Portfolio in Marketing Mgt

I. COMPILATION OF LECTURE OUTLINE

STRATEGIC PLANNING AND THE MARKETING MANAGEMENT PROCESS

Marketing Concept- means that an organization should seek to make a profit by serving the needs of the customers groups.

What is MARKETING?The process of planning and executing conception, pricing, promotion, and

distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goal.

MARKETING MANAGEMENT – the process of conceptualizing, analyzing, planning, implementing, and controlling marketing activities to achieve the organization’s desired key result area.

Strategic Planning – includes all the activities that lead to the development of a clearorganization mission, organizational objectives, and appropriate strategies to achieve the objectives for the entire organization.

THE STRATEGIC PLANNING PROCESS

I. Organizational Mission- statement of mission or purpose of organization and the description of their existence.

Key Elements:1. The organization’s history- history of objectives, accomplishment, mistakes and some critical

characteristics and events of the past 2. The organization’s distinctive competencies – things that an organization does well; so well in

fact that they give it an advantage over similar organization.3. The organization’s environment – the environment dictates the opportunities, constraints, and

threats that must be identified before a mission statement is developed.

Mission statement must be;a. Achievableb. Motivationalc. Specific

II. Organizational Objectives – are the end points of an organization’s mission and are what it seeks through the ongoing, long-run operations of the organization. These objectives must be; Specific, measureable, action commitments by which the mission of the organization is to be achieved.

Objectives can accomplish the following;1. They can be converted into specific action.2. They will provide direction3. They can establish long run priorities for the organization.4. They can facilitate management control.

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III. Organizational Strategies – involves the choice of major directions the organization will take in the pursuing its objectives.

a. Organizational Strategies Based on Products and Markets – developing organizational strategies is to focus on the directions the organization can take in order to grow.

Four paths in order to grow1. Market penetration strategies – focus primarily on increasing the sale of

present products to present customers2. Market development strategies – pursuing growth through market

development, an organization would seek to find new customers for its present products.

3. Product development strategies – the new products developed would be directed primarily to present customers

4. Diversification – strategy can lead the organization into entirely new and even unrelated business. Seeking new products for customers not currently being served

b. Organizational Strategies Based on Competitive Advantage – devising means to gain competitive advantage against other. Competitive advantage is an ability to outperform competitors in providing something that the market values

c. Organizational Strategies Based on Values – focuses on developing and delivering superior value to customers as a way to achieve organizational objectives. It also focuses not only on customers need , but also on the question, How can we create value for them and still achieve our objectives.

IV. Organizational Portfolio Plan- final phase of strategic planning process is the formulation of the organizational portfolio plan, that is, portfolio of business, product line.

Strategic Planning Environment – give necessary information to strategic plan1. Cooperative environment – includes all firms and individuals who have a vested interest in the

firm accomplishing its objectives2. Competitive environment – includes primarily other firms in the industry that rival the

organization for both resources and sales3. Economic environment –state of macro economy and changes in it that also bring about

marketing opportunities and constraint.4. Social environment – includes general cultural and social traditions, norms, and attitudes5. Political environment – includes the attitude and reactions of the general public, social and

business critics, and other organizations.Legal environment – includes a host of federal, state, and local legislation directed at protecting both business competition and consumer rights.

MARKETING REASEARCH: PROCESS AND SYSTEMS FOR DECISION MAKING

Marketing Research – is the process by which information about the environment is generated, analyzed, and interpreted for use in marketing decision making. It is an aid to decision making and not a substitute for it. In other words, marketing research does not make decision, but it can substantially increase the chances that good decisions are made.

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THE MARKETING RESEARCH PROCESS

The 5 P’s of the Research process1. Purpose of the research – to determine explicitly why the research is needed and what it is to

accomplish.2. Plan of the research – it spells out the nature of the research to be conducted and includes an

explanation of such things as the sample design, measures, and analysis technique to be used.

3. Performance of the research – involve preparing for data collection and actually collecting them. Data collection will defend on the kind of research and the type of data needed.

4. Processing of research data – the preparation of data for analysis and the actual analysis of them.

5. Preparation of research report – completes statement of everything done in a research project and includes a write- up of each of the previous stage as well as the strategic recommendation from the research.

Sample Research PlanI. Tentative projective titleII. Statement of the problem

One or two sentences describing the general problem under considerationIII. Define and delimit the problem

States the purposes and scope of the problem. Purpose refers to goals and objectives.IV. Outline

This is a tentative framework for the entire project. Show statistical tables in outline form, and also show planned graphs

V. Method and Data source The types of data to be sought are briefly identified. A brief explanation of how the necessary information or data will be gathered ( surveys, experiment, library sources)

VI. Sample design This provides a description of the population to be studied and how it will be defined.

VII. Data collection forms The forms to be employed in gathering the data are discussed here. These involve surveys, questionnaire, or an interview schedule. The plan should state how these instruments have been validated and should be given any evidence of their reliability and validity.

VIII. Personnel requirements This provides complete list of all personnel who will be required, indicating exact jobs, time duration, and expected rate of pay.

IX. Phases of the study with the time schedule This is the detailed outline of the plan to complete the study. The study should be divided into workable pieces:

- Preliminary investigation- Final test- Sample selection- Mail questionnaire, field follow up, and so forth- Additional task

X. Analysis plans

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This is the discussion of editing and proofreading of questionnaire, coding instruction, and the type of data analysis. A major table that will appear in the report should be presented.

XI. Cost estimate for doing the study This includes all cost incurred in doing the study.

Qualitative and Quantitative Research

Qualitative research – typically involves face-to-face interviews with respondents designed to develop a better understanding of what they think and feel concerning a research topic, such as a brand name, a product, a package, or an advertisement. Quantitative research – involves more systematic procedures designed to obtain and analyzes numerical data.

CONSUMER BEHAVIORThe marketing concepts emphasizes that profitable marketing begins with the discovery and

understanding of consumer needs and then develops a marketing mix to satisfy these needs. Thus , an understanding of consumers and their needs and purchasing behavior is integral to successful marketing.

INFLUENCES ON CONSUMER DECISION MAKING

1. Social Influencesa. Culture and Subculture – one of the most basic influences on an individual’ needs, wants,

and behavior, since all facets of life are carried out against the background of the society in which an individual lives. Cultural values are transmitted through three basic organizations: the family, religious organizations, and educational institutions.

b. Social class – develop on the basis of such things as wealth, skills, and power.c. Reference groups and families – when forming attitudes and opinions as described as

reference groups. Group includes family and close friends, and fraternal organizations and professional association.

2. Marketing Influencesa. Product influences – attributes of a company’s product, including brand name, quality,

newness, and the physical appearance of the product such as packaging and labeling information.

b. Price Influences – the price of the products and services often influences whether consumers will purchase them after which competitive offering is selected.

c. Promotion Influences – advertising, sales promotion, salespeople, and publicity can influence what consumers will think about products, and what experience in purchasing and using the products.

d. Place Influences – distribution of products can influence in several ways; 1). Products that are convenient to buy in a variety of stores. 2). Products are sold in an exclusive outlets. 3). Offering products by non-store methods such as internet or by catalog.

3. Situational Influencesa. Physical Features – most readily apparent features of a situation. These includes

geographical and institutional location, décor, sounds, visible configuration etc.

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b. Social Features – provide additional depth to a description of a situation. Persons characteristics, their roles and interpersonal interactions are potentially relevant examples.

c. Time – a dimension of the situations that may be specified in units ranging from time of day to season of the year.

d. Task features – a situation include an intent or requirement to select, shop for, or obtain information about the general or specific purchase.

e. Current Conditions – make up a final feature that characterizes a situation. These are monetary mood or monetary conditions rather than chronic individual traits.

4. Psychological Influencea. Product Knowledge – the amount of information a consumer has stored in her/his memory

about the particular productsb. Product Involvement – a consumer’s perception of the importance of an item

CONSUMER DECISION – MAKING PROCESS

1. Need Recognition – starting point of the buying process is the recognition of an unsatisfied need by the customer.a. Physiological needs- primary need of human body to surviveb. Safety needs – need for protection from physical harmc. Belongingness and love needs – a social needs or need for companionshipd. Esteem needs – self awareness and importance to others e. Self-actualization needs – defined as a desire to become more and more what one is, to

become everything one is capable of becoming.

2. Alternative Searcha. Internal sources – searched through whatever stored information and experience in his mind

for dealing with the need.b. Group sources – common source of information for purchase decision comes from

communication with other people.c. Marketing sources – information include such factor as advertising, salesperson, dealers,

packaging, and display.d. Public sources – information include publicity, such as newspaper article about the product,

and independent rating of the product.e. Experiential sources – refer to handling, examining, and perhaps trying the product while

shopping.

3. Alternative Evaluationa. Consumer has information about a number brands in a product class.b. Consumer perceive that at least some of the brands are viable alternatives for satisfying a

recognized needc. Each the these brands has a set of attributes ( color, quality, size, etc. )d. A set of this attribute is relevant to consumere. The brand that is perceived as offering the greater number of desired attributesf. The brand the consumer like best is the brand the consumer will intend to purchase.

4. Purchase DecisionIf no other factors intervene after the consumer has decided on the brand that is intended for purchase, the actual purchase is a common result of search and evaluation.

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5. Post purchase Evaluationa. The decision is an important one psychologically or financially, or both.b. There are number of forgone alternativesc. The forgone alternatives have many favorable features.

THE STRATEGIC 3C’S AND THE MARKETING TRIANGLE

3C’s in Marketing

Customers

Competition Company

Customers

Two Basic Questions1. Who are your customers and why? Who are not your customers and why?2. What are your customer’s needs, wants, and expectations?

Competition

Determine the direct and indirect competition Direct Competition – offering the same line of product Indirect Competition – all company competing for the customers share of money

3 Ways to Competitive Advantage

Better

Faster Closer

Company Competencies of company to devise strategy and tactical plan to satisfy customers.

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KRA – Key Results Area used to evaluate of marketing performance

KRA Basic Components

Shares

Market Shares Profit

Sales – resulting from satisfying customer’s requirements.Market Share – resulting from outperforming competition.Profit – resulting from having excess of sales over expenses.

Evaluating 3C’s into KRA

What is marketing? How it is measured?3C’s KRA

Consumers Sales Competition Market shares Company Profit

Maximizing Sales

Sales = Selling Price x Sales Volume

2 Basic Ways to maximize sales

1. increase or maximize the selling price2. increase or maximize sales volume

3 Ways to increase sales volume

1. New users (who uses the product)2. New usage (for what purpose is the product used)3. More usage (when & in what occasion is it used)

II. WRITTEN REPORT OF ORAL PRESENTATION

Topic: New Product Planning and Development

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New Product Strategy

1. New-to-the-world products. Products that are inventions.2. New category entries. Products that take a firm into a category new to it, but are not new to the

world.3. Additions to product lines. Products that are line extensions, flankers, and so on, to the firm’s

current markets.4. Product improvements. Current products made better.5. Repositioning. Products that are retargeted for a new use or application.

Ten Factors Associated with New Product Success

1. Product superiority/quality. The competitive advantage the product has by virtue of features, benefits, quality, uniqueness, and so on.

2. Economic advantage to the user. The product’s quality for the consumer’s money.3. Overall/project fit. The product’s synergy with the company.4. Technological compatibility. The product’s technological synergy with the company.5. Familiarity to the company. How familiar or “close to home” the product is to the company’s current

products and markets.6. Market need, growth, and size. The magnitude of the market opportunity.7. Competitive situation. How easy the market is to penetrate from a competitive standpoint.8. Defined opportunity. Whether the product process has a well defined category and established

market to enter.9. Market-driven process. The new product process is well-planned and executed, receiving adequate

resources suited to the customer’s needs, wants, and buying behavior.10. Customer service. The product is supported by friendly, courteous, prompt and efficient customer

service.

New Product Planning and Development Process

1. Idea GenerationEvery product starts as an idea. Ideas are the raw materials for product development, and the whole planning process depends on the quality of idea generation and screening process. Since idea generation is the least costly stage in the product development process, it makes sense that an emphasis be placed first on recognizing available sources of new product ideas and then on funneling these ideas to appropriate decision makers for screening.

2. Idea ScreeningThe primary function of the idea screening process is twofold: first, to eliminate ideas for new products that could not be profitably marketed by the firm, and second, to expand viable ideas into full product concepts.

3. Project PlanningThe new product proposal is evaluated further and responsibility for the project is assigned to a project team. The proposal is analyzed in terms of production, marketing, financial, and competitive factors.

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4. Product DevelopmentAt this juncture, the product idea has been evaluated from the standpoint of engineering, manufacturing, finance, and marketing. If it has met all expectations, it is considered a candidate for further research and testing.

5. Test MarketingThe management goes outside the company and submits the product candidate for customer approval. Test market programs are conducted in line with the general plans for launching the product. Test marketing is a controlled experiment in a limited geographical area to test the new product or in some cases certain aspects of the marketing strategy, such as packaging or advertising.

6. CommercializationThis is the launching step where the firm commits to introducing the product into the marketplace.

III. WRITTEN REPORT OF CASE PRESENTATION

Case Study: Starbucks

Brief BackgroundStarbucks Coffee Houses were started in Seattle, Washington, in 1971 when three young men, Gerald Baldwin, Gordon Bowker, and Zev Siegl, decided to try their hand at selling gourmet coffee. They were betting that consumers would pay $1.50 for a cup of coffee compared to 40 cents for generic coffee offered elsewhere. By 2002, there were more than 3,400 Starbucks Coffee Houses throughout the world. Starbucks has decided to stick to its knitting, understand its core competency, know what the value proposition is for the customers, and do everything possible to get close to the customers.

Main ProblemHow to boost sales growth far more rapidly than current sales?

Objective• To develop ways and means to attract new customers while maintaining the old customers• To maximize sales volume

SWOT Analysis

Strength• High revenue• Large profit margin

Weakness• Difficulty to perfectly replicate their product to their different branches

Opportunity• Only 5% of coffee consumption in the US is done in coffee houses leaving ample room for growth

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Threat• New competitors enter the industry

Alternative Courses of Action• Develop a variety of products to offer in the market• Saturate the market• Increase the selling price

RecommendationStarbucks must saturate the market by means of opening and locating branches to every corner of major cities. They must also offer various products to attract their customers and to maintain their competitive advantage by continuously developing new products.

ConclusionIn order to maximize the sales profit, we must maximize the sales price or sales volume, and/or both. By saturating the market with new products that are well strategized, the company will then have an increase in their sales growth.

IV. COMPILATION OF WRITTEN REPORTS

2. PRODUCT STRATEGY

OBJECTIVES To be able to learn on how to make a strategic plan in marketing a product. To have a great opportunities to increase sales and develop a sustainable competitive advantage. To learn on how to go with the flow of the current trends.

CONTENT

Product strategy – is a critical element of marketing and business strategy, since it is through the sale of products and services that companies survive and grow.

Product - is the sum of the physical, psychological, and sociological satisfactions the buyer derives from purchase, ownership, and consumption.

Types of product Tangible Product - the physical entity or service that is offered to the buyer. Extended Product - the tangible product along with the whole cluster of services that accompany

it. Generic Product - the essential benefits the buyer expects to receive from the product.

Product Classification1. Agricultural products and raw materials

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These are goods grown or extended from the land or sea such as iron ore, wheat, and sand. In general, these products are fairly homogeneous, sold in large volume, and have low value per unit or in bulk weight.

2. Organizational GoodsSuch products are purchased by business firms for the purpose of producing other goods or for running the business. This category includes the following:

a. Raw materials and semi-finished goods.b. Major and minor equipment, such as basic machinery, tools, and other processing

facilities.c. Parts or components, which become an integral element of some other finished goods.d. Supplies of items used to operate the business but that do not become part of the final

product.3. Consumer goods

Consumer goods can be divided into three classes:a. Convenience goods, such as foods, which are purchased frequently with minimum effort.

Impulse goods would also fall into this category.b. Shopping goods, such as appliances, which are purchased after some time and energy,

are spent comparing the various offerings.c. Special goods, which are unique in some way so the consumer will make a special

purchase effort to obtain them.

Product Quality and Value

Quality - can be defines as the degree of excellence or superiority that an organization’s product possesses.

Value - can be defined as what the customer gets in exchange for what the customer gives.

Product Mix and Product Line

Product MixProduct mix is the complete list of all products offered for sale or produced by a company. It is a

composite of all products, brands or items within each product line

Product LineProduct line is a group of products closely related to each other. They are intended for same uses

or they function in similar manner.

Three reasons organizations offer varying products within a given product1. Potential customers rarely agree on a single set of specifications regarding their “ideal product”

differing greatly in the importance and value they place on specific attribute2. Customers prefer variety.3. The dynamics of competition lead to multiproduct lines.

Branding

Factors that serve to increase the strength of a brand1. Product quality when products do what they do very well.2. Consistent advertising and other marketing communications in which brands tell their story often

and well.

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3. Distribution intensity whereby customers see the brand wherever they shop.4. Brand personality where the brand stands for something.

Brand - is a name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers. The legal term for brand is Trademark.

Trademark - is a registered company name. It is a brand registered under the Intellectual Property Office (IPO), and therefore given legal protection.

Branding Strategies1. Line Extension - approach uses a brand name to facilitate entry into a new market segment.2. Brand Extension - a current brand name is used to enter a completely different product class.3. Franchise Extension or Family Branding - a company attaches the corporate name to a product

either to enter a new market segment or a different product class.4. Dual Branding - also known as joint or co-branding, strategy is one in which two or more branded

products are integrated.5. Multibranding Strategy - companies may also choose to assign different brand names to each

other.

PackagingPackaging is a group of activities in product planning which involved designing and producing

container or wrapper for a product.Product Life Cycle

1. Introduction Stage- this is the stage when the product is launched in the market.2. Growth Stage - also known as the “Market acceptance stage”. This is when sales and profits

increase at an increasing rate.3. Maturity Stage - during this stage, sales and profit start to decline.4. Decline Stage - new products or brands eventually enter the industry.

The Product AuditProduct audit is a marketing management technique whereby the company’s current product

offerings are reviewed to ascertain whether each product should be continued as is, improved, modified, or deleted.

Factors to be considered in Deletion of Products1. Sales trends

How have sales moved over time? What has happened to market share? Why have sales declined? What changes in sales have occurred in competitive products both in our line and in those of other manufacturers?

2. Profit ContributionWhat has been the profit contribution of this product to the company? If profits have declined, how are these tied to price? Have selling, promotion, and distribution costs risen out of proportion to sales? Does the Product require excessive management time and effort?

3. Product Life CycleHas the product reached a level of maturity and saturation in the market? Has new technology been developed that poses a threat to the product? Are there more effective substitutes on the market? Has the product outgrown its usefulness? Can the resources used on this product be put to better use?

4. Customer Migration Patterns

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If the product is deleted, will customers of this product switch to other substitute products marketed by our firm? In total, will profits associated with our line increase due to favorable switching patterns?

Product ImprovementProduct Improvement is a cross-functional effort between the Engineering, Manufacturing, Quality

and Marketing teams to monitor product quality/yield/cost and then identify, prioritize and implement ongoing product improvement activities.

SUMMARYThis chapter discussed the central element of marketing management which is the product

strategy. It includes the four important areas of concern in developing product strategies. First, the basic issues in product management which includes the product definition, product classification, product quality and value, product line and product mix, branding and brand equity and packaging. Second part includes the product life cycle which consists of its introductory stage, growth stage, maturity stage and the decline stage. The last part which is the product audit includes the factors in deciding if the products are to be deleted in the market.

CONCLUSIONProduct Strategy is perhaps the most important function of a company. It must take in account the

capabilities in terms of engineering, of production, of distribution (sales) existing in the company or of time to acquire them (by hiring or by mergers). It must evaluate the customers expectations at the time of delivery. It must foresee the competition (including new entrants) probable moves to enter the same market.

REFERENCES Alminar-Mutya, Ruby F., (2007) “Elements of Marketing”, Fourth Edition, Navotas Press, Navotas

City http://www.feb-patrimoine.com/english/corporate/product_strategy.htm http://www.masetllc.com/products/452.shtml

3. NEW PRODUCT PLANNING AND DEVELOPMENT

New Product Strategy

1. New-to-the-world products. Products that are inventions.2. New category entries. Products that take a firm into a category new to it, but are not new to the

world.3. Additions to product lines. Products that are line extensions, flankers, and so on, to the firm’s

current markets.4. Product improvements. Current products made better.5. Repositionings. Products that are retargeted for a new use or application.

Ten Factors Associated with New Product Success

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1. Product superiority/quality. The competitive advantage the product has by virtue of features, benefits, quality, uniqueness, and so on.

2. Economic advantage to the user. The product’s quality for the consumer’s money.3. Overall/project fit. The product’s synergy with the company.4. Technological compatibility. The product’s technological synergy with the company.5. Familiarity to the company. How familiar or “close to home” the product is to the company’s current

products and markets.6. Market need, growth, and size. The magnitude of the market opportunity.7. Competitive situation. How easy the market is to penetrate from a competitive standpoint.8. Defined opportunity. Whether the product process has a well defined category and established

market to enter.9. Market-driven process. The new product process is well-planned and executed, receiving adequate

resources suited to the customer’s needs, wants, and buying behavior.10. Customer service. The product is supported by friendly, courteous, prompt and efficient customer

service.

New Product Planning and Development Process

1. Idea GenerationEvery product starts as an idea. Ideas are the raw materials for product development, and the whole planning process depends on the quality of idea generation and screening process. Since idea generation is the least costly stage in the product development process, it makes sense that an emphasis be placed first on recognizing available sources of new product ideas and then on funneling these ideas to appropriate decision makers for screening.

2. Idea ScreeningThe primary function of the idea screening process is twofold: first, to eliminate ideas for new products that could not be profitably marketed by the firm, and second, to expand viable ideas into full product concepts.

3. Project PlanningThe new product proposal is evaluated further and responsibility for the project is assigned to a project team. The proposal is analyzed in terms of production, marketing, financial, and competitive factors.

4. Product DevelopmentAt this juncture, the product idea has been evaluated from the standpoint of engineering, manufacturing, finance, and marketing. If it has met all expectations, it is considered a candidate for further research and testing.

5. Test MarketingThe management goes outside the company and submits the product candidate for customer approval. Test market programs are conducted in line with the general plans for launching the product. Test marketing is a controlled experiment in a limited geographical area to test the new product or in some cases certain aspects of the marketing strategy, such as packaging or advertising.

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6. CommercializationThis is the launching step where the firm commits to introducing the product into the marketplace.

4. INTEGRATED MARKETING COMMUNICATIONS

Integrated Marketing Communications is a term used to describe a holistic approach to marketing. It aims to ensure consistency of message and the complementary use of media. The concept includes online and offline marketing channels. It is a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time.

Integrated Marketing Communications is a term used to describe a holistic approach to marketing. The concept includes online and offline marketing channels. Online marketing channels include any e-marketing campaigns or programs, from search engine optimization (SEO), pay-per-click, affiliate, email, banner to latest web related channels for webinar, blog, micro-blogging, RSS, podcast, and Internet TV. Offline marketing channels are traditional print (newspaper, magazine), mail order, public relations, industry relations, billboard, radio, and television. A company develops its integrated marketing communication programme using all the elements of the marketing mix (product, price, place, and promotion).

Integrated marketing communication is integration of all marketing tools, approaches, and resources within a company which maximizes impact on consumer mind and which results into maximum profit at minimum cost. Generally marketing starts from "Marketing Mix". Promotion is one element of Marketing Mix. Promotional activities include Advertising(by using different medium), sales promotion (sales and trades promotion), and personal selling activities. It also includes Internet marketing, Sponsorship marketing, Direct marketing, Database marketing and Public relation. And integration of all these promotional tools along with other components of marketing mix to gain edge over competitor is called as Integrated Marketing Communication.

THE PROMOTION MIX

The promotion mix concept refers to the combination and types of non personal and personal communication. Marketers have at their disposal four major methods of promotion. Taken together these comprise the promotion mix. In this section a basic definition of each method is offered while in the next section a comparison of each method based on the characteristics of promotion is presented.

ADVERTISING

It is a paid form of nonpersonal communication about an organization, its product or its activities that is transmitted through a mass medium to a target audience. Advertising is a form of communication used to help sell products and services. Typically it communicates a message including the name of the product or service and how that product or service could potentially benefit the consumer. However, advertising does typically attempt to persuade potential customers to purchase or to consume more of a particular brand of product or service. Modern advertising developed with the rise of mass production in the late 19th and early 20th centuries.[1]

Many advertisements are designed to generate increased consumption of those products and services through the creation and reinvention of the "brand image". For these purposes, advertisements sometimes embed their persuasive message with factual information. There are many media used to deliver these

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messages, including traditional media such as television, radio, cinema, magazines, newspapers, video games, the carrier bags, billboards, mail or post and Internet marketing. Today, new media such as digital signage is growing as a major new mass media. Advertising is often placed by an advertising agency on behalf of a company or other organization.

ADVERTISING DECISIONS

THE EXPENDITURE QUESTIONDetermining the size of the advertising budget or determining how much to spend on advertising.

METHODS

Percent of SalesThe firm simply takes a percentage figure and applies it to either past or future sales.

Per-Unit ExpenditureOne in which a fixed monetary amount is spent on advertising for each unit of the product

expected to be sold.

All You Can AffordThe advertising budget is established as a predetermined share of profits or financial

resources.

Competitive ParityAdvertising budgets are based on those competitors or other members of the industry.

The Research MethodThe advertising budget is argued for and presented on the basis of research findings.

The Task ApproachIt initially formulates the advertising goals and defines the tasks to accomplish those goals.

THE ALLOCATION QUESTIONThis question deals with the problem of deciding on the most effective way of spending

advertising dollars.

Marketing StrategyAdvertising process involves creating messages with words, ideas, sounds and other

forms of audiovisual stimuli that are designed to affect consumer behavior.

Two General Criteria for Effective Advertising Message

1. It should take into account the basic principles of communication.2. It should be predicated upon a good theory of consumer motivation and behaviour.

3 BASIC COMMUNICATION PROCESS

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1. The sender or the source of communication2. The communication or the message 3. The receiver or the audience

Media MixAdvertising process which involves different media types such as newspapers, radio,

television, internet, etc.

SALES PROMOTION

Sales promotion is an element of the marketing process that can close the sale of goods or services to a potential customer by providing the incentive to make a positive purchase decision. Sales promotion describes promotional methods using special short-term techniques to persuade members of a target market to respond or undertake certain activity. As a reward, marketers offer something of value to those responding generally in the form of lower cost of ownership for a purchased product (e.g., lower purchase price, money back) or the inclusion of additional value-added material (e.g., something more for the same price).

Objectives of Sales Promotion

Building Product Awareness

Creating Interest

Providing Information

Stimulating Demand

Reinforcing the Brand

Push versus pull marketing

Push strategies involve aiming promotional efforts to contributors, retailers, and sales personnel to gain their cooperation in ordering, stocking, and accelerating their sales of a product.

Pull strategies involve aiming promotional efforts directly at customers to encourage them to ask the retailer for the product.

Classification of Sales Promotion

Sales promotion can be classified based on the primary target audience to whom the promotion is directed. These include:

Consumer Market Directed Trade Market Directed

Business-to-Business Market Directed

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PUBLIC RELATIONS

Public relations describes the various methods a company uses to disseminate messages about its products, services, or overall image to its customers, employees, stockholders, suppliers, or other interested members of the community. The point of public relations is to make the public think favorably about the company and its offerings. Also referred to as publicity, this type of promotion uses third-party sources, and particularly the news media, to offer a favorable mention of the marketer’s company or product without direct payment to the publisher of the information.

Commonly used tools of public relations:

news releases

press conferences

speaking engagements

And community service programs.

Goals of Public Relations

To create, maintain, and protect the organization's reputation Enhance its prestige Present a favorable image.

Areas of Public Relations

Product public relations Employees relations Financial relations Community relations.

DIRECT MARKETING

According to the official definition of the Direct Marketing Association (DMA), direct marketing is an "interactive system of marketing which uses one or more advertising media to affect a measurable response and/or transaction at any location.

Measurability sets direct marketing apart from general advertising and other forms of marketing. Direct marketers can measure the response to any offer. Measurability allows direct marketers to test a variety of lists, offers, media—virtually any aspect of a campaign—in order to allocate marketing resources to the most effective combination of elements.

Direct Marketing Media

Direct mail

Telephone-based direct marketing (telemarketing)

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Magazines

Newspaper

Television

7. PRICING STRATEGY

PRICE – means the money value of product or service expressed in terms of peso and or centavos. Price is also means the amount of money needed in order to acquire a product or service and its accompanying services

PRICING OBJECTIVES

1. PROFIT ORIENTED OBJECTIVES.

a. Target return objective sets a specific level of profit of an objective. This amount is often stated as percentage of sales or investment. Businessmen want satisfactory return as an assurance of corporate survival or success.

b. Profit maximization objective seeks to get as much profit as possible.

2. SALES ORIENTED OBJECTIVE – seek higher level or sales volume, peso sales or market share without primary reference to profit. Some managers are more concerned about more sales than profit, since more sales lead to more profit. This concern can only be possible if costs of materials are not increasing.

3. STATUS QUO OBJECTIVE – This objective adopted by managers who are satisfied with their present profits under market share. These companies simply stabilize price by sticking to their own price line. This is a non-price competition company.

PRICING STRATEGIES

1. SKIM THE CREAM PRICING – Involves setting a higher price from what the market expects. This can be possible, since the buyers associate higher prices with better quality goods.

2. PENETRATION PRICING – Involves setting a low initial price for the product or service. Product is priced at minimum that will generate profit. The aim of this strategy is to target the mass market immediately.

PRICING STRATEGY FOR NEW PRODUCTS

1 PREMIUM PRICING STRATEGY – Is the use of a high price for high quality product. Economy pricing strategy is charging a low price for lower quality product. A good value strategy is charging lower price for high quality product, and the overcharging strategy is overpricing price of the product in relation to quality.

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2. SKIM-THE-CREAM PRICING – Involves setting higher price from what the market expects. This can be possible since e the buyer’s associate higher prices with better quality goods. This strategy makes sense under certain condition. First, the quality of the product can be relative to its high price. Second, cost of production for small volume must not be high to affect high price. And finally, market entry for competitors must not be easy to undercut the high price.

3. MARKET PENETRATION PRICING – Involves setting a low initial price for the product or service. Product is priced at minimum that will generate profit. The aim of this strategy is to target the mass market immediately and win a large market share. This strategy can be effective when market is price sensitive, where low price result to market growth.

PRICING STRATEGY FOR PRODUCT MIX/PRODUCT LINE

1. PRODUCT LINE PRICING – Determining the price levels between product varieties in a line based cost differences, product features and competitor’s prices. For example, a product has several varieties – regular and premium categories, the marketer may set a higher price for the premium category and lower price for the regular category because they differ in costs, features and performance.

2. OPTIONAL PRODUCT PRICING – The strategy of pricing options or accessory products along with a main product. The marketer quotes the base price for the product and offer accessory products at optional price. Market may decide to take optional items at optional prices, or leave it and decide just for the main product at the base price.

3. CAPTIVE PRODUCT PRICING – The strategy of pricing accessory products required to be used along with a main product. Marketers commonly set a low price for main products and high price for the accessory product.

4. BY-PRODUCT PRICING – This decision requires manufacturers to seek a market for its by-products and should accept any price that covers more than the cost of storing and delivering them. This will allow manufacturers to lower expenses and reduce main product’s price. By –Products are those sawdust from lumber mills; processed meats; bar soaps; chocolate bars; petroleum product which can be sold to another industrial market who can re-processed these items into another final products.

5. PRODUCT BUNDLE PRICING – This combines products and offers the bundle or total package at a reduced price. This strategy can promote sales of products which consumer may need or are slow-moving items, but the package price must be low enough to get them buy the bundle.

PSYCHOLOGICAL PRICING POLICIES

1. FIXED-PRICE POLICY – In-store retailers adopt one-price system, where goods are sold to customers at the same price. This gives advantage such as building customer confidence in the store, it saves time, and can be used for self service store.

2. VARIABLE PRICE POLICY –Price paid by custo0mer at a given time for a certain item is determined by the buyer’s bargaining power. This gives the seller flexibility in dealing with customers like by lowering prices to some buyers.

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3. ODD-PRICE POLICY – Prices are set at odd amounts, such as P19.95; P99.95; P39.95. This pricing is based on the belief that buyers feel, for example, that P19.95 is much lower than P20.00 or 99.95 lower than P100.00, because they give more attention to the peso figure than the centavos.

GEOGRAPHICAL PRICING POLICY

1. FACTORY POINT – When seller quotes the price at FOB factory (Free on Board). The buyer is responsible for paying the cost of transportation. Title to the products and risks are transferred to the buyer at the time of loading the goods of the shipper’s dock or carrier’s place. Under FOB factory price policy, the seller charges the same amount for similar products of the same quantity and quality irrespective of the distance or nearness of the buyer’s business.

2. POSTAGE PRICE STAMPING – This is a geographic pricing policy where the seller is pricing FOB at the buyer’s location. Seller quotes a price which includes delivery cost regardless of the buyer’s location. Seller receives net profit on each sale depending upon the amount of his shipping costs. This can be used if freight costs can b e a minor issue on the seller’s cost structure or this is given as additional service in the form of free delivery.

3. ZONE PRICING – This geographic policy is synonymous with pricing of parcel post service, long distance telephone service. Zone lines for the total market must be carefully drawn to avoid discrimination among buyers. Although delivered prices may vary from one zone to another, within a zone, all customers pay the same delivered price.

ELEMENTS TO CONSIDER IN SETTING PRICES

INTERNAL ELEMENTS AFFECTING PRICING DECISION

1. MARKETING OBJECTIVES – The Company must first decide on its marketing objectives. Common objectives are profit maximization, market share leadership, product quality leadership or competitive survival.

2. MARKETING MIX STRATEGY – Pricing decisions vary with products features, distribution, and promotion decisions. Companies often position their products on price, wherein it defines the target market, competitors and product design. This technique is called target costing, wherein it starts with identifying ideal selling price, then targets costs that will ensure that the price is met.

3. COSTS - Types of costs are the fixed and variable costs. Fixed costs are overhead expenses that do not vary with quantity produced or sold. These maybe the rentals, executive salaries, interest and the like. Variable Costs are directly related to output level, such as the quantity of raw materials needed to produce quantity of output. The sum of the fixed cost and variable cost is called total cost.

EXTERNAL ELEMENETS AFFECTING PRICE DECISION

1. MARKET AND DEMAND – Before setting the price, the marketer must understand the relationship between price and demand under different types of market. Economists recognize four types of markets: pure competition, monopolistic, oligopolistic, and pure monopoly. In a pure competition, a seller cannot charge higher than the on-going price because buyers can obtain as much as they need at the regular

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price. In monopolistic competition, buyers and sellers can trade over range of prices, because sellers can differentiate offers to buyers in terms of variations in features, quality, style or services. In an oligopolistic

2. COMPETITOR’S COST, PRICES AND OFFERS – A company’s pricing decision is affected by its competitor’s cost, prices and offers. A consumer planning to purchase a product will evaluate prices of comparative competitor’s brands.

Other external elements are economic factors like interest rates, inflation affecting pricing decisions. Government restrictions and social concerns may also be taken into account.

PRICING APPROACHES

1. COST BASED PRICING

a. COST-PLUS PRICING – This is the simplest method wherein a standard mark-up is added to the cost of the product. To illustrate, suppose a manufacturer has the following variable and fixed costs and expected sales.

Variable cost - Php 10.00

Fixed cost - 30,000.00

Expected Unit sales - 1,500.00

Therefore, the manufacturer’s unit cost will be:

Unit cost = VC + (FC/Unit sales)

= 10 + Php30,000 / 1,500

= Php 30.00

Suppose the manufacturer wants to earn 20% markup on sales.

Manufacturer’s Selling Price = Unit cost / (1- % mark-up)

= Php 30.00 / (1-.20)

= Php 37.50

Cost-Plus pricing remains popular because sellers are more concern about costs than demand; they do not have to make frequent adjustments as demand changes.

b. BREAK EVEN PRICING – Wherein the marketing organization tries to determine the price at which it will break even or achieve the target profit it aims.

Supposing fixed cost is Php 30,000.00, variable cost is Php 10.00, at Php 37.50 the company must sell at least 1091 units to break-even.

Break-even Volume = Fixed cost / (Price-variable cost)

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= 30,000 / (37.50-10) for its marketing program.

= 1091 units

2. VALUE BASED PRICING – Considers consumers perceived value on the product. This means that the price is considered before designing the product or planning for its marketing program. Value pricing is offering just the right combination of quality and good service at the fair price. Pricing begins with analyzing consumer needs and value perceptions, and price is set to match consumer’s perceived value.

3. COMPETITION BASED PRICING

a. GOING RATE PRICING – The company places less attention on its own costs or demand. This approach charges the same price with that of major competitors. Some firms follow the leader’s price, and feel that holding to the ongoing price will minimize price wars.

b. SEALED BID PRICING – This sets price based on how the marketer thinks that the other competitors will price, irrespective of cost and demand, when company bids for job. In short, the higher the marketing organizations set its price above cost, the lesser is the chance of getting the contact.

PRICING STRATEGY

DEMAND INFLUENCES ON PRICING DECISIONS

Demand influences on pricing decisions concern primarily the nature of the target market and expected reactions of consumers to a given price or change in price.

A. Demographic Factors – In the initial selection of the target market that a firm intends to serve, a number of demographic factors are usually concerned. Demographic factors that are particularly important for pricing decisions include the following.

1. Number of potential buyers, and their age, education, and gender.

2. Location of potential buyers.

3. Potential of potential buyers (organizational buyers or final consumers)

4. Expected consumption rates of potential buyers.

5. Economic strength of potential buyers.

B. Psychological Factors – Psychological factors are related to pricing concern primarily how consumer will perceive various prices or price changes.

PRICE ELASTICITY

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Both demographic and psychological factors affect price elasticity. Price elasticity is a measure of consumers’ price sensitivity, which is estimated by dividing relative changes in the quantity sold by the relative changes in price.

e = percent change in quantity demand / percent change in price

SUPPLY INFLUENCES ON PRICING DECISIONS

A. Pricing Objectives – pricing objectives should derive from overall marketing objectives, which is turn should be derived in corporate objectives. The most common pricing objectives are (1) pricing to achieve a target return on investments (2) stabilization of price margin, (3) pricing to achieve a target market share, and (4) pricing to meet or prevent competition.

B. Cost Considerations in Pricing – The price of a product is usually must cover costs of production, promotion, and distribution, plus a profit for the offering to be a value to the firm. In addition, when products are priced on the basis of costs plus a fair profit, there is an implicit assumption that this sum represents the economic value of the product in the market place.

C. Product Consideration in Pricing

1. PERISHABILITY – Goods that are very perishable in a physical sense must be priced to promote sales without costly delays

2. DISTINCTIVENESS – Products can be classified in terms of how distinctive they are. Homogenous goods are perfect substitutes for each other, as in the case of bulk wheat or whole milk, while most manufactured goods can be differentiated on the basis of certain features, trademark, engineering design, and chemical features.

3. LIFE CYCLE

ENVIRONMENTAL INFLUENCES ON PRICING DECISION

A. Competition – In setting or changing prices, the firm must consider its competition and how competition will react to the price of the product.

1. Number of competitors.

2. Size of competitors.

3. Location of competitors.

4. Conditions of entry into the industry.

5. Degree of vertical integration of competitors.

6. Number of products sold by competitors.

7. Cost structure of competitors.

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8. Historical reaction of competitors to price changes.

B. Government Regulations

GENERAL PRICING MODEL APPROACH

SET PRICING OBJECTIVES

EVALUATE PRODUCT PRICE RELATIONSHIP

ESTIMATE COST AND OTHER PRICE LIMITATION

ANALYZE PROFIT POTENTIAL

SET INITIAL PRICE STRUCTURE

CHANGE PRICE AS NEED

SET PRICING OBJECTIVES

Given a product or service designed for a specific target market, the pricing process begins with a clear statement of the pricing objectives. These objectives guide the pricing strategy and should be designed to support the overall marketing strategy.

EVALUATE PRODUCT PRICE RELATIONSHIP

Marketers need to consider what value the product has for customers and how price will influence product positioning.

ESTIMATE COST AND OTHE PRICE LIMITATIONS

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The cost to produce and market products provides a lower bound for pricing decisions and baseline from which to compute profit potential. Price limitation that need to be considered are government regulations and the prices that are charged by competitors for similar and substitute products.

ANALYZE PROFIT POTENTIAL

Analysis in the preceding stages should result in a range of prices that could be charged. Marketers must then estimate the likely profit in pricing levels in this range.

SET INITIAL PRICE STRUCTURE

The price structure takes into account the price to various channel members, such as wholesaler and retailers, as well as the recommended price to final consumers or organizational buyers.

CHANGE PRICE AS NEED

There are many reasons why an initial price may need to be changed. Channel members may bargain for greater margins, competitors may lower their prices, or costs may increase with inflation. In the short term, discounts and allowances may have to be larger or more frequent than planned to get greater marketing effort to increase demand to profitable levels.

CONCLUSION

Pricing decision that integrate firm’s cost with marketing strategy, business conditions, competition, demand, product variables, channel of distribution and general resources can determine the success or failure of a business. This places very heavy burden in the price maker. Modern – day marketing managers cannot ignore the complexity or the importance of price management. Pricing strategy must be continually reviewed and must take into account that the firm is dynamic entity operating in a very competitive environment. There are many ways for more to flow out of a firm in the form of costs, but often there is only one way to bring revenues and that is by price-product mechanism.

8. GLOBAL MARKETING

The process of conceptualizing and then conveying a final product or service worldwide with the hopes of reaching the international marketing community. Proper global marketing has the ability to catapult a company to the next level, if they do it correctly. Different strategies are implemented based on the region the company is marketing to.

BASIC REASON WHY FIRM INVEST IN OTHER COUNTRIES:

Offensive Goals

1. Increase profit prospect

2. Maximize total sales revenue

3. Take advantage of economies of scale

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4. Improve overall market position

Defensive Goals

1. Compete with foreign companies

2. Have access to technological innovations that are developed in other countries.

3. Take advantage of significant differences in operating costs between countries.

4. Pre-empt competitors global move

5. Not be locked out of future markets by arriving too late.

Elements of the global marketing mix

Product

A global company is one that can create a single product and only have to tweak elements for different markets

Price

Price will always vary from market to market. Price is affected by many variables: cost of product development (produced locally or imported), cost of ingredients, cost of delivery (transportation, tariffs, etc.), and much more. Additionally, the product’s position in relation to the competition influences the ultimate profit margin. Whether this product is considered the high-end, expensive choice, the economical, low-cost choice, or something in-between helps determine the price point.

Placement

How the product is distributed is also a country-by-country decision influenced by how the competition is being offered to the target market

Promotion

After product research, development and creation, promotion (specifically advertising) is generally the largest line item in a global company’s marketing budget. At this stage of a company’s development, integrated marketing is the goal. The global corporation seeks to reduce costs, minimize redundancies in personnel and work, maximize speed of implementation, and to speak with one voice. If the goal of a global company is to send the same message worldwide, then delivering that message in a relevant, engaging, and cost-effective way is the challenge.

Problems with Entering Foreign Markets

Cultural Misunderstanding Political Uncertainty

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Import Restrictions

Exchange Controls and Ownership Restrictions

Economic Conditions

PROGRAMMING FOR GLOBAL MARKETING

Global Marketing Research

- Organizations must collect and analyze pertinent information to support the decisions before getting to the issues addressed by market research.

4 Organizational Issues to consider:

1. Population Characteristic - marketing manager should be familiar with the total population and with the regional, urban, rural, and interurban distribution. Other demographic variables are also important such as the number and size of families, education, occupation, and religion.2. Ability to Buy

4 broad measures should be examined:a. gross national product or per capita national incomeb. distribution of incomec. rate of growth in buying powerd. extent of available financing

3. Willingness to Buy - the cultural framework of consumer motives and behavior4. Differences in Research Tasks and Process

Problems that a market researcher is likely to encounter:a. Languageb. Data Contentc. Timelinessd. Availability in the United States

Global Product Strategy

Product planning is necessary to determine the type of product to be offered and whether there is sufficient demand to warrant entry into a foreign market

Global Distribution Strategy

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Indirect channels of distribution - the channel arrangement where the manufacturers sell to resident buyers, export agents, or export merchandise located in the United States have the manufacturers' least control. These are the most indirect channels of distribution.

Direct channels of distribution - manufacturers become more directly involved and, hence, have greater control over distribution when agents and distributor located in foreign markets are selected

Global Pricing Strategy

Pricing task is often more complicated in foreign markets because of additional problems associated with tariffs, antidumping laws, ____ inflation, and currency conversion.

Global Advertising and Sales Promotion Strategy

- An important promotion decision that must be made is the type of agency used to prepare and place the firm's advertisements

- Use either a U.S. - based multinational agency or a multinational agency with the U.S. offices to develop and implement the ad campaign

- Sales promotion can also lead to opportunities and problems for marketers in foreign markets.

Entry and Growth Strategies for Global Marketing

There are six ways by which company can initially enter global market and pursue growth in the global market place.

1. Exporting – occurs when a company produces the product outside the final destination and then ships it there for sale. The easiest and most common approach for a company making its first international move.

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Manufacturer

No

Control

Some

Control

Much

Control

Resident Buyer

Export

Agent

Export

Merchant

Foreign

Agent

Foreign

Distributor

Foreign

Branch

Foreign

Consumer

United States Foreign Market

Advantages:

It avoids the cost of establishing manufacturing operation in the host country It may help a firm achieve experience-curve and location economies

Disadvantages:

Sometimes higher cost associated with the process Necessity of the exporting firm to pay import duties or face trade barriers Delegation of marketing responsibility for the product to foreign agents who may

not be dependable

2. Licensing – is the most common strategy for small and medium-size company.Advantage:

The firm does not have to bear the development cost risks associated with operating up with foreign market.

Disadvantages:

Firm does not have tight control over manufacturing, marketing and strategy that is required for realizing economies of scale

There is risk that the license technology may be capitalized on by foreign companies

3. Franchising – is similar to licensing but tends to involve long term commitments. It is commonly employed by service firm, exposed to manufacturing firms.

4. Joint Venture – are especially popular in industries that call for large investments, such as natural gas exploration and automobile manufacturing.Advantages:

Firms may be able to benefit from a partner’s knowledge of the host country’s competitive position, culture, language, political systems, etc.

Firms gains by sharing costs and risks of operating in a foreign market Political considerations make joint ventures the only feasible entry mode. Allow firms to take advantage of a partner’s distribution system, technological

know-how, or marketing skills.Disadvantages:

Firm may risk giving up control of proprietary knowledge to its partner Firm may lose the right control over a foreign subsidiary needed to engage in

coordinate global attacks against rivals5. Strategic Alliances - considered as distinct entity for two reasons:

a. normally partnerships entered into by two or more firms to gain competitive advantage on worldwide versus local basis

b. usually of a much longer-term nature than are joint ventureAdvantage:

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It can be used to reduce manufacturing costs, accelerate technological diffusion and new product development, and overcome legal and trade barriers.

Disadvantage:

The increased risk of competitive conflict between the partners

6. Direct Ownership Advantages:

Complete control over its technology and operations Immediate access to foreign markets Instant credibility and gains in the foreign country Ability to install its own management team

Disadvantage:

Huge costs and significant risks associated with this strategy

Regardless of the choice method used to gain in entry into and grow within a foreign marketplace, company must somehow integrate their operations. A critical decision that marketing managers must make relates to the extent of adaptation of the marketing mix elements for the foreign country in which the company operates. As a guideline, it is more likely to succeed under the following conditions:

When markets are economically similar When worldwide customer are the basis for segmenting markets When customer behavior and lifestyle are similar When the product is culturally compatible across the host country When a firm’s competitive position is similar in different markets When competing against the same competitors rather than competing against purely

local companies When the product is an organization and high-technology product rather than a

consumer product When there are similarities in the physical, political, and legal environment of the home

and host countries When the marketing infrastructure in the home and host countries are similar

V. COMPILATION OF CASE PRESENTATION

CASE 2: MCDONALD’S CORPORATION IN THE NEW MILLENIUM

I. BRIEF BACKGROUNDJack Greenberg, CEO of McDonald’s Corporation is thinking about the “Big Mac Attack” which

resulted to McDonald’s earnings to decline in the late 1990’s and early 2000’s. Dynamic market expansion, new products, and special promotional strategies had made McDonald’s Corporation a leader of fast food industry. However, sales growth in the United States had slowed to below the industry average in recent

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years. Jack Greenberg was trying to decide on a set of appropriate strategies for the future in order to reverse the declines to stay ahead of the competition.

II. MAIN PROBLEMHow will McDonalds cope up with the improved and new product lines offered by its competitors?

III. OBJECTIVES To improve their product lines To increase its sales

IV. SWOT ANALYSISStrength

Drive thru sales grow three times faster than on-premise sales They train employees in faster food preparation methods Using timers to encourage employees to prepare and deliver food faster

Weaknesses They have minimal line of products Using timers to encourage employees to prepare and deliver food faster

Opportunity McDonalds is a popular fast food chain in the industry Price is lower than other competitors Advertisement

Threats Competitors – indirect & direct competitors Young consumers are getting tired of fast food and are thinking about their health.

V. ALTERNATIVE COURSES OF ACTION Survey Introduce new/improved line of products Promotional strategy

VI. RECOMMENDATIONMcDonald’s should be quick in introducing or in improving its product line to be able to take

advantage of the changes in customer’s preferences and tastes.

VII. CONCLUSIONTherefore, McDonalds should think of a way on how they could retain their products in the Growth

Stage like improving their product lines or introducing new products that will suit the consumer’s preferences and tastes. They should think of a strategy in which they could counter attack the products offered by its competitors.

CASE 3: STARBUCKS

Brief Background

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Starbucks Coffee Houses were started in Seattle, Washington, in 1971 when three young men, Gerald Baldwin, Gordon Bowker, and Zev Siegl, decided to try their hand at selling gourmet coffee. They were betting that consumers would pay $1.50 for a cup of coffee compared to 40 cents for generic coffee offered elsewhere. By 2002, there were more than 3,400 Starbucks Coffee Houses throughout the world. Starbucks has decided to stick to its knitting, understand its core competency, know what the value proposition is for the customers, and do everything possible to get close to the customers.

Main ProblemHow to boost sales growth far more rapidly than current sales?

Objective• To develop ways and means to attract new customers while maintaining the old customers• To maximize sales volume

SWOT Analysis

Strength• High revenue• Large profit margin

Weakness• Difficulty to perfectly replicate their product to their different branches

Opportunity• Only 5% of coffee consumption in the US is done in coffee houses leaving ample room for growth

Threat• New competitors enter the industry

Alternative Courses of Action• Develop a variety of products to offer in the market• Saturate the market• Increase the selling price

RecommendationStarbucks must saturate the market by means of opening and locating branches to every corner of major cities. They must also offer various products to attract their customers and to maintain their competitive advantage by continuously developing new products.

ConclusionIn order to maximize the sales profit, we must maximize the sales price or sales volume, and/or both. By saturating the market with new products that are well strategized, the company will then have an increase in their sales growth.

CASE 4: PFIZER, INC. ANIMAL HEALTH PRODUCTS – INDUSTRY DOWNTURNS AND MARKETING STRATEGY

Brief Background

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Gail Oss, a Territory Manager of Pfizer Inc., Animal Health Group in western Montana and south-eastern Idaho. She sold high quality animal health products, often times at a premium price. She is also responsible to visit and communicate with the ranchers in her territory. The NAFTA agreement with Canada and Mexico had hit the local rancher particularly hard. That make rancher no choice but to lower their price.Some other reasons for the decline are Switching to alternative meat product, Changes in customer lifestyles, Health/nutrition issues.Ranchers were actively seeking ways to cut costs. One way in which ranchers could cut costs was either scrimp on animal health products or to switch to a lower cost alternative and some ranchers wants to give up. Gail Oss worried not only about her company but most especially to her livelihood.

Main Problem

The problem is that the Pfizer, Inc. Health Products declines its marketing stability due to industry downturns.

Objectives

To provide solution to the recession condition of the cattle industry.

To provide two-way communication between the consumers and the producers.

To instill and maintain good and long-term relationship among consumers and distributors.

To increase sales

SWOT Analysis

Strength

Strong manufacturing capabilities

Known for quality products

Continuous research and development

Weakness

Products are sold at premium price.

Opportunity

Global marketing coverage

Good relationship among customers

Ranching has already been a part of the history in Montana

Threat

NAFTA Agreement

Local competitors (direct and indirect)

Alternative Courses of Action

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Use marketing strategies that will give benefits not only to Pfizer but also to cattle industry

Make use of its company’s resources

Minimize the selling price

Recommendation

Use marketing strategies such as sales promotions and advertisement that will give benefits not only to Pfizer but also to cattle industry for example Pfizer should launch a commercial or any other promotion mix, which tells that the cattle will be healthy if they use the product and also tell the benefits people can get in eating this kind of cattle, with this the Pfizer get a high sales and they will provide solution to the recession condition of the cattle industry.

Conclusion

We came up with the conclusion that through the aid of marketing strategies such as sales promotions, advertising, public relations etc. We will be able to make solution on the on going industry downturns in Montana.

CASE 7: LONGEVITY HEALTH CARE SYSTEM INC.

BRIEF BACKGROUND 1972 – 75 - nursing care for parents 1976 -1977 – leased a 40-bed hospital and converted it to a nursing home 1979 – business incorporated as Longevity Nursing home. 1980-85 – acquired 8 nursing homes in Grand Rapids area, 480 beds. 1986-88 – Constructed nursing homes in Grand Rapids area, 210 beds. 1990-91- converted a 30 bed wing of Grand Rapids nursing home to sub acute care 1992 -93 – Constructed a 50-bed sub acute care facility in Grand Rapids area. 1992 – Acquired a retail pharmacy in Grand Rapids. 1992-93 – Acquired 7 nursing homes in Toledo are, 280 beds. 1993 – Corporation name changed to Longevity Healthcare Systems Inc

MAIN PROBLEM: How to increase the profitability of Longevity ‘s nursing homes in Toledo , Ohio

OBJECTIVES: To increase the profitability of nursing homes in Toledo, Ohio.

SWOT ANALYSIS STRENGTH

Longevity’s nursing homes in grand rapid Michigan is profitable.

WEAKNESSlack of marketing strategy

OPPORTUNITIEShigh demand for nursing homes.

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increasing the need for Alzheimer's treatment.

THREATCompetitors

ALTERNATIVE COURSES OF ACTION

Introduced sub acute care To have an Alzheimer's treatment Integrate longevity by establishing a pharmacy in Toledo. To be sensitive to the cost/price of their nursing homes.

CONCLUSION AND RECOMMENDATION Customer satisfaction would become an important competitive factor and Longevity would need to

assess the reactions of nursing home residents and their families to the quality of its services. Expanding into Alzheimer’s treatment because of the demographics and the growing need for

facilities in the area. It is also an opportunity to further integrate Longevity b y establishing a pharmacy in Toledo.

CASE 8: TUPPERWARE

Brief Background

In 1958, Justin dart purchased Tupperware from former DuPont chemist Earl Tupper for $10 million. From that the time until 1980. Tupperware earned an estimated $3 billion pre-tax and had a phenomenal 25-year record of doubling sales and earn every 5 years. In 1983, Tupperware sales slipped 7 percent and operating profit of 15 percent. In 1992, sales for the second quarter fell 33 percent from the same period a year before. That quarter also saw 20 percent decline in the number of selective US dealers.

Traditionally, Tupperware plastic products were sold at in-home parties. Selling Tupperware might be a lot easier except that most women (55 percent Tupperware’s estimate) either have no idea how to find Tupperware or no desire to go to a Tupperware party. Some 40 percent of Tupperware’s sales are from people who skip the parties but send orders along with friends who attend.

Competitors like Rubbermaid were introducing low-priced products and capturing market. Tupperware relies heavily on overseas market to generate sales growth but due to economic downturns, revenues drop by more than one third.

Main Problem

Loss of business due to economic downturns, competition and poor placement of the product

OBJECTIVE

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To meet the increasing competition and to regain its lost market.

SWOT ANALYSIS

Strength Offers variety of new products

High Quality product

Multi-purpose product

Weakness

High price

Poor placement

Opportunities

Exposure of products all over the world

Threat

Bankruptcy

ALTERNATIVE COURSES OF ACTION

Reinvent its marketing approach through eMarketing Lower the product’s price

Hired more trained tupperware ladies to promote and explain the product’s advantages.

Sell tupperware on cart-like kiosk in malls across the country

RECOMMENDATION

Reinvent its marketing approach through eMarketing

1. TV Shopping2. E-commerce

3. Direct Mail

CONCLUSION

Tupperware’s intention of retaining direct selling using in-home parties is an effective approach in increasing the firm's sales in later years; it has been such an effective channel in Tupperware historically. But then, companies around the world starts thinking globally, time and distance are shrinking rapidly with the advent of faster communication, transportation, and financial flows. The concept of in home parties is to show and prove the quality of Tupperware. The company must change

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their selling strategy to increase their sales, this is due to the fact that there are only few percentage of consumers have no desire to go to Tupperware parties. The company should take advantage of eMarketing which opens up new avenues for smaller businesses on much smaller budget, to access potential consumers from all over the world.

VI. LIBRARY RESEARCH FOR RELATED LITERATURE

VII. Directory of Marketing Course (Engr. Ramos class)

MARKETING MANAGEMENTE5I4 – 3:30-5:00 – TFENGR. MARCELO T. RAMOS JR.

NAME ADDRESS CONTACTARTILLEGAS, Cheene M. 502 A. Mabini street Dela Paz Binan, Laguna 09322021829BASTON, Romarico Jr., A Blk. 71 Lot 25 Ipil 1 Bulihan, Silang, Cavite 09063020586CABUELLO, Liezl B. Blk.4 Lot 27 champaca St. Elvinda Vill. San Pedro

Laguna09293051498

CEPE, Jennylyn J. Blk.8 Lot 6 Pisces St. Mercedez Homes 3-A Binan, Laguna

09278800476

CLIMACO, Roxanne M. 203 Amendrala St. San Vicente, San Pedro, Laguna 09156442194DADUFALZA, Renato Jr. N. Blk.6 lot 29 Phase 1 St. Joseph Village 7, Cabuyao,

Laguna09054144431

DANTIS, Eileen L. Blk.10 Lot 5 Town Homes Subd. Brgy. Milagrosa, Carmona , Cavite

09065417860

DELOS SANTOS, Jerica Joy G. Blk.1 Lot 34 Adelina 2-A San Pedro, Laguna 09161168657ELOMINA, Richiel E. 3734 Felix Reyes St. Balibago, Sta. Rosa City, 09174902633

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Laguna ENTILA, Cherry Rose R. Blk.19 Lot 10 Phase 1-A Berlin St. Villa Olympia.

Subd., San Pedro, Laguna09167910377

ESPINO, Sunshine S. 171 San Pablo Street Carmona, Cavite 09153184949ESTRELLA, Carmela Mariel E. Phase 3B Blk. 21 Lot 8 Pacita Complex I,

Binan,Laguna09162839834

EVANGELISTA, Irish R. Blk. 97 Lot 15 Phase 2 Golden City Subd. Sta. Rosa City, Laguna

09266978711

FALCON, John William A. Blk. 5 Lot 24 Diamond St. Saint Francis IV San Francisco Binan, Laguna

09153772451

HERNANDEZ, Joan A. 0618 A. Mabini St. Dela Paz Binan, laguna 09276078036MAPOLA, Cielo Maureen A. 181 Bigaa, Cabuyao, Laguna 09053919093MONTOYA, Jhernie G. 129 Talon, Amadeo, Cavite 09053624207NAYPA, Josie A. Blk. 3 Lot 8 Bvena Rosa 9, Brgy Macabling, Sta.

Rosa City Laguna09099556832

PELAEZ, Jofel Anne T. Blk. 223 Lot 10 Phase 2 Mabuhay City, Mamatid, Binan, Laguna

09266978717

PIALAGO, Jonathan C. 238 Sterling St. GMA, Cavite 09294508726SEVILLO, Bryan D. 291 Tubigan, Binan, Laguna 09053384038VERGARA, Jover D. 09272322324VILLAR, Joscel Anne C. 129 Purok 2, Brgy. Macabling Sta. Rosa City, Laguna 09158779965YASAY, Jonjon M. 09056441371

VIII. UPDATED RESUME with PICTURE as of SEPTEMBER 2009

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