MIRIAM COLLEGE

CBEA Graduate Programs

ADVANCED MARKETING
MANAGEMENT
COURSE CODE: MBA 205
CLASS SCHEDULE:
Saturdays 8:00AM-5:00PM
CURRENT PRINT REFERENCE:
Kotler, P. and Keller, K.L. (2012). Marketing management. Upper Saddle River,
NJ. Pearson Education Inc.
COURSE FACILITATOR:
Oscar G. Torres
0917-656-0405
paceeduc@gmail.com
CONSULTATION HOURS:
Saturdays 5:00PM-6:00AM at the Assigned Classroom
GRADING SYSTEM:
Class Standing 70%
External Macro-Environment Report 15%
Seven-S Report 15%
TOWS Matrix 20%
Class Participation 20%
Culminating Report 30%
100%
NUMERICAL QUALITATIVE GRADE
GRADING RATING
99-100 Outstanding 5.0 F - Failed
96-98 Excellent 4.5 FA - Failed due to Absences
93-95 Very Good 4.0 INC - Incomplete
90-92 Above Average 3.5 W - Officially Withdrawn
87-89 Average 3.0 NE - Never Entered
84-86 No Graduate Credit 2.5
 MIRIAM COLLEGE VISION
Miriam College is a premier Filipino
Catholic institution of learning that forms
leaders in service who combine
competence with caring, are rooted in
Filipino culture and Asian tradition, and
yet are citizens of the world. Miriam
College, by integrating the work of
education with the life of faith, develops
persons, particularly girls and young
women to build the Filipino nation and to
be co-creators of God’s kingdom on
earth.
Miriam College is committed to excellent
academic programs infused with
Christian values, enhanced by modern
technology and enriched by national and
international linkages. Finally, Miriam
College commits itself to creating and
living within our school community the
very changes we seek to realize in
society.
 MIRIAM COLLEGE MISSION
Miriam College, in partnership with
families and the community, provides
quality and relevant Christian education
that prepares students to become
effective leaders, lifelong learners, and
productive citizens. It offers excellent
programs at the basic, tertiary, post
graduate, and adult education levels
through learner-centered, value-
integrating, research-based, and
innovative approaches.
MIRIAM COLLEGE CORE VALUES
• Truth
• Justice
• Peace
• Integrity of Creation
 FUNCTIONAL ORGANIZATION
PRESIDENT

HUMAN
PRODUCTION MARKETING FINANCE
RESOURCES

SALES MIS MARCOM

 MARKETING

Marketing is the activity, set of

institutions, and processes for
creating, communicating, delivering,
and exchanging offerings that have
value for customers, clients,
partners, and society at large. 
 MARKETING MANAGEMENT
Marketing management is the art
and science of choosing target
markets and getting, keeping, and
growing customers through
creating, delivering, and
communicating superior customer
value profitably.
 PRODUCT/GOOD

A product is a physical item offered for

sale. Every product is made at a cost and
each is sold at a price. The price that can
be charged depends on the market, the
quality, the marketing, and the segment
that is targeted. Each product has a
useful life after which it needs repair or
replacement.
 SERVICES
An intangible product such as
accounting, banking, consultancy,
education, insurance, medical treatment,
or transportation.
Sometimes services are difficult to
identify because they are closely
associated with a good - such as the
combination of a diagnosis with the
administration of a medicine.
WHICH IS MORE DIFFICULT TO
MARKET: PRODUCTS OR
SERVICES?
SERVICES
FOUR MAJOR ATTRIBUTES OF
SERVICES
INTANGIBILITY
VARIABILITY
SIMULTANEOUS PRODUCTION AND
CONSUMPTION
PERISHABILITY
PRODUCTS/GOODS
 INSTALLMENT
INSTALLATION
AUGMENTED PRODUCT WARRANTY
CREDIT
TERMS REPAIR
FORMAL PRODUCT

CORE or
GENERIC
PRODUCT

PRICE STYLING

PACKAGING FEATURES

BRAND
LABELING
PRODUCT LAYERS
 TYPES OF PRODUCTS/GOODS
ACCORDING TO DIFFERENTIATION
•Undifferentiated
•Differentiated
ACCORDING TO USE
•Consumer
•Industrial
ACCORDING TO TYPE
•Convenience goods
•Staples
•Impulse goods
•Emergency goods
•Shopping goods
•Specialty goods
•Unsought goods
ACCORDING TO DURABILITY
•Consumables
•Durables
•Semi-durables
 External Environment:
• Macro-Environment
• Industry Type
• Competition
• Porter’s Five Forces
• Demand
Internal Environment:
• Seven S
• Value Chain Analysis
• Product Life Cycle
• Internal Resource Audit

External
Environment

Strategy Feedback
Goal Program Implementation
Mission SWOT Analysis Formulation and
Formulation Formulation
Control

Internal
Environment

THE STRATEGIC MARKETING

MANAGEMENT PROCESS
 External Environment:
• Macro-Environment
• Industry Type
• Competition
• Porter’s Five Forces
• Demand
Internal Environment:
• Seven S
• Value Chain Analysis
• Product Life Cycle
• Internal Resource Audit

External
Environment

Strategy Feedback
Goal Program Implementation
Mission SWOT Analysis Formulation and
Formulation Formulation
Control

Internal
Environment

THE STRATEGIC MARKETING

MANAGEMENT PROCESS
 MISSION
An enduring statement of purpose
that is an organization’s “reason
for being.” It is statement of
purpose, philosophy, beliefs,
business principles, or a statement
that defines an organization’s
business. It reveals what an
organization wants to be and
whom it wants to serve.
 MIRIAM COLLEGE MISSION
Miriam College, in partnership with
families and the community, provides
quality and relevant Christian education
that prepares students to become
effective leaders, lifelong learners, and
productive citizens. It offers excellent
programs at the basic, tertiary, post
graduate, and adult education levels
through learner-centered, value-
integrating, research-based, and
innovative approaches.
THE EXTERNAL
ENVIRONMENT
 External Environment:
• Macro-Environment
• Industry Type
• Competition
• Porter’s Five Forces
• Demand
Internal Environment:
• Seven S
• Value Chain Analysis
• Product Life Cycle
• Internal Resource Audit

External
Environment

Strategy Feedback
Goal Program Implementation
Mission SWOT Analysis Formulation and
Formulation Formulation
Control

Internal
Environment

THE STRATEGIC MARKETING

MANAGEMENT PROCESS
MACRO-ENVIRONMENT
1. Economic
2. Political-Legal
3. Socio-Cultural
4. Demographic
5. Technological
6. Natural
PURE MONOPOLY
 PURE MONOPOLY
• Results from regulation, patent, or
license
• Regulated monopolist must charge low
price and provide required service
• If no substitutes exist and objective is
profit maximization, strategy is the
implementation of a high selling price
with little or no advertising
• If partial substitutes exist or
competition is imminent, strategy is to
render more service and raise entry
barriers
INDUSTRY BARRIERS
 ENTRY BARRIERS
• High capital requirement
• Low profit expectancy
• License and patent requirements
• Scarcity of locations
• Availability of raw materials
• Availability of product distributors
 EXIT BARRIERS
• Warranties and service contracts
• Equipment commitments
• Government restrictions
• Financial remuneration to employees
• Moral considerations
PURE OLIGOPOLY
 PURE OLIGOPOLY
• Can only charge on-going price unless
differentiation can be effective on
services rendered. If competition can
match services, strategy is to raise
sales volume to lower costs further
DIFFERENTIATED OLIGOPOLY
 DIFFERENTIATED OLIGOPOLY
• Differentiation is on quality, features,
styling, or services
• Each participant will seek leadership on
one attribute and may charge a
premium based on said attribute
MONOPOLISTIC COMPETITION
 MONOPOLISTIC COMPETITION
• Each participant will focus on a
particular market segment where it can
meet its target market needs in a
superior manner and may command a
price premium
PURE COMPETITION
 PURE COMPETITION
• Since no differentiation exists, prices
are essentially the same
• No competitor will advertise unless it
can create psychological differentiation
• Different profit margins enjoyed based
on savings on production and / or
distribution
COMPETITION
 TYPES OF COMPETITORS
DESIRE COMPETITORS “What desire do I want to satisfy?”
 Eat
 Text
 Read
 Smoke

GENERIC COMPETITORS “What do I want to eat?”

 A sandwich
 Dimsum
 Pasta
 Snack food

FORM COMPETITORS “What kind of sandwich?”

 Chicken
 Cheese
 Hotdog
 Hamburger

BRAND COMPETITORS “What brand of hamburger sandwich?”

 Wendy’s
 McDonald’s
 Jollibee
 Burger King
 Angel’s Burger
 INDUSTRY
Beauty and Personal Care (Product Class)

SEGMENTS (Product Category)

• Baby and Child-Specific Products • Fragrances • Skin Care
• Bath and Shower • Hair Care • Sun Care
• Color Cosmetics • Men’s Grooming • Sets/Kits
• Deodorants • Oral Care
• Depilatories • Oral Care excluding Power Toothbrushes

SUB-SEGMENTS (Product Type)

• Bar Soap • Body Wash/Shower Gel • Liquid Soap

• Bath Additives • Intimate Hygiene • Talcum Powder

COMPETITORS
• Dove • Likas • Safeguard • Skin White
• Johnson’s • Palmolive • Silka • Others
 FACTORS TO CONSIDER WHEN
ASSESSING THE INDUSTRY/
SEGMENT / SUB-SEGMENT
SITUATION
CHARACTERISTIC ISSUES TO ADDRESS
Market size and growth rate • How big is it and how fast is it
growing?
• What does its position in the product
life cycle (early development, rapid
growth and take-off, early maturity
and slowing growth, saturation and
stagnation, decline) reveal about the
its growth prospects?
Number of rivals • Is it fragmented into many small
companies or concentrated and
dominated by a few large
companies?
• Is it consolidating to a smaller
number of competitors?
 CHARACTERISTIC
Scope of competitive rivalry
Number of buyers
Degree of product
differentiation
ISSUES TO ADDRESS
• Is the geographic area over which
most companies compete local,
regional, national, multinational, or
global?
• Is having a presence in foreign
markets becoming more important to
a company’s long-term competitive
success?
• Is market demand fragmented among
many buyers?
• Do some buyers have bargaining
power because they purchase in large
volume?
• Are the products of rivals becoming
more differentiated or less
differentiated?
• Are the products of rivals becoming
increasingly similar and causing
heightened price competition?
 CHARACTERISTIC
Product innovation
Pace of technological change
Demand-supply conditions
ISSUES TO ADDRESS
• Is it characterized by rapid product
innovation and short product life
cycles?
• How important is R&D and product
innovation?
• Are there opportunities to overtake
key rivals by being first-to-market
with next-generation products?
• What role does advancing
technology play?
• Are ongoing upgrades of facilities/
equipment essential because of
rapidly advancing production
process technologies?
• Do most competitors have or need
strong technological capabilities?
Why?
• Is a surplus of capacity pushing
prices and profit margins down?
• Is it overcrowded with competitors?
 CHARACTERISTIC ISSUES TO ADDRESS
Vertical integration • Do most competitors operate in only
one stage (parts and components
production, manufacturing and
assembly, distribution, retailing) or do
some competitors operate in multiple
stages?
• Is there any cost or competitive
advantage or disadvantage associated
with being fully or partially
integrated?
Economies of scale • Is it characterized by economies of
scale in purchasing, manufacturing,
advertising, shipping, or other
activities?
• Do companies with large-scale
operations have an important cost
advantage over small-scale firms?
 CHARACTERISTIC ISSUES TO ADDRESS
Learning/experience curve • Are certain activities characterized
effects by strong learning and experience
effects (“learning by doing”) such
that unit costs decline as a
competitor’s experience in
performing the activity builds?
• Do competitors have significant cost
advantages because of their
learning/experience in performing
particular activities?
 PORTER’S FIVE-FORCES
FRAMEWORK OF COMPETITIVE
ANALYSIS
 PORTER’S FIVE-FORCES
DEVELOPMENT AND
GROWTH OF
SUBSTITUTE
PRODUCTS

BARGAINING RIVALRY AMONG BARGAINING POWER

POWER OF COMPETING FIRMS OF CONSUMERS
SUPPLIERS

POTENTIAL ENTRY
OF NEW
COMPETITORS
 ANALYZING PORTER’S FIVE-
FORCES
1. Identify the specific competitive
pressures associated with each of the
five forces
2. Evaluate the strength of each
competitive force - fierce, strong,
moderate to normal, or weak
3. Determine whether the collective
strength of the five competitive forces
is conducive to earning attractive
profits
 POTENTIAL ENTRY OF NEW
COMPETITORS
Entry threats are Entry threats are stronger
weaker when: when:
• The pool of • The pool of entry
possible entrants Rivalry Among candidates is large and
is small Competing Sellers some have resources that
• Entry barriers would make them
are high formidable market
• Competitors are contenders
struggling to earn • Entry barriers are low or
healthy profits can be readily hurdled by
• The industry’s the likely entry candidates
How strong are
outlook is risky • When existing industry
competitive
or uncertain members are looking to
pressures associated
• Buyer demand expand their market reach
with the entry threat
is growing slowly by entering product
from new rivals?
or is stagnant segments or geographic
• Industry areas where they currently
members will do not have a presence
strongly contest • Newcomers can expect to
the efforts of new earn attractive profits
entrants to gain a • Buyer demand is growing
market foothold rapidly
• Industry members are
Potential of New Entrants unable or unwilling to
strongly contest the entry of
newcomers
 BARGAINING POWER OF
SUPPLIERS How strong are the
competitive
Suppliers of Raw
pressures stemming
Materials, Parts, Rivalry Among
from supplier
Components, or Other Competing Sellers
bargaining power and
Resource Inputs
seller-supplier
collaboration?
Supplier bargaining power is stronger when:
• Industry members incur high costs in switching their purchases to alternative suppliers
• Needed inputs are in short supply which gives suppliers more leverage in setting prices
• A supplier has a differentiated input that enhances the quality or performance of sellers’ products or is
a valuable or critical part of sellers’ production process
• There are only a few suppliers of a particular input
• Some suppliers threaten to integrate forward into the business of industry members and perhaps
become a powerful rival

Supplier bargaining power is weaker when:

• The item being supplied is a commodity, that is, an item readily available from many suppliers at the
going market price
• Seller switching costs to alternative suppliers are low
• Good substitute inputs exist or new ones emerge
• There is a surge in the availability of supplies thus greatly weakening supplier pricing power
• Industry members account for a big fraction of suppliers’ total sales and continued high volume
purchases are important to the well-being of suppliers
• Industry members are a threat to integrate backward into the business of suppliers and to self-
manufacture their own requirements
• Seller collaboration or partnering with selected suppliers provides attractive win-win opportunities
 BARGAINING POWER OF
CONSUMERS
How strong are
competitive
Rivalry Among pressures from buyer Buyers
Competing Sellers bargaining power and
seller-buyer
collaboration?

Buyer bargaining power is stronger when:

• Buyer switching costs to competing brands or substitute products are low
• Buyers are large and can demand concessions when purchasing large quantities
• Large volume purchases by buyers are important to sellers
• Buyer demand is weak or declining
• There are only a few buyers so that each one’s business is important to sellers
• Identity of buyer adds prestige to the seller’s list of customers
• Quantity and quality of information available to buyers improves
• Buyers have the ability to postpone purchases until later if they do not like the present deals being
offered by sellers
• Some buyers are a threat to integrate backward into the business of sellers and become competitors

Buyer bargaining power is weaker when:

• Buyers purchase the item infrequently or in small quantities
• Buyer switching costs to competing brands are high
• There is a surge in buyer demand that creates a seller’s market
• A seller’s brand reputation is important to a buyer
• A particular seller’s product delivers quality or performance that is very important to buyer and that
is not matched in other brands
• Buyer collaboration or partnering with selected sellers provides attractive win-win opportunities
 DEVELOPMENT AND GROWTH OF
SUBSTITUTE PRODUCTS
Competitive Competitive
Firms in other Industries
pressures from pressures from
Offering Substitute
substitutes are substitutes are
Products
weaker when: stronger when:
• Good • Good substitutes
substitutes are are available or
not readily emerging
available or don’t How strong are competitive • Substitutes are
exist pressures from the attempts affordably priced
• Substitutes are of companies outside the • Substitutes have
higher priced industry to win buyers over comparable or
relative to the to their products? better
performance they performance
deliver • End users have
• End users have low costs in
high costs in switching to
switching to Rivalry Among Competing Sellers substitutes
substitutes

Signs that competition from substitutes is strong:

• Sales of substitutes are growing faster than sales of the industry being analyzed, an indication
that the sellers of substitutes are drawing customers away from the industry in question
• Producers of substitutes are moving to add new capacity
• Profits from the producers of substitutes are on the rise
 EXAMPLES OF COMPETITIVE
PRESSURES FROM SUBSTITUTE
PRODUCTS
1. Sugar vs. Artificial sweeteners
2. Eyeglasses vs. Contact lens vs. Laser
surgery
3. Newspapers vs. TV vs. the Internet
 RIVALRY AMONG COMPETING FIRMS
Typical weapons Rivalry among Rivalry is generally stronger when:
for battling rivals competing • Competing sellers are active in making fresh moves to
and attracting sellers: How improve their market standing and business
buyers: strong are the performance
• Lower prices competitive • Buyer demand is growing slowly
• More features pressures • Buyer demand falls off and sellers find themselves
• Better product stemming from with excess capacity and/or inventory
performance the efforts of • The number of rivals increases and rivals are of
• Higher quality rivals to gain roughly equal size and competitive capability
• Stronger brand better market • Buyer costs to switch brands are low
image and appeal position, • The products of rival sellers are commodities or else
• Wider selection higher sales weakly differentiated
of models and and market • Rivals have diverse objectives and strategies and/or
styles shares, and are located in different countries
• Bigger/better competitive • Outsiders have recently acquired weak competitors
dealer network advantages and are trying to turn them into major contenders
• Low-interest • One or more rivals are dissatisfied with their current
financing position and market share and make aggressive moves
• More advertising to attract more customers
• Stronger product
innovation Rivalry is generally weaker when:
• Better customer • Industry members move only infrequently or in a nonaggressive manner to draw
service sales and market share away from rivals
• Stronger • Buyer demand is growing rapidly
capabilities to • The products of rival sellers are strongly differentiated and customer loyalty is
provide buyers high
with custom-made • Buyer costs to switch brands are high
products • There are fewer than five sellers or else so many rivals that any one company’s
actions have little direct impact on rivals’ business
 INDUSTRY OUTLOOK AND
ATTRACTIVENESS
Involves assessing whether the industry
and competitive environment presents a
company with an attractive or
unattractive opportunity for earning good
profits.
 FACTORS TO CONSIDER IN
ASSESSING INDUSTRY OUTLOOK
AND ATTRACTIVENESS
1. Industry growth potential
2. Whether competitive forces are
growing stronger or weaker
3. Whether driving forces will favorably or
unfavorably impact industry profitability
4. Degree of risk and uncertainty in the
industry’s future
5. Whether the industry confronts severe
problems
6. The firm’s competitive position in the
industry vis-à-vis rivals
7. The firm’s potential to capitalize on
industry opportunities or the
vulnerabilities of weaker rivals
8. Whether a firm has sufficient
competitive strength to
defend against unattractive industry
factors
DEMAND
 DEMAND
How much goods and services are
bought at various prices during a certain
period of time.
THE PRODUCT LIFE CYCLE
PRODUCT LIFE CYCLE STAGES
• Introduction
• Growth
• Maturity
• Decline
 INTRODUCTION STAGE
SALES Low

COSTS High

PROFITS Negative

TYPE OF CUSTOMERS Innovators

NUMBER OF COMPETITORS Few, if any

MARKETING OBJECTIVES Create product awareness

Encourage product trial

PRODUCT STRATEGIES Offer a basic product

PRICE STRATEGIES Rapid skimming

Slow skimming
Rapid penetration
Slow penetration
DISTRIBUTION STRATEGIES Selective distribution, at best

ADVERTISING STRATEGIES Educate market if necessary

Build product awareness among early adopters and dealers

SALES PROMOTION STRATEGIES Use heavy sales promotion to entice trial

 GROWTH STAGE
SALES Rapidly rising

COSTS Stabilizing

PROFITS Rising

TYPE OF CUSTOMERS Early adopters

NUMBER OF COMPETITORS Growing in number

MARKETING OBJECTIVES Stress differentiation

Maximize market share

PRODUCT STRATEGIES Add features

Improve styling
Improve quality
Add new models
PRICE STRATEGIES Lower price to attract next level of customers

DISTRIBUTION STRATEGIES Drive to penetrate market

Enter new channels

ADVERTISING STRATEGIES Stress competitive differentiation

Shift from awareness to purchase conviction

SALES PROMOTION STRATEGIES Reduce to take advantage of heavy consumer demand

 MATURITY STAGE
SALES Peak
COSTS Low
PROFITS High
TYPE OF CUSTOMERS Middle majority
NUMBER OF COMPETITORS Stable but beginning to decline
MARKETING OBJECTIVES Maximize profits
Defend market share
Maintain brand loyalty

PRODUCT STRATEGIES Diversify brands and models

Full product line
Enter new segments
Introduce new uses

PRICE STRATEGIES Price at what the market will bear

Price to match or beat competition
Avoid price wars

DISTRIBUTION STRATEGIES Build more intensive distribution

Offer heavy trade allowances to retain shelf space

ADVERTISING STRATEGIES Stress brand differences and benefits

Launch reminder-oriented advertising
Encourage more usage per occasion
Encourage more usage frequency
Convert non-users

SALES PROMOTION STRATEGIES Increase to encourage brand switching and reward loyalty
 DECLINE STAGE
SALES Declining

COSTS Low

PROFITS Declining

TYPE OF CUSTOMERS Laggards

NUMBER OF COMPETITORS Declining

MARKETING OBJECTIVES Reduce expenditure

Milk the brand

PRODUCT STRATEGIES Phase out weak items

Divest
Harvest

PRICE STRATEGIES Cut price

DISTRIBUTION STRATEGIES Phase out unprofitable outlets

Maintain distribution level

ADVERTISING STRATEGIES Reduce level to maintain hardcore loyal customers

Maintain advertising level
Increase and intensify

SALES PROMOTION STRATEGIES Reduce to minimal level

OPPORTUNITIES AND
THREATS
 OPPORTUNITIES AND THREATS

OPPORTUNITIES THREATS
External in nature
Affects all companies in the industry
Essentially non-controllable
Not directly caused by the firm itself
Favorable to the firm Unfavorable to the firm