Introduction to Marketing Concepts

Podcast Beta

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which element is NOT part of the marketing function?

Conducting financial audits (correct)

Implementing pricing strategies

Planning the conception of products

Distributing products or services

Which is a key question that should be answered to align a firm’s offerings with its customers?

How much are my customers willing to pay? (correct)

What is my firm's historical sales data?

What are my competitors offering?

What are the latest market trends?

What is the main purpose of market strategy planning?

To evaluate employee performances

To identify attractive market opportunities (correct)

To set product manufacturing standards

To determine the company’s financial stability

What output is a result of market strategy planning?

The target market Signup and view all the answers

Which of the following components is not included in the marketing mix?

Positioning Signup and view all the answers

What does the marketing concept primarily emphasize for small businesses?

Aligning products with customer needs Signup and view all the answers

Which of these is a method to gather insights on market needs?

Marketing research Signup and view all the answers

What aspect is NOT critical in devising a marketing strategy?

Analyzing employee satisfaction Signup and view all the answers

What components are included in the product offering?

Packaging, warranties, and maintenance Signup and view all the answers

Which factor is primarily considered when setting the price of a product?

Profits Signup and view all the answers

What is the main purpose of promotion in marketing?

To communicate and influence buying behavior Signup and view all the answers

Which of the following best describes personal selling?

Direct communication between sellers and potential customers Signup and view all the answers

What does market research primarily help businesses identify?

Market needs and competition Signup and view all the answers

What is primary research in market research?

The collection of original primary data Signup and view all the answers

Why is it important to consider competitor pricing?

To ensure profits are maximized Signup and view all the answers

How does promotion contribute to sales?

By creating interest and stimulating purchases Signup and view all the answers

What is a notable disadvantage of primary research?

It may yield a low response rate. Signup and view all the answers

Which of the following is considered a primary source of secondary research?

Sales reports from a company's records. Signup and view all the answers

What is market share essentially calculated as?

Individual firm's sales as a percentage of total market sales. Signup and view all the answers

Which source would you consult for determining the number of schools in a specific area?

The Commission on Higher Education (CHED). Signup and view all the answers

Which library is known to have a collection of original studies and trade journals?

National Library. Signup and view all the answers

What should be determined to effectively forecast market share?

Total sales revenue of the industry in the target market area. Signup and view all the answers

What role does the Department of Trade and Industry (DTI) play in research?

They provide information on existing enterprises in an area. Signup and view all the answers

Which of the following is NOT a step in determining probable market share?

Assess the competitor's sales tactics. Signup and view all the answers

What does CMS represent in the market share calculation?

Company's market share Signup and view all the answers

Which method of sales forecasting involves asking customers about their purchasing intentions?

Survey of buyer intention Signup and view all the answers

Which of the following methods applies a flat percentage increase to previous sales data?

Past sales analysis Signup and view all the answers

What is the purpose of trend analysis in sales forecasting?

To forecast long-term and short-term sales Signup and view all the answers

How is company sales defined in relation to market potential?

Actual sales made by the company Signup and view all the answers

Which forecasting method involves limited market testing before a product is rolled out widely?

Test marketing Signup and view all the answers

Which of the following sales forecasting methods relies on estimates from sales representatives?

Sales-force composite Signup and view all the answers

What does potential sales of the target market refer to?

Total sales volume all competitors could achieve Signup and view all the answers

What is the primary difference between secondary research and primary research?

Secondary research synthesizes existing data, while primary research collects new data. Signup and view all the answers

Which of the following methods is NOT typically used in primary research?

Literature Review Signup and view all the answers

Which primary research method involves no direct interaction with the subjects being observed?

Observation Signup and view all the answers

What is one major disadvantage of primary research compared to secondary research?

It can be very expensive and time-consuming. Signup and view all the answers

Which type of survey method is considered the most expensive and time-consuming?

Personal Interview Signup and view all the answers

What is a requirement for conducting a successful telephone survey?

Cordial interviewers Signup and view all the answers

In the experimental method of primary research, what is held constant while observing the change in one variable?

All other conditions Signup and view all the answers

Which of the following is an advantage of primary research?

Ability to customize the research design Signup and view all the answers

Marketing is a function concerned with planning and implementing the conception, pricing, promotion, and distribution of products or services that will satisfy the firm's ______.

objectives Signup and view all the answers

A marketing strategy must identify who the ______ are to effectively align products or services with customer needs.

customers Signup and view all the answers

The marketing mix refers to the set of marketing tools that the firm uses to pursue its marketing ______ in the target market.

objectives Signup and view all the answers

In market strategy planning, one must analyze the external ______ to identify attractive market opportunities.

environment Signup and view all the answers

Developing a marketing ______ is essential for small businesses to engage in effective marketing efforts.

strategy Signup and view all the answers

To develop a marketing mix, a firm must first identify the size of the ______.

target market Signup and view all the answers

An important aspect of the marketing concept is ensuring a match between intended ______ and the firm’s products or service offerings.

customers Signup and view all the answers

A good marketing ______ combines various elements to effectively reach and satisfy the needs of a target market.

mix Signup and view all the answers

The combination of product line, quality levels, and customer services is known as the product __________.

offering Signup and view all the answers

In marketing, the element that refers to the cost charged for products is called __________.

price Signup and view all the answers

__________ involves the communication of information to influence buying attitudes and behaviors.

Promotion Signup and view all the answers

Market __________ is the organized effort to gather information about markets or customers.

research Signup and view all the answers

__________ research consists of collecting original data to gain insights into market issues.

Primary Signup and view all the answers

The right __________ ensures that products are available in adequate quantities at suitable locations when customers need them.

place Signup and view all the answers

Sales promotion can include tactics such as __________, coupons, and point-of-purchase displays.

samples Signup and view all the answers

Understanding market size and competition is a key advantage provided by market __________.

research Signup and view all the answers

By the time the research is complete, it may be out of ______.

date Signup and view all the answers

Company records include sales reports or clues on customer ______.

behavior Signup and view all the answers

Libraries are important for collecting original studies, trade journals, and business ______.

magazines Signup and view all the answers

The Commission on Higher Education (CHED) provides basic data on the number of ______ operating in specific areas.

schools Signup and view all the answers

Market share refers to the individual firm's sales as a percentage of total sales in a specific ______.

market Signup and view all the answers

To determine probable market share, one must ascertain the purchasing ______ of the target market.

power Signup and view all the answers

The Department of Trade and Industry (DTI) provides information on the number of ______ existing in an area.

enterprises Signup and view all the answers

Reports, newspapers, and journals are considered ______ research sources.

secondary Signup and view all the answers

Secondary research involves the summary, collation and/or synthesis of existing ______ rather than primary research.

research Signup and view all the answers

In the observational method, data is collected by ______ the actions of a person or a group.

observing Signup and view all the answers

A survey can gather data by ______ people through methods like personal interviews and telephone surveys.

interviewing Signup and view all the answers

The most expensive and time-consuming method of primary research is the ______ interview.

personal Signup and view all the answers

In experimental research, one variable is changed while keeping all other ______ constant.

conditions Signup and view all the answers

Primary research can focus on both qualitative and ______ issues.

quantitative Signup and view all the answers

Primary research can be very ______ compared to secondary research, as it often incurs higher costs.

expensive Signup and view all the answers

Conducting primary research requires the development and execution of a ______ plan.

research Signup and view all the answers

The company’s market share can be computed using the formula: CMS = CS/TIS, where CMS stands for the company’s ______.

market share Signup and view all the answers

The potential sales of the target market refer to the total sales volume that all ______ could achieve in that particular market segment.

competitors Signup and view all the answers

Market-factor analysis assumes that the future demand for a product is related to the behavior of certain ______.

market factors Signup and view all the answers

Test marketing is a forecasting method in which a company markets its new product in a limited ______ area.

geographic Signup and view all the answers

Past sales analysis applies a flat percentage ______ to the average volume achieved last year.

increase Signup and view all the answers

Trend analysis uses statistical methods such as regression analysis for forecasting sales over the ______ term.

long Signup and view all the answers

The sales-force composite method involves collecting estimates of sales from all ______ assigned to specific territories.

salespeople Signup and view all the answers

The sales potential of the company refers to the portion of the market potential that the company could expect to achieve under ______ conditions.

ideal Signup and view all the answers

Study Notes

What is Marketing?

Marketing involves planning and executing the creation, pricing, promotion, and distribution of products or services to achieve business objectives.

Marketing Concept

The marketing concept emphasizes aligning a business’s offerings with the needs and wants of its target customers.

Marketing Strategy Planning

This is a process where businesses identify opportunities, develop profitable marketing strategies, and analyze internal and external environments to identify attractive market opportunities.

Key Questions in Marketing

Who are my customers?
What products or services do my customers need?
What price are they willing to pay for my products or services?
Where do they need my products or services?
When do they need my products or services?
How do they want to receive my products or services?

Market Strategy

A general guide for achieving a business's marketing goals.
It involves getting products and services to customers efficiently, cost-effectively, and appropriately.

Marketing Mix

A combination of controllable variables that companies use to achieve marketing objectives in their target market.
The four key elements are:
- Product Offering: Includes the breadth of the product line, quality levels, and customer services.
- Price: Determined considering profits, production costs, marketing expenses, and competitors' prices.
- Promotion: Communicating information between the company and potential buyers to influence buying attitudes and behavior.
  - Examples include personal selling, advertising, and sales promotion.
- Place (Distribution): Ensuring products are available in the right quantities and locations when customers want them.

Market Research

Any organized effort to gather information about markets or customers.
A vital component of business strategy.

Types of Market Research

Primary Research: Collecting original data directly from sources.
Secondary Research: Utilizing existing information, such as summaries, collations, and syntheses of previous research.

Primary Research Methods

Observation: Gathering data by observing the actions of individuals or groups without direct interaction.
Surveys: Collecting data through interviews.
- Personal Interviews: The most expensive and time-consuming method.
- Telephone Surveys: Requires a well-designed questionnaire, a representative sample group, and courteous interviewers.
- Mail Surveys: Sending questionnaires through postal services.
- Internet Surveys: Posting questionnaires on a company website or distributing them to target groups.
Experimentation: Observing changes in results by altering one variable while keeping other conditions constant.

Advantages of Primary Research

Allows focus on both qualitative and quantitative aspects.
Enables researchers to tailor the research design to meet specific needs, providing greater control over the process.

Disadvantages of Primary Research

More expensive and time-consuming than secondary research.
Requires a well-developed research plan.
Information gathered can become outdated quickly.
May encounter low response rates.

Secondary Research Sources

Company Records: Sales reports, customer behavior data.
Libraries: Collections of original studies, trade journals, business magazines, and graduate theses.
Government Agencies:
- CHED (Commission on Higher Education): Provides data on the number of schools, courses offered, student enrollment, etc.
- DTI (Department of Trade and Industry): Information on the number of businesses in a particular area.
- Local Governments: Listings of businesses and business types.

Determining the amount of sales a company can achieve by focusing on a specific market segment.
Market Share: A company's sales as a percentage of total sales in a specific market.

Define the physical limits of the target market area.
Determine the potential sales of the target market based on demographic characteristics.
Determine the target market's purchasing power.
Determine the total sales revenue of the industry in the target market area.
Determine the percentage of total sales that the company can effectively serve.

CMS = CS / TIS
CMS = Company's Market Share
CS = Company's Sales
TIS = Total Industry Sales

Forecasting Company Sales Methods

Market-Factor Analysis: Assumes future demand for a product is connected to specific market factors.
Survey of Buyer Intention: Asking current or potential customers about their purchasing intentions for a product at a given price.
Test Marketing: Testing a new product in a limited geographic area, measuring sales, and projecting results to a larger area.
Past Sales Analysis: Applying a flat percentage increase to previous years' sales volume.
Trend Analysis: Using statistical methods, like regression analysis, to forecast sales over long or short terms.
Sales-Force Composite: Collecting sales estimates from each salesperson for their assigned territories.

Marketing

A business function that focuses on planning and implementing the development, pricing, promotion, and distribution of products or services to achieve organizational objectives.

Marketing Concept

It emphasizes the importance of understanding and meeting customer needs to achieve firm success.

Devising a Marketing Strategy

It involves understanding customer needs and aligning the firm's product or service offerings with those needs.
It is an essential step in guiding the firm's marketing efforts to reach customers in a timely, cost-effective, and appropriate manner.

Market Strategy Planning

It's a systematic process that analyzes the market and the firm to identify attractive opportunities and develop profitable strategies.
Considers the firm's strengths and weaknesses.
Examines the external environment to identify potential opportunities.
It helps to define:
- The target market
- The marketing mix
- The size of the market area

The Marketing Mix

It is the set of controllable marketing variables used to achieve marketing objectives in the target market.
It consists of:
- Product offering: Product line, quality levels, and customer services.
- Price: Determined considering profitability, cost of production, marketing, and competitive pricing.
- Promotion: Advertising, sales promotion, and personal selling.
- Place (distribution): Making products available in the right quantities, locations, and when customers need them.

Marketing Research

It is a systematic process of gathering, analyzing, and interpreting information about markets and customers.
It is crucial for guiding business strategy and gaining a competitive advantage.

Types of Market Research

Primary Research: Involves collecting original data directly from the source (observations, surveys, or experiments).
Secondary Research: Utilizes existing data from sources like company records, libraries, government agencies, reports, newspapers, magazines, and journals.

Primary Research Methods

Observation: Collecting data by observing people or groups in their natural setting without direct interaction.
Survey: Gathering data through interviews, telephone calls, mail, or online questionnaires.
- Personal interviews: Expensive but provide detailed information.
- Telephone surveys: Require good questionnaires, a representative sample, and courteous interviewers.
- Mail surveys: Less expensive, but response rates can be low.
- Internet surveys: Convenient but may have limitations with sample selection.
Experimentation: Modifying one aspect of a situation and observing the effects while keeping other conditions constant.

Advantages of Primary Research

Allows the researcher to focus on both qualitative and quantitative research questions.
Gives control over the research design to fit specific needs.
Offers strong control over the data collection process.

Disadvantages of Primary Research

More expensive than secondary research.
Requires time and effort to develop and execute a research plan.
May be outside the budget of smaller businesses.
Information can be outdated quickly.
Can have low response rates.

Possible Sources for Secondary Research

Company records: Sale reports and customer behavior data.
Libraries: Original studies, trade journals, business magazines, and graduate theses.
Government agencies: Data on demographics, industries, businesses, and economic indicators.

Other Sources of Secondary Research

Reports, newspapers, magazines, journal articles, government and NGO statistics.

Major Libraries

National Library
University of the Philippines – Institute of Small Scale Industries Library
Development Academy of the Philippines Libraries Pasig City
Polytechnic University of the Philippines Library Sta.Mesa

Using Government Data for Market Research

Commission on Higher Education (CHED): Provides information on the number of schools, courses, students, and other education-related data.
Department of Trade and Industry (DTI): Offers data on the number of businesses in an area.
Local government: Lists of businesses, types of industries, and other local data.

It uses market research to determine the quantity of sales a company can generate in a specific market segment.
Market share: The firm's individual sales expressed as a percentage of total sales in a specific market.
Steps for Determining Market Share Potential:
- Define the physical limits of the target market area.
- Determine potential sales in the target market.
- Analyze the purchasing power of the target market.
- Determine the total sales revenue of the industry.
- Estimate the company's percentage of the total sales.
Calculation: CMS = CS / TIS
- CMS = Company’s market share
- CS = Company’s sales
- TIS = Total industry sales

Forecasting Company Sales:

Market-factor Analysis: Relates future product demand to market factors, measuring their impact on sales activity.
Survey of buyer intention: Asks current or potential customers about their purchasing plans.
Test Marketing: Introduces a new product in a limited geographic area to measure sales and project future sales.
Past Sales Analysis: Projects future sales based on a percentage increase from past performance or average sales over a few years.
Trend Analysis: Uses statistical methods to predict long-term sales with regression analysis or short-term sales using a seasonal index.
Sales-force composite: Collect sales estimates from individual salespeople for territories within the sales force.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

This quiz explores the fundamental concepts of marketing, including planning, strategy, and the marketing mix. Test your understanding of key questions and strategies that guide effective marketing in today's business landscape.