CHAPTER 8

Marketing (Mindset – Market – Message)

Opportunity Seizing
Entrepreneurs need to have an innovation mindset so they can stand out in the marketplace. They need to
identify their target market and formulate a compelling message, supported by a marketing mix that
matches the desired customer bonding strategy that will resonate with the target market.
Creating a Compelling Message
Positioning is communicating the overall positive impression of a brand, relative to competition. There
are three points to remember in product or service positioning – it must be relevant, it must be unique, and
it must be communicated. In chapter 4, there are four benefits that can be communicated to the consumers
– functional, economic, emotional and social benefits so brand owners should not limit communication to
functional benefits alone.

List of Potential Compelling Value Propositions (Ways to Create Value)

1. Better – Superior products or services.
o Cycles Mild Detergent for Babies does not have the harsh chemicals that leave detergent residues,
which may cause rashes to babies with sensitive.

2. Faster – Speed or capability to move quickly.

o Phoenix Petroleum owner Dennis Uy had an advantage when he was just starting – dealers can
call him directly and decisions can be made immediately unlike managers of multinational
competitors who cannot make decisions on the spot.

3. Cheaper – Lower prices with the same or better value.

o Boy Kanin serves Filipino dishes either in carts, kiosks or in-line stores at reasonable prices
versus the bigger competitors.

4. Closer – Good relationship with customers, including localization.

o Motolite car battery can be delivered and installed wherever the motorist is located.

5. Larger – Wider choices, including localization.

o Philippines is a shopping paradise with four of the world’s biggest malls located in the country –
SM North EDSA, SM Mall of Asia, SM Megamall, SM Cebu City.

6. Smaller – it is more convenient than larger value.

o Bibingkinitan offers a smaller serving size of bibingka, making much more affordable in the
market.

7. Easier – Flexible service or total solution provider.

o Linear Coffee Roasters does end-to-end service starting from sourcing and roasting of beans, to
training and product consignment, and even tie-ups.

8. Rarer – Exclusivity, or being the only choice in the area.

 o Mansmith and Fielders Inc. created propriety marketing seminars in the Philippines, available
only from them such as Market-Driving Strategy, Marketing and Sales Implementation, and 5
Skills of Master Strategists.

9. Prestige – Reputation from favorable and aspirational perception.

o Premium priced products like BMW in cars not only offer superior functional performance but
high emotional benefit from status or social associations as well.)

10. Different – New category or innovation, including targeting underserved or unserved market (the
innovation need not be superior and can even be inferior compared to what is available.)

Communication is the last step of positioning. It is converting a superior product or service value advantage
to a market advantage. A compelling message not communicated deprives the entrepreneur of his brand’s
awareness, which is the first of three steps in the customer bonding strategy: awareness, trial and repeat
purchase. The manner of communication is dependent on how the entrepreneur wants his product to be
sold. If selling-driven, communication will be done by the salesforce, hence, quantity and quality of sales
force are indispensable. If the entrepreneur has chosen to be advertising-driven, they have to do mass media
or digital advertising.

Alternative Ways to Communicate Positioning

Alternative Positioning Examples

Price Cebu Pacific Air: Best deals, seat sale, lowest airfare, and discounted flights.

Product Attribute Jollibee: Langhap Sarap (Delicious-tasting smell)

Product Category Fit Flop Sandals: A Taste of Superb Comfort

Product Source Ginseng: Proudly Made in Korea

User Segment Duty Fee Shopping: For Balikbayan shopping

Usage Behavior Viva Mineral Water: Wash Your Excesses Away

Experience / Feeling BMW: The Ultimate Driving Machine

Against Competition Sustagen: Recommended by 8 out of 10 Doctors

6-Question Positioning Framework by Ries and Trout

Ries and Trout gave a six-step question framework for proper positioning. It is important to be consistent
in the positioning, or consumers will be confused.

Ries and Trout Positioning Guidelines

1. What position do you currently own?
 2. What position do you want to own?
3. Whom do you have to defeat to own the position you want?
4. Do you have the resources to do it?
5. Can you persist until you get there?
6. Are your tactics supporting the positioning objective you set?

Marketing Mix
Popularly known as the 4 Ps of marketing is a set of controllable and inter-related variables composed of
product, place, price and promotions that the company assembles to satisfy a target group. Note the intent,
which is to satisfy the target market. If the target market is unclear, the marketing mix is useless.
For the service industry, there are three additional Ps namely: physical, people, and process. The marketing
function of each marketing mix element is explained below with Promotions Mix having four sub-elements:
advertising, sales promotions, public relations and selling.

Role of Each Marketing Mix Element

1. Product/Service – To satisfy consumer needs and wants
• Promotech is a promotions agency that also handles merchandising and events. Its first client in
1996, Magnolia, is still their client today, creating a satisfying business relationship that has lasted
over two decades.
2. Price – To make product affordable to target consumers
• Masflex is a cookware brand launched by Ramesh Trading in 1989. The owner, Haresh
Mirchandani, gave the brand name masflex from two combined words - - Mass market and Flexible,
the former is the market they are trying to reach, and later, the feature of the products they are
marketing at affordable prices.
o Mass Market – economy premium pricing, meaning slightly higher than economy brands
justified by quality dimensions and additional features.
o Flexible – being the first to market affordable induction cookware and compatible pots and pans.
3. Place – To make product available consistent with consumers’ purchasing pattern
• Amazon started by selling books online but expanded to sell toys, games and small appliances,
gadgets like Kindle, Fire TV and Echo, services like web services, and Prime Instant Video and
Prime Music, creating an Amazon ecosystem. Amazon Prime also offers its members free two-hour
delivery on over ten thousand items or one-hour delivery for US 12.99/month.
4. Promotions – To build and improve consumer demand. Promotions has four components called the
Promotions Mix: advertising, sales promotions, public relations and selling.
o Advertising – To effectively inform, persuade and remind the target consumers.
o Sales Promotions – To convince customers to buy immediately.
 o Public Relations – To offer a positive image of the company and the brand, as well as promote
an advocacy
o Selling – To get the customers to buy.
o Physical Environment – To create the tangible expression of the brand engaging the senses
through the layout and images of the services cape.
o People – To show a living representation of the brand promise
o Process – To experience how the brand promise.

4 Key Questions to Ask in Assembling the Marketing Mix of Ink for Less

4 Key Questions to
Type of Marketing Mix
Ask in Assembling Examples
Decisions to be Used
the Marketing Mix
1. What do I tell my The Advertising Ink For Less Pro Services offers free
target market? communication Public Relations printers in exchange for a minimum 2-year
channel Selling contract, communicated by an institutional
decision salesforce.
2. Where can I find The Place Top 500 corporations of the Philippines
my target market? distribution (distribution)
channel
decision
3. How will I make The sampling Promotions Product demonstration done by the
my target market try decision Price institutional salesforce, emphasizing budget
me? savings companies can use for other
products.
4. Will my product The value Product Service Companies save 100% on printer cost and
and service be proposition save another 60% on ink cost versus the
compelling enough to decision original equipment manufacturer (OEM),
encourage repeat and while giving the same page yield and
referrals? printing quality.

Value Proposition
Among the elements of the marketing mix, the first elements to be assembled is always the value
proposition, or the product vis-à-vis price, as these two are inseparable. The entrepreneur needs to decide
if the value proposition will be superior, parity, inferior or even different to what is available in the
marketplace.
4 Decisions about Value Proposition for Restaurants

Value
Typical Product –
Proposition What It Is Examples
Price Typology
Decision
 Superior Better than what’s High Quality – High Full service restaurants like Italianni’s
available Price and Fridays
Parity Same as what’s Same Quality – Same Jollibee vs. McDonald’s
available Price
Inferior Not as good as Lower Quality – The perceived basic hygiene practices of
what’s available Lower Price food carts (Jolly Jeeps)
Different Different from Can be Higher or Suspended account concept where
what’s available Lower Price customers pay for two cups of coffee but
will get only one cup, with the other cup
reserved for any poor person who wants
it.

Develop a Brand Name

After identifying the type of value proposition, branding is the next task, and must be consistent with the
intent of the value proposition. For instance, if an entrepreneur wants to promote a high tech, serious
product, the branding should not be “Barbie” as this connotes toys that are not high tech.
Good brand names are easy to pronounce, easy to remember and helps in the brand positioning process.

Marketing Mix and Product Life Cycle

To formulate the marketing mix, it is important to know where the target market is in order to be aligned
with their needs. This is especially important when introducing a new product category.

Characteristics of the Product Life Cycle

Amount of
Product Life Product Category Brand Stage of Speed in
Information
Cycle Awareness Awareness Decision Decision Making
Needed
Introductory Low Low Extensive Large Slow

Growth High Low Limited Medium Medium

Maturity High High Routine Small Fast

Introductory Stage
Consumers are confronted with a brand from an unfamiliar product category. Their decision-making speed,
therefore, would be slow while their information search needs would be high. Marketers must remember that
the greater the complexity of a new product, the slower acceptance it should expect because of the higher
risk associated with buying unfamiliar product.

Growth Stage
 Consumers may encounter a new brand in a familiar product category. Their decision- making speed improves
as the amounts of information needed and used are significantly less because they already know the product
category.
Maturing Stage
Consumers are familiar with both the brand and the product category. Consumers consider the price and
availability of the brand important. Customers may shift from a specialty store to a discount store as they
become accustomed to the product and a better offer may attract them to a new location. It is important that
the fast-moving products be revitalized often enough so as not to make the product obsolete.
Declining Stage
When sales volume would fall due to the introduction of new products that are preferred or superior to the
existing product. In this stage, companies may want to reposition its product or maintain only the strongest
product and phase-out weak products to maximize earnings.

Buyer’s Characteristics

Buyer’s
What is it? Elements Examples
Characteristics
Cultural How a learned world Culture, sub- Buying airline business class ticket or concert
view can influence culture, social class VIP ticket shows social and economic wealth,
buyer behavior. power and even prestige.
Social How people around Reference groups, Junior Chamber International Manila (JCI
us can influence roles, status, family Manila) is the premier association for
buyer behavior leadership development among young
professionals. They are a network of
businessmen and entrepreneurs.
Personal How personal Age, life cycle Competitive parents with young kids are a
circumstances can stage, occupation, good market for tutorials like ahead tutorials.
influence buyer economic situation,
behavior lifestyle,
personality, self-
concept
Psychological How self-concept can Motivation, Red Wine has been experiencing increasing
influence buyer perception, demand, as people perceive it to be good for
behavior learning, belief, the heart while giving the drinker a more
attitudes sophisticated image.

For business-to-business (BTB), there is a slight difference as buyer’s influences are taken into
consideration, as follows:
• Environmental Influences
• Organizational Influences
• Situational Influences
• Interpersonal Influences
 • Individual Influences

Consumer Decision Process

Consumer
Decision What is it? Example: Home Water Purifiers
Process
Problem Why do I need to A housewife spends P150.00 a week on drinking water. That sums up to
Recognition make this purchase? P600.00 a month, P7, 200.00 a year or over P500, 000.00 in her
lifetime.
Information Where do I get my Online review, social media page, blog, friends, advertisements.
Search information relevant
to my need?
Evaluation of What are available Should a housewife buy an expensive water treatment device similar to
Alternatives attributes and how the cost of a car? Should she settle for a cheap water filter or should she
do I prioritize these buy something in-between that can give her family clean, tasty and
attributes, including alkaline water that can hopefully be bought on installment payment
brand image? terms near her monthly budget for drinking water – plus give her peace
of mind?
What will I buy Buying alkaline-mineral-purified water treatment unit that won’t exceed
Purchase (product, brand), alkalinity of 8.5 as per World Health Organization (a product with
Decision from whom (seller), higher alkaline level than 8.5 requires medical supervision.)
when and how much Buying from a reputable supplier who has test results from reputable
(price and quantity)? laboratories, with delivery and quick installation without breaking any
walls (product).
Buying from direct seller as part of helping an individual to have
inclusive growth (seller).
Delivering on a weekend (when), buying on installment (price) together
with a sibling (quantity).
Post-Purchase How do I feel after A housewife will feel more secure not just with warranty but also with
Decision using the product or reputable suppliers providing personalized after sales service centers. In
service case of large parties and events, the customer can borrow water
purifying units from the suppliers instead of being required to buy more
units as part of a lifetime partnership.

For business-to-business (BTB), there is a slight difference in business decision process as BTB clients go
through:
• Problem recognition
• General need description
• Product specifications
• Supplier search
• Proposal solicitation
 • Purchase decision (supplier selection)
• Order routine and supplier performance review

The 4-Mind Framework

The 4 Minds What is it? Examples Decision-Making

Ideal point Customers know exactly what they Dream home Customers compare every things
want to the ideal
Market Customers figure out what is Digital camera Customers look at a few key
comparison available in the market place attributes
Local comparison Customers decide based on options Menu in a Customers compare based on
available at the moment restaurant limited choices
Image point Customers decide based on general Known brands Customers are brand conscious.
impression

Marketing Mix of the Dr. Carl Balita Review Center

4 Key Questions to Type of Marketing CBRC

Ask in Assembling Decision Mix to be
the Marketing Mix Used
1. What do I tell The Advertising • Credentials of Dr. Carl Balita
my target communicati (including • Brand association of company name with radio/
market? on channel social media), TV talk show of Dr. Carl Balita in DZMM
decision Public • Unprecedented number of Board Topnotchers
Relations, • Testimonials of topnotchers and passers
Selling • Movie “Maestra” and “NARS” to motivate
younger generation to be teachers and nurses.
2. Where can I find The Place • Close to 100 branches in the Philippines and
my target distribution (Distribution) abroad, including Abu Dhabi, Dubai, Jakarta and
market? channel Physical Hong Kong.
decision Environment • Study-friendly branches in green color.

3. How will I make The Promotions. • Seminars

my target market sampling Price • Conferences
try me? decision People, • Premium pricing
Process • Quality of reviewers and review materials plus
the manner of teaching as process
4. Will my product The value Product/Servic • Number of topnotchers in board exams
and service be proposition e • Franchise excellence award for franchisees
compelling enough decision • Referrals from passers and topnotchers, their
to encourage repeat parents and relatives and social media reputation
and referrals?
Expanding the Portfolio
Seizing the opportunity is an initial step, but once a firm experiences success, the challenge is nurturing it
to grow in a sustainable manner. One way is to consider expanding in the white spaces of the industry
before new entrants grab “a piece of the pie”. But entrepreneurs must resist using good money to run after
bad money by not fighting in a red ocean market where competitors are already well entrenched. They
should look for underserved and unserved market opportunities.

Value Creation Strategies of Jimini Foods Group

Brands Jimini Pizza Pedricos Santino’s Slice

Year established 1999 2005 2012
Target Market Kids Family and Barkada (gang) Time-starved
individuals
Value Frozen-fresh pizza that “Pasalubong” (treat) with four Quick pizza with
proposition tastes like freshly flavors in one pizza supreme flavor, not just
prepared pies one flavor variant

Channel Premier schools and Carts and kiosks where family High traffic transient
premier supermarkets and friends hang out + areas offering grab and
convenience stores go foods

Growth of Jimini Foods Group

1. Product – from Jimini, to Pizza Pedricos, then Santino’s Supreme Slice.

2. Market – from kids, to family and barkada (gang), to time-starved individuals.
3. Channel – from carts and kiosks outside schools, to inside schools, to convenience stores, to
supermarkets, malls or transient places.
4. Geography – from Metro Manila to key cities, then secondary cities nationwide.

Three questions must be asked before a major opportunity should be considered for adoption:
• Can it add value to either the business unit or the company as a whole?
• Other than profit, can the benefit outweigh the cost?
• Can it have significant competitive advantage?
Managing Risk
Risk is simply the possibility of losing something. Entrepreneurs are most people with higher risk appetites,
but they are also good at recognizing and mitigating risks before it affects their financial well-being.