PRINCIPLES OF

MARKETING
(MODULE)

ROMEO B. NUQUI JASMINE I. REY

MARIA TERESA MUNJI ANTONINO MARILOU P. PASCUAL
CHAPTER 2 “BUILDING CUSTOMER RELATIONSHIP AND MARKETING
STRATEGY”

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RONALD PAUL GAMBA
 The Power of Positive Customer Relations, Harnessed - Tait Pollack

THERE IS MORE TO CONSIDER IN MARKETING OTHER THAN SELLING, IT IS THE

COMPANY’S RELATIONSHIP WITH CUSTOMER.

INTRODUCTION
COMPANY STRATEGIES ARE PLANS TO SOLVE AND ACHIEVE GOALS AND
OBJECTIVE WHICH CAN BE EXECUTED WITHIN THE TIME BOUND AND ALLOTMENT
FOR SUCH OBJECTIVES. THESE ARE PLANS OF ACTION FORMULATED BY MARKETING
MANAGERS AHEAD OF TIME TO KEEP THE COMPANY PREPARED FOR ANY BATTLE
WITH COMPETITORS, AND A BACK UP PLAN AND A SAFETY NET IN CASE OF
UNEXPECTED FAILURES. THESE COMPANY STRATEGIES ARE TOOLS THAT ARE
ESSENTIAL TO BREAK THE PREVIOUS TARGET OF THE COMPANY BY “BEING BETTER
THAN BEFORE IN TERMS OF SALES, BETTER THAN OTHERS IN TERMS OF MARKET
SHARE AND BETTER THAN EXPECTED IN TERMS OF PROFIT’ (GO AND ESCARIAL, 2010)

STRATEGIC PLANNING: DEFINING THE ROLE OF MARKETING TO A COMPANY

STRATEGIC PLANNING PERTAINS TO THE PROCESS OF DEVELOPING AND
MAINTAINING A “STRATEGIC FIT” OR THE MOST APPROPRIATE STRATEGY BETWEEN
THE ORGANIZATION’S GOALS AND CAPABILITES IN THE CHANGING MARKETING
OPPORTUNITES.
DEVELOPING
DEFINING THE MISSION
STARTEGIES

COMPANY’S STRATEGIC PLANNING

PROCESS

SETTING COMPANY OBJECTIVES AND DEFING THE BUSINESS

GOALS PORTFOLIO

THE PROCESS OF STRATEGIC PLANNING

1. DEFINING THE COMPANY MISSION;
2. SETTING THE COMPANY OBJECTIVES AND GOALS;
3. DESIGNING THE BUSINESS PORTFOLIO; AND
4. PLANNING THE MARKETING AND OTHER FUNCTIONAL STRATEGIES

DEFINING THE MISSION

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RONALD PAUL GAMBA
MISSION IS A STATEMENT OF THE COMPNAY’S PURPOSE IN THE INDUSTRY
CATEGORY OR WHAT ORGANIZATION WANTS TO ACCOMPLISH IN THE LARGER
BUSINESS ENVIRONMENT. IT CAN ALSO MEAN THE PURPOSE OF WHY AN
ORGANIZATION IS EXISTING.
SETTING COMPANY OBJECTIVES AND GOALS
IN SETTING THE COMPANY OBJECTIVES AND GOALS, THE COMPANY SHOULD
ESTABLISH A PROFITABLE RELATIONSHIP WITH CUSTOMERS. THESE CAN BE
ACHIEVED BY DEVELOPING BETTER PRODUCTS AND BY DELIVERING THESES
PRODUCTS TO THE MARKET FAST, OFFERING A LOWER COST POSSIBLE.
DESIGNING THE BUSINESS PORTFOLIO
AS DEFINED BY KOTLER (2010), A BUSINESS PORTFOLIO IS THE COLLECTION OF
BUSINESSES AND PRODUCTS THAT MAKE UP THE COMPANY REPRESENTED BY
SPECIFIC BUSINESS UNIT (SBU) PRESENTED IN BCG MATRIX (BOSTON CONSULTING
GROUP MATRIX) THE MATRIX IS BASED ON PRODUCT LIFE CYCLE THEORY THAT CAN
BE USED IN DETERMINING THE BUSINESS PORTFOLIO OF A BUSINESS UNIT. THE
MATRIX SHOWS THE VARIOUS BUSINESS UNITS OF THE MARKET GROWTH VERSUS
THE MARKET SHARE.
 THE BGC MATRIX CLASSIFIES ALL ITS SBU’s ACCORDING TO THE GROWTH
SHARE MATRIX AS FOLLOWS:
1. STARS – CATEGORY OF PRODUCTS SBU’s WITH HIGH MARKET SHARE AND
HIGH MARKET GROWTH. THE PRODUCTS PLACED ORDER UNDER THIS
CATEGORY USE MORE CASH BUT ARE DOING GOOD IN THE BUSINESS,
THEREFORE ARE EXPECTED TO GENERATE HIGHER PROFIT OR INCOME.
2. CASH COWS – SBU’s WITH HIGH MARKET SHARE BUT LOW IN MARKET
GROWTH. INVESTMENT UNDER THIS CATEGORY SHOULD BE KEPT LOW
BECAUSE OF THE SLOW GROWTH.
3. QUESTION MARKS – SBUs WITH LOW MARKET SHARE BUT HIGH MARKET
GROWTH. THIS MEANS THAT THERE IS A LARGE CONSUMPTION OF CASH, BUT
BECAUSE THE SHARE IN THE MARKET IS LOW, NOT MUCH CASH IS
GENERATED.
4. DOGS – SBU’s OF PRODUCTS WITH LOW MARKET SHARE AND LOW MARKET
GROWTH. THE PRODUCTS UNDER THIS CATEGORY DO NOT GENERATE MUCH
CASH, AND CAN BARELY SUSTAIN THEIR MARKET SHARE. THEY MAY “BREAK
EVEN” BUT ARE BETTER SOLD THE DISPOSED OFF.
Star Question mark
Marketing rate
growth

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RONALD PAUL GAMBA
Cash Cow Dog
THE PARAGRAPH BELOW IS BASED ON THE ANALYSIS MADE BY THE INDIANA
UNIVERSITY NORTHWEST, RETRIEVED ON MARCH 17, 2012 FORM WWW.IUN.EDU.
THE MAJOR BENEFITS OF THE BGC MATRIX IS THAT IT DRAWNS ATTENTION TO
THE CASH FLOW, INVESTMENT CHARACTERISTICS, AND NEEDS OF AN
ORGANIZATION’S VARIOUS DIVISIONS. THE DIVISIONS OF MANY FIRMS EVOLVE OVER
TIME. DOGS, CASH COWS, AND QUESTIONS MARKS, QUESTION MARKS BECOME
STARS, STARS, BECOME CASH COWS, AND CASH COWS, BECOME DOGS IN AN
ONGOING COUNTERCLOCKWISE MOTION. LESS FREQUENTLY, STARS BECOME
QUESTION MARKS, QUESTION MARKS BECOME DOGS, DOGS BECOME CASH COWS,
AND CASH COWS, BECOME STARS IN A CLOCKWISE MOTION.
THIS ANALYSIS MAY NOT LOOK SIMPLE, BUT IT IS. IT DISCUSSES ABOUT THE
DIFFERENT POSSIBILITIES THAT MAY HAPPEN IN TERMS OF THE MARKET SHARE AND
PROFIT A PRODUCT MAY GIVE A BUSINESS. FOR EXAMPLE, A PRODUCT WITH A HIGH
MARKET SHARE NORMALLY GIVE MORE INCOME AND A PRODUCT WITH A LOW
MARKET SHARE WOULD USUALLY GENERATE LOW PROFIT. IT IS NOT IMPOSSIBLE
THOUGH, THAT A PRODUCT WITH A HIGH MARKET SHARE MAY YIELD NO PROFIT, OR
ONE WITH A LOW SHARE IN THE MARKET WOULD EARN MORE PROFIT.
AND THIS IS THE IMPORTANCE OF A BUSINESS PLAN. ALL BUSINESS, BIG OR
SMALL, ALREADY MADE OR JUST STARTING, MUST HAVE A BUSINESS PLAN. WITH IT,
THE COMPANY WILL BE ABLE TO MAKE SURE THAT IT CAN KEEP AN EYE ON HOW THE
PRODUCTS ARE DOING IN THE MARKET. AT THE SAME TIME, IT WOULD BENEFIT THE
COMPANY BY USING THE BUSINESS PLAN AS A GUIDE TO COME UP WITH
STRATEGIES ON HOW IT CAN SATISFY THE NEEDS AND WANTS OF THE CUSTOMERS,
WHILE INCREASING ITS PROFIT AND MAKING SURE THAT IT DOES NOT
SHORTCHANGE THE CUSTOMERS NEEDS AND STILL SATISFY THEM. AN EXAMPLE OF
A BUSINESS PORTFOLIO AND ITS ANALYSIS IS SHOWN BELOW.

STARS QUESTION MARKS

DETERGENT SOAPS AND TOOTHPASTES COLOGNE FOR MEN
CASH COWS DOGS
SHAMPOO AND CONDITIONER ALL-AROUND CLEANING PRODUCTS
ANALYSIS
1. THE DETERGENT SOAPS AND TOOTHPASTES, BEING STARS HAVE A HIGH MARKET
SHARE AND MARKET GROWTH.
2. THE COMPANY’S COLOGNE FOR MEN HAS A LOW MARKET SHARE BUT HAS THE
POTENTIAL TO HAVE A HIGH MARKET GROWTH WITH THE USE OF AN EFFECTIVE
MARKETING STRATEGY.
3. THE SHAMPOO AND CONDITIONER HAVE A HIGH MARKET SHARE BUT WITH A LOW
MARKET GROWTH WHICH MAY BE DUE TO SO MANY NEW BRANDS OF SHAMPOOS AND
CONDITIONERS OFFERED IN THE MARKET.

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 4. THE CLEANING PRODUCTS HAVE A LOW MARKET SHARE AND LOW MARKET GROWTH
WHICH MAY BE DUE TO THEIR POOR PERFORMANCE IN THE MARKET, AND THE
INTRODUCTION FOR A NEW BLEACHING PRODUCT OF RIVAL COMPANIES.

DEVELOPING STRATEGIES FOR GROWTH AND DOWNSIZING

A BUSINESS PORTFOLIO IS A COLLECTION OF BUSINESS AND PRODUCTS THAT MAKE
UP THE COMPANY (TUTOR2U.NET) IT IS USED TO DETERMINE THE POSITION OF THE PRODUCT
IN A PARTICULAR MARKET, SO THAT A FIRM MAY BE ABLE TO COME UP WITH DECISIONS AS
TO WHICH PRODUCTS NEEDED MORE INVESTMENT, WHAT PRODUCTS WILL BE MORE
PROFITABLE FOR A CERTAIN MARKET, WHICH WOULD BE RETAINED OR SOLD OFF AND WHAT
STRATEGIES CAN THE COMPANY COME UP WITH TO ENSURE A HIGH MARKET SHARE AND
PRODUCT GROWTH.

A PORTFOLIO PLANNING IS A TOOL FOR IDENTIFYING COMPANY GROWTH OPPORTUNITIES

THROUGH MARKET PENETRATION, MARKET DEVELOPMENT, PRODUCT DEVELOPMENT AND
DIVERSIFICATION

1. MARKET PENETRATION – IT IS A STRATEGY USED TO INCREASE THE SALES OF

CURRENT MARKET SEGMENTS WITHOUT CHANGING THE PRODUCT.
EXAMPLE:
THE CASE OF AN ICE CREAM BRAND THAT OFFERS THREE VARIOUS FLAVORS
IN ONE CONTAINER
2. MARKET DEVELOPMENT – IT IS A STRATEGY IN IDENTIFYING AND CREATING NEW
MARKET SEGMENTS FOR THE CURRENT PRODUCT.
EXAMPLE:
A FACE POWDER THAT DOES NOT ONLY CATER TO THE ADULT MARKET BUT
ALSO TO YOUNGER ONES.
3. PRODUCT DEVELOPMENT – IT IS ASTRATEGY FOR COMPANY GROWTH BY OFFERING A
MODIFIED OR A NEW PRODUCT TO CURRENT MARKET SEGMENTS.
EXAMPLE:
THE CASE OF A COMPANY THAT BECOME SUCCESSFUL FOR ITS BEER
PRODUCT, BUT DECIDED TO OFFER A NEW COFFEE PRODUCT CARRYING THE SAME
BRAND NAME.
4. DIVERSIFICATION – IT IS A STRATEGY FOR A COMPANY GROWTH BY STARTING OR
ACQUIRING BUSINESSES OUTSIDE THE COMPANY’S CURRENT PRODUCT AND MARKET.
EXAMPLE:
A KNOWN CORPORATION THAT OWNS A CHAIN OF DEPARTMENT STORES AND
LATER ON VENTURED INTO BUILDING CONDOMINIUMS IN THE METRO.

EXISTING NEW
EXISTING MARKET PENETRATION DIVERSIFICATION
NEW MARKET DEVELOPMENT PRODUCT DEVELOPMENT

ANSOFF OPPORTUNITY MATRIX HEPLS A COMPANY TO ANALYZE THE GROWTH OF ITS

PRODUCTS AND TO DIRECT THE COMPANY AS TO THE BUSINESS STRATEGIES TO USE.

CASELETS

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RONALD PAUL GAMBA
 BURGER ON THE GO
BURGER MAC IS IN THE NICHE MARKET CATEGORY CONCENTRATING ON SMALL SEGMENTS
OR CUSTOMERS WHO PREFER TO BUY CHEAPER PRICED BURGERS ANYTIME OF THE DAY.
OPEN 24 HOURS DAILY AND WITH PRICES SO AFFORDABLE, IT SEEMED THAT THERE IS
NOTHING MORE THAT A CUSTOMER COULD LOOK FOR. AT FIRST, BURGER MAC WAS
KNOWN AS THE “BURGER ON THE GO” BEING SOLD ONLY WITHIN THE NEIGHBORHOOD
UNTIL THE OWNER DECIDED TO ESTABLISH THE COMPANY’S FIRST 24-HOUR FAST FOOD
CHAIN.
UNFORTUNATELY, AFTER A FEW YEARS IN THE MARKET, THE NEW STORE DID NOT
SUCCEED TO SUSTAIN CUSTOMERS. THE PEOPLE DID NOT PATRONIZE THE IDEA OF A 24-
HOUR FOOD CHAIN, THE SAME THEY DID THE OLD CONCEPT OF BURGER MAC.

QUESTIONS:

1. WHAT DO YOU THINK CAUSED BURGER MAC TO FAIL IN THE MARKET?

2. WHAT ASPECT MAY NOT HAVE BEEN FULLY STUDIED IN THE PLANT?
3. DEVELOP A BACK UP PLAN TO REINFORCE WHAT YOU THINK HAS BEED MISTAKENLY
DONE IN THE MARKETING PLAN OF BURGER MAC?

CHAPTER 2

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