ABM163 Marketing Management PDF

**ABM163** **Marketing Management** **Kringle Marie P. Mercado, L.Agri, MSc, MBA** **MARKETING MANAGEMENT** analysis, planning, implementation and control of programs designed to bring about desired exchanges with target consumers both for profit and service (Kotler). **MARKETING ENVIRONMENT*...

**ABM163** **Marketing Management** **Kringle Marie P. Mercado, L.Agri, MSc, MBA** **MARKETING MANAGEMENT** analysis, planning, implementation and control of programs designed to bring about desired exchanges with target consumers both for profit and service (Kotler). **MARKETING ENVIRONMENT** **Uncontrollable Factors** -- external environment\ elements affecting an organization's performance that cannot be altered by the organization and its managers/marketers. **MARKETING ENVIRONMENT (EXTERNAL)** **The Political Environment**: The political--legal dimension of the general environment consists of government regulation of business and the relationship between business and government. For one, the legal system partially defines what an organization can and cannot do. Although the Philippines is basically a free-market economy, major regulation of business activity still exits. **RA 7394** Consumer Act of the Philippines of 1991 a. protection against hazards to health and safety;\ b. protection against deceptive, unfair and unconscionable sales acts and practices; c. provision of information and education to facilitate sound choice and the proper exercise of rights by the consumer;\ d. provision of adequate rights and means of redress; and e\. involvement of consumer representatives in the formulation of social and economic policies. **RA 7900** High Value Crops Law **RA 11511 / RA 10068** Organic Agriculture Act of 2010 ** The Economic Environment** Consumer Income Levels\ Economic Growth or Recession\ Inflation Rate\ Unemployment Rates\ Market Competition\ Exchange Rates ** The Social Environment**: The consumers\ Consumer behavior : the individual's attempt to obtain satisfactions for needs\ Culture: the sum total of knowledge, beliefs, values, customs, and artifacts that we use to adapt to out environment and that we hand down on our succeeding generation. **Consumer Studies** **Kinds of consumers**\ 1. **Ultimate Consumers** -- buy products for their own use and satisfaction\ 2. **Industrial Consumers** -- businessmen who buy products for further processing and assembling of products\ 3. **Commercial Consumers** -- buy products to resell to others\ 4. **Institutional Consumers** -- buy goods under the name of the institution **Environmental** **Influences** 1\. **Social** **Influences**- family, friends, school, neighborhood **Status**- the relative position in the group of any individual members **Roles**- what the other members of the group expect the individual to play within the group 2\. **Group influence** - groups are highly influential in making purchases 3\. **Reference** **group**- those which an individual identifies to the point where the group becomes a standard, a norm, a point of reference for him/her 4\. **Social** **classes** - structured class system 5\. **Role of the opinion leader**- trend setters, these individuals like to purchase new products before others do and serve as an information source 6\. **Cultural influences** ** The Technological Environment** ** Internet of Things\ Innovation\ Technological Developments** **Consumer Studies** ** Decision Process**\ 1. **Stimulus - Stimulus**- a cue or a drive mean to motivate a person to act **Social stimulus**- comes from an interpersonal source not affiliated with the seller\ **Commercial stimulus**- message sponsored by a manufacturer, wholesaler, retailer, or other seller\ **Non-commercial stimulus**- a message received from an impartial source (consumer reports, news)\ **Physical Drive**- This occurs when a person's senses are affected (thirst, pain, cold, hunger, fear) 2\. **Problem awareness**- entails recognition of a shortage of a product or service or unfulfilled desire 3\. **Information search**- gathering of information after recognizing that the unfulfilled desire needs further action 4\. **Evaluation of alternatives**- ranking of alternatives from the most desirable to the least desirable needs further action 5\. **Purchase**- the act of purchasing the selected product or service **Buying Motives** **Rational**: The rational buying motives are based on one's thoughts and judgement. Consumers purchase a product by testing, comparing and observing the product keenly in terms of price, quality and durability. Durability, Suitability, Variety of Uses, Safety, Convenience, Profitability **Emotional**: The consumer at times, is driven by emotions while buying certain products. In such cases, the consumer does not bother to make intelligent or right decision. Pride, Fashion or Imitation, Attraction, Comfort, Affection for Family, Vanity, Aesthetic Value **Patronage**: Sometimes, customers patronize a store or shop, driven either by their emotional or rational choice. There are certain factors which are responsible for arriving at such a choice. Appearance, Prestige, Reputation of the Store, Habit **MARKETING STRATEGY** Outlines the manner in which marketing is used to accomplish an organization's objectives Increase sales volume Continuous receipt of revenues and profits **Target Market**: described as the set of present and potential customers that an organization attempts to satisfy **Market Segmentation**: aims at narrow, specific consumer group through one specialized marketing plan that caters to the needs of that specific segment. **MARKET SEGMENTATION** **Bases of segmentation** 1\. **Geographical**- segmenting the market by regions or marketing areas 2\. **Demographical**- distinguish different groups based on demographic variables such as sex, age, family size, etc. 3\. **Psychography**- showed that buyer's needs maybe differentiated along life-style and along personality lines (outgoing/status seeker) 4\. **Benefit segmentation** - consumers are grouped together on the basis of various benefits that seek to obtain from the use of a particular product 5\. **Volume segmentation**- the seller attempts to differentiate the heavy, medium, light, and nonusers of his products 6\. **Marketing factor segmentation**- attempts to subdivide the market into groups responsive to different factors such as price and discounts, advertising, sales promotion, and brands. **MARKETING ENVIRONMENT** **Controllable Factors** -- directed by the organization and its marketers. **MARKETING MIX MANAGEMENT** **MARKETING MIX** PRODUCT\ PRICE\ PLACE\ PROMOTION **INTERNAL ENVIRONMENT** Controllable Factors\ Directed by the organization and its marketers **PRODUCT** Anything offered for sale, attention and acquisition **Essential Elements** 1\. **Physical Core** - the benefit that the product brings to the customer 2\. **Function** -- the purpose it serves and how much it gives of satisfaction based on its performance 3\. **Adaptability** -- how can a product meet the needs of customers in a market other than the one in which it is made 4\. **Value** - the benefit that a customer gets by using a product to satisfy her needs minus associated costs **Product Levels** 1\. **Core** - the benefit that the product brings to the customer 2\. **Physical** - what the product is made of, what it looks like; dimensions; specifications\ 3. **Augmented** - extra elements which add to the perceived value of the product in the eyes of the consumers (free insurance, free installation, warranty, etc.) **Categories of Agricultural Products** 1\. Raw or Fresh\ 2. Semi-processed\ 3. Processed **Product Classification\ **1. Durables\ 2. Non-Durables\ 3. Service 1\. Convenience\ 2. Shopping\ 3. Specialty\ 4. Unsought PICTURE **Product Mix** **Product line** -- a group of related products all marketed under a single brand name by the same company **Product mix** -- refers to the number of products a firm is handling, - **Wide product mix** -- there are a lot of product lines - **Deep** -- there are several products in each product line - **Consistent** -- if the products being produced are related PICTURE **Branding** **Brand** -- a letter, a word, a symbol, a design, or a combination of them used to identify products. - **Brand Name** -- part of the brand which consists of a word, letter or group of letters or words comprising a name which identifies a specific good; part of the brand which can be vocalized - **Trademark** -- a brand that has been given legal protection because it is capable of exclusive appropriation by its owner; it is used in a distinctive manner affixed to a product when sold. **Tests in Measuring the Brand Effectiveness** 1\. **Association test** - merely mentioning the brand, the customer can associate with a particular product 2\. **Learning test** - measure the ease at which brand names are read and pronounced 3\. **Memory test** - easiness in re-calling the name 4\. **Uniqueness test** - determine the uniqueness of the brand 5\. **Preference test** - rate of the preference of the customers **Degree of Brand Preference** 1\. **Brand recognition** - this means that customers remember having seen or heard of the brand 2\. **Brand preference** - customers tend to insist on buying only those products with a particular brand of their choice or preference as a result of the satisfaction that they have enjoyed or received from the use of the product bearing such brand 3\. **Brand insistence** - insistence for a particular brand and accepting no substitutes **Branding Policies** 1\. Brand vs. No brand\ 2. Manufacturer's Brand vs. Distributor's Brand\ 3. Family Brand vs. Individual Brand **\ Branding Strategies** 1\. **Individual Branding** - is a policy of naming its products differently **Overall family branding** - all of a firm's products are branded with the same name or at least part of the name **Brand extension branding** - when the firm uses one of its existing brand for an improved or new product that is usually in the same product category of the existing brand **Multi-brand strategies** **Generic branding** - indicates only the product category and does not include the company name and other identifying terms **Packaging** **Packaging**- the total presentation of the product; it may be defined as the process of signing, manufacturing, and incorporating the various physical elements and accessories required for the proper wrapping, containing, protection, shipping, stacking, and identification of a product **Package** -- is a product's physical container, label and inserts; may include a cardboard box, cellophane wrapper, glass, aluminum or plastic jar, paper bag, Styrofoam, or a combination of these **Label** -- contains the product's brand name, company logo, ingredients, promotional messages, inventory control code, and instructions for use. ◦Inserts -- are detailed instructions and safety information for complex and dangerous products that are carried in medicines, toys, or other packages; and could also be coupons, prizes, or recipe booklets **Benefits of Packaging** 1\. Protects the goods in storage and transit\ 2. It makes handling convenient\ 3. It promotes the product\ 4. It enhances the product **Characteristics of a Good Packaging**\ 1. Attractive\ 2. Recognizable\ 3. Informative\ 4. Immediate\ 5. Textural\ 6. Functional\ 7. Labelling\ 8. Dependable **PRICE** - the amount of money paid for the goods and service; ◦the monetary value of a product. **Pricing Objectives** **Profit-oriented objectives** - profit maximization or achievement of a sufficient return on invested capital. - **Volume-oriented objectives** - maximize current revenue or market share, or simply to ensure sufficient sales growth - **Competition-oriented objectives** - aim for price stability or to be in line with competitors. **Types of Price Fluctuations** - Seasonal - Annual - Trend - Irregular/Random **Manufacturer's Pricing Strategies** **Skimming the Market** - holding prices at a relatively high level and promoting the product's effectiveness and value - **Moving Down the Demand Curve** - prices are set at a high point and held there until the market available at that point is pretty well saturated - **Penetration Pricing** - sets price at a low level to get an immediate mass market **Pre-emptive Pricing** - set the price of the product so low that the market is not attractive to competitors - **Extinction Pricing** - the price of the product is set based on the variable costs in order to force firms in weak financial positions to discontinue their production **Formula Pricing** - pricing agreement is negotiated with the buyer - Tie Pricing - negotiate a sale that provides for the inclusion in the purchase of a sought for product a quantity of an unwanted product **Retailer's Pricing Strategies** - **Competitive Pricing** - set price near or equal to those in other stores for products bought on a regular or irregular basis - **Psychological Pricing** - odd-centavo pricing to give an appearance of having cut prices to the base minimum centavo to gain competitive pricing **Unit Pricing** - Pricing items in units two or more **Price Lining** - offering two or more classes of the same product at different prices **Special Prices** - offering items as specials for a given period of time **Specific Pricing Policies** **Cost-plus Pricing** - determine the costs of goods adds a percentage to cover expenses and profit **Flexible Mark-up Method** - a special form of cost plus pricing where instead of using a constant margin, it calls for a markup to be varied in the basis of several considerations **Intuitive Pricing** - set the price of the goods simply by estimating how much people will be willing to pay for the product, and without regard to costs **Less-than-cost Pricing** - Market minus price policy; based on the theory that it is desirable to sell goods at prices below the cost of the seller which happens when there is declining sales in order to dispose the product as fast as it can be done\ \ **Price maintenance** - adhering to the price hat has been charged in the past **Geographical Pricing Policies** **Freight on Board (FOB) Factory Price** -- buyer **Cost in Freight (CIF) Price** -- seller **MARKETING MARGIN** Refers to the difference between prices at different levels of the marketing system; The difference between what the consumers pay & what the producers receive for their agricultural price;\ "price spread" **\ COMPONENTS OF MARKETING MARGIN** **Marketing Costs** -- returns to factors of production used in providing the processing & marketing services rendered between the farmers & consumers **Marketing Charges** -- returns according to the various agencies or institutions involved in the marketing of products **Net return** - profit component **Point of Consumption Price -- Point of Production Price** PICTURE **\ ** **PLACE** **CONSIDERATIONS IN DISTRIBUTION STRATEGIES** 1\. **Nature of the product** -- perishability/newness/value of the product a. The faster product perishability, the shorter the marketing channel b. The higher the value of a product, the shorter the marketing channel 2\. **Nature of the market** -- consumer buying habits/size of average sale/concentration of purchases 3\. **Distribution** **budget** 4\. **Seller's sales and distribution experiences** 5\. **Geography** **MAJOR ARTERIES IN THE DISTRIBUTION SYSTEM** 1\. Wholesaling\ 2. Retailing\ a. Independent stores\ b. Specialty stores\ c. Department stores\ d. Chain stores\ e. Supermarkets\ f. Consumer cooperatives\ g. Automatic Vending Machines **PROMOTION** the coordination of all seller-initiated efforts to set up channels of information and persuasion to facilitate the sale of a good or service, or acceptance of an idea **PROMOTIONAL STRATEGIES** 1.**Pushing**\ 2.**Pulling** **IMPORTANCE OF PROMOTION** 1\. Makes the buyers aware of alternative goods & services\ \ 2. Shorten the distance between the market& the manufacturers 3\. Regulate the level& timing of demand **METHODS OF PROMOTION** 1\. Advertising\ 2. Personal selling\ 3. Sales promotion\ 4. Publicity **ADVERTISING** paid form of non-personal presentation or promotion of the product (the use of mainstream media/television commercials/billboards; these are non-personal and are paid) **\ TYPES OF ADVERTISING\ ** Outdoor advertising\ Point of purchase advertising\ National advertising\ Local advertising **ADVERTISING MEDIA**\ Newspapers\ Magazines\ Radio\ Television\ Transportation/Outdoor\ Direct mail advertising **PERSONAL SELLING**\ personal/oral presentation of the product **SALES PROMOTION** Activity or material that acts as a direct inducement, offering added value or incentive to the product, to resellers, and consumers It encompasses all promotional activities or materials other than personal selling, advertising, and publicity Samples\ Coupons\ Cash refund offers\ Price packs\ Premiums\ Prizes\ Free trials\ Tie-in\ Point of purchase displays **PUBLICITY** non personal form of promotion which aims to attract buyers by publishing commercially