LET THE MARKET

KNOW YOU
BETTER
What is Marketing?
 Marketing plans are
designed to capture
market share and
defeat competitors. The
marketing function and
the marketing mix serve
the overall business
strategy.
SEVEN P’s
 Positioning is the way the
customers perceive the
enterprise and its products
or services in their minds.
(The stronger the overlap is in
these three perspectives, the
more defined the positioning of
an enterprise is in the
marketplace. )
 Positioning, in the
context of a marketing
battle plan, has three
overlapping objectives.
Enterprise scans the market
environment and decides to
position itself with products
that specifically address the
needs of a chosen target
market.
 Enterprise has to
differentiate and
distinguish itself from its
competitors.
 Enterprises can establish
their positioning either by
starting with their own
product creations or with
their customers’
outcome expectations.
 The competitive
landscape of the
enterprise, relative to its
market, can be clearly
mapped out by laying
out both the latitudinal
and longitudinal market
dimensions.
It lays out what's important to
the different customer
segments from their differing
points of view.
 Represents the product
features and attributes of
competitors in the
marketplace.
*In determining its positioning,
the enterprise should be
mindful of the main value
proposition (MVP) to its
customers relative to its
competitors.
 It must evaluate the other
six P’s of marketing to find
out if they complement
and reinforce one another.
Each of the P’s of
marketing must
communicate something
to the customer.
To establish the positioning
of its various products in the
marketplace, the enterprise
endeavors to build the
brand of each product.
 o differentiate the
product from other
products.
2. To avoid a commodity image
for the product.
3. To fill a space in the
consumer’s mind that would
prevent other products from
occupying the same space.
Volvo stresses its safety brand positioning by
crashing their test cars into brick walls to
dramatize the minimal effect on the owner-
driver.
Powerful brands have become the generic
name for their product categories.
A product is the tangible good
or the intangible service that
the enterprise offers to its
customers in order to satisfy their
needs and to produce their
expected results.
1. Breakthrough products
2. Differentiated products
3. Copycat products
4. Niche products
 Breakthrough products
It offers completely new
performance benefits. They may
double the performance at half
the cost. Marketing
breakthrough products need a
higher level of customer
education and orientation.
Common examples of breakthrough
products are borne out of the
biotechnology held particularly in
terms of coming up with new vaccines
to protect people from certain viruses.
 Differentiated products

Tries to claim a new space in the

mind of the customer different from
the spaces occupied by existing
products but there would be
additional benefits on special
aspects of the product.
Example of Differentiated products

There are many different eyeglasses

available in the market today but
Transitions® lenses was able to
differentiate itself from the rest because
the lenses they use adapt to changing light.
With this feature, the wearer gets
additional protection against ultraviolet
rays, glare, and eye fatigue.
 Copycat products
Offering more physical space in
the shelves, lower prices, easier
access, and promotional
freebies.
A classic Philippine example of copycat
product is the Beer na Beer brand of
Asia Brewery pitted against San Miguel
Pale Pilsen. Both have amber colored
bottles with similarly styled white colored
font printed outside the bottle. N o
wonder after Beer na Beer came out of
the market, San Miguel filed a law suit
against Asia Brewery for trademark
infringement. In this case, San Miguel
prevailed.
 Niche products
They are products with lower
reach, lower visibility, low prices,
and lower top of mind. They are
content to play minor roles in
specific and smaller market
segments.
 There were used to be a time
when products came wrapped
in ordinary packaging that
prominently displayed the brand
name, the main attributes of the
product, the company's logo,
and its place of business.
 Identifies the product,
describes its features and
benefits, and complies with
government rules on specifying
its contents, weight, chemical
composition, and potency. It
provides easy brand
identification for the consumers.
 Differentiates the
product from its
competitors and even
from its other brand
offerings .
 Lengthens the
lifespan, physically
protects, and
extends the
usefulness of the
product.
 Packaging has become
an environmental issue by
itself. Recyclability and
biodegradability are now
a major concern of
packagers and
consumers alike.
 The aforementioned
purposes of packaging
have increased the
cost of packaging and,
therefore. the price of
the product.
Packaging does not refer only
to the wrapper or container
of the product. It can mean
the bundle of products or
services that are put together
to attract and delight
customers and also mean the
terms and conditions
attached to the sale or after-
sale servicing of the product.
 ln finding a good
location, one needs to
consider the following:
In a similar way, the
entrepreneur must be able
to determine the price that
comes with the location
because it will spell out the
success or failure of the
business.
 It would benefit the
entrepreneur to do an in-
depth location analysis.
These are the in choosing
the location for your business:
 Physical Proximity to
Target Market
Locations are chosen based
on how close it is to the target
market. Ideally, the best
locations should be easily
accessible from home or the
workplace.
 Customer Traffic
Flow
Refers to the people that
regularly come into
contact with your
business establishment.
 Industry Clustering
A lot of competitors clustered
in one location usually draw in
a bigger market to the area,
some entrepreneurs prefer to
establish a monopoly far
away from competitors.
 Convergence of
Multiple Industries

Locations where
multiple industries
converge.
 Population
Concentrations

The more populous the

location is, the greater is
the opportunity for
business and profit.
 Activity Hubs
Activity hubs such as large
schools, high-rise buildings, public
parks, transport terminals, and
entertainment centers provide
good location potentials for food
establishments and client-specific
services.
 Growth Potential
The new development site
will be the natural greener
pasture for early locators.
The early locators will catch
the early customers.
 Business Climate
Enterprises prefer locations that are
conducive in doing business. This
includes areas with:
high economic growth efficient transportation and logistics

stable political situation availability of skilled labor force

effective social services low crime rates

good infrastructures a good fiscal incentives

cheap Utilities trusted public officials

 Comparative Location
Analysis
A potential location is
through comparing it with
other locations with more
or less the same features
and tenant mix or clusters
of competitors.
 Geography and
Atmosphere
Determinants

For the geography

determinant, there are six
decision tensions:
1.Concentration versus
Destination
2.Access versus Abundance
3.Clustered versus Dispersed
4.Developed versus
Underdeveloped
5.Physical versus Virtual
6.Upscale versus Downscale
For the atmosphere
determinant, there are five
decision tensions:
1.Formal versus Informal

2.Exclusive versus Public

3.Conservative Versus
Adventurous

4.Aesthetics versus Functionality

5.Minimalist versus Maximalist

-are the ultimate marketing
strategy.
(1) to create customer
awareness;
(2) to arouse customer interest;
(3) to educate customers as they
evaluate their buying choices;
and
(4) to close the sale and deliver
the products.
 To arouse the interest of
customers, the enterprise
can use several people or
organizational modalities.
 1. To outsource the people
from advertising agencies,
events management outfits,
call centers, and
telemarketers.
 2. To build in house
capabilities by hiring market
researchers, brand managers,
salespeople, public relations
officers, website writers,
orchestrators, etc.
 2. To collaborate or
enter into partnerships
with principals,
distributors, dealers, and
industry associations.
Educating customers in
their evaluation process
requires the enterprise
to know the customer’s
decision making process.
1. What and who are involved in the buying process?

2. Where are the customers in the buying process? Are

they still canvassing and “shopping around"? Are they
currently focusing on a few candidates? Are they
seriously evaluating the company’s product?

3. What are the next steps of the customers and how

can the company facilitate their next steps? What else
do the customers need to know and what issues must
be addressed by the marketer? The customer
evaluation process may follow something similar to
Table 4.1.
Table 4.1
• Availability means that the enterprise
has the goods or services on hand.

• Accessible means that the customers

can easily get the product from their
usual buying places or the products can
be conveniently delivered to them.

• Adequate means the product meets

the quality and delivery specifications
of the customer.
• Acceptable means that the
customer is convinced by the
selling points of the product, finds
very little or no objectionable
features in the product, and
accepts the conditionality,
warranties, and amenities given by
the seller.

• Affordable means the price and

payment terms are right.
The organizational modality to
educate the customers, to
help them in their decision-
making process, and to close
the sale would depend on four
variables.
1. Is there a need for high contact (face to face) or
will low contact (internet) be sufficient?

2. ls there a need for high accessibility? If so, the

company requires distributors, dealers, branches,
and franchisees to expand their reach.
Alternatively, they need a very fast, reliable, and
economical delivery system.

3. How heavy or light is the transaction cost? High

transaction cost products need new competent
people to sell them.

4. Does the customer need a lot of sale servicing

and after-sales servicing?
-is the explicit communication
strategy adopted by an
enterprise to elicit
the patronage, loyalty, and
support not only from its
customers but also from its
other significant stakeholders.
-is the explicit communication
strategy adopted by an
enterprise to elicit
the patronage, loyalty, and
support not only from its
customers but also from its
other significant stakeholders.
Promotion encompasses all the
direct communication efforts
of the enterprise, such as
advertising, public relation
campaigns, promotional tours,
product offerings, point-ofsale
displays, websites, flyers,
emails, letters, telemarketing,
and others.
 Effective promotion depends on
three critical factors:
1. the credibility of the
communicator
2. the message and the
medium of the message
3. the receptiveness of the
audience to all that is being
communicated.
 The idea is to match the
size of the market with the
medium used and the
resources of the
enterprise.
Case Example :
The Ayala Group has been able to
build tremendous credibility in over
a century of service to the Filipino
people. Their bank, the Bank of
the Philippine islands, is a
conservative, safe but growing
financial institution with a
tremendous following from
corporations, high net worth
individuals, and ordinary
depositors.
 Its Ayala Land offerings sell upscale lots
and condominiums like hot cakes. Buyers
know that Ayala can deliver quality
properties and that these properties
would be able to gain market value
easily. Ayala’s reputation in building
Makati City has spilled over to its
numerous commercial centers and high-
class Subdivisions in many key locations.
All Ayala has to do in its promotion
campaign is to announce that it is
‘Ayala‘ building the property and the
people will buy.
 Pricing depends on the
business objectives set by
the enterprise.
Major factor for the customer
in buying a product, it is not
the only factor such as in the
case of buying premium
products.
 outweigh the
price factor whenever a customer
is buying a premium item because
he or she is more particular about
the 'premiumness' in terms of
quality, the status or image that
the product brings, shorter waiting
time or immediate delivery, and
other such decision criteria.
 1. Profit maximization

2. Revenue maximization

3. Market share maximization

4: Attainment of the desired

prestige or quality leadership

5.Penetration, survival, or
liquidation
6.Scarcity pricing or market
skimming

7. Cost recovery

8. Subsidy pricing

9. Marginal pricing
The first three pricing strategies
pertain to the related dynamics of
the different price ranges applied
across different product volumes
or quantities while considering the
product costs incurred as these
products are bought or sold. For a
better appreciation let us take a
look at Table 4.2.
Table 4.2
 *Assumes the following: Fixed
Costs equal 300; Variable Costs
equal 5 per unit
Table 4.2 shows an example of
a profit, revenue, and market
share maximization pricing
strategies. Prices ranging from
10 to 18 per unit have been
market tested as shown in the
first column.
 The total revenues are
computed by multiplying price
with quantity as provided in the
third column. The total costs are
computed in the fourth
column,assuming fixed costs of
300, irrespective of the volume
level, and variable costs of 5 per
unit. The fifth column calculates
the total profits.
At the price of 14 per unit, the profits are
maximized at 375, compared to the
other price levels which yield lower
profits. Unit cost is computed in column
six in order to illustrate its decline as
volume goes up. As shown in the table,
the revenue-maximizing price is 12,
generating total revenues of 1,080. This
revenuemaximizing price model is easier
to derive than the profit-maximizing
price. it should be used when the total
costs are mainly fixed (little change over
a wide volume range).
Market share maximization is achieved
by the price that obtains the highest
volume of sales possible without
sacrificing too much profitability. In the
same table, this market share-
maximizing price is 10, with a volume of
100 units.
 One market research approach in
estimating the demand, given the different
price levels, is to conduct a price tolerance
survey of randomly selected respondents.
Assuming that 100 respondents are chosen
(at 90% confidence level), the respondents
should be asked whether they would buy a
product at, say, ?10 a piece. After securing
their answers, the respondents should be
queried if they would still buy at 12 pesos per
piece. The surveyor should, subsequently,
move up to the higher price levels. There
would be less and less respondents
answering "yes” to the question. The
percentage of respondents answering "yes"
at the different price levels could be
multiplied by the estimated population of
the target market to obtain the size of the
demand.
At the other end, prices can be set very low
to survive in a competitive market or to get
rid of mounting inventories and convert
them into cash. The other objective of a low
pricing strategy is to penetrate the market
fully and overtake the competition.
 Take note:

Products that are very scarce

or rare would appeal to
wealthier customers who wish
to belong to an exclusive club
of owners.
 Take note:

Cost recovery pricing charges

a price that allows the
organization to merely recover
its full costs. The purpose is to
reinvest the sales proceeds to
produce additional products
and reach out to more people.
 Take note:

Marginal pricing sets the price

higher than the variable costs
of a product but lower than
the full costs in order to
increase overall profitability.
 Other pricing objectives which the
enterprise may have.
• Offer introductory or promotional
pricing to launch a new product.
• Different prices in different geographical
areas to take care of additional logistics
costs in farther locations .
• Discount pricing may be given to loyal
and regular customers to maintain their
patronage.