MARKMAG notes for midterms Professor DA ROZA, ENRIQUE VEGA

1. Customer Value
 Is a bundle of benefit customers expect
from a brand.
 As well as, the bundle of costs customer
expect to incur in evaluating, obtaining,
and using the product or service
𝐶𝑢𝑠𝑡𝑜𝑚𝑒𝑟 𝑉𝑎𝑙𝑢𝑒 = 𝐵𝑒𝑛𝑒𝑓𝑖𝑡𝑠 − 𝐶𝑜𝑠𝑡𝑠
Core Benefit
1. Product
2. Attribute – functional utility
3. Quality – satisfies preferences and
expectations
4. Uses—occasions of its use
Product Attribute
 Benefits based on attribute that provides
functional utility
Ex: Volvo is a safe durable car because of
its light weight design
Product Quality
 The collection of features of a product
that satisfies a consumers preference and
expectation
 Durability
 Warranty
 On-time
 Easy-to-deal with
 Reasonable cost
Product Uses
 What the product is used for, occasions
Ex: Gatorade to sustain high level of
performance
Ex: Starbucks as a familiar upscale place
to relax and have coffee
Communicating Core Benefits
1. User Imagery — shows types of people
who uses the product most often.
2. Symbols — is an object that represents,
stands for, or suggest an idea, belief, or
action.
In marketing, symbols take the form of
words, sounds, visual image, and logos to
represent a brand for easy recognition and
recall.
Ex: häagen-dazs logo/word is used to
communicate a Belgium like ice cream.
3. Country of Origin — the origin of the
brand can add credibility
Ex: “Made in China”
4. Emotional Benefits — the purchase or use
of a brand gives the customer a positive
feeling
Ex: warm when buying or reading
Hallmark cards
Ex: Strong and rugged when wearing
Levi’s
Product
Quality
Uses
Attributes
SYMBOLS
Country of
Origin
USER
IMAGERY
Emotional
Benefits
Brand
Personality

2. 5. Brand Personality — is the set of human
characteristics associated with a brand
 Gender
 Age
 Socio-economic class
Ex: frugal and unpretentious by shopping
at SM Mall
Limitations of Product Core Benefits
 When all brands are perceived to be
adequate on an attribute
 The uniqueness is important, otherwise it
is not a differentiator
 Can be easily copied
 Assumes that customer is a rational
decision-maker all the time, which they
aren’t
o Many customers do not care as
much about function as they do
about style, status, reassurance,
and other less functional benefits.
Marketing Planning
A planner considers these questions:
 Where will sales next year come from?
 What is the business environment?
How can the Brand grow?
Four (4) Step Marketing Management Process
1. Analysis of Market Opportunities
2. Develop Marketing Strategy
3. Action Plan & Budget
4. Execute & Monitor
1. Situational Analysis
 Customer
 Competitors
 Market Environment
 Brand Performance
2. Marketing Strategy
 Objectives of sales and market share
 Marketing mix strategy
3. Action Plan and Budget
 Product Plan
 Pricing
 Advertising/Promotion
 Distribution
4. Execute and Monitor
MARKETING OPTIONS
Market
Existing New
Product
Same Market
Penetration
Market
Development
New Product
Development
Diversification
Option 1: Marketing Penetration
a. Encourage Frequent Use
Ex. Coke big bottle to smaller bottles
b. Increase Quantity of Use
Ex. Lucky Me is a snack but it was
introduce for breakfast as well
c. Make New Applications
Ex. Baking Soda can take away bad odors
d. Attract Competitor’s Customers
Ex. Coke regular to coke zero
Growth in the current market segment
Segmentation
Is a process of placing the buyer in a
product market into sub groups so that
members of each segment displays
similar responsiveness to a particular
marketing strategy
.
The target customer…
 Know the product attributes and bundles
of benefits that satisfy customers needs
and wants
Product Offerings Customers Using
Other Brands
ExistingCustomers

3.  Respond positively to the emotional and
social appeals as they are experienced in
the pricing point of sale and advertising
material.
 Are predisposed to the product concept
and willing to try
Reasons for Segmentation of Market
 Markets are no longer “one size fits all,”
requiring different value offerings
 Consumer s that are similar will behave
and respond in particular way to a given
stimulus
 Products with different features will
appeal to another set of consumers
Shared Characteristics
a. Demographic
b. Behavioristic
c. Psychographic
Segmentation by Demographic
 Age: under 6; 6-11; 12-19; 20-34; 35-49;
50-64; 65+
 Sex: male, female
 Income: low, middle, high
 Religion: Catholic, Muslim, Protestant
 Geographic: Luzon, Visayas, Mindanao
Segmentation by Behavioristic
- Group consumers by purchase behavior
- Tells us who the customers are, when
they buy and how much
Variables of Behavioristic
 Benefits Sought
economy, convenience, prestige
 User Status
nonuser, first-timers, regular
 Usage Rate
light, medium, heavy
 Usage Type
product type, size, flavor
 Purchase Occasion:
regular, special occasion
Option 2: Market Development Strategy
a. Discover New Customer Segment
Ex. Coke life
b. Seek New Distribution Channels
Ex. ATM machines in Malls
c. Sell in New Geographic Locations
Ex. Penshoppe form Cebu to Manila
Analyzing Competition
i. Performance
 Size and growth of company
 Firms that represent the most direct
competition
ii. Marketing Practice
 Pricing
 Advertising (positioning) and Media
Spending
 Sales Promotion Activities
 Distribution Surveys
iii. Customer Motivations
 What is important to the customers?
Identify Customers
- Competitors are group of firms that offer
similar products that are close substitute.
- Products that can satisfy same customer
need from another category
Understand Competitor Strengths and
Weaknesses
- In what areas are they successful?
Unsuccessful?
- What relevant assets and competencies
do they have? Not have?
- What are the key customer motivations?
- Which components of the value chain can
create competitive advantage?
Competitive Force that Shape Strategy
- Rivalry among existing firms
- Threat

4. Internal Analysis
Components Reasons
Sales Satisfy desire for product
Market Share Better than competitors
Advertising, promo,
price, distributions
Communication, value,
and convenience
Customer relationship Long-term, sustainable
development
Situational Analysis
External Analysis Internal Analysis
- Customer
- Competition
- Market
- Environment
(opportunities
and threats)
- Performance
- Current
Marketing
(strengths and
weaknesses)
Marketing Plan Framework
STEP 1: Strategy Analysis
- Customer
- Consumer
- Market Environment
- Brand Performance
STEP 2: Marketing Objectives
- Sales and Share
- New Product
- Problems from step 1
STEP 3: Marketing Strategy
- Target Market
- Marketing Mix
- Competitive Advantage
- Opportunities and Threats
Marketing Objectives
a. Financial result that provide
revenues and profit
Sale
b. Track progress against
competition and guide for
future possibilities
Market Share
c. Source of future revenues
and profits
New Product
Sales
Market Forecasting
Total
2008 2009
Champion 35 ?
Tide 60 ?
Total 346 ?
Given: Total market share in 09 will increase
10%
Solution for Tide:
I. Total market share in 2009
(346 × 0.10) + 346 = 380.60
II. Current market share (2008)
60
346
= 17.34%
III. Sales in 2009
(60 × 1.10) = 66
Total
2008 2009
Champion 35 ?
Tide 60 66
Total 346 280.60
Strategy Analysis
Marketing Objective
Marketing Strategy
Action Plan and Budget

5. IV. Recommended Growth Sales in 2009
 Market share in 2009 should be
greater than market share in 2008
(safe increase is between 1-5pts)
STEP 1: 17% + 4 = 21%
STEP 2: 0.21 × 380.60 = 83.732
𝑟𝑒𝑐𝑜𝑚𝑚𝑒𝑛𝑑𝑒𝑑 𝑔𝑟𝑜𝑤𝑡ℎ 𝑠𝑎𝑙𝑒𝑠
STEP 3: 83.732 ÷ 60 = 1.3955 𝑜𝑟 39.55%
𝑟𝑒𝑐𝑜𝑚𝑚𝑒𝑛𝑑𝑒𝑑 𝑔𝑟𝑜𝑤𝑡ℎ 𝑟𝑎𝑡𝑒
Option 3: Product Development Strategy
1. New Product Innovation
- Enhance existing product
2. Product Line Expansion
- Provide more product to sell
- Additional items in different product
class and using different brand names
but are under one (1) company
Ex. Lacoste bag, perfume, and apparel
Ex. Hershey’s dark, white, and milk
chocolate
3. New Generation Product
- Big changes
Ex. Apple Touch Screens
Ex. Samsung Curve
4. Line Extension Product
- Change in size or taste
- Provides variety
- Expands user base
- A way of defending their market so
that competitors would have a hard
time finding a niche within the
market.
- Additional items in the same product
class using the same brand name.
Ex. San Miguel Pale to San Miguel
Light
Problems with Line Expansion
 New brand name cost a lot of money to
establish
Problems with Line Extension
 Confuse the market
 Create their own competition
 Known brands can have a negative
connotation to new product
Think “ Where to Compete”
1. Defend core products from sharing
corrosion among current target market
2. Identify new markets and segments
3. Develop new product variants that appeal
to market taste preferences.