Principle of Marketing Reviewer 3rd Periodical PDF

**PRINCIPLE IN MARKETING** **Marketing Mix** - a set of elements that companies or business consider - referred as 4P's **what are the 4P's** - product -- offered by the firm that satisfied the needs of a costumers - price -- the amount of which the firm is selling the product -...

**PRINCIPLE IN MARKETING** **Marketing Mix** - a set of elements that companies or business consider - referred as 4P's **what are the 4P's** - product -- offered by the firm that satisfied the needs of a costumers - price -- the amount of which the firm is selling the product - place -- the manner through which the firm makes its products available - promotion -- the strategies that companies use **PRODUCTS AND SERVICES DEFINED** - tangible and intangible - goods, services, and ideas are the major products - **Goods -- physical product** - **Services -- intangible** **LEVELS OF PRODUCTS** 1. **Core or Generic Product --** the functional essence of the product 2. **Actual Product --** basic features of the product 3. **Extended Product --** additional features added 4. **Modified Product --** meet new demands of costumers 5. **Potential Product --** a firm plan to add or change in the product **CLASSIFICATION OF PRODUCTS** - **Consumer Product --** personal used by costumers - **Convenience --** people normally buy - **Shopping --** consume less frequently - **Specialty --** distributed exclusively - **Unsought --** often - **Industrial Product --** used by companies **Types of industrial product** - **Raw materials** -- assembles to create a new product - **Finished products --** the final product - **Equipment --** tools use in creating the product - **Supplies --** may not necessarily **Packaging --** product are enclosed in container wrapper **labeling -** providing information about the product **branding --** companies make their products distinct **Scramble Merchandise --** product grouping **STAGES IN DEVELOPING PRODUCT** 1. **Idea generation -** business firms source their ideas internally or externally. 2. **Idea screening --** proper and careful screening 3. **Project planning --** idea is further developed and conceptualized 4. **Product development --** produce a prototype or sample actual product 5. **Test marketing --** small quantities of the product are tested 6. **Commercialization --** full-scale launching 7. **THE PRODUCT LIFE CYCLE (PLC)** 1. Encompasses its first promotion u **COMPOSED OF FOUR STAGES** 1. **INTRODUCTION --** the product is officially launched 2. **GROWTH STAGE --** costumers are aware of the product 3. **MATURITY STAGE --** product reaches is peak sale performance 4. **DECLINE STAGE --** sales of the product begin to decrease. 1. **INNVATORS --** who are willing to a buy a new product 2. **EARLY ADOPTERS --** less adventurous 3. **EARLY MAJORITY --** who make sure that the product has a practical cost 4. **LATE MAJORITY-** when it becomes accepted by a large part of the population 5. **LAGGARDS-** lower socio-economic class **NATURE AND CHARACTERISTICS OF A SERVICES** - **INTANGIBILITY -** they cannot be seen - **INSEPARABILITY --** consumed at the same time - **VARIABILITY --** highly efficient and hospitable - **PERISHABILITY --** cannot be stored for later sale or use **PRICE** - Related to revenue **PRICING CONCEPTS** - **COMPUTATION PRICES --** can be studied through formulas - **VARIABILITY --** references price or the price that customers expect the product to have. **PRICE AND QUALITY**- Most consumers look at quality as the indicator of price. **CUSTOMER VALUE --** the value and benefits customers gain from purchasing **PRICING OBJECTIVES** 1. **SURVIVAL PRICING --** main pricing objective when the firm is in deep competition 2. **MARKET PENETRATION PRICING--** to increase shares from the weakest competitors. So, its product slightly lower than the competition order. 3. **MARKET SKIMMING PRICING -** When a firm happens to develop a unique product ahead of its competitors 4. **PARITY PRICING -** benchmark its pricing scheme with those of competitors. 5. **REGULATED PRICING -** The firm must abide by government regulations in setting prices. **COMMON PRICING STRATEGIES AND SCHEMES** a. **COST-BASED PRICING -** is mostly concerned with the expenses of the company in creating a product. - ***[unit cost]*** is the total amount of money needed to create the product. The unit cost can be obtained by dividing the sum of the variable cost and the fixed cost by the total product units - ***[Fixed cost-]*** expenses necessary to create products - [***Variable cost*** --] comprises expenses needed for the creation - ***[Total product units-]*** is the quantity of the products b. **DEMAND BASED PRICING** - focuses on the needs of customers. A company utilizing this approach conducts thorough research c. **BREAK EVEN PRICING** -- companies may earn just enough to cover the costs of production without any profit  d. **PSYCHOLOGICAL PRICING -** appeals to customers\' ideas regarding affordability and value. Is primarily used for convenience products. e. **TIME-BASED PRICING**- Companies utilizing time-based pricing consider a certain time frame in setting prices**.** f. **LOCATION-BASED PRICING-** marketers consider proximity g. **COMPETITIVE PRICING --** setting prices same with the rivals h. **PREMIUM PRICING-** exclusive **PLACE** **DISTRIBUTION CHANNEL --** also known as MARKETING CHANNEL is the path that a product takes **MARKETING INTERMEDIARIES -** refer to individuals or businesses that sell products to a firm **MANUFACTURERS --** create product from raw materials **SUPPLIERS** -- provide manufacturers with the raw materials **WHOLESALERS --** are independently-owned firms **RETAILERS** -- individuals or groups of people who sell goods directly to consumers. **DISTRIBUTORS --** also sell bulk products to other businesses and vendors **AGENTS -** are individuals who represent a manufacturer or a company to convince buyers to purchase their products. **TYPES OF DISTRIBUTION CHANNELS** - **DIRECT MARKETING** -- the manufacturer and the end consumer - **INDIRECT MARKETING CHANNEL** - is the traditional distribution channel structure implemented by most firms **EXAMPLES OF DISTRIBUTION CHANNELS** - **Vending machine** -- automated - **Sidewalk kiosks and store -- products on the street** - **Home services- personal visit** - **GRAY MARKETING -- refers to the unauthorized distribution of genuine products** - **EXCLUSIVE -** employs only one intermediary in a specific area - **SELECTIVE --** utilizes several intermediaries in specific areas - **INTENSIVE -** involves selling products in as many outlets as possible. **VERTICAL MARKETING SYSTEM (VMS)** - involves all the intermediaries in selling a product **HORIZONTAL MARKETING SYSTEM (HMS) -** two or more separate companies work together to improve their sales performance **MEANS SUPPORT:** **ONLINE BANKING -** can be used to pay for products **USE DEBIT AND CREDIT CARDS WHEN MAKING PURCHASES** **TELEMARKETING -**Involves the direct contact with potential customers through telephone or the internet. **CONCERNS IN UTILIZING DISTRIBUTION CHANNELS** - **Logistical concerns** - **Failure to meet demand** - **Pressure from channel leaders** - **Presence of franchised chain stores** - UPSTREAM - managing raw materials, inbound logistics, and storage facilities are performed by suppliers - DOWNSTREAM - are performed by intermediaries such as the wholesalers and retailers. **PROMOTION** - It encompasses all activities that involve communicating to the customers all the features of the product and its benefits. - Promotion is the communicative element of the marketing mix. **THE ROLE OF PROMOTION IN MARKETING MIX** - Building awareness and creating interest - Reinforcing a brand Brand recall involves the customer\'s association of a product with a specific brand in his or her mind. - Persuading customers and enhancing sales - Improving the performance of a declining product **TARGETS OF PROMOTIONAL ACTIVITIES** 1. **ACTUAL AUDIENCE -** which includes current, former, and potential customers of the company. 2. **INFLUENCERS --** people and org that have an impact on the purchasing decision 3. **INDIVIDUALS --** supplying and handling products **THE PROMOTIONAL MIX --** is a single tool, but rather a mix of tools used by the company. This also called MARKETING COMMUNICATION MIX 1. **Advertising -** defined as any paid, non-personal form of promoting products, services, and ideas by a company or organization. 2. **SALES PROMOTIONS -** short-term strategies and incentives that help improve a product\'s sales performance. *TRADE PROMOTION is a form of sales promotion* 3. **PUBLIC RELATIONS -**Refers to the means a company employs to maintain positive connections with the public 4. **PERSONAL SELLING -** done by the company\'s salespeople and involves one-on-one interactions **2 types of promotional strategies** - **Push promotional strategy -** each person or organization in the supply chain \"pushes\" the product or service forward until it reaches the end consumers. - **Negotiation with retailers --** companies work with retailers - **Personal selling --** one intermediary sells - **Point-of-sale displays --** provide infromations - **Pull promotional strategy -** the company itself directly convinces customers to purchase its products or services. **METHODS TO SET PROMOTION BUDGET** - **PERCENTAGE-OF-SALES METHOD -** the easiest method, but it also has major disadvantages. - **AFFORDABLE METHOD -** Money is allocated to advertising and promotion only after setting the budget for other components of the marketing mix - **COMPETITIVE PARITY METHOD -** the company determines the advertising budget by matching the budget of its competitors - **OBJECTIVE-AND-TASK METHOD --** setting a budget based on a company\'s promotional goals and the tasks that must be performed to achieve them. GUERILLA MARKETING is considered a unique approach in promoting products because it uses unconventional techniques to attract customers\' attention. **TYPES OF GUERILLA MARKETING** - Viral or buzz marketing -- relies on word of mouth - Street marketing -- placing ads in streets - Wild posting -- business place posters or flyers **Market Analysis** - Understanding market conditions, demand-supply dynamics, and competitive positioning. - to understand how your business fits into the market **Market Segmentation** - Dividing the target audience based on shared traits (e.g., age, income, location). **Target Market Identification**: - Key factors: Demographics, purchasing power, preferences, and trends. - Goal: Identify profitable customer segments. **Competitive Analysis** - Study competitors\' strengths, weaknesses, and unique selling points. - **Strengths --** internal advantages - **Weakness --** internal limitations - **Opportunities --** external trends to exploit - **Threats --** external risks **Marketing Planning** - Focuses on target markets, marketing mix (4Ps), and budgeting. - Outcome: A comprehensive marketing plan. - It's like making a step-by-step guide or recipe to sell your products. **Components of Marketing Plan** - **Marketing Strategy** - Define and position products for the target market - Use segmentation to cater to specific audience needs - Consider positive positioning factors (e.g., affordability, functionality). - **Marketing Mix** - **Product --** features, quality, and differentiation - **Price --** reflects value and market competitiveness - **Place --** where and how products will be sold - **Promotion --** advertising, sales, discounts, and public relations - **Financial Objectives --** quantifiable, time-bound profit goals - **Action Plan --** detailed steps for implementations.Includes budgeting for surveys, marketing activities, and promotions. **Implementation and Control** **Marketing Implementation** - **Execution of strategies to achieve objectives** - **Interdependent with planning** 1. **Organize the marketing unit** 2. **Motivate personnel** 3. **Communicate with management** 4. **Define the marketing budget** 5. **Coordinate activities** 6. **Establish a timeline** - **MARKETING CONTROL --** ensures alignment with objectives and corrects deviation **Strategic Performance Evaluation**  **Performance Standards**: Set targets for sales, costs, etc.  **Analyze Performance**: Compare market conditions before and after implementation.  **Sales Analysis**: Evaluate sales figures and market share.  **Cost Analysis**: Compare costs to sales results.  **Corrective Actions**: Revise strategies, increase funding, or set realistic objectives. **How to Make a Marketing Plan (Format)** 1. **Title Page**: Write the name of your business and the date. 2. **Executive Summary**: A short summary of what the plan is about. 3. **Business Overview**: Write your strengths, weaknesses, opportunities, and threats (SWOT). 4. **Market Analysis**: Explain your product, target audience, and competitors. 5. **Marketing Strategy**: Show how you will promote and sell your product. 6. **Financial Objectives**: Write down your money goals. 7. **Implementation Plan**: Step-by-step actions to launch your product. 8. **Control Measures**: How you'll monitor success and make adjustments. 9. **Financial Projections**: Pedict how much you'll earn in 1-3 years.