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Chapter 6 - 7 Principles of Marketing

This document provides an overview of marketing concepts and pricing strategies covered in a Grade 12 marketing textbook. It discusses key terms like products, offers, satisfiers, and resources. It also outlines the marketing mix of product, price, place, and promotion considerations. Several pricing strategies are examined, including psychological pricing, discriminatory pricing based on customer segments or location, and product mix pricing. The marketing management philosophies of production, product, selling, marketing, and societal concepts are compared. Factors affecting the internal and external marketing mix are also summarized.

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322 views

Chapter 6 - 7 Principles of Marketing

This document provides an overview of marketing concepts and pricing strategies covered in a Grade 12 marketing textbook. It discusses key terms like products, offers, satisfiers, and resources. It also outlines the marketing mix of product, price, place, and promotion considerations. Several pricing strategies are examined, including psychological pricing, discriminatory pricing based on customer segments or location, and product mix pricing. The marketing management philosophies of production, product, selling, marketing, and societal concepts are compared. Factors affecting the internal and external marketing mix are also summarized.

Uploaded by

jonna
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Principles of Marketing

Grade 12 – ABM
Instructor: Mr. Paolo J. Castillo
Chapter 6-7

Basic Concepts of Marketing


Chapter 6

Products, Offers, Satisfiers, Resources


Lesson 1

Products | Offers | Satisfiers | Resources


 Anything that can be offered to someone to satisfy a need or want is a product.
 A product refers to physical object.
 Services refer to intangible object.

Value & Satisfaction


 Value is the customers’ estimate of the product’s capacity to satisfy a set of goals.
 Value is the ratio between what the customer gets and what he gives.
 Customer gets benefits & assumes costs.
 When customers expectance = Performance (Satisfied)
 Customer Expectance > Performance (Dis-satisfied)
 Customer Expectance < Performance (Highly Satisfied)

HOLISTIC MARKETING CONCEPT


• Companies have new capabilities that can transform the way they have been doing
marketing.
• Companies can operate a powerful new information and sales channel.
• Companies can collect fuller and richer information.
• Companies can facilitate and speed up internal communication.

Marketing Mix
• Marketing Mix:
• Combination of 4 controllable variables
• Product
• Price
• Place
• Promotion
Product Considerations
• Choice of products
• Packaging
• Services to support products
• Branding
• Warranties
• Level of quality
• Business image
• Product research & development
• Positioning

Price Considerations
• Price setting – What is your goal?
• Terms – Conditions of purchase and payment between suppliers and buyers.
• Discounts – Reductions in the price of goods, which are sometimes negotiated.
Place Considerations
• Channels of distribution – How do products get from manufacturer to customer?
• Specific stores
• Transportation – What carrier will you choose to move your products?

Promotion Considerations
• Advertising: Non-personal promotional messages paid for by an identified sponsor.
• Personal Selling: Communication between a salesperson and a customer intended to
influence the customer’s buying decision.
• Publicity: Information about a business or its products distributed through the media at
no cost to the business.
External Factors That Affect the Marketing Mix
• Customer attitudes
• Economic conditions
• Technological advances
• Political forces
• Natural forces
• Competition

Internal Factors That Affect the Marketing Mix


• Company objectives
• Company policies
• Financial situation

As far as Customers are concerned there are three elements to address


• Customer value: Difference between the values that the customer gains from owning
and using a product versus the costs of obtaining the product.

• Customer satisfaction: The extent to which a product’s perceived performance in


delivering value matches a buyer’s expectations.
• Quality: The characteristics of a product or service that bear on its ability to satisfy
stated or implied customer needs.

Marketing Management Philosophies


1. Production: consumers will favor products that are available and highly affordable
2. Product: consumers favor products that offer the most in quality, performance, and
innovative features
3. Selling: consumers will not buy unless an organization undertakes a large-scale selling
and promotional effort
4. Marketing: determining the needs and wants of target markets and delivering the
desired satisfactions more effectively and efficiently then the competitors
5. Societal marketing: generating customer satisfaction and long-run societal well-being
are the keys to both achieving the company’s goals and fulfilling its responsibilities
MARKETING CONCEPTS
• There are FIVE competing concepts under which organizations conduct their marketing
activities:
• The Production Concept
• The Product Concept
• The Selling Concept
• The Marketing Concept
• The Societal Marketing Concept

THE PRODUCTION CONCEPT


• Consumers will favor those products that are widely available and low in cost.
• Therefore increase production and cut down costs.
• And build profit through volume.

THE PRODUCT CONCEPT


• Consumers will favor those products that offer the most quality, performance, or
innovative features.
• Therefore, improve quality, performance and features.
• This would lead to increased sales and profits.

THE SELLING CONCEPT


• Consumers, if left alone, will not buy enough of company’s products.
• Therefore, promote sales aggressively.
• And, build profit through quick turnover.

THE MARKETING CONCEPT


• The key to achieving organizational goals consist in determining the needs and wants of
target markets and delivering the desired satisfactions more effectively and efficiently
than competitors.
• And build profit through customer satisfaction and loyalty.

(5) THE SOCIETAL MARKETING CONCEPT


• It is Marketing Concept (+) Society’s well being.
• Balancing of following three considerations while setting marketing policies :
-Customer’s want satisfaction -Society’s well being
-Company’s profits

Marketing Plan
Analyzing
• current market situation
• opportunities and issues
• implementation
• finance
• control
Marketing Plan
I. Current Market Situation
~Market Situation
~Competitive Situation
~Macroeconomic Environment

Marketing Plan
II. Opportunities and Issues Analysis
~Opportunities & Threats outside firm
~Strengths & Weaknesses within firm
~Issues Analysis
~Financial & Marketing Objectives

Marketing Plan
III. Marketing Strategy
~Target Market ~Sales Promotion
~Product Positioning ~Res. & Develop
~Product Line ~Market Research
~Price ~Distribution
~Sales Force ~Level of Service
~Advertising—when and where

Benefits of a Good Marketing Plan


Firms achieve higher rates of return on invested capital when they have
--A clear business purpose
--A clear business objective

Benefits of A Good Marketing Plan


That is reflected in a well-thought-out marketing plan with
-- an effective marketing mix
Pricing Strategies
Chapter 7

Origins of Pricing
Lesson 1

“Price should never be just about cost plus markup. It should also be a tool for communication
and strategy.”

Suggested Retail Price (SRP)


• It denotes the price that a consumer product is expected.
Emerge of the Suggested Retail Price
• Two elements in particular seriously altered merchandisers’ approach to pricing.
• Mass Production – which led to wider access to cheap goods that are sold in bulk.
• Transportation – the emerge of long range mechanical transportation systems would
provide merchants with access to a far wider variety of goods than was ever before
possible.

Pricing a New Product


• Market skimming – involves setting the price high in order to milk the segments with
higher disposable incomes, with the price gradually being reduced over time to milk the
next income tiers.
• Market penetration – involves setting the price even lower than planned, if only to
attract as much of the market into trying it and hopefully becoming loyal to it.

Psychological Pricing
• Much of pricing’s communication, particularly with regard to referencing other
products’ prices, is inherently psychological in nature.
• Odd-number pricing – Prices that end in non-rounded odd numbers, such as 9.95 or
99.50, are said to give the consumers the perception that the prices are not as
expensive as they actually are.
• Free pricing – Selling of two (2) complementary products.

Discriminatory Pricing
• Market segmentation is a way of life.
• Market segmentation often translates to opportunities for discriminatory pricing –
offering different prices to different market segments.
• Customer-segment pricing – this takes advantage of the likelihood that the upscale
market takes the higher price for granted while the broader market expects a more
mainstream price point.
• Product-form pricing – the price in here are not commensurate with the far greater
margins.
• Image pricing – Upscale products practically demand higher prices, otherwise their
credibility may be ruined.
• Location pricing – This is a form of discrimination that is based on the physical location
of the buyers.
• Time pricing – this is a form of discrimination – what is the difference between selling
the stocks anytime in the day.

Product Mix Pricing


• Product line pricing – The flagship product in the line, for instance, will likely have a
popular price point as it seeks to attract a wide audience. The premium product gets a
premium price while a populist offering have a low price point.
• Optional feature pricing – It is difficult to sell complete packages to consumers. It may
be easier to sell them a basic stripped-down model first, then everything else becoming
optional add-ons.
• Captive product pricing – They end up having the customer as a captive market for the
consumables on which they really make their money.
• By-product pricing – In case the production of your product generates by-products and
you manage to find a way to make money out of these by-products, then this becomes
an opportunity for realigning the price of your primary product.
• Product bundle pricing – Bundling the slower moving products together with star
performers can be a strategic option.

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