ABM-605 Module 1 Lesson 2 Philosophies of Marketing Management PDF

Module No. and Title MODULE 1: Understanding Marketing Management LESSON 2 Philosophies of Marketing Management Objectives: At the end of this lesson, you are expected to: discuss the concepts of Marketing;...

Module No. and Title MODULE 1: Understanding Marketing Management LESSON 2 Philosophies of Marketing Management Objectives: At the end of this lesson, you are expected to: discuss the concepts of Marketing; define Customer Relationship Management; discuss the process of Marketing; discuss the customer relationship concept; and discuss the product marketing mix and services marketing mix. Time Frame: Week 3 Introduction Welcome to Lesson 2! This lesson will give you an overview on the Philosophies of Marketing Management. This tackles on customer relationship and its processes. Product marketing mix and services marketing mix will also be discussed. Enjoy this lesson and keep learning! Express your Thoughts! (ANSWER THIS!) As a would-be entrepreneur, in what way/s can you establish value-laden relationships with your customer? Why? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ Analysis Consider the questions below: (ANSWER THIS!) 1. What kind of business you intend to venture in the future? Why? ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 2. Who are your target markets? Why? ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 3. What do you think customer would get when they buy your product or avail of your services? ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 4. What steps will do you to gain advantage over your competitors? ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ Abstraction Marketing Concepts 1. Production Concept  holds that customers will favour products that are available and highly affordable  management should focus on improving production and distribution Starting Point: Factory efficiency Focus: Output The production concept is useful when: Means: Production quantity 1. demand for a product exceeds the supply. and efficiency 2. the product's cost is too high and improved End: Profit through volume and productivity is needed to bring it down. low production costs  focuses too narrowly on company operations  do not ignore the desires of the market. 2. Product Concept  consumers will favour products that offer the most quality, performance, and features  organization should devote its energy to making continuous product Starting Point: Product improvements Focus: Product quality  organization assumes that a customer Means: Improvement and will buy the product of highest quality innovation  organizations fail because they do not End: Profits through better attempt to study the needs and wants of product features the customers. 3. Selling Concept  many organizations follow this concept  consumers will not buy enough of the organization's products unless the organization undertakes a largescale selling and promotion effort  typically practiced with unsought goods, those that buyers do not normally think of Starting Point: Factory buying Focus: Existing products  organization must be good at tracking Means: Selling and promoting down the interested buyer End: Profits through sales  industries that use this concept usually volume have overcapacity  aim to sell what they make rather than make what will sell in the market  there are not only high risks with this approach but low satisfaction by customers. 4. Marketing Concept  puts customers twice in the entire business cycle (beginning and end of the business cycle)  assumes that the business should start with the determination of consumer needs and Starting Point: Target Market wants Focus: Consumer needs  should end with the satisfaction of those Means: Integrated Marketing needs and wants  any business should be organized around the End: Profits through customer marketing function and it should strive to satisfaction anticipate, stimulate and meet customer’s expectations. 5. Societal Concept  holds that organization should not develop marketing strategy by only keeping customer needs and wants in mind but also consider the Starting Point: Target Market well-being and betterment of society  passes out positive message to the Focus: Social needs stakeholder, partners, government, customer Means: Protecting and and public supporting consumer  organizations working on this concept is End: Profits through customer communicating the message that they are not and social well-being only working for the profits, but also for the well-being of the society. Customer Relationship Management (CRM)  overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction  companies use CRM to retain current customers and build profitable, long-term relationships with them  the key to building lasting customer relationships is to create customer value and satisfaction  satisfied customers are more likely to be loyal customers, and they are likely to give the company a larger share of their business  customer buys from the firm that offers the highest customer perceived value — the customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of the competitor’s offer  customers act on perceived value and not on actual product values and costs. The Marketing Process The marketing process consists of the following activities: 1. Analysing market opportunities 2. Selecting target market 3. Developing the marketing mix 4. Managing the marketing effort Customer Relationships  to succeed in today’s highly competitive market, companies must be customer-centered, winning customers from competitors, then keeping and growing them by delivering greater value  to be able to satisfy the customers, a company must first analyze the consumers and understand their needs and wants  companies know very well that they cannot profitably serve all customers in the same way.  3-Step Process of CRM: 1. Market Segmentation: the process of dividing a market of potential customers into groups, or segments, based on different characteristics  segments created are composed of consumers who will respond similarly to marketing strategies and who share traits such as similar interests, needs, or locations  consumers can be grouped and served in various ways based on geographic, demographic, psychographic, and behavioural factors.  market segment will consist of homogeneous consumers who might respond in a similar manner to a given set of marketing efforts  in segmentation, it is the consumers who are classified and not the products  companies should focus their marketing efforts on meeting the distinct needs and wants of individual market segments.  Example: Car market can be segmented into budget or compact car segment, family car segment, premium car segment and 3-Step Process: luxury car segment 2. Target Marketing: process of evaluating each market segment’s attractiveness and selecting one or more segments to enter  company should target segments in which it can generate the greatest customer value profitably and sustain it over time  company with limited resources might decide to serve only one or a few special segments or ‘market niches’  big company may decide to offer a complete range of products to serve all market segments 3. Market Positioning: refers to the ability to influence consumer perception regarding a brand or product relative to competitors  the objective is to establish the image or identity of a brand or product so that consumers perceive it in a certain way  while positioning a product, the company has to first identify possible competitive advantages upon which to build the position  to gain competitive advantage, the company must offer greater value to target customers "Marketing is a total system of business activities designed to plan, price, promote and distribute want- satisfying products to target markets to achieve organizational objectives." – William J. Stanton Product Marketing Mix 1. Product: it is anything that can be offered to a market to satisfy the desire or need of a customer.  variety, quality, design, features, brand name, packaging, services 2. Price: the amount that consumers is willing to pay for a product  list price, discounts, allowances, payment periods, credit terms  marketers must link the price to the product's real and perceived value, while also considering supply costs, seasonal discounts, competitors' prices, and retail mark-up. 3. Promotion: this communicates the product/service to consumers  advertising, personal selling, sales promotion, public relations, and publicity  Purpose: inform, persuade, remind 4. Place: it is where consumers buy the product/service  channels, coverage, assortments, locations, inventory, transportation, logistics 4Ps 4Cs (seller’s perspective) (customers’ perspective) Product Customer solution Price Customer cost Promotion Convenience Place Communication Service Marketing Mix 1. People: refers to anyone directly or indirectly involved in the business side of the enterprise  anyone involved in selling a product or service, designing it, marketing, managing teams, representing customers, recruiting and training 2. Process: refers to the processes involved in delivering your products and services to the customer  having good process in place ensures repeatedly delivering the same standard of service to your customers, and saving time and money by increasing efficiency. 3. Physical Evidence: refers to everything your customers see when interacting with your business.  includes the physical environment where you provide the product or service, the layout or interior design, and your packaging Application: ANSWER THIS! Multiple Choice: Choose the letter that corresponds to your answer. (2 points each) 1. Last Saturday, Michael went to GMall Supermarket to buy body soap. When buying for body soap, he considers affordability. That is why, he chose Safeguard over Dove. What concept of Marketing is described? a. Product Concept c. Production Concept b. Societal Concept d. Marketing Concept 2. Buying behavior can be understood if the following are considered EXCEPT: a. Producer’s preferences c. Consumer’s preferences b. Budget constraints d. Consumer’s choices 3. All activities that relate to the container or wrapper of the product. a. Augmented product c. Brand b. Product mix d. Packaging 4. Kristine religiously checks the quality of kitchen utensils she intends to buy in Simply 28. What concept of Marketing is expressed? a. Product Concept c. Production Concept b. Societal Concept d. Marketing Concept 5. As a newly established cafeteria in Kidapawan City, Mary tracks down her interested customers. What concept of Marketing can be traced? a. Societal Concept c. Selling Concept b. Production Concept d. Marketing Concept 6. Before putting up business, Nancy determines the needs of her target market. What concept of Marketing is described? a. Societal Concept c. Selling Concept b. Production Concept d. Marketing Concept 7. Wilmar not only establish business for personal gain, but also to help his neighbors. What concept of Marketing is expressed? a. Societal Concept c. Selling Concept b. Production Concept d. Marketing Concept 8. The following are true of Customer Relationship Management EXCEPT: a. Company maintains value-laden relationship with its customers by giving them with satisfaction. b. Company retains loyal customers. c. Both A and B d. None of the above 9. What activity should be considered first in the marketing process? a. Managing the marketing effort c. Developing the marketing mix b. Analyzing market opportunities d. Selecting target market 10. As Territory Manager, Reniel considers the geographic location of his market. What term is described? a. Competitive Advantage c. Market Segmentation b. Market Positioning d. Target Marketing 11. The purpose of this term is to establish the image of the company based on the perception of its market. What is asked? a. Competitive Advantage c. Market Segmentation b. Market Positioning d. Target Marketing 12. It is anything that gives a company an edge over its competitors, helping it attract more customers and grow its market share. a. Competitive Advantage c. Market Segmentation b. Market Positioning d. Target Marketing 13. Anything that can be offered to a market to satisfy the desire or need of a customer. a. Place b. Promotion c. Product d. Price 14. Which of the following is NOT a form of product? a. Tangible b. Services c. People c. Place 15. Money serves as a: a. Store of value and standard for deferred payment c. Medium of exchange b. Unit of account d. All of the above 16. This P of Marketing communicates the target market of the business. a. Place b. Promotion c. Product d. Price 17. Which of the following is NOT true about promotion? a. Make buyers aware of the alternative goods and services that exist. b. Shorten the distance between the market and the manufacturers. c. Help regulate the level and timing of the demand d. None of the above 18. Rebates, coupons, samplings, and premiums abide what P of Marketing? a. Place b. Promotion c. Product d. Price 19. Logistics is under what P of Marketing? a. Place b. Promotion c. Product d. Price 20. Which does NOT belong the group? a. Place b. Process c. People d. Physical evidence Congratulations! You have successfully completed Lesson 2. This is the last lesson in Module 1. Should there be questions and clarifications in some part of the lesson, kindly message your instructor. If you do not have any questions or clarifications, you are now prepared to move on to Module 2 Lesson 1 – Marketing Environment. Enjoy and keep working! God Bless. MODULE ASSESSMENT: Test Yourself! PART I. TRUE or FALSE: Write True if the statement is correct. Write False if the statement is incorrect. (1 point each) 1. Business activities in Marketing are not interrelated with one another. 2. Generation of profit is the major objective of Marketing. 3. Need is something that is desired, wished for, or aspired for. 4. Personal computer is an intangible goods. 5. Satisfaction exists when the product’s perceived performance matches to the expectations of customers. 6. The essence of Marketing is exchange. 7. In consumer market, the purpose for buying is for personal consumption. 8. Marketing is concerned with the creation of utilities. 9. Consumers will consume highly affordable concept in production concept. 10. In selling concept, an organization should be good at tracking down its target market. 11. Business organization should determine customer needs in marketing concept. 12. Maintaining value-laden relationship with customers is expressed in Relationship Marketing. 13. Analyzing market opportunities is the first step in the marketing process. 14. The purpose of promotion is to inform, persuade, and remind. 15. Logistics is included in place of distribution. PART II. ESSAY: Briefly and concisely discuss the following: (10 points each) 1. Distinguish needs from wants. Provide a scenario in your life where these two are evident. ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 2. Distinguish business market from consumer market. ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 3. Distinguish production concept from product concept. ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 4. Distinguish selling concept from marketing concept. ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 5. Discuss Relationship Marketing. ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ Rubrics in Grading Essay (10 points) 0 2 5 7 10 Student is unable Student is able to Student is able to Student not only Student establish to establish the establish the ideas establish the ideas establish the the correct ideas ideas and concepts and concepts and concepts correct ideas and and concepts prescribed by the prescribed by the prescribed by the concepts prescribed by the topic. topic but shows topic and shows prescribed by the topic, shows erroneous correct topic but also evidence by citing understanding. understanding. shows evidence by relevant examples, citing relevant and consistently examples. contributes additional thoughts to the Core idea. MODULE SUMMARY Marketing is a total system of business activities designed to plan, price, promote and distribute want-satisfying products to target markets to achieve organizational objectives. Customer satisfaction is the major objective of Marketing. Satisfaction exists when the product’s perceived performance meets the buyer’s expectation. Exchange is the essence of Marketing. Production concept holds that customers will favour products that are available and highly affordable. In product concept, consumers will favour products that offer the most quality, performance, and features. In selling concept, consumers will not buy enough of the organization's products unless the organization undertakes a largescale selling and promotion effort. Marketing concept assumes that business should start with the determination of consumer needs and wants. Societal concept holds that organization should not develop marketing strategy by only keeping customer needs and wants in mind but also consider the well-being and betterment of society Customer Relationship Management (CRM) builds and maintains profitable customer relationship. The first step in the marketing process is analyzing market opportunities. The 4Ps of Marketing are product, price, promotion, and place of distribution. REFERENCES Karunakaran, K. (2011). Marketing Management: text and content in Indian context. (1st ed.). Himalaya Publishing House. Kotler, P. & Armstrong, G. (2006). Principles of Marketing. (7th ed.). Manila: Prentice Hall Internal, Inc. Medina, R. (2015). Principles of Marketing. (Revised ed.). Manila: Rex Bookstore, Inc. Mutya, R. (2014). Elements of Marketing. (5th ed.). Manila: National Bookstore.