. Creating long lasting
relationships help to ensure long-lasting customers and repeat sales.

Some of the benefits in developing and implementing customer relationship strategies

are the following:

1. Consistent customer experience – Organizations that are aligned across all touch
points seamlessly share information and work together to ensure customer's needs are
addressed with minimum effort. This is particularly important when the consumer is
experiencing challenges with the product or service. Quickly resolving issues build trust
and it can improve customer satisfaction.

2. Customer feedback – When the organization's culture facilitates open communication

and cooperation, consumer concerns, complaints and compliments can quickly be
addressed. By paying careful attention to positive and negative trends, organizations can
use this feedback to make appropriate adjustments to product or service offerings,
ensuring customer satisfaction.

3. Customer profitability – Relevant communications and offers motivate consumers to

use the full complement of product and service offerings. Because consumers understand
the benefits of the offerings, they are typically more compliant and they remain customers
for longer periods of time.

4. Customer advocates – Consumers who are pleased and enjoy a consistent experience
increasingly share this information with each other. Increasingly consumers are turning
to each other for suggestions and recommendations. Make it easy for customers to share
their experience, but first make sure they have a consistently good experience.

5. Innovation – Organizations, like Starbucks through MyStarbucksIdea.com, invite their

customers to provide ideas. Consumers are allowed to share, vote and discuss each
others' ideas. Most importantly, they are kept appraised of the status of ideas. There are
other ways organizations can invite consumers to share ideas and insights.

How can we develop strategies in developing customer relationship?

Customers are known to be indecisive but they are all looking for something in common,
"value at a fairprice". Customers are looking for solutions to their problem and how will
companies know their problems when they have no relationship with them? Customers
value relationship a lot; they are always looking for someone to discuss their problems
with and this is where the company comes in.

The following are strategies in developing customer relationship:

1. Make every customer interaction count – The first strategy to build a strong customer
relationship is to make every customer interaction count. Don't take a single customer for
granted. Each and every interaction with a customer is a gift and should be valued. An
interaction can be achieved by setting up a focus group made up of loyal customers. A
focus group can be a vital tool to getting into the mind of customers and knowing their
needs.

2. Follow-through on commitments and claims about customer products or – A business

must make a specific promise to the customer and deliver on that promise if it intends to
win the heart of the customer. False claims however should be avoided at all cost as it
can harm the company's credibility.

3. Develop employees – Customers appreciate service from well-trained and friendly

customer service staff. Take the time consistently to develop the customer service team
and there will be a direct chain reaction that affects customers.

4. Offer benefits and product value that responds to the customer's desires – Another
positive step to building a strong customer relationship is to offer value to the customer.
Go all out to let customers know that the company is a stickler for quality.

5. Treat customers as individuals who are respected and valued – All businesses know
how hard it is to find one good customer. Companies must also know that it cost more to
find a new customer than to take care of existing ones.

6. Listen to customers – Even complaints can be a gift if handled properly and quickly. Be
available and accessible when customers have questions, concerns, or comments.
Humans always look for someone to talk to or share their problems with. If companies
can listen more to their customers, they will end up knotting the bond between the
customer and their business.

7. Build a strong brand identity – Make it easy for customers to identify ones business or
products in the midst of the crowd. Create a winning slogan, tagged with a catchy logo
and a unique theme. Most important, make a specific promise and deliver on that promise.

8. Surround customers with valuable information by using emails, website content, social
media, and other methods of outreach but do not be invasive – Keep them informed on
the latest trend, price or development. Companies must also make it easy for customers
to reach them; if possible, be their next door neighbor. For best results, it's important to
communicate frequently and vary the types of messages being sent. Instead of a constant
barrage of promotions, sprinkle in helpful newsletters or softer-sell messages. The exact
frequency depends on the industry and even seasonality, but for many types of
businesses, it's possible to combine e-mail, direct mail, phone contact and face-to-face
communication to keep prospects moving through the sales cycle without burning out on
any message.
9. The business must have a website – If the company has none, then it's time to get one.
If it has, it should consider making its website user-friendly and easy to navigate for new
and existing customers. The World Wide Web is making it easier for businesses to build
a strong customer relationship with their customers. Every business should take
advantage of it.

10. Reward loyal customers – This is a point that can never be over emphasized. Most
businesses go after new customers while forgetting that the existing customers need to
be taken care of. Introducing a loyalty program is a very effective relationship marketing
strategy. Customer loyalty or reward programs work well for many types of businesses,
from retail to cruise and travel. The most effective programs offer graduated rewards, so
the more customers spend, the more they earn. This rewards the best, most profitable
clients or customers and cuts down on low-value price switchers-customers who switch
from program to program to get entry-level rewards. Whenever possible, offer in-kind
rewards that remind customers of one's company and its products or services.

11. Nothing strengthens a bond more than appreciation – Thanking customers for sticking
to the company's brand will go a long way to make them know they are important. A
simple "thank you" package might be all the business needs to connect personally with
existing customers.

12. Create a blog about the business where discussion is more casual and inviting –
Blogging is a trend that has come to stay. Almost all businesses today maintain a blog. A
blog is a powerful communication tool that can help a company stay in touch with its
customers. A blog improves customer relationship process and can be a tool to obtaining
instantaneous feedback from customers.

CUSTOMER SERVICE STRATEGY IN THE PHILIPPINE BUSINESS

ENTERPRISE

Good customer service means having thorough knowledge of the inventory, experience
with the products, and being able to help customers make the best choices for them.
Good customer service is treating customers with a friendly, helpful attitude.

What is a customer service strategy and how does it work?

Customer Service is the act of taking care of the customer's needs by providing and
delivering professional, helpful, high quality service and assistance before, during, and
after the customer's requirements are met.

A customer service strategy consists of the following elements:

1. A vision for customer service – Employees need to understand their role in meeting the
needs of customers and how their work contributes to the vision. It is easy to recognize
businesses that are strong in service and those that aren't. Service training is the key to
a great customer service experience.
2. Assessing customer needs – It is important to find out what the customer needs and
expects. There are several approaches to soliciting customer feedback. It can be done
by using customer comment cards, satisfaction surveys or focus groups. Each method
can be used to acquire feedback that can then be used to develop a plan that strives to
exceed customer expectations.

3. Hiring for service – Successful organizations have figured out how to hire service-
oriented employees. This is done by screening potential candidates that have a natural
tendency for service. Technical skills can be taught but personality and attitude cannot.
Therefore, not every employee should be interacting with customers.

4. Organizational goals for customer service – Customer satisfaction should be measured

against identified customer needs. There should be measurable customer satisfaction
goals, and employees should be aware of those goals so they can help the organization
achieve its service objective.

5. Customer service training – Every business should develop customized employee

training that expresses the organization's approach to service. This should be practical
teaching that demonstrates how the employee is expected to respond in all service
interactions.

6. Employee accountability – Employees should be held accountable for the

organization's customer satisfaction goals. Achieving these goals should be a cultural
norm that is incorporated into the performance management process. It is imperative that
all employees understand the part they play and the responsibility they have for helping
to achieve the organization's overall customer satisfaction goals.

7. Rewarding good service – Strong service behaviors are reinforced through a defined
reward and recognition system. This ensures that employees receive positive feedback
when they exhibit the desired customer service

How is the customer service strategy employed in the Philippines?

In the Philippines, just like in other parts of the world, the "you-scratch-my-back-I’ll-
scratch-yours" concept is a cornerstone of modern marketing, with large companies from
airlines and hotels to supermarkets and coffee shops offering reward programs in
exchange for customer loyalty.

Loyalty and rewards programs is already been a proven method of increasing business
profits. Most of the Philippine businesses invest on this customer service strategy.

Here are some practices of various businesses in our country:

1. Cebu Pacific
•
• By continuing their strategy of "unbundled fares" and cutting
out frills, like in-flight food service, the low-cost carrier (LCC)
is able to offer tickets at a lower price and appeal to the price-
sensitive Philippine market.
• Regular customers can be members of GetGo, CEB's newest
lifestyle rewards program. They can earn GetGo points when
flying with Cebu Pacific. Their GetGo points can earn them
 free flights. GetGo encourages members to Get Points and Go
Places.

2. Starbucks
•
• Starbucks, the goliath of coffee, has made a name for itself
with its customer service. For good or bad, its strategy has
helped the company become recognized over the world. In
Starbucks Reward campaign, loyalty holders need to earn
stars. This can be achieved only by buying their products with
their loyalty cards. More claimed rewards; higher level of
rewards can be received. Enjoying coffee to have more of it is
the essence of the program.
• Below are three takeaways on how Starbucks' customer
service strategy can be applied to any brand:
a. Meet customers where they want to be met
 Find the white space and where audience is reaching out and put emphasis on that
platform. Overall, Starbucks has 35 million likes on its Facebook page, 8 million followers
on Twitter and 4.8 million followers on Instagram. Starbucks is constantly reaching out to
its customers on these platforms for feedback and engaging in conversation.
b. Think mobile, mobile, mobile
 It's not surprising that 18% of Starbucks Card transactions come through its mobile
app. Consumers spend more time today connecting on their phone than on any other
device. It's important to tailor mobile experience to audience.
c. Focus on personalization
 Starbucks recognizes that it's not just about the product, it's also about the experience.
Each Starbucks location has the same look and feel, yet is personalized to the geographic
area. Baristas serve coffee to customers by name. And if it isn't exactly what has been
ordered, they make sure to correct it and ask how they can make the customers
experience better. Just recently, Starbucks announced a deal with Spotify where
employees will make personalized playlists for each store location.

3. Globe Telecom
•
• Globe was awarded Best Customer Experience for its
innovative customer service program that harnesses the
power of social media. Globe launched a social media strategy
geared at significantly changing the way the company
provides customer service through social networking site
Twitter in a manner that is engaging, meaningful, and
personal. This strategy created an avenue for honest and
sincere communication, enabling the brand to proactively
build lasting relationships with customers through their social
networks.
• Globe Blue is the newest tier in the Globe Rewards
membership portfolio that will reward mid-value customers
with special perks and topnotch aftersales service. Members
will also enjoy seasonal treats like free movies, special offers
from partner merchants for travel, dining, and other lifestyle
establishments throughout their membership year.

4. ShoeMart
•
 • SM is the Philippines' leader in the retail industry. For the last
50 years, it has been committed in providing quality products
and services at reasonable prices and to meet the ever-
changing needs of its customers in a responsible and
responsive manner. Mr. Henry Sy, Sr.'s innovative approach
to customer service helped build a highly recognized brand
which, in turn, enabled Shoemart to grow and evolve into a full
service department store; hence, changing its brand name
into the more simple and appropriate SM.
• SM's tagline, "We've Got It All For You" has become a guiding
principle for the level of service that SM lives up to until today
and has helped transform it into a household name.

5. Bank of the Philippine Island

•
• BPI has continued the tradition of excellence and customer
service through its products and services that makes the lives
of both internal and external customers easy. Products such
as Easy Saver Program, Ka-Negosyo and BPI Globe Banko
have extended banking services and expertise to the lower
end of the spectrum. BPI has been an advocate of financial
literacy to support business goals and strategy.

The Suki System in the Philippines

The "suki" system is a system of patronage in which a customer regularly buys their
merchandise from a certain client. In the merchandising business, Filipinos often buy from
specific suppliers who will grant their customers reduced prices, good quality and credit
as well. These factors are the usual components of becoming a "suki."

• The existence of trust and the development of friendship

between the two parties is a crucial aspect in the
establishment of an economic exchange relationship. In some
instances, regular patrons of restaurants, small neighborhood
retail shops and tailoring shops receive special treatment in
return for their patronage.

• Suki is basically a partner system of doing business in the

Philippines, wherein a customer buys certain products from a
particular vendor, who in turn offers discounts and other perks
for such exclusivity. Filipinos use the word suki to refer to both
buyers and sellers, indicating their equal roles and obligations
in an eponymous relationship.

In the Philippine suki system, however, the commitment between buyer and seller goes
even further. Though the relationship seems informal, it can be as binding as a formal
contract, complete with personal and social clauses. This contractual aspect of suki may
be traced to its original purpose as a kind of credit check between vendor and customer.
If the customer proves to be loyal and dependable, the vendor may feel protected enough
to broaden credit or defer payment. In turn, buyers with limited means expect that their
loyalty will result in the best prices and products to stretch each peso. Developing and
maintaining this level of trust is not taken lightly.
 • For that matter, establishing suki in the first place is no mean
feat. Given its unwritten and, for the most part, unspoken
terms, initiating the relationship is a vague process that is part
mating dance and part intuition. Simply declaring oneself a
suki is not enough, a buyer or seller first needs to demonstrate
his commitment. In order to establish suki relationship with a
local produce vendor, the buyer has to purchase items several
times in a row, making sure to greet the seller before
shopping, asking for the seller's recommendations, and
complimenting any offerings. Becoming a suki can be done
without ever uttering the word.

Responsibility for maintaining this mutually beneficial relationship falls equally on both
sides. Sellers are expected to offer lower prices than those quoted to walk-by shoppers
or to add a little something extra or "dagdag".

GENERALIZATION

Customers want to know that they are valued and appreciated as an individual. Showing
existing customers that value and appreciation encourages them to refer their colleagues,
friends, and others to the business. So armed with customer relationship strategies, a
company can build a strong customer relationship and outperform the giants.

Successful businesses don't just communicate with prospects and customers for special
sales. Today, making your company indispensable is a vital key to marketing success,
terrific way to add value, enhance your brand and position against your competition.

Any successful organization understands the importance of a strong service culture. This
is accomplished by creating systems and processes that help to identify who the
customers are and what the customers want, and developing strategies to achieve those
expectations.

Week 5-6 - Chapter 3.1-3.2,

WEEKLY STUDY AND ASSESSMENT GUID

E

TOPIC ACTIVITIES OR TASKS

 Read and venture on the motivation question given prior the
Chapter III: Market Opportunity
Analysis and Consumer Analysis Read and study the lessons on strategic marketing vs tactica
3.1. Strategic Marketing vs
Tactical Marketing Read and understand the lessons on the marketing environm

3.2. The Marketing Environment

Accomplish and submit your 3rd Performance Task (Tic Tact

For this week of this term, the following shall be your guide for the different lessons
and tasks that you need to accomplish. Be patient, read it carefully before proceeding to
the tasks expected of you. GOOD LUCK!

Chapter III: Marketing Opportunity Analysis and Consumer Analysis

Content 3.1. Strategic Marketing vs Tactical Marketing
3.2. The Marketing Environment

At the end of the lesson, you should be able to:

Learning
Competencies • distinguish between strategic and marketing planning in terms of objective
• analyze the elements of macro and micro-environment and their influence
Activities • “Tic Tactic Toe” (Performance Task #3)

• How does strategic planning differ from tactical planning?

Essential Questions
• Why is it essential to understand the firm’s marketing environment?
• "It’s through curiosity and looking at opportunities in new ways that we’ve
Value Statement
- Michael Dell
Textbooks:
• 3G Learning (2018). 2nd Edition Principles of Marketing. 3G Learning.
• Ligaya, E., et. al. (2017). Principles of Marketing. Fastbooks Educational S
• Serrano, A. (2016). Principles of Marketing. Unlimited Books Library Servi
• Illano, A. B. (2016). Principles of Marketing. Rex Book Store Inc.
References
• Kotler, P., et. al. (2016). 14th Edition Marketing Management. Pearson Ed
Online References:
• Watson, D (2021). Effects of Predictability and Importance on Acoustic Pro
Production. NCBI
• Sicinski, A. (2021). How to Make the Most of Life’s Opportunities. IQ Dood

LEARNING CONTENT

Hello, future professional! Last week, you were tasked to study about the customer
relationship development strategies and customer service strategy in the Philippine
business enterprise. For this week, we will be discussing the next chapter which
encompasses the market opportunity analysis and consumer analysis. Specifically, we
shall commence with the discussion on the strategic marketing versus tactical marketing
and the marketing environment. After which, you will be tasked to accomplish your first
performance task.

LET’S GET THIS CRACKING!

Source: https://en.wikipedia.org/wiki/Tic-tac-toe

Have you ever tried playing tic tac toe with your friends? I know it sounds silly but would
you believe some people even think of elaborate strategies just to win this “simple” game?
By face value, it may seem simple but this game may be more than just the predictable
game moves we know.

Traditionally, players take turns placing a mark in one of the cells of the grid. The goal of
the game is for players to position their marks so that they make a continuous line of three
cells vertically, horizontally, or diagonally. An opponent can prevent a win by blocking the
completion of the opponent’s line.

But let us take this game and relate it to the marketing realm. Instead of the tic tac toe,
how about we make it to “tic tactic toe”? Tactics and strategies are part of marketing, and
organizations make use of this to stay in the game or even lead the race! Just like in tic
tac toe, we go past the misconception of a “simple” marketing environment and learn how
to utilize tactics and strategies to win the market.

That is why for this week, let’s have a jump start by learning all of these and by answering
the essential questions “how does strategic planning differ from tactical planning?” and
“why is it essential to understand the firm’s marketing environment?”.

CHAPTER III: MARKET OPPORTUNITY ANALYSIS AND CONSUMER ANALYSIS

STRATEGIC MARKETING VS TACTICAL MARKETING

Strategic marketing planning comes first when you're creating your marketing plan. It
deals with the direction of your business growth in relation to your competition and the
brand image necessary to advance your market position. Then comes tactical marketing
planning, which consists of planning the actual activities that improve your competitive
position and convey your brand image. In order to distinguish between the two, it's
important to understand their objectives and purposes.

What is strategic marketing planning?

 Strategic Marketing is the way a firm effectively differentiates itself from its competitors
by capitalizing on its strengths (both current and potential) to provide consistently better
value to customers than its competitors. In principle it's that simple, but it means a lot
more than getting creative with the marketing mix.

• Planning a marketing strategy requires a thorough understanding of trends in your

industry, your competitive position, and the demographics and buying habits of your target
customer. Achieve this understanding through industry and market research; then
formulate your goals. Your strategy is the road map that helps you to achieve our goals
and comprises a financial plan entailing your marketing budget as well as a conceptual
plan. If you run out of money before your strategies can be implemented, your marketing
may not achieve your goals.

How can we conduct strategic planning?

For us to come up with a strategic marketing plan, we have to consider the following
process:

1. Defining the Corporate Mission

•
• A well-worked-out mission statement provides employees with a joint sense of purpose,
direction, and opportunity. It also guides geographically dispersed employees to work
separately and yet cooperatively toward realizing the organization's goals.

2. Environmental Scanning
•
• Environmental scanning is the collection and interpretation of information about forces,
events, and relationships that may affect the future of an organization. It allows a company
to constantly look for threats and opportunities before they are fully apparent.

3. Goal Formulation
•
• After the company has completed a SWOT analysis of the internal and external
environments, it can progress to create definite goals for the planning period in a process
termed as goal formulation. Measurable goals make possible and uncomplicated
management planning, implementation, and control. In order to be effective, goals must
be attainable, consistent, comprehensive, and intangible.

4. Strategy Formulation
•
• Goals indicate what a business unit wants to achieve. Strategy describes the game plan
for achieving those goals. Every business strategy consists of a marketing strategy plus
a compatible technology strategy and sourcing strategy.
• Although many types of marketing strategies are available, Michael Porter has condensed
them into three generic types that provide a good starting point for strategic thinking:

1.
1.
a. Overall Cost Leadership – The business operates to realize the lowest production and
distribution costs in order that it can price lower than competitors and gain more market
share.
b. Differentiation – The business concentrates on achieving superior performance in a vital
customer benefit area, like being the leader in service, quality, style, or technology, but
not leading in all of these things
c. Focus – The business focuses on one or more narrow market segments, getting to know
these segments thoroughly and practicing either cost leadership or differentiation within
the target segment.

5. Program Formulation
•
• Once the business unit has developed its principal strategies, it must work out detailed
supporting programs. Thus, if the business has decided to attain technological leadership,
it must plan programs to strengthen its R& D department, gather technological
intelligence, develop leading-edge products, train the technical sales force, and develop
ads to communicate its technological leadership.

6. Implementation
•
• The implementation stage of the process is the putting of the marketing strategies and
plans into action. The implementation stage involves assignments addressing the who,
where, when, and how of reaching the goals and objectives of a business. This stage
requires the giving of specific tasks and timeliness to individuals and groups.

7. Feedback and Control

•
• As it implements its strategy, the firm requires to track the results and monitor new
developments in the internal and external environments. Some environments are fairly
stable from year to year. Other environments evolve slowly in a fairly predictable way.
Still, other environments change rapidly in significant and unpredictable ways.

What is tactical marketing planning?

Tactical planning is short range planning that emphasizes the current operations of
various parts of the organization. Managers use tactical planning to outline what the
various parts of the organization must do for the organization to be successful at some
point one year or less into the future. Tactical plans are usually developed in the areas of
production, marketing, personnel, finance, and plant facilities.

• Advertising, community building, and sales promotions are all parts of your tactical
marketing plan. Advertising entails online, radio, television, and print marketing. It
communicates your brand image and informs your target customer of your presence in
the market and any promotional events you're hosting.

How can you effectively prepare your tactical plan?

Apportion the budget established in your strategic plan as necessary to cover your
advertising, community building, and sales promotions. Set benchmarks for revenue
production and adjust your strategic assumptions if they aren't met.

Tactical marketing is an ongoing set of activities and evaluations. Schedule your

advertising and events to optimize key times of your marketing season and plan social
networking efforts and newsletters to build a community of current and potential
customers.
 How does strategic planning differ from tactical planning?
Strategy and tactics are words closely connected and, unfortunately, used
interchangeably. Yet, in business terminology, the words strategy and tactics refer to
separate business functions and practices.

In real-world business usage, the term strategy actually is the thinking process required
to plan a change, course of action, or organization. Strategy defines, or outlines, the
desired goals and why a company should go about achieving them.

• Owners or upper management decide what the guiding philosophy and values will be,
and how people involved in the business's operations should act, in attaining their
objectives. It can be a compilation of many complex multi-faceted plans created for
achieving pre-established objectives.

Tactics are the specific actions to be taken in implementing a strategy. These actions
comprise what is to be done, in what order, using which tools and personnel.

• A company may employ a number of tactics and involve many different departments and
people in this effort to reach a common goal. It may even recruit suppliers to accomplish
objectives. Tactics typically require the involvement of the organization as a whole.

LOGIC TIME!
Strategic marketing is the idea. Tactical marketing is the action.

THE MARKETING ENVIRONMENT

What is a marketing environment?

Firms are affected by lots of different things; a firm's marketing environment is made up
of all of the things that affect the way it operates. Some of the factors in a firm's marketing
environment can be controlled by the firm but some are uncontrollable.

• A company's marketing environment consists of the actors and forces outside marketing
that affect marketing management’s ability to build and maintain successful relationships
with target customers.

Why is it essential to understand the firm’s marketing environment?

Firms need to understand their marketing environment so that they can make the most of
positive factors and manage the impact of negative factors. The marketing environment
surrounds and impacts the organization.

Why are they important? Well marketers build both internal and external relationships.
Marketers aim to deliver value to satisfied customers, so we need to assess and evaluate
our internal business/corporate environment and our external environment which is
subdivided into micro and macro.
 Hence, there are three key elements to the marketing environment which are the internal
environment, the microenvironment and the macroenvironment.

What comprises the marketing environment?

The marketing environment consists of the three levels of the environment, they are:

1. Internal Environment
•
• A useful tool for quickly auditing your internal environment is known as the Five Ms which
are Men, Money, Machinery, Materials, and Markets.
• Here is a really quick example using British Airways. Looking internally at men, British
Airways employs pilots, engineers, cabin crew, marketing managers, etc. Money is
invested in the business by shareholders and banks for example. Machinery would
include its aircraft but also access to air bridges and buses to ferry passengers from the
terminal to the aircraft. Materials for a service business like British Airways would be
aircraft fuel called kerosene (although if we were making aircraft materials, it would
include aluminum, wiring, glass, fabric, and so on). Finally, markets which we know can
be both internal and external. Some might include a sixth M, which is minutes since time
is a valuable internal resource.

2. Microenvironment
•
• Marketing manager's job is to build relationships with customers by creating customer
value and satisfaction. However, marketing managers cannot do this alone. Marketing
success requires building relationships with other company departments, suppliers,
marketing intermediaries, competitors, various publics, and customers, which combine to
make up the company's value

a. Company
- Company aspect of micro-environment is the internal environment of the company. This
includes all departments, such as management, finance, research and development,
purchasing operations, and accounting.

b. 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. Supplier problems can seriously affect marketing. Marketing managers must
watch supply availability and costs.

c. Marketing Intermediaries
- Marketing intermediaries help the company promote and distribute its products to final
buyers. They include resellers' physical distribution firms, marketing services agencies,
and financial intermediaries. Resellers are distribution channel firms that help the
company find customers or make sales to them.

d. Competitors
 - Competitors are also a factor in the microenvironment and include companies with
similar offerings for goods and services. To remain competitive, a company must consider
who its biggest competitors are while considering its own size and position in the industry.

e. Publics
- The company's marketing environment also includes various publics. A public is any
group that has an actual or potential interest in or impact on an organization's ability to
achieve its objectives. We can identify seven types of publics:

1.
1.
1.
i. Financial Publics – This group influences the company's ability to obtain funds. Banks,
investment analysts, and stockholders are the major financial publics.
ii. Media Publics – This group carries news, features, and editorial opinion. It includes
newspapers, magazines, television stations, blogs, and other Internet media.
iii. Government Publics – Management must take government developments into account.
Marketers must often consult the company's lawyers on issues of product safety, truth in
advertising, and other matters.
iv. Citizen-Action Publics – A company's marketing decisions may be questioned by
consumer organizations, environmental groups, minority groups, and others. Its public
relations department can help it stay in touch with consumer and citizen groups.
v. Local Publics – This group includes neighborhood residents and community
organizations. Large companies usually create departments and programs that deal with
local community issues and provide community supports.
vi. General Public – A company needs to be concerned about the general public's attitude
toward its products and activities. The public's image of the company affects its buying.
vii. Internal Publics – This group includes workers, managers, volunteers, and the board of
directors. Large companies use newsletters and other means to inform and motivate their
internal publics.

f. Customers
- As we've emphasized throughout, 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. Consumer markets consist
of individuals and households that buy goods and services for personal consumption.
Business markets buy goods and services for further processing or use in their production
processes, whereas reseller markets buy goods and services to resell at a profit.

3. Macroenvironment
•
• The macro-environment refers to all forces that are part of the larger society and affect
the micro-environment. The company and all of the other actors operate in a larger
macroenvironment of forces that shape opportunities and pose threats to the company.
• The six major forces in the company's macroenvironment are demography, economy,
natural forces, technology, politics, and culture.

a. Demographic Environment
- Demography is the study of human population in terms of size, density, location, age,
gender, race, occupation, and other statistics. The demographic environment is of major
interest to marketers because it involves people, and people make up markets.

b. Economic Environment
- Markets require buying power as well as people. The economic environment consists of
economic factors that affect consumer purchasing power and spending patterns.
Marketers must pay close attention to major trends and consumer spending patterns both
across and within their world markets.

c. Natural Environment
- The natural environment involves the natural resources that are needed as inputs by
marketers or that are affected by marketing activities. Environmental concerns have
grown steadily over the past three decades. World concern continues to mount about the
possibilities of global warming, and many environmental fear that we soon will be buried
in our own trash.

d. Technological Environment
- The technological environment is perhaps the most dramatic force now shaping our
destiny. It is also perhaps one of the fastest changing factors in the macroenvironment
now. As these markets develop, it can create new markets and new uses for products. It
also requires a company to stay ahead of others and update their own technology as it
becomes outdated.

e. Political and Social Environment

- The political environment includes all laws, government agencies, and groups that
influence or limit other organizations and individuals within a society. It is important for
marketers to be aware of these restrictions as they can be complex. As laws and
regulations change often, this is a very important aspect for a marketer to monitor.

f. Cultural Environment
9 The final aspect of the macro-environment is the cultural environment, which consists
of institutions and basic values and beliefs of a group of people. The values can also be
further categorized into core beliefs, which passed on from generation to generation and
very difficult to change, and secondary beliefs, which tend to be easier to influence.

GENERALIZATION

Strategic planning is a broad process that can address the entire business, or a portion
of the business such as marketing. Marketing planning is written based from strategic
plans. Ultimately, strategic marketing is the idea while tactical marketing is the action.

When dealing with the marketing environment, it is important for a company to become
proactive. By doing so, they can create the kind of environment that they will prosper in
and can become more efficient by marketing in areas with the greatest customer potential.
It is important to place equal emphasis on both the macro and micro environment and to
react accordin
Week 7 - Chapter 3.3.

WEEKLY STUDY AND ASSESSM

ENT GUIDE

TOPIC ACTIVITIES OR TASKS

Read and venture on the motivation question given prior the lessons.
Chapter III: Market Opportunity
Analysis and Consumer Analysis Read and study the lessons on marketing research.
3.3. Marketing Research
Accomplish and submit your 1st Written Work (Synchronous Quiz).

For this week, the following shall be your guide for the different lessons and tasks
that you need to accomplish. Be patient, read it carefully before proceeding to the tasks
expected of you. GOD BLESS!

Chapter III: Market Opportunity Analysis and Consumer Analysis

Content
3.3. Marketing Research

At the end of the lesson, you should be able to:

Learning
Competencies • define marketing research, its importance to a business enterprise; and
• identify the steps in marketing research.

Activities • Synchronous Assessment (Written Work #1)

Essential Questions • How important is marketing information in a business enterprise?

Value Statements • "Marketing without data is like driving with your eyes closed.” - Dan Zarrella

Textbook:
• 3G Learning (2018). 2nd Edition Principles of Marketing. 3G Learning.
• Ligaya, E., et. al. (2017). Principles of Marketing. Fastbooks Educational Su
• Serrano, A. (2016). Principles of Marketing. Unlimited Books Library Service
References
• Illano, A. B. (2016). Principles of Marketing. Rex Book Store Inc.
• Kotler, P., et. al. (2016). 14th Edition Marketing Management. Pearson Educ
Online Resources:
• Francia, B. (2021). Marketing Without Data is Like Driving with Your Eyes Closed
 • Online Hub Educational Services (2021). Marketing Without Data is Like Drivin
Hub

LEARNING CONTENT

Hello, future professional! Last week, you were tasked to study about the strategic
marketing versus tactical marketing and the marketing environment. For this week, we
will be discussing the next topic of chapter three which is the marketing research. After
which, you will be tasked to accomplish your first written work.

LET’S GET THIS CRACKING!

Source: https://www.easel.ly/blog/infographic-how-to-avoid-bringing-coronavirus-home/grocery-checklist-infographic/

Have you ever observed the buying behavior in your locality even before the quarantine
period began? How do consumers in these places behave in terms of their purchasing
habit? Have you ever wondered why there are places where business establishments get
the “hype” upon opening but experience a decline in their sales eventually? This type of
situation is just one of the many instances that marketers look into the behavior of
consumers by conducting a marketing research.

In today's rapidly changing environment, managers need up-to-date information to make

timely, well-thought-of decisions. Most marketing research benefits both the initiating
company and its consumers. However, the misuse of marketing research information may
also harm or annoy some consumers.

It is said that “the best vision is insight”. That is why for this week, we’ll look into the
marketing research and know how important marketing information is in a business.

CHAPTER III: MARKET OPPORTUNITY ANALYSIS AND CONSUMER ANALYS

MARKETING RESEARCH

How important is marketing information in a business enterprise?

"Marketing without data is like driving with your eyes closed."

Companies gather, study, develop and manage information about important marketplace
elements—information about customers, competitors, products, and marketing programs.
Companies need an abundance of information, and increasingly, marketers are viewing
information not only as an input for making better decisions but also as an important
strategic asset and marketing tool.

A company's information may prove to be its chief competitive advantage. Competitors

can copy each other's equipment, products and procedures, but they cannot duplicate
the company's information and intellectual capital.

Companies must design effective marketing information systems that give managers the
right information, in the right form, at the right time, to help make them make better
marketing decisions.

What is a marketing information system?

Marketing Information System (MIS) consists of people, equipment and procedures to
gather, sort, analyze, evaluate and distribute needed, timely and accurate information to
marketing decision makers. MIS begins and ends with information users — marketing
managers, internal and external partners, and others who need and use marketing
information.

• First, it interacts with these information users to assess

information needs. Next, it gathers and develops needed
information from internal company databases, marketing
intelligence and marketing research. Then, it helps users
to analyze information and put it in the right form for making
marketing decisions and managing customer relationships.
Finally, MIS distributes the marketing and helps managers
use it in their decision making.
• The MIS primarily serves the firm's marketing and other
managers. However, it may also provide information to
external partners such as suppliers, marketing service
agencies, etc.
• By itself, information has no worth; its value comes from its
use. In many cases, additional information will do little to
change or improve the decision, or the costs of the information
may exceed the returns from the improved decision.
Marketers should not assume that added information will
always be worth obtaining. They should weigh carefully the
costs of getting more info against the benefits resulting from
it.

How do marketers obtain the needed information?

a. Internal Data/ Databases
 Companies build extensive internal databases which are electronic collections of
information obtained from data sources within the organization.
 Internal databases usually can be accessed more quickly and cheaply than other info
sources, but it may be incomplete or in the wrong form for making marketing decisions.
Furthermore, data ages quickly; keeping the information up-to-date requires a major
effort.

b. Marketing Intelligence
 The goal of marketing intelligence, the systematic collection and analysis of publicly
available information about competitors and developments in the marketplace, is to
improve strategic decision making, assess and track rivals' actions, and provide early
warning of opportunities and threats.

c. Marketing Research
 In addition to information about competitor and market place happenings, marketers
often need formal studies of specific situations. Marketing intelligence may not provide
the detailed information needed, and managers may need marketing research, which is
the systematic design, collection, analysis and reporting of data relevant to a specific
marketing situation facing an organization.

How do businesses conduct marketing research?

Marketing research is the process or set of processes that links the producers, customers,
and end users to the marketer through information—information used to identify and
define marketing opportunities and problems; generate, refine, and evaluate marketing
actions; monitor marketing performance; and improve understanding of marketing as a
process.

Marketing research specifies the information required to address these issues, designs
the method for collecting information, manages and implements the data collection
process, analyzes the results, and communicates the findings and their implications.

Marketing research is often partitioned into two sets of categorical pairs, either by target
market:
• Consumer marketing research; and
• Business-to-business (B2B) marketing research

Or, alternatively, by methodological approach:

• Qualitative marketing research; and
• Quantitative marketing research

What are the steps in the marketing research and what do these steps entail?
The marketing research process has four steps. We’ll discuss them individually below:

1. Defining the Problem and Research Objectives

 Defining the problem and research objectives is often the hardest step in the research
process. The manager may know that something is wrong, without knowing the specific
causes.
 After the problem has been defined carefully, the manager and researcher must set
the research objectives, which can either be one of the following:

1.
a. The objective of exploratory research is to gather preliminary
information that will help define problems and suggest
hypotheses.
b. The objective of descriptive research is to better describe
marketing problems, situations or markets, such as the market
 potential for a product or the demographics and attitudes of
consumers.
c. The objective of causal research is to test hypotheses about
cause-and-effect relationships.

2. Developing the Research Plan

 Once the problem and objectives have been defined, developing the research plan
comes next, which involves determining the exact information needed.
 The research plan should be presented in a written proposal, which should cover the
management concerns addressed and the research objectives, the information to be
obtained, and the ways the results will help in decision making. The research cost must
also be indicated in the proposal.
 The plan outlines sources of existing data and spells out the specific research
approaches, instruments, sampling plans, and contact methods that researchers will use
to gather new data.

a. Data Sources
•
• Primary Data
 are data freshly gathered for a specific purpose or for a specific research project.
•
• Secondary Data
 are data that were collected for another person and already exists somewhere.

b. Research Approaches
•
• Observational Research
 This involves gathering primary data by observing relevant people, actions, and
situations. Some companies collect data through mechanical observation via machine or
computer.
•
• Survey Research
 Survey research, the most widely used method for primary data collection, is the
approach best suited for gathering descriptive information. A company that wants to know
people's attitudes, preferences, knowledge, or buying behavior can often find out by
asking them directly.
•
• Behavioral Research
 Actual purchases reflect consumers’ preferences and often are more reliable than
statements they offer to market researchers.
•
• Experimental Research
 While observation is best suited for exploratory research and surveys for descriptive
research, experimental research is best suited to gathering causal information as it tries
to explain cause-and-effect relationships. Experiments involve selecting matched groups
of subjects, giving them different treatments, controlling unrelated factors, and noting
differences in group responses.
c. Research Instruments
•
• Questionnaires
 Questionnaires are very flexible; there are many ways to ask questions. Closed-end
questions (like multiple-choice ones) include all the possible answers and subjects make
choices among them. Open-end questions allow subjects to answer in their own words.
•
• Qualitative Measures
 Qualitative research techniques are relatively unstructured measurement approaches
that permit a range of possible responses.
•
• Technological Devices
 Although questionnaires are most commonly used, researchers also use mechanical
instruments to monitor customer behavior such as store scanners and people meters.
Eye cameras are used to study respondents' eye movements to spot at what points their
eyes focus and how long they linger on items. A subject's smile or frown or headshake
while looking at a product or an ad is given appropriate interpretations.

d. Sampling Plan
•
• Sampling Unit
 Who is to be surveyed?
•
• Sample Size
 How many people should be surveyed?
•
• Sampling Procedure
 How should the people in the sample be chosen?

e. Contact Methods
•
• Mail Contacts
 Mail questionnaire can be used to collect large amounts of information at a low cost
per respondent. Respondents may give more honest answers to more personal questions
on a mail questionnaire than an unknown interviewer. Also, no interviewer is involved to
bias the respondent's answers. However, mail questionnaires are not very flexible:
respondents answer the same question in a fixed order.
•
• Telephone Contacts
 Telephone interviewing is one of the best methods of gathering information quickly. It
is more flexible than mail questionnaires: interviewers can explain difficult questions and,
depending on initial answers, skip some questions or probe on others. However, the cost
of telephone interviewing per respondent is higher than thru mail. The method also
introduces interviewer bias – the way the interviewer talks, how they ask questions, and
other factors may affect respondents' answers.
•
• Personal Contacts
 Personal interviewing takes two forms — individual and group interview. Individual
interviewing involves talking with people at their homes or office, on the street or in stores
while group interviewing may involve inviting 6 to 10 people to talk with a trained
moderator about a product, service, or subject.
•
• Online Contacts
 Advances in technology have resulted in changes in the interview method. One is
computer-assisted interviewing in which interviewers sit at computers, read questions on
the screen, and type in respondents' answers. Another method employs videoconference
to connect with focus groups; using cameras and 2-way sound systems, marketers at
headquarters can look and listen to groups in another location.

3. Implementing the Research Plan

 The researcher next puts the plan into action: collecting (by the company's research
staff or by outside firms), processing, and analyzing the information.
 The data collection phase of the research process is generally the most expensive and
most subject to error. Researchers must watch out for mistakes, problems in contacting
respondents and with subjects who refuse or hesitate to cooperate or who give biased
responses.
 Researchers must process and analyze the collected data to isolate important
information and findings; they need to check data for accuracy and completeness and
code it for analysis. Then they summarize and tabulate the results, and compute averages
and other statistical measures.

4. Interpreting and Reporting the Findings

 The market researchers must now interpret the findings, draw conclusions, and report
to the management. They should not try to overwhelm managers with numbers and fancy
statistical techniques; rather, they should present important findings that are useful in the
major decisions faced by management.
 However, interpretation should not be left only to the researchers; they are often
experts in research design and statistics, but the marketing manager knows more about
the problem and the decisions that need to be made. In many cases, findings may be
interpreted in different ways, and discussions between researchers and managers will
help arrive at the best interpretation. Thus, they must work closely when interpreting
research results, and both must share responsibility in the research process and the
resulting decision.

GENERALIZATION

Marketing information has no value until it is used to-make better marketing decisions.
Thus, the marketing information system must make the information available to the
managers and others who make marketing decisions or deal with customers on a regular
basis. This means providing managers with regular performance reports, intelligence
updates, and reports on the results of research studies.

The marketing research process has four steps. First is to define the problem and
research objectives. Next is to develop the research plan. Third is to implement the
research plan. Finally, we interpret and report the findings of the marketing research.
Week 7 - Chapter 3.4.

WEEKLY STUDY AND ASSESSMENT GUID

E

TOPIC ACTIVITIES OR TASKS

Chapter III: Market Opportunity Read and venture on the LEGO story prior the lessons.
Analysis and Consumer
Analysis Read and study the lessons on consumer and business markets.
3.4. Consumer and
Business Markets Accomplish and submit your 2nd Written Work (Synchronous Quiz).

For this week, the following shall be your guide for the different lessons and tasks
that you need to accomplish. Be patient, read it carefully before proceeding to the tasks
expected of you. GOD BLESS!

Chapter III: Market Opportunity Analysis and Consumer Analysis

Content
3.4. Consumer and Business Markets

At the end of the lesson, you should be able to:

Learning • describe the consumer and business markets; and
Competencies
• differentiate the buying behavior and decision making of individual/househol
(organizational) costumer.

Activities • Synchronous Assessment (Written Work #2)

• How do consumers respond to various marketing efforts and stimuli the com
Essential Questions
• How does consumer behavior differ from business buyer behavior?

• “Put your consumers in focus, and listen to what they’re actually saying, not
Value Statements
- Daniel EK

Textbook:
• 3G Learning (2018). 2nd Edition Principles of Marketing. 3G Learning.
• Ligaya, E., et. al. (2017). Principles of Marketing. Fastbooks Educational Su
References • Serrano, A. (2016). Principles of Marketing. Unlimited Books Library Service
• Illano, A. B. (2016). Principles of Marketing. Rex Book Store Inc.
• Kotler, P., et. al. (2016). 14th Edition Marketing Management. Pearson Edu
Online Resources:
 • Bernazzini, S. (2021). Why and How You Should Actually Listen to Your Cu
• SumUp Payments Limited (2021). The Importance of Listening to Your Cus

LEARNING CONTENT

Hello, future professional! Last week, you were tasked to study about marketing
research. For this week, we will be discussing the next topic of chapter three which is
the consumer and business markets. After which, you will be tasked to accomplish your
second written work.

LET’S GET THIS CRACKING!

The aim of marketing is to meet and satisfy target customers' needs and wants better
than competitors. Marketers must have a thorough understanding of how consumers
think, feel, and act and offer clear value to each and every target consumer.

Source: https://www.lego.com/en-us/product/central-perk-21319

Every child who has ever had a set of the most basic
LEGO blocks has built his or her own unique and
amazing creations, brick by plastic brick. When LEGO
decided to become a lifestyle brand and launch theme
parks; its own lines of clothes, watches, and video
games; and products such as Clikits craft sets designed
to attract more girls to the brand franchise, it neglected
its core market of five- to nine-year-old boys. Plunging
profits led to layoffs of almost half its employees as the
firm streamlined its brand portfolio to emphasize its
core businesses. To better coordinate new product
activities, LEGO revamped its organizational structure
into four functional groups managing eight key areas.
One group was responsible for supporting customer
communities and tapping into them for customer
communities and tapping into them for product ideas.

Successful marketing requires that companies fully connect with their customers.
Adopting a holistic marketing orientation means understanding customers — gaining a
360-degree view of both their daily lives and the changes that occur during their
lifetimes so the right products are always marketed to the right customers in the right
way. That is why we’ll explore individual consumer buying dynamics and the buying
dynamics of business buyers for this week.

Before we start with the discussion, let us have a short reflection on our value
statement. Daniel EK said that we should put our customers in focus, and listen to what
they’re actually saying, not what they tell us. Listening to customers isn't just hearing
about their problems. It's not picking up the phone or answering the ringing bell at your
service desk. Listening to customers is about connecting with them. It involves paying
close attention to their needs and understanding how you can help them achieve their
goals. As future entrepreneurs, we should become the best service representatives of
our business. Service representatives are excellent listeners. They can recall relevant
details and are consistently in tune with the customer’s emotions. This saves customers
from having to repeat information which adds friction to the service experience.

If you wish to learn more about why and how you should listen to your
customers, I have provided the link to the article in the online reference. We can now
finally get started on our discussion. Enjoy your reading!

CHAPTER III: MARKET OPPORTUNITY ANALYSIS AND CONSUMER ANALYSIS

CONSUMER AND BUSINESS MARKETS

The success of a marketing strategy involves gaining a comprehensive understanding of

the particular markets that the company serves. These markets can either be consumer
markets or business markets. As there is a significant difference between these two
markets, the marketing strategies adopted to serve them also differ. These strategies
need to be developed based on the needs, wants and buying processes of the particular
market.

What is consumer behavior?

Marketing is so much more than creating a catchy phrase or a jingle people will sing for
days. Understanding consumer behavior is a vital aspect of marketing. Consumer
behavior is the study of how people make decisions about what they buy, want, need or
act with regard to a product, service, or company. It is critical to understand consumer
behavior to know how potential customers will respond to a new product or service. It also
helps companies identify opportunities that are not currently met.

How do consumers respond to various marketing efforts and stimuli the company might
use?
Most large companies study consumer buying decisions in great detail to answer
questions about what consumers buy, where they buy, and how much they buy, when
they buy, and why they buy. Marketers can study actual consumer purchases to find out
what they buy, where and how much. But learning about the whys of consumer buying
behavior is not so easy — answers are often kept deep within the consumers' head and
penetrating the recesses of the consumers' mind is no easy task.

“Put your consumers in focus, and listen to what they’re actually saying, not what they
tell you.”
With the statement I mentioned above, we have to be reminded that it is a must that we
look into our consumers that is why you should take into account that the central question
that marketers should ask is “How do consumers respond to various marketing efforts
and stimuli the company might use?”. Thus, marketers could consider the marketing mix
or other stimuli such as the buyer’s environment. All these inputs enter the buyer's mind,
where they are turned into a set of observable buyer response: product choice, brand
choice, dealer choice, purchase timing, and purchase amount.

The marketer wants to understand how the stimuli are changed into responses inside the
consumer's mind, which has two parts. First, the buyer's characteristics influence how he
or she perceives and reacts to the stimuli. Second, the buyer's decision process affects
the buyer's behavior.

What are the characteristics affecting consumer behavior?

Consumer purchases are influenced strongly by cultural, social, personal, and
psychological characteristics. For the most part, marketers cannot control such factors,
but they must still take them into account.

1. Cultural Factors
• Since cultural factors exert a broad and deep influence on
consumer behavior, marketers need to understand the role
played by the buyer's culture, subculture, and social class.

1.
a. Culture is the most basic cause of a person's wants and
behavior; growing up the child learns basic values,
perceptions, wants, and behaviors from the family and other
institutions (school, groups, etc.). Every group or society has
a culture, and cultural influences on buying behavior may vary
from country to country.
b. Each culture contains smaller subcultures, or groups of
people with shared value systems based on common life
experiences and situations. Subcultures include nationalities,
religions, racial groups, geographic regions, etc.
c. Almost every society has some form of social class It is a
society's relatively permanent and ordered divisions whose
members share similar values, interests, and behaviors.
Social scientists have identified the following American social
classes:

1.
1.
i. Upper Class – generally the social elite who live on inherited
wealth, own more than one home, or those who have earned
higher income or wealth through exceptional ability.
ii. Middle Class – the upper middle class consists of
professionals, independent businessmen and corporate
managers; while the middle class are average-pay white- and
blue-collar workers who live on the “better side of town”.
iii. Working Class – are those who lead a “working-class” life-
style whatever their income, school background, or job. They
depend heavily on relatives for economic and emotional
support, advice on purchases, and assistance in times of
trouble.
iv. Lower Class – consists of upper lowers who are the “working
poor”, whose living standards are just above poverty. The
 lower are visibly poor, often unskilled and tend to live a day-
to-day existence.

2. Social Factors
• A consumer's behavior is also influenced by social factors
such as the consumer’s family, small groups, and social roles
and status.

1.
a. Family, the most important consumer buying organization in
society, can strongly influence buyer behavior. Marketers are
interested in the roles and influence of the husband, wife, and
children on family purchases.
b. A person belongs to several small groups — clubs,
organizations, teams, etc., which may have an influence in
their behavior. Groups introduce/ expose others to a new
behavior, lifestyle, attitudes, and may influence the person's
product and brand choices.
c. At the same time, the person's position or involvement in the
group can be defined in terms of both role and status.

3. Personal Factors
• A buyer’s decision also is influenced by personal
characteristics such as the buyer's age and life-cycle stage,
occupation, economic situation, lifestyle, and personality and
self-concept.

1.
a. Age and life-cycle stage emphasizes that people change the
goods and services they buy over their lifetime. Tastes and
wants in food, clothes, recreation, etc., are often age-related.
Life-cycle stages refer to singles, newly married couples,
couples with kids, mature couples – they have different needs.
b. A person's occupation affects the goods and services bought.
Blue-collar workers tend to buy rugged work clothes, while
executives buy more business suits. Young workers
especially in the tech field are gravitating to more casual wear
like jeans, chinos, etc.
c. A person's economic situation will affect product choice. A
fast-rising executive will understandably be looking for a more
expensive car. If economic conditions turn bad, marketers will
take steps to recalibrate their efforts.
d. Lifestyle is a person or family's pattern of living as expressed
in his activities (income source, hobbies, and social events),
interests (food, fashion, family), and opinions (about
himself/themselves, social issues, products).
e. Personality and self-concept is usually described in terms of
traits such as sociability, self-confidence, adaptability,
assertiveness, autonomy, etc. Brands also have "gained" their
personality, and consumers are likely to choose brands that
match their own.

4. Psychological Factors
 • A person's buying choices or decisions are further influenced
by four major psychological factors, which are: motivation,
perception, learning, and beliefs and attitudes.

a. A person buys something usually to satisfy a need, which is either biological

(pertaining to the body, like thirst, hunger, discomfort), or psychological (arising from
want of recognition, esteem, belonging). A need becomes a motive when it becomes
sufficiently pressing to direct a person to seek satisfaction.
b. A motivated person who is ready to act may be influenced by his or her perception of
the situation. Perception is the process by which people select, organize, and interpret
information to form a meaningful picture of the world. One can form different
perceptions of the same stimulus because of three perceptual processes:

1.
1.
i. selective attention is when a person focuses on something
and screens out most of the other information to which he is
exposed;
ii. selective distortion describes the tendency of people to
interpret information in a way that will support what they
already believe; and
iii. selective retention happens when one is likely to remember
the good points of a product and forgets the good points about
other brands.
c. When people act, they learn. Learning describes changes in a person's behavior
arising from experience. Theorists say that most human behavior is learned through the
interplay of stimuli, responses, reinforcements, etc.
d. Through doing and learning, people acquire beliefs and attitudes which, in turn,
influences their buying behavior. A belief is a descriptive thought that a person has about
something, which may be based on real knowledge, opinion or faith. Attitude describes a
person's relatively consistent evaluations, feelings and tendencies toward an object or
idea, which put people in a frame of mind of liking or disliking it.

What is the buying decision process?

The buying process starts even before the actual purchase and continues long after.
Marketers should focus on the entire buying process rather than just the purchase
decision. The buying decision process consists of 5 stages: need recognition,
information search, evaluation of alternatives, purchase decision, and post-purchase
behavior.

1. Need or problem recognition

• Need recognition is when the buyer recognizes a problem.
The need recognition is the first and most important step in the
buying process. If there is no need, there is no purchase.
• The recognition of a need by a consumer can be caused in
different ways. Different classifications are used:

a. Internal stimuli (physiological need felt by the individual as hunger or thirst) which
opposes the external stimuli such as exposure to an advertisement.
b. Classification by type of needs:
 1.
1.
i. Functional need – the need is related to a feature or specific
functions of the product or happens to be the answer to a
functional problem.
ii. Social need – the need comes from a desire for integration
and belongingness in the social environment or for social
recognition.
iii. Need for change – the need has its origin in a desire from the
consumer to change.
c. Maslow's hierarchy of needs developed by Abraham Maslow, is one of the best known
and widely used classifications and representations for hierarchy of needs. It specifies
that an individual is guided by certain needs that he wants to achieve before seeking to
focus on the following ones:

1.
1.
i. Physiological needs – basic needs like hunger and thirst
ii. Safety needs – security and protection
iii. Need of love and belonging – love and friendship
iv. Need of esteem – recognition, status
v. Need of self-actualization – self-development and realization

2. Information search
• Once the need is identified, it's time for the consumer to seek
information about possible solutions to the problem. He will
search more or less information depending on the complexity
of the choices to be made but also his level of involvement.
Then the consumer will seek to make his opinion to guide his
choice and his decision-making process with:

1.
a. Internal information – This information is already present in
the consumer’s memory. It comes from previous experiences
he had with a product or brand and the opinion he may have
of the brand.
b. External information – This is information on a product or
brand received from and obtained by friends or family, by
reviews from other consumers or from the press. Not to
mention, of course, official business sources such as an
advertising or a seller’s speech.

3. Evaluating alternatives
• Once the information is collected, the consumer will be able
to evaluate the different alternatives that are offered to him,
evaluate the most suitable to his needs, and choose the one
he thinks is best for him. In order to do so, he will evaluate
their attributes on two aspects.

1.
a. Objective characteristics – such as the features and
functionality of the product.
b. Subjective characteristics – such as perception and
perceived value of the brand by the consumer or its reputation.
4. Purchase decision
• In analyzing the purchase decision, the marketer should find
out what happens between the purchase intention and the
decision. The buyer may have intended to buy the desired
brand, but may form a decision based on unexpected
situational factors such as change in income, expected price
(sale offer, bonus points, rival's price drop). As may be seen,
preferences and even purchase intentions do not always
result in the desired decision.
• Now that the consumer has evaluated the different solutions
and products available to respond to his need, he will be able
to choose the product or brand that seems most appropriate
to his needs. Then proceed to the actual purchase itself. His
decision will depend on the information and the selection
made in the previous step based on the perceived value,
product's features and capabilities that are important to him.

5. Post-purchase behavior
• Once the product is purchased and used, the consumer will
evaluate the adequacy with his original needs or whether he
has made the right choice in buying this product or not. He will
feel either a sense of satisfaction for the product. On the
contrary, he will feel disappointed if the product has fallen far
short of expectations.
• The marketer's job does not end when the product is sold.
Will the buyer be satisfied or dissatisfied with the product? If
satisfied, he will probably be a repeat customer. But if not, he
will probably not buy the product again; worse, he may
communicate his dissatisfaction to others.

What is business buyer behavior and how does it differ from consumer behavior?
Most large companies sell to other business firms. Business buyer behavior refers to the
buying behavior of organizations that buy goods and services for use in the production of
other products and services that are sold.

While a consumer market refers to a market wherein the seller sells the product for a
primary reason of making profits and buyer buys the products for personal use, a business
market, on the other hand, is the business to business market wherein the products or
services of a particular organization are sold to or purchased by other organization or
business.

For our discussion on the business market, we’ll discuss the buying activity of
organizations which consists of the buying center, types of business purchase decisions,
the various types of business markets, and buying decision process.

Who are the major participants in the business buying process?

The buying center consists of all those individuals and groups who participate in the
purchasing decision-making process, who share some common goals and the risks
arising from the decisions. The major participants in business buying process are:

a. Initiators – are the ones who initiate or recognize the need of

a particular product requirement in the organization for
enhancement or to combat deprivation.
 b. Users – are the ones who are going to use the product or
require it for the smooth functioning of their operations.
c. Influencers – are basically the people who will influence the
decision of which product to buy from where and what suitable
price to buy it in.
d. Deciders – they decide or have the authority to decide whether
to buy a certain product or not.
e. Approvers – they approve the decider’s decision to buy,
usually these people are authorized to do so.
f. Buyers – they are the ones who make the actual purchases
from other business.
g. Gatekeepers – are the people who have the power to prevent
sellers or information from reaching members of the buying
center.

What are the types of business purchase decisions?

Not all buying situations are first-time occurrences. There are actually three types of
buying situations that can occur:

1. Straight Rebuy
• These purchase situations involve routine ordering. In most
cases buyers simply reorder the same products or services
that were previously purchased. In fact, many larger
companies have programmed re-purchases into an
automated ordering system that initiates electronic orders
when inventory falls below a certain pre-determined level or
service options.

2. Modified Rebuy
• These purchases occur when products or services previously
considered a straight re-purchase are, for some reason, now
under a re-evaluation process. There are many reasons why
a product is moved to the status of a modified re-purchase.
Some of these reasons include: end of purchase contract
period, change in who is involved in making the purchase,
supplier is removed from an approved supplier’s list, mandate
from top level of organization to re-evaluate all purchasing, or
strong marketing effort by competitors.

3. New Task Purchase

• As the name suggests, these purchases are ones the buyer
has never or rarely made before. In some ways, new task
purchases can be considered as either minor or major
depending on the total cost or overall importance of the
purchase. In either case, the buyer will spend considerably
more time evaluating alternatives.

What are the various types of business markets?

The business market comprises all the organizations that buy goods and service for use
in the production of other products and services that are sold, rented, or supplied to
others.

1. Intermediaries
 • Companies that sell to both consumers and other businesses
may market their products through intermediaries, such as
retailers, wholesalers or distributors.

2. Services Market
• Companies offer consumers services, such as plumbing,
hairdressing or landscaping. They may also provide
professional services, such as management consultancy,
accountancy or property maintenance, to other businesses or
government agencies.

3. Industrial Businesses
• Companies that sell products to other businesses operate in
the business-to-business market, or B2B. They may sell
materials or components that other companies use to
manufacture their own products, or they might sell finished
goods, such as office equipment or machine tools.

4. Institutional Markets
• The institutional market consists of schools, hospitals,
nursing homes, prisons and other institutions that provide
goods and services to people in their care. Institutions differ
from one another in their sponsors and activities. Many
institutional markets are characterized by low budget and
captive patrons.

5. Government Markets
• The government market offers big opportunities for small and
big companies. In most countries, government organizations
are major buyers of goods and services. Companies who wish
to sell products and services to governments must know the
similarities and differences of government buying and
business buying.

What is the business buying process?

The business buying process has some similarities with the consumer buying process,
but there are significant differences, for obvious reasons. Buyers in a new-task buying
situation usually go through all the stages, while those in the modified or straight rebuys
may skip some of the stages. The six stages are the following:

1. Need or problem recognition

• The buying process starts when someone in the company
identifies a problem or need that can be met by acquiring a
specific product or service. Problem recognition can result
from internal or external stimuli.

2. General need description and product specification

 • Having identified a need, the buyer prepares a general need
description that explains the characteristics and quantity of the
needed item. Further, the buying organization in this step
needs to develop the item's technical product description or
specification through the assistance of a technical or
engineering team using value analysis.

3. Supplier search
• The buyer in this stage searches for a supplier to find the best
vendors. The buyer can make a list of qualified suppliers from
information coming from trade directories, Internet or calling
other companies for recommendations.

4. Proposal solicitation
• In this stage of the business buying process, the buyer sends
invitations to qualified suppliers to propose. In response to the
invitation, some invited suppliers will either send a catalog or
their sales representative. If the item is complex and
expensive, the buyer will require comprehensive written
proposals of formal presentation from individual potential
supplier.

5. Supplier selection
• The members of the technical or engineering team review the
proposals submitted and pick the supplier or suppliers. In this
stage, the team must come up with a list of the desired supplier
attributes and their comparative significance. The members of
the team will rate the suppliers using the attributes and identify
the best supplier.

6. Order-routine specification
• This time the buyer prepares an order-routine specification.
An order-routine specification consists of the final order with
the chosen supplier or suppliers and make a list of items like
technical specifications, quantity needed, expected time of
delivery, return policies and warranties. In the case of
maintenance, repair and operating items are included.

GENERALIZATION

The success of a marketing strategy involves gaining a comprehensive understanding of

the particular markets that the company serves. These markets can either be consumer
markets or business markets. As there is a significant difference between these two
markets, the marketing strategies adopted to serve them also differ. These strategies
need to be developed based on the needs, wants and buying processes of the particular
market.
A consumer market refers to a market wherein the seller sells the product for a primary
reason of making profits and buyer buys the products for personal use while a business
market is the business to business market wherein the products or services of a particular
organization are sold to or purchased by other organization or business. The
characteristics affecting consumer behavior includes cultural factors, social factors,
personal factors, and psychological factors. On the other hand, the various types of
business markets include intermediaries, services market, industrial businesses,
institutional markets, and government markets.

The buying decision process of consumer market starts with the need or problem
recognition, followed by information search, evaluating alternatives, purchase decision,
and lastly the post-purchase behavior. Whereas the business buying process entails need
or problem recognition, followed by general need description and product specification,
supplier search, proposal solicitation, supplier selection, and order-routine specification.

Week 8 - Chapter 3.5.

WEEKLY STUDY AND ASSESSMENT GUID

E

TOPIC ACTIVITIES OR TASKS

Read and venture on the motivation questions given prior the lessons.
Chapter III: Market Opportunity
Analysis and Consumer Analysis Read and study the lessons on marketing segmentation, market target
3.5. Marketing Segmentation, market positioning.
Market Targeting, and
Market Positioning (STP) Review and prepare for your Midterm Examination in Principles of Mark

For this week, the following shall be your guide for the different lessons and tasks
that you need to accomplish. Be patient, read it carefully before proceeding to the tasks
expected of you. GOD BLESS!

Chapter III: Market Opportunity Analysis and Consumer Analysis

Content
3.5. Marketing Segmentation, Market Targeting, and Market Positioning (STP

At the end of the lesson, you should be able to:

Learning
Competencies • identify and segment the market for a product or service; and
• select the appropriate target market segment and its positioning.
Essential Questions • Why is a business not one size fits all?
 • "Focus on the right message for the right people at the right time."
Value Statements
- Russell Glass

Textbook:
• 3G Learning (2018). 2nd Edition Principles of Marketing. 3G Learning.
• Ligaya, E., et. al. (2017). Principles of Marketing. Fastbooks Educational Sup
• Serrano, A. (2016). Principles of Marketing. Unlimited Books Library Services
References • Illano, A. B. (2016). Principles of Marketing. Rex Book Store Inc.
• Kotler, P., et. al. (2016). 14th Edition Marketing Management. Pearson Educa
Online Reference:
• Edinburgh, K. (2021). Ultimate Motivation. Exam Study Expert
• Spence, B. (2019). Boost Your Business by Creating Killer Marketing Strategi

LEARNING CONTENT

Hello, future professional! Last week, you were tasked to study about the consumer and
business markets. For this week, we will be discussing the last subtopic of chapter three
which is marketing segmentation, market targeting, and market positioning (STP).

LET’S GET THIS CRACKING!

Let’s try to do a little activity so I can see who am I dealing with… Go and take on an
adventure by answering the following questions.

Now that you’ve answered the questions, let’s see if you agree with the following
outcome of your responses. We’ll determine your spirit animal and your greatest value!
Are you ready? G!
 =

I’m pretty much sure that not all of you have arrived in a single classification. Fret
not! That is actually normal because not all people have the same attributes and behavior.
The simple activity we had further highlights that even in a single class, there are varying
personality which requires several means just to relate with each one of you.

Just like in marketing sense, the market has varying consumers which requires
appropriate strategies just to reach out to them. Thus, for this week, we’ll discuss all about
market segmentation, market targeting, and market positioning to learn how to effectively
serve them.

But before we proceed with the discussion, let us have a short reflection on our
value statement. Russell Glass said that we should focus on the right message for the
right people at the right time. This message applies not just to businesses, but also to
humans. We can interpret this message in terms of where, when, and to whom we should
devote our time and attention. We must remember that not everyone is our friend. We
can't possibly please everyone. We need to quit looking for approval from people we don't
even know. It is important that we do not let other people's perceptions of us influence us.
Save your energy and time for the people you value, because their opinion and validity
are the only things that matter.

We can now finally start with the discussion. Happy reading!

CHAPTER III: MARKET OPPORTUNITY ANALYSIS AND CONSUMER ANALYSIS

MARKETING SEGMENTATION, MARKET TARGETING, AND MARKET

POSITIONING (STP)

Companies cannot connect with all customers in large, broad, or diverse markets. But
they can divide such markets into groups of consumers or segments with distinct needs
and wants. A company then needs to identify which market segments it can serve
 effectively. This decision requires a keen understanding of consumer behavior and careful
strategic thinking. To develop the best marketing plans, managers need to understand
what makes each segment unique and different. Identifying and satisfying the right market
segments is often the key to marketing success.

Why is a business not one size fits all?

In order to be an effective and efficient business, firms should seek out their target
customer market. A good understanding of the principles of market segmentation is an
important building block of a company's marketing strategy. Market segmentation serves
as the foundation for an efficient, streamlined, and ultimately successful approach to
customers, and a means of targeting products and services accurately, with the minimum
of wastage.

That is why a business is not one size fits all; as consumers vary, so should the strategies
of a company must be. Further, it should take into consideration that if the market is too
broad, market segmentation can be considered in order to effectively reach out to your
core market.

What is market segmentation?

Market segmentation involves grouping various customers into segments that have
common needs or will respond similarly to a marketing action. Each segment will respond
to a different marketing mix strategy, with each offering alternate growth and profit
opportunities.

• A market is composed of individuals or organizations with the ability and willingness to

make purchases to fulfill their needs or wants.
• A market segment is a subdivision or part of an overall market with specific and
distinctive characteristics.

As opposed to mass marketing where companies direct their marketing activities to the
entire market, in market segmentation, companies tailor-fit their marketing to the needs
and wants of the particular market segment.

What are the criteria of market segmentation?

For the segmentation to be useful, the following criteria must be met:

1. Substantiality
The targeted segment needs to be large enough to justify creating and maintaining a
customized marketing mix. Simply put, there would be no point in wasting marketing
budget on a market segment that is inadequately large, or has insignificant spending
power.

2. Measurability
The company must be able to identify this specific segment and its measurable size.
Market segments are usually measured in terms of a sales value or the number of
customers within the segment.
 3. Accessibility
The company must have access to its targeted segment with its specific marketing mix.
When differentiating a market segment, it is vital to consider how the group could be
accessed and, significantly, whether this falls within the strengths and abilities of the
company's marketing department.

4. Differentiable
The best market segment should be internally homogeneous. Internal homogeneity
means all customers within the segment have similar preferences and characteristics
but are externally heterogeneous.

5. Actionable
The market segment must have practical value. Its characteristics must give supporting
data for a marketing position or sales approach. This in turn must have outcomes that
are easily quantified, ideally in relation to the existing measurements of the market
segment as defined by initial market research.

What are the bases for segmenting a consumer market?

Marketers used several bases or variables to divide a total market into segments. It is
significant that the bases for segmentation to be used should be thought of wisely
because an unsuitable segmentation strategy could lead to lost sales and overlooked
profit opportunities.

The major variables that might be used in segmenting

are geographic, demographic, psychographic, and behavioral variables.

1. Geographic Segmentation
Geographic segmentation means segregating markets by region of the country or the
world, market size, market density or climate. A company may decide to operate in one
or a few geographical areas or operate in all areas but pay attention to geographical
differences in needs and wants.

There are four reasons why consumer goods companies use regional approach to
marketing:

1.
1.
a. Many firms have to find new ways to make sales because of slow and strong
competition.
b. Retailers using their computerized checkout stations with scanners can get precise
assessment of which brands sell most in the region.
c. New-regional brand intended for local tastes and preferences is introduced by many
packaged-goods manufacturers.
d. More regional approach lets consumer goods companies to respond more swiftly to
competitors.

2. Demographic Segmentation
Demographic segmentation is market segmentation according to age, race, religion,
gender, family size, ethnicity, income, and education. Demographics can be segmented
 into several markets to help an organization target its consumers more accurately. With
this type of segmentation, an organization can categorize the needs of consumers.

The following are the variables of demographic factors used in market segmentation:

a. Age – Age segmentation is the use of marketers of a variety of terms to refer to

different age groups.
i. Generation Z
- Born between 1995-2010, they are also known as Gen Z, iGen, or Centennials. Gen Z
is said to be on track to be the best-educated generation yet.
ii. Generation Y
- Born between 1979 and 1994, they are also known as Echo Boomers; these
consumers have been "wired" almost from birth.
iii. Generation X
- Born between 1964-1978. Gen X was certainly raised in more challenging times.
iv. Baby Boomers
- Born between 1946-1963. They represent a wealthy target.
- Since Gen Y "Echo Boomers" are living with their boomer parents, parents are being
influenced by what demographers are calling a "Boom-Boom Effect" – the same
products that appeal to 21-year-olds are appealing to youth-obsessed baby boomers.
v. Silent Generation
- Born between 1925-1945. Defying their advancing age, they maintain active lives and
products and marketing that help them to achieve that.
b. Gender – Gender segmentation is dividing a market into different segments based on
gender. It has long been used in clothing, cosmetics, toiletries, and magazines.
c. Income – Income segmentation is dividing a market into different income segments.
Income influences consumers' wants and determines their buying power.
d. Family life cycle – The family life cycle is a series of stages established through a
combination of age, marital status, and the presence or absence of children.

3. Psychographic Segmentation
Psychographic segmentation divides buyers into different segments based on
personality characteristics, motives, lifestyles, and geodemographics.

1.
1.
a. Personality – Personality mirrors a person's traits, attitudes, and habits. An ultimate
personality descriptor is clothing. People buy clothes that give others the idea of who
they are.
b. Motives – A motive is a need that is sufficiently pressing to direct the person to seek
satisfaction. Products and services have varying appeals.
c. Lifestyles – Lifestyle is a person's way of living and describes how an individual spends
his time, the importance of things around him, his beliefs, and socioeconomic
characteristics like income and education.
d. Geodemographics – Geodemographics divides the potential market into neighborhood
lifestyles. This manner, of segmentation, combines geographic, demographic, and
lifestyle segmentations.
 4. Behavioral Segmentation
Behavioral segmentation divides buyers into segments based on their knowledge,
attitudes, uses, or responses to a product. Many marketers believe that behavior
variables are the best starting point for building market segments.

1.
1.
a. Occasions – Buyers can be grouped according to occasions when they get the idea to
buy, actually make their purchase, or use the purchased item. Occasion segmentation
can help firms build up product usage.
b. Benefits Sought – A powerful form of segmentation is grouping buyers according to the
different benefits that they seek from a product. Benefit segmentation requires finding
the major benefits people look for in product class, the kinds of people who look for
each benefit, and the major brands that deliver each benefit.
c. User Status – Markets can be segmented into non-users, ex-users, potential users, first-
time users, and regular users of a product. Marketers want to reinforce and retain
regular users, attract targeted non-users, and reinvigorate relationships with ex-users.
d. Usage Rate – Markets can also be segmented into light, medium, and heavy product
users.
e. Loyalty Status – A market can also be segmented by consumer loyalty. Consumers can
be hard-core loyal, split loyal, shifting loyal, or switchers.

What is market targeting?

Market targeting involves breaking a market into segments and then concentrating
marketing efforts on one or a few key segments. Marketers select target markets using
four different strategies which are undifferentiated targeting, concentrated targeting,
multi-segment targeting, and customized marketing.

1. Undifferentiated Targeting
An undifferentiated targeting strategy assumes that all members of a market have
similar needs that can be met with a single marketing mix. Undifferentiated targeting
occurs when the marketer ignores the apparent segment differences that exist within
the market and uses a marketing strategy that is intended to appeal to as many people
as possible.

2. Concentrated Targeting
A concentrated targeting strategy focuses all marketing efforts on a single market
segment. A company may target just one segment with a single marketing mix. It
understands the needs, and motives of the segment's customers and designs a
specialized marketing mix. Several segments may be identified but a company may not
serve all of them. Some may be unattractive or out of line with the company's business
strengths.

3. Multi-segment Targeting
Multi-segment targeting is a strategy that uses two or more marketing mixes to target
two or more market segments. A company following a multi-segment targeting strategy
serves two or more well-defined segments and develops a distinct marketing mix for
each one of them. Separate brands are developed to serve each of the segments.

4. Customized Marketing
Customized marketing is tailoring a particular product to the specific needs of an
individual customer. In some markets, the requirements of individual customers are
 unique and their purchasing power is sufficient to make designing a separate marketing
mix for each customer a viable option. Many service providers such as advertising,
marketing research firms, architects, and solicitors vary their offerings on a customer to
customer basis.

What is market positioning?

Market positioning is developing a product and brand image in the minds of consumers.
It can also include improving a customer's perception about the experience they will have
if they choose to purchase a company's product or service. The business can positively
influence the perceptions of its chosen customer base through strategic promotional
activities and by carefully defining the marketing mix.

In positioning, the marketing department creates an image for the product based on its
intended audience. This is created through the use of promotion, price, place, and
product. The more intense a positioning strategy, typically the more effective the
marketing strategy is for a company. The end result of positioning is the successful
creation of a market-focused value proposition, a cogent reason why the target market
should buy the product.

There are two approaches in product positioning which are head-to-head positioning and
differentiation positioning. Head-to-head positioning is competing directly with
competitors on similar product attributes in the same target markets. While differentiation
positioning seeks a less competitive smaller market niche in which to position the brand.

Once the company has developed a clear positioning strategy, it must communicate that
positioning effectively through all facets of the marketing mix and every point of contact
with customers. On the other hand, companies risk confusing the target audience if their
marketing tactics run counter to their positioning.

How can we make a good positioning statement?

A positioning statement is a brief description of the target market as well as a convincing
picture of how the company wants that market to perceive the brand. A positioning
statement is an internal tool. Every product and marketing decision about the brand has
to be aligned with and support the positioning statement. A good positioning statement is
a guidepost for the marketing efforts. It helps maintain focus on the brand and its value
proposition while working on market strategy and tactics.

• Here are six keys to keep in mind about a positioning statement:

1.
a. It is simple, memorable, and tailored to the target market.
b. It provides an unmistakable and easily understood picture of the brand that
differentiates it from competitors.
c. It is credible, and the brand can deliver on its promise.
d. The brand can be the sole occupier of this particular position in the market. The brand
can "own" it.
e. It helps evaluate whether or not marketing decisions are consistent with and supportive
of the brand.
f. It leaves room for growth.

• Here's a basic template for writing a positioning statement:

For [insert Target Market], the [insert Brand] is the [insert Point of Differentiation] among
all [insert Frame of Reference] because [insert Reason to Believe].
1.
a. The point of differentiation (POD) describes how your brand or product benefits
customers in ways that set you apart from your competitors.
b. The frame of reference (FOR) is the segment or category in which your company
competes.
c. The reason to believe is just what it says. This is a statement providing compelling
evidence and reasons why customers in your target market can have confidence in your
differentiation claims.

The point of differentiation, frame of reference, and reason to believe must be meaningful,
important, and convincing to customers, not just to the company.

• Here’s an example of a great positioning statement:

The following positioning statement was used by Amazon.com in 2001 when it sold
books almost exclusively:

For World Wide Web users who enjoy books, Amazon.com is a retail bookseller that
provides instant access to over 1.1 million books. Unlike traditional book retailers,
Amazon.com provides a combination of extraordinary convenience, low prices, and
comprehensive selection.

At this point, if you’ve taken into consideration all the essential facets of market
segmentation, market targeting, and market positioning, we can effectively reach out and
serve the best market for our business; hence, the market and the business will perfectly
fit together and have the “Cinderella moment”!

GENERALIZATION
Market segmentation tries to quantify the ways in which different groups assign value to
a product or service. In this sense, it allows companies to reach the greatest number of
consumers through greater awareness of how people respond to marketing efforts. On
the other hand, market targeting involves breaking a market into segments and then
concentrating marketing efforts on one or a few key segments.

The criteria of market segmentation include substantiality, measurability, accessibility,

differentiable, and actionable. The major variables that might be used in segmenting are
geographic, demographic, psychographic, and behavioral variables. Market targeting
involves breaking a market into segments and then concentrating marketing efforts on
one or a few key segments. Marketers select target markets using four different strategies
which are undifferentiated targeting, concentrated targeting, multi-segment targeting, and
customized marketing.

END OF MIDTERM

Congratulations on reaching the end of the midterm module. The next challenge
you will be facing is the Midterm Examination. Peruse the accompanying inspirational
statements that I arranged for you to be roused and enlivened.

“Just believe in yourself. Even if you don’t, pretend that you do, and at some point, you
will.”
– Venus Williams

“Self-belief and hard work will always earn you success.”

– Virat Kohli

“By failing to prepare you are preparing to fail.”

– Benjamin Franklin

“Doubt kills more dreams than failure ever will.”

– Karim Seddiki