Reviewer in Principles of Marketing PDF

Reviewer in Principles of Marketing large market segment. They are generally consumed on routine with little thought and purchased frequently. WEEK 1: DEVELOPING THE MARKETING MIX: PRODUCT...

Reviewer in Principles of Marketing large market segment. They are generally consumed on routine with little thought and purchased frequently. WEEK 1: DEVELOPING THE MARKETING MIX: PRODUCT 2. Shopping products - These are products consumers TERMS: purchase and consume less frequently compared to Product - anything that can be offered in the market that convenience products. might satisfy need or want and is received in exchange for 3. Specialty products - These are products that are likely to money carry a high price tag relative to convenience and shopping Goods - a pure tangible product products. Service - intangible offerings that companies provide for 4. Unsought products - these are products whose purchase is their customers. unplanned by the consumer but takes place because of the Intangible - not tangible marketer’s actions. Heterogeneous - consisting of dissimilar or diverse B. Industrial products - are goods that are sold to other constituents businesses and used to produce other goods. Inseparable- incapable of being separated or disjoined Industrial Product Categories Perishable - liable to spoil or decay 1. Raw Materials - these are products obtained through mining, Discount - reduction made from a regular or list price harvesting, fishing, and other trades, that are key ingredients Consumer - one that utilizes economic goods in the production of higher-order products. Industrial - used in or developed for use in industry. 2. Processed Materials - These are products created through Diversification - the act or process of diversifying the processing of basic raw materials. something or of becoming diversified: an increase in the 3. Equipment - These are products used to help with the variety or diversity of something production or operations activities. 4. Basic Components - These are products used with more DEVELOPING MARKETING MIX: PRODUCT advanced components. These are often built with raw PRODUCT DEFINED materials or processed materials. A product is anything in the form of good, service, or idea 5. Advanced Components - These are products that apply basic consisting of a bundle of tangible and intangible attributes that components to produce products that offer an important can be affordable to a market that might satisfy a want or need function required within a larger product. and is received in exchange for money or something else of 6. Product Component - These are products used in the value. assembly of final products through these could also function as Components of product: stand-alone products. 1. Core product - this is the end benefit for the buyer. The core 7. MRO (Maintenance, Repair, and Operating) - These are product is the buyer really buying. products used to assist with the operation of the organization 2. Formal product - this is the actual physical or perceived but are not directly used in producing goods and services. characteristics of the product including its level of quality, special features, styling, branding, and packaging. PRODUCT LIFE CYCLE 3. Augmented product - These are the support items that 1. Introduction Stage - this stage of the cycle could be the complete the total offering such as aftersales service, warranty, priciest for a company launching a new product. The size of the delivery, and installation. market for the product is small, which means sales are low, although they will be increasing. 2. Growth Stage - The growth stage is normally characterized by strong growth in sales and profit. 3. Maturity Stage - During the maturity stage, the product is established and the aim for the manufacturer is now to keep the market share they have built up. 4. Decline Stage - Eventually, the market for a product will start to get smaller. As that life cycle nears an end, the company must decide what to do. Decisions could be to retire the product altogether or extend the life cycle of the product through a number of Classification of Product strategies. Among these strategies are: A. Consumer product - refers to a wide array of manufactured 1. Re-packing - provides a way for the company to give a goods that are purchased primarily for personal, family, and/or mature image, particularly if the product’s earlier image has household purposes. limited its target audience. Consumer Product Categories 1. Convenience product - These are products that to a very 2. Discounting - Designing a new pricing strategy does not have The type of product strategies are as follows: to be a short-term alternative for mature products. 1. Product Positioning - this strategy is placing a brand in that 3. Rebranding - Rebranding a mature product can be a part of the market where it will have an approving acceptance somewhat extreme approach to extending its life cycle, but it compared to competing brands. can also be a valuable method. Re-branding results in changing 2. Product Elimination - This strategy cuts in the composition not only the packaging. The name and total appearance of the of a company’s product portfolio by pruning the number of product could be changed also. products within a line or by totally divesting a division or 4. Expanding Abroad - Expanding the product in a foreign business. country to reach out to a totally unserved market can make the 3. Product Repositioning - This strategy means reviewing the product life cycle longer on a different level. current position of the product and its marketing mix and seeking a new position for it that seems more appropriate. THE PRODUCT MIX 4. New Product - this strategy is a set of operations that Is also known as product assortment, refers to the total introduces: number of product lines that a company offers to its customers. a. Within the business, a product new to its earlier line Product line - is a number of products grouped together based of products on similar characteristics. b. On the market, a product that provides a new kind of 1. Product Mix width - is the number of product lines in the satisfaction product mix. New product could be in the form of the following alternatives: 2. Product line length - show the number of different products a. Product improvement/modification in a product line b. Product imitation 3. Product line depth - shows how many subgroups the c. Product innovation product line contains. 5. Product Overlap - This strategy is about competing against 4. Product consistency - pertains to how closely related one’s own brand through the introduction of competing product lines are to one another in terms of use, production, products, use of private labels, and selling to original and distribution. equipment manufacturers. 6. Diversification - This strategy is developing unfamiliar Product Mix Decision - refers to the decisions about adding a products and markets through: new or getting rid of any existing product from the product mix, a. Concentric diversification - Here product/s introduced are adding a new product line, lengthening an existing line, or related to existing ones in terms of marketing or bringing fresh variants of a brand to enlarge the business and technology. to boost the profitability. b. Horizontal diversification - Here new product/s are 1. Product Line decision - Marketing managers must settle on unrelated to existing ones but are sold to the same the best length of the product line by adding fresh items or customers. dropping existing items from the line. c. Conglomerate diversification - Here product/s are entirely 2. Product Line Stretching Decision - Takes place when a new business adds a fresh product to the product line and the latest 7. Product Scope - It is determined by taking into account the product types are higher or lower quality than present overall mission of the business unit. products in the product line. 8. Value Marketing - It concerns delivering on promises made Downward stretching - means adding low-end items to for the product or service. the product line. This means the new product types are 9. Product Design - It deals with the degree of standardization cheaper or of lower quality. of a product. Upward stretching - means adding high-end items to the product line. This means the new product types are WEEK 2: DEVELOPING THE MARKETING MIX: PRICING AND more closely or of higher quality. DISTRIBUTION Two-way stretching - means stretching the line in both TERMS: directions if an organization is in the middle range of the Commodity - is a basic good used in commerce that is market. interchangeable with other goods of the same type 3. Line Filling Decision - It means adding more items within the Demand - economic principle referring to a consumer's present range of the product line. desire to purchase goods and services and willingness to pay a price for a specific good or service. PRODUCT STRATEGIES Niche - a specialized segment of the market for a particular Product strategy- is often called the roadmap of a product and kind of product or service. outlines the end-to-end vision of the product and what the product will become.  Psychological pricing - pricing strategy that utilizes specific ii) Demand - buyers are less conscious when the product techniques to form a psychological or subconscious impact they are buying is inimitable or when it is high in on consumers. quality, prestige, or exclusiveness. Cost - an amount that must be paid or spent to buy or iii) Economy - economic conditions can have a strong obtain something. impact on the firm’s pricing strategies. Economic Break-even - the point at which cost, and income are equal factors like boom or recession, inflation, and interest and there is neither profit nor loss rates affect pricing decisions because they affect Middlemen - a person who buys goods from producers consumer spending, consumer perceptions of the and sells them to retailers or consumers. product’s price and value, and the company’s costs of producing and selling a product. PRICING iv) Other environmental factors - Aside from the market PRICE - is the amount of money charged for a product or and economy, the company must think about other service. Sum of all values that customers give up to gain the factors in its external environment when setting prices. benefits of having or using a product or service. It should distinguish what impact its prices will have PRICE DETERMINANTS on other elements in its environment. 1. Internal Factors - affecting pricing include the company’s overall marketing strategy, strategy, objectives, and marketing NEW PRODUCT PRICING mix, as well as the other organizational considerations. Pricing strategies typically alter as the product passes through i. Marketing strategy - Price is only one element of the its life cycle. The introductory stage is especially demanding. company’s broader marketing strategy. Companies launching a new product and face the challenge of ii. Objectives - Pricing may play an essential function in setting prices for the first time. They can decide between two helping to achieve company objectives at many levels. A broad strategies which are: firm can set prices to draw new customers or profitably 1. Market-Skimming Pricing - Set high prices to “Skim” keep existing ones. revenues layer by layer from the market. iii. Marketing Mix - Price choices must be harmonized with 2. Market-Penetration Pricing - companies set a low product design, distribution, and promotion decisions to preliminary price to break into the market fast and deeply to structure a reliable and valuable integrated marketing draw large numbers of buyers quickly and gain a huge market program. share. iv. Other Organizational considerations - management must fix who within the organization should set prices. GENERAL PRICING APPROACHES Companies handle pricing in a variety of ways. There are four approaches for pricing at an appropriate level. 2. External Factors - include the nature of the market and Often, some of them overlap. demand and other environmental factors. 1. Demand - oriented Approaches- consider the underlying i) Nature of the market - The seller’s pricing freedom expected customer tastes and preferences more heavily than varies with different types of markets. There are four cost, profit, and competition. types of market, each presenting a different pricing i) Skimming - pricing strategy in which a marketer sets a challenge. relatively high price for a product or service at first, (1) Pure Competition- market consists of many buyers and then lowers the price over time. sellers trading in a uniform commodity like wheat, copper, or ii) Penetration - is a pricing technique of setting a financial securities. In a purely competitive market, marketing relatively low initial entry price, often lower than the research, product development, pricing, advertising, and sales eventual market price, to attract new customers. promotion play tiny or no role. iii) Prestige pricing - is a physiological pricing strategy (2) Monopolistic Competition - the market consists of many that sets prices of luxury products to the expectations buyers and sellers who trade a range of prices rather than a of a niche class of customers who associate higher single market price. A range of prices arises because sellers can prices with superior quality. set apart their offers to buyers. Freely use branding, advertising, iv) Price - lining (product line pricing) is a marketing and personal selling can also set their offers apart. process wherein products or services within a specific (3) Oligopolistic Competition - the market consists of many area are set at different price points. sellers who are extremely responsive to each other’s pricing v) Odd-even - a type of psychological pricing where the and marketing strategies. As there are hardly any sellers, each price is set based on customers’ perception of a seller is watchful and sensitive to competitors’ pricing significant difference in cost between products priced strategies and moves. at a whole number value and products priced slightly (4) Pure Monopoly - the market has one seller. below this whole number. vi) Target pricing - is a pricing method that involves 3. PRODUCER →WHOLESALER/DISTRIBUTOR → CUSTOMER 4. PRODUCER →AGENT/BROKER →WHOLESALER/RETAILER →CUSTOMER identifying the price at which a product will be competitive in the marketplace. vii) Bundle pricing - companies sell a package or set of goods or services for a lower price than they would charge if the customer bought all of them separately. viii) Yield management - is the process of understanding, anticipating, and influencing consumer behavior to maximize yield or profits from a fixed, perishable resource. 2. Cost-Oriented Approaches - the cost side of the pricing is given emphasis, not the demand side. i) Cost-plus pricing - pricing involves adding a certain Function of distribution channels percentage to cost in order to fix the price. 1. Information provider- Middlemen have a role in providing ii) Break-even pricing - pricing at which sales revenue is information about the market to the manufacturer. equal to the cost of goods sold. 2. Price stability- The middleman also maintains price stability iii) Experience Curve pricing - is to be price aggressive by keeping his overheads low. and decrease the price of the products below the 3. Promotion- Many of them design their own sales incentive current market price. programs, intended at building customers traffic at the other 3. Profit-Oriented Approaches - involves setting prices for outlets. products that will guarantee to make money on each sale. 4. Financing- Middlemen finance manufacturers’ operations by i) Target Profit - is a pricing method in which the seller providing the needed working capital. sets prices with the purpose to make a certain amount 5. Title- Most middlemen take the title to the goods services of money. and trade in their own name. ii) Target return on sales - it is setting typical prices that 6. Help in production function- The producer can focus on the will give the companies a profit that is a specified production leaving the marketing problem to middlemen who percentage. concentrate on the profession. iii) Target return on investment- considering profits in 7. Matching demand and supply- The principal function of relation to the capital invested. intermediaries is to assemble the goods from many producers 4. Competition-oriented Approaches - approaches involve in such a way that a customer can influence purchases with setting prices based on competitors’ strategies, costs, prices, simplicity. and market offerings. 8. Pricing- In pricing the product, the producer should i) Customary - for some products where tradition, a encourage the suggestions from the middlemen who are very standardized channel of distribution, or other close to the final users and know what they can pay for the competitive factors dictate the price. product. ii) Above, at, or below - subjective feel for the 9. Standardizing transactions- Standardizing transactions is competitors’ price or market price using the another function of marketing channels. benchmark. 10. Matching buyers and sellers- The role of marketing iii) Loss leader - Deliberately sells a product below its channels to match the buyers’ and sellers’ needs becomes very customary price to attract attention to it. vital. DISTRIBUTION Choice of Distribution Channels DISTRIBUTION CHANNELS - consist of the physical access point 1. Offer the best coverage of the target market- This needs to where the product is provided to customers and the methods know the density or the number of stores in a specific place. of transporting or storing goods before making them available There are three degrees of distribution density that are for clients. present in the market namely: STRUCTURE OF DISTRIBUTION CHANNELS a. Intensive Distribution- This means that the company tries Business-to-business (B2B) distribution - occurs between to place its product and services possible in many outlets. a producer and industrial users of raw materials needed b. Exclusive distribution- This means that only one outlet for the manufacture of finished products. carries the company’s product in a practical place. Business-to-customer (B2C) distribution - occurs between c. Selective distribution – this means that the company picks the producer and the final user. a few retail outlets in a particular place to distribute its Four types of marketing channels 1. PRODUCER → CUSTOMER products. 2. PRODUCER → RETAILER → CONSUMER 2. Best satisfy the buying requirements of the target market- purchasing of customers. This means that channels and intermediaries need to satisfy at 4. Order- Fulfillment- This engages in generating, filling, least some of the interest buyers would desire to be fulfilled delivering, and providing on-the-spot service for customer when they buy a company’s product or services. orders. a. Information- it is a vital requirement when buyers have 5. Manufacturing flow management- This ensures that firms restricted knowledge or want data regarding a product or in the supply chain have the necessary resources to produce service. with flexibility and to move products in a multi-stage b. Convenience- Convenience means less hassle. Channel production process. and intermediaries must be proximate or driving time to 6. Supplier relationship management- It provides structural reach are at a minimum. support for developing and maintaining good relationships, c. Variety- Variety reflects the buyer’s interest to have especially with highly valued suppliers in order to a gain numerous choices of competing and complementary performance advantage. products. 7. Product development and commercialization- It facilitates d. Attendant services- This is a requirement for the joint development and marketing of new products and intermediaries of large home appliances that need services among a group of supply chain partner firms. delivery, installation, and credit. 8. Returns management- This enables firms to manage 3. Be most lucrative- Being profitable is determined by profit volumes of returned products efficiently while minimizing margins earned for each channel member and the channel as related costs. a whole. LOGISTICS COMPONENTS OF THE SUPPLY CHAIN NATURE OF SUPPLY CHAIN MANAGEMENT LOGISTICS- is the strategic management of the efficient flow SUPPLY CHAIN- consists of the various firms included in and storage of raw materials, in-process inventory, and finished executing the activities needed to produce and transport a goods from the point of origin to point of consumption. product or service to consumers or industrial users. 1. Sourcing and procurement- The goal of sourcing and SUPPLY CHAIN MANAGEMENT (SCM)- is the supervision of procurement activities is to lessen the costs of raw materials materials, information, and finances as they move in a process and supplies. from supplier to manufacturer to wholesaler to retailer to 2. Production scheduling- Traditionally, production starts consumer. when inventory levels become low, or the forecasts call for Nature of Supply chain management additional products to be manufactured. 1. Shared efficiency- When manufacturers, wholesalers, and Push Manufacturing Environment- the goods are retailers work together on a supply chain system, it is easier to scheduled and produced based on past sales and demand guarantee efficiency. and then sent to retailers to resell. 2. Optimized transportation and logistics- The umbrella Pull Manufacturing Environment- the production of concept of supply chain management encompasses goods or services is not scheduled until there is an order transportation and logistics. by the customer specifying the desired design. 3. Quality improvement- Getting consumers the best value is 3. Order processing- It processes the requirements of the a shared goal of supply chain management. customer and sends the information into the supply chain 4. Long-term stability- Through structuring strong trusting through the logistic information system then to the warehouse. supply chain relationships and working toward best practices 4. Inventory control- This system develops and maintains in distribution, companies aim for long-term stability. enough variety of materials or products to meet a manufacturers or consumer’s demands. KEY PROCESSES OF SUPPLY CHAIN MANAGEMENT 5. Warehousing and materials handling- Storage aids Business processes- consist of bundles of interlinked activities manufacturers manage supply and demand or production and that stretch across firms in the supply chain management. consumption. 1. Customer relationship management- It allows companies to 6. Transportation- This concerns the decision on the mode of prioritize their marketing focus on different customer groups transportation that will move the goods from supplier to based on each group’s long-term value to the company or producer and from producer to customers. The five commonly supply chain. used modes of transportation are railroads, motor carriers, 2. Customer Service management- It is a multi-company, pipelines, water transportation, and airways. unified system of responding to customers’ complaints, The criteria in the selection of transportation modes are: concerns, questions, or comments. a. Cost- the total amount of charge by the carrier to move the 3. Demand management- This process tries to align supply and product from point of origin to destination demand throughout the supply chain by foreseeing customer b. Transit time- the total time for the carrier to pick-up, delivery, requirements and creating an action plan before the actual handling, and movement from point of origin to destination.  c. Reliability- consistency of the carrier on delivering the goods advertising that gets to the consumers when they are on time and satisfactory condition to outside of the home. d. Capability- the ability of the carrier to provide applicable v. Public service advertising (PSA)- is mainly designed to equipment and conditions for moving goods like those that enlighten and educate instead of selling a product or service. must be transported in a controlled environment (like vi. Product placement advertising- is the promotion of branded processed goods that should be refrigerated) goods and services within the context of a show or movie, e. Accessibility- the ability of the carrier to transport the goods instead of an explicit advertisement. over a particular route or network vii. Cellphone and mobile advertising- present trends in mobile f. Traceability- the relative ease that a shipment of goods can advertising entail major use of social media such as Twitter be located or transferred. and Facebook. viii. Online advertising (Digital)- If internet users see an WEEK 3: DEVELOPING THE MARKETING MIX: PROMOTION advertisement via the internet (WWW), then it is classified as online advertising. TERMS: 2 SALES PROMOTION- the process of persuading a possible Explicit advertisement- involves short and direct sales customer to purchase the product. Sales promotion is designed messages to a target audience to be used as a short-term tactic to boost sales. It is seldom Online advertising- also known as online marketing, appropriate as a technique for building long-term customer Internet advertising, digital advertising, or web advertising, loyalty. is a form of marketing and advertising which uses the i. Money off coupons- cut coupons out of newspaper or a Internet to deliver promotional marketing messages to product’s packaging that enables them to purchase the consumers product next time at a reduced price. Coupon- a voucher entitling the holder to a discount for a ii. Competitions- here buying the product will let the customer particular product. take part in a chance to win a prize. Product awareness- is the degree of knowledge that iii. Discount vouchers- here a voucher works like a money-off customers have about a product. The first step in coupon. purchasing a product is developing the knowledge that the iv. Free gifts- It is a free product when customers buy another product exists. Information about function, benefits, product. quality, price, compatibility, and usability may also be v. Point of sale materials such as posters, display stands- these important to a sale are ways of presenting the product in its best way or show Demand- economic principle referring to a consumer's the customer that the product is there. desire to purchase goods and services and willingness to vi. Loyalty cards- this is where customers earn points for buying pay a price for a specific good or service. certain goods or shopping at certain retailers that can be Media- the main means of mass communication later exchanged for money, goods, or other offers. (broadcasting, publishing, and the internet) are regarded 3 PERSONAL SELLING- Since selling involves personal contact, collectively. this promotional method often happens through face-to-face Philanthropy- the desire to promote the welfare of others, meetings or through a telephone conversation. Personal selling expressed especially by the generous donation of money is a strategy that a salesperson uses to convince customers to to good causes. purchase a product. 4 PUBLIC RELATIONS- includes ongoing activities to ensure the PROMOTION overall company has a strong public image. Public relations Is all the communication methods used by a company to inform activities include helping the public to understand the both customers and prospects about their products or services. company and its products. PROMOTIONAL MIX TOOLS Like other aspects of marketing promotion, public relations 1 ADVERTISING- bringing a product or service to the attention are used to address several broad objectives including: of potential and current customers. Every single tactic available a) Building product awareness to the advertiser falls into one of the following: b) Creating interest i. Print advertising- if the advertisement is printed on paper c) Providing information ii. Guerilla advertising- broadly used term for anything d) Stimulating demand unconventional, and usually encourages the consumer to e) Reinforcing the brand participate or interact with the piece in some way. 5 DIRECT MARKETING- occurs when businesses address iii. Broadcast advertising- a mass-market form of customers through a multitude of channels, including mail, e communication comprising television and radio. mail, phone, and in person. Direct marketing messages involve iv. Outdoor advertising- also known as out-of-home (OOH) a specific “call to action”, such as “Call this toll-free-number” advertising, is a broad term that describes any type of or “Click this link to subscribe”. WEEK 4: MANAGING THE MARKETING EFFORT: MARKET 2. Porter’s Five Forces Model ANALYSIS AND PLANNING A model developed by Michael Porter (1980) provides a basis for companies engaged in strategic planning to consider the TERMS: critical forces that are impacting it. Planning- the process of predicting future events and i) Supplier Power- represented by their ability to determine the conditions and of determining the best way to attain the terms and price of supply and will increase if there are fewer goals and objectives of the organization supplies than buyers. Strategy- a plan of reaching a goal ii) Buyer Power- refers to the pressure that customers exert on Market trends- focus on price and spending patterns companies to obtain high-quality products and services at Distribution channel- account existing and new channels lower prices. Technology and resources- analysis on the impact on iii) New entrants- newcomers increase the level of competition production as well as other aspects of marketing. and decrease the profitability of the existing company. iv) Substitute Products- are viable, alternative choices of THE MARKETING PROCESS products or services that the customer can make which meet 1. Analysis - Entails gathering of qualitative and quantitative the same needs as the original product. data about the company’s products and possible markets by v) Intensity of competitive rivalry- is the major determinant of using surveys, audits and observation. The data gathered will the competitiveness of the industry for most companies. be compared to the data that have been gathered in the past. 3. Ansoff’s Opportunity Matrix 2. Planning - Constructing strategies of an organization to put A matrix created by Igor Ansoff to create growth strategies for into action to attain the results in the target market. corporations based on markets and products. 3. Implementation - The success of this stage depends on the i) Marketing Penetration- this growth strategy uses current preparation made during the analysis and planning stage. The products and current markets with the goal of increasing vital part of this stage is to stay focused on target objectives market share. and be ready to adapt plans due to changing conditions. ii) Market Development- uses existing products to gain new 4. Control - Stage of monitoring and controlling the markets. performance of the product or service in the market. iii) Product Development- uses new products in the existing markets. The Market Analysis iv) Diversification- this strategy creates totally new Analysis-entails gathering qualitative and quantitative data opportunities for the company by creating new products and about the company’s product and possible markets. new markets. 1. SWOT Analysis- is a tool used in strategic planning to identify 4. The Boston Consulting Model and ultimately, prioritize the organization’s strengths, Bruce Henderson created a chart to help organizations with the weaknesses, opportunities, and threats. task of analyzing their product line or portfolio. The matrix i) Strengths- represent those specific characteristics of the assesses products on two dimensions business that offer an advantage over its competitors. Relative Market Share- if a company produces more, ii) Weaknesses- are characteristics that limit performance benefits from higher economies of scale, and experience curve and could represent an obstacle in achieving objectives. will result in higher profits. iii) Opportunities- include external conditions that could help Market growth rate- business units that are in rapid growth improve performance or that can be capitalized upon or industries and are worth investing in when they are expected exploited. to grow or maintain. iv) Threats- indicate external conditions and situations that Product Classifications: could hinder performance, so ways of defending against (1) Stars- function in high-growth industries and maintain high them can be explored. market share. Strengths and Weaknesses refer to internal factors, on the (2) Cash Cows- are the most money-making brands and should other hand, Opportunities and Threats are external forces that be “milked” to provide as much cash as possible. affect the organization. TOWS Analysis will be useful to create (3) Question marks- are the brands that need much closer actionable strategies: consideration. Strengths-Opportunities. Use your internal strengths to (4) Dogs- hold low market share in contrast to competitors and take advantage of opportunities. function in a slowly growing market. Strengths-Threats. Use your strengths to minimize threats. Strategies Weaknesses-Opportunities. Improve weaknesses by (1) Build- The objective here is to increase market share, even taking advantage of opportunities. forgoing short-term earnings to achieve this objective if Weaknesses-Threats. Work to eliminate weaknesses to necessary avoid threats. (2) Hold – the objective here is to preserve market share. (3) Harvest- the objective here is to increase short-term cash provides support for these plans to be executed in such a way flow regardless of long-term effect. as to achieve the objectives of the marketing plan” (4) Divest- the objective is to sell or liquidate the business There are four identified skills for implementing marketing because the resources can be better used elsewhere. programs: 5. The General Electric Model- was developed by GE with the 1 Diagnostic skills - The ability to find what went wrong if the help of Mckinsey & Company, a consulting firm. The model cause is due to implementation identifies the market position and profitability of different 2 Identification of company level - Can occur at three levels businesses based on their market attractiveness and business namely: Marketing function, Marketing program, and strength. Marketing policy. (a) Attractiveness of the market is demonstrated by how 3 Implementation skills - The marketers are required to have advantageous it is for a company to enter and compete within apportioning skills for budgeting resources, organizing skills, this market. Factors that can help conclude attractiveness: and interaction skills needed to implement the programs 1. Market size successfully. 2. Market growth 4 Evaluation skills - Marketers need monitoring skills to assess 3. Market profitability the results of the implementation of marketing actions 4. Pricing trends 5. Competitive intensity/rivalry Marketing Control 6. Overall risk of returns in the industry Monitoring and evaluation are activities intended for the 7. Opportunity to differentiate products and services assessment of marketing activities to recognize the efficiency 8. Segmentation of the marketing plan. Marketing control consists of 9. Distribution structure (like retail, direct, wholesale) formulation of standard performance, substantiating the level (b) Business strengths- help decide whether a company is to which the projected performance is achieved, correcting capable enough to compete in the given market(s). Factors to deviations and marketing plans to reformulate, if needed. reflect on in business strengths include: Types of marketing control 1. Strength of assets and competencies 1 Annual-Plan Control - The purpose of annual-plan control is 2. Relative brand strength to make certain that the company gets the sales, profits, and 3. Market share other goals create in its annual plan. 4. Customer loyalty Five Tools: 5. Relative cost position (cost structure compared to a. Sales Analysis- consists of measuring and evaluating actual competitors) sales in relation to goals 6. Distribution strength ▪ Sales-variance analysis- measures the relative 7. Record of technological or other innovation involvement of different factors in a gap in sales 8. Access to financial and other investments performance ▪ Micro-sales analysis- looks at a specific product, WEEK 5: MANAGING THE MARKETING EFFORT: MARKETING territories, and other elements that failed to generate IMPLEMENTATION AND CONTROL expected sales. b. Market-Share Analysis- tracking the performance of relative TERMS: competitors by its market share Marketing Plan- written document that describes your ▪ Overall market share- refers to the company’s sales advertising and marketing efforts for the coming year expressed as a percentage of total market sales. Sales- any operating revenues that a company earns ▪ Relative market share- can be stated as market share through its business activities. in relation to the largest competitor. Market Share- the percentage of unit and peso sales a c. Market Expense-to-Sales Analysis- identified as a key ratio company handles in their industry. because it permits management to be confident that the Stakeholder- person, group or organization with a vested company is not spending excessively to realize sales goals. interest, or stake, in the decision-making and activities of d. Financial Analysis- a tool that identifies the factors that a business, organization or project. affect the company’s return on net worth. e. Market-based Scorecard Analysis Marketing Implementation ▪ Customer-performance scorecard- records how well the Is the process that turns marketing plans into action company is performing on such customer-based measures assignments and ensures that such assignments are executed as new customers, dissatisfied customers, lost customers, in a manner that accomplishes the plan’s stated objectives. target market awareness, target market preference, Kotler considers that the implementation of marketing is “the relative product quality, relative service quality. process that turns marketing plans into action plans and ▪ Stakeholder-performance scorecard- tracks the Marketing planning is a systematic process involving the satisfaction of constituencies who have a serious interest assessment of marketing opportunities and resources, the in and influence on the company’s performance such as determination of marketing objectives, and the development the employees, suppliers, banks, distributors, retailers, of a plan for implementation and control. (Dibb and Simkin, and stockholders. Marketing: Concepts and Strategies, 2001) 2 Profitability Control- specifies the relative profitability of different channels, products, territories, or other marketing There are three helpful items that should be established and entities. placed in mind before doing the marketing plan. 3 Efficiency Control- this is when management must inquire A completion date whether there are more efficient ways to manage the sales The responsible parties force, advertising, sales promotion, and distribution in The budget connection with these marketing entities. 4 Strategic Control- a critical review of overall marketing goals How to write a marketing plan? and effectiveness. 1. Setting Objectives- With a vision and a better logic of the ▪ The Marketing-Effectiveness Review opportunities and threats confronting business, marketers can o Customer philosophy- providing customer needs and begin establishing SMART objectives that will help the wants company drive to its tangible goals. o Integrated marketing organization- interaction with 2. Do the research- The goal of the research is to understand other important departments who and where customers are or also known as market o Adequate marketing information- timely and fitting segmentation. marketing researches 3. Define the strategies needed - Strategies are the “hows” in o Strategic orientation- designing formal marketing plans the plan. This is the point where a company starts to address and strategies questions such as: o Operational efficiency- effectively and flexibly utilizing How will the company position itself as a business against marketing resources other businesses? ▪ The Marketing Audit- a comprehensive, systematic, What target markets are the best prospects to achieve independent, and periodic examination of an company’s or your goals? business units in terms of the marketing environment, How will the company price its offerings to achieve its objectives, strategies, and activities with a view to determining goals? problem areas and opportunities and recommending a plan of 4. Outline tactics- Tactics are the “what” in the plan. Marketers action to improve the company’s marketing performance. must start by reflecting on what they should do first to achieve Characteristics of Marketing Audit the best result. Comprehensive 5. Build in Measurement for each tactic- Marketers need to Systematic measure the success of their tactics to evaluate the Independent effectiveness of delivery and find out which one works best for Periodic the business. 6. Develop the plan and stick to it WEEK 6: WORKSHOP AND PRESENTATION OF MARKETING 7. Implement the plan- and stay flexible PLAN TERMS: Marketing Plan- a written document that describes your advertising and marketing efforts for the coming year; it includes a statement of the marketing situation, a discussion of target markets and company positioning, and a description of the marketing mix you intend to use to reach your marketing goals. Merchandising- any practice which contributes to the sale of products to a retail consumer. Gantt chart- a graphical representation of activity against time. Industry - group of businesses that are related in terms of - Study hard!!! their main activity. MARCO E.☺