Q4 M1
physical are so identical, that it would be difficult,
DEFINING A PRODUCT AND DIFFERENTIATING
PRODUCT, SERVICES AND EXPERIENCES
PRODUCT
- is anything that can be offered in a market for attention,
acquisition, use that might satisfy a need or want.
For Kotler-product goes way beyond being a physical
object or a service. Product is defined as anything that
can meet a need or want. Even a retail store or a
customer service representative is considered as product.
FIVE PRODUCT LEVELS
1. CORE BENEFIT- fundamental need or want that the
customer satisfies when they buy the product.
Ex. The core benefit of a hotel is to provide somewhere
to rest or sleep when away from home.
2.GENERIC PRODUCT- basic version of the product
made up of only those features necessary for it to
function
Ex. In hotel, this mean a bed, towels, a bathroom, mirror
and wardrobe.
3. EXPECTED PRODUCT- set of features that the
customer expects when they buy the product.
Ex. In a hotel, this include clean sheets, clean towels,
Wi-fi and clean bathroom.
4. AUGMENTED PRODUCT- refers to any product
variations, extra features, or services that help
differentiate the product from its competitors.
Ex. In the hotel, this could be the inclusion of a concierge
service or a free map of the town in every room.
5. POTENTIAL PRODUCT- includes all augmentations
and transformation the product might undergo in the
future.
Ex. In a hotel, this could mean a different gift placed in
the room each time a customer stay. Ex, it could be
some chocolates on one occasion, and some luxury
water on another.
PRODUCT CLASSIFICATION
1. According to use: Consumer and Industrial Goods
 Consumer goods- goods that are purchased for
personal consumption and household use
Ex. Instant noodles, biscuits, detergent soap.
 Industrial goods- purchased in order to make
other goods, to serve as a raw material or input in
the production of other goods.
Ex. Aluminum (used to manufacture kitchen equipment
and cans)
2. According to differentiation: Undifferentiated and
Differentiated Goods
 Undifferentiated goods- products whose
if not impossible, to distinguish one purchased
from one vendor or another.
Ex. Salt bought from the two different vendors’ looks
feels, and tastes identical.
 Differentiate goods- varied in their
characteristics and features that make them
distinguishable from one another.
Ex. Car, the appearance and the features vary because
of the ability of manufacturers to successfully distinguish
their products from competitors which is branding.
3. According to durability: Consumable, Semi-
Durable, and Durable Goods
Durability refers to the length of time a consumer can
derive benefit from the product or good purchased.
 Consumable- product whose benefit can only be
used by a consumer for a short period of time
sometimes only a few minutes such as food and
drinks.
 Semi-durables-provide benefits to the customer
for a longer period of time. Ex. Clothes, shoes,
belts and jackets
 Durables- products that are manufactured to last
a long time. Ex. Automobiles, home appliances,
furniture.
4. According to Type: Convenience, shopping,
specialty, and Unsought Goods
 Convenience goods-products that are
purchased frequently, usually inexpensive and do
not require much purchase effort and evaluation
Ex. newspapers, gum and candy
 Shopping goods- purchased less frequently
than no.1, are relatively more expensive, and
require some amount of information search and
evaluation prior to purchase.
Ex. Shoes, clothes, and handbags.
 Specialty goods-goods that require an unusually
large effort on the part of consumer to acquire.
Ex. Luxury merchandise, works of art, automobiles and
home.
 Unsought goods- goods that consumer seldom
actively look for, and are usually purchased for
extraordinary reasons such as fear or adversity,
rather than desire.
Ex. Investments, memorial plans, and life insurance.
SERVICE
 Form of product that consist of activities, benefits
or satisfaction offered for sale.
 FOUR MAJOR ATTRIBUTES
1.INTANGIBILITY- physical products are intangible. On
the other hand, service is intangible. It would, therefore,
not be possible to “sample” a lawyer’s legal skills, or a
doctor ability to handle a surgical operation before one
decides to retain a lawyer and doctor.
2. VARIABILITY- Because services are performed by
human beings, no service provider can render the same
service in exactly the same way every single time. A
college professor when giving the same lectures in two
separate sessions, cannot used the exact words and
gestures for both sessions.
3. INSEPARABITILITY- Because service is rendered by
people, the service provider must be present each and
every time the service is provided. Services are rendered
and consumed simultaneously.
4. PERISHABILITY- Unconsumed services cannot be
stored or warehoused.
 The key is the implementation of a marketing
strategy called capacity management
EXPERIENCE
A product which involves experiential aspects of
consumptions rather than utilitarian ones
-engage in fantasies, feelings, and fun and often carries
subjective meanings and characteristics
PRODUCT EXPERIENCES- is the overall value of a
product or service to consumer.
CUSTOMER EXPERIENCE- is the expression your
customers have of your brand as a whole throughout all
aspects of the buyer journey.
PEOPLE AND PRODUCT- the two primary touch points
that create the customer experience
IMPORTANCE OF CUSTOMER EXPERIENCE
-critical to the sustained growth of any business
-promotes loyalty, helps you retain customers, and
encourages brand advocacy
-today, customers have the power and not the seller
-US who gave the power with the hell from the world
wide web.
Q4 M2
FACTORS TO CONSIDER WHEN SSETTING
PRICES AND ITS GENERAL PRICING
APPROACHES
WHAT IS PRICE?
 Is the amount of money charged for a product or
service.
 Is the sum of all the values the consumers
exchange for the benefits of having the product or
service.
 Set by negotiation between buyers and sellers.
 Is the only element in the marketing mix that
products revenue.
FACTORS TO CONSIDER WHEN SETTING PRICES
INTERNAL FACTORS AFFECTING PRICING
DECISIONS
MARKET OBJECTIVES
-Before setting price, the company must decide
on its strategy for the product. If the company has
selected its market and positioning carefully, then its
marketing-mix strategy, including price, will be
straightforward
- A firm that has clearly defined its objectives will
find it easier to set price.
MARKETING-MIX STRATEGY
-Price is the only one of the marketing-mix tools
that a company uses to achieve its marketing objectives
-Decisions made for other marketing-mix
variables may affect pricing decisions.
-Companies often make their pricing decisions
first then base other marketing-mix decisions on the
price that they want to charge.
COSTS
-Set the floor for the price that the company can
charge for its product
TYPES OF COST
Fixed Costs (overheads)- are costs that do not vary
with production or sales level.
Variable Costs- vary directly with the level of production
Total Costs- are the sum of fixed and variable costs for
any given level of production.
ORGANIZATIONAL CONSIDERATION
-Management must decide who within the
organization should set prices.
EXTERNAL FACTORS AFFECTING PRICING
DECISIONS
THE MARKET AND DEMAND
-set the upper limit
-before setting prices, the marketer must
understand the relationship between price and demand
for its product
Under pure competition, the market consists of many
buyer and sellers trading in a uniform commodity such as
wheat or financial securities.
Under monopolistic competition, the market consists
of many buyers and sellers that trade over a range of
prices rather than a single market price.
Under oligopolistic competition, the market consists of Market-penetration pricing- they set low initial price to
a few sellers that are highly sensitive to each other penetrate the market quickly and deeply – to attract
pricing and marketing strategies. many buyers quickly and win a large market share.
In pure monopoly, the market consists one Seller. GENERAL PRICING APPROACHES
 Government monopoly (a postal service)- can
pursue a variety of pricing objectives.
 Private regulated monopoly- the government
permits the company to set rates.
 Private non-regulated monopoly- are free to price
at what the market will bear.
COMPETITORS’ COSTS, PRICES, AND OFFERS The Price that the company charges will be
somewhere between one that is too low to produce a
-A consumer who is considering the purchase of profit and one that is too high to produce any demand
a Brand A will evaluate Brand A’s price and value
against the prices and prices of comparable products.  Product costs set a floor to the price: consumer
perception of the products value set the ceiling.
-Once a brand is aware of competitor’s prices  The company must consider competitors prices
and offers, it can use them as a starting point for its own and other external and internal factors to find
pricing. the best price between these two extremes.
 Sets of factors: costs, consumer perception,
OTHER EXTERNAL FACTORS
and competitors prices.
Economic conditions- can have a strong impact on the
Cost-Based Pricing
firms pricing strategies.
-is the practice of setting prices based on the cost
Resellers- The company should set prices that give
of goods or services being sold.
resellers a fair profit, encourage their support and help
them sell. Cost-Plus Pricing
Government- another important on pricing decision -the simplest pricing method
Social Concerns- in setting prices, a company’s short-
term sales and profit goals may have to be tempered by
broader societal consideration.
NEW PRODUCT PRICING STRATEGIES

Premium pricing strategy- producing a high-quality

product and charging the highest price.
Economy pricing strategy- producing a lower quality
product but charging a low price.
Good- Value Strategy- represents a way to attack
premium pricer.
Overcharging Strategy- the company overprices in Break-Even Analysis and Target Profit Pricing
relation to its quality. -The firm tries to determine the price at which it will break
Market-skimming pricing- many companies that invent even or make the target profit it is seeking
new products initially set high prices to ‘skim’ revenues
layer by layer from the market.
-target pricing uses concept of a break-even chart, which Q4 M3
shows the total cost and total revenue expected at
different sales volume levels. STRUCTURE OF DISTRIBUTION CHANNELS, ITS
FUNCION, AND NATURE OF SUPPLY CHAIN
MANAGEMENT

MARKETING INTERMEDIARIES IN THE

DISTRIBUTION CHANNEL
Distribution Channel- is made up of marketing
intermediaries, or organization that assist in moving
goods and services from produces to end user.
Marketing Intermediaries- are in the middle of
distribution process, between producer and end user

THE FOLLOWING ARE MARKETING

INTERMEDIARES THAT APPEAR IN
DISTRIBUTION CHANNEL
AGENTS AND BROKERS
-are usually hired in commission basis by either a
Value-Based Pricing buyer or seller
An increasing number of companies are basing their -job is to make deals.
prices on the product perceived value.
 Agents are sales representative of
-uses buyer perception of value, not the seller’s cost, as manufacturers and wholesalers.
the key to pricing  Brokers are entities that bring buyers and sellers
together.
INDUSTRIAL DISTRIBUTOR
-Are independent wholesalers that buy related
product lines from many manufacturers and sell to
industrial users
WHOLESALERS

Competition-Based Pricing -firms that sell finished goods to retailers

-Consumer will base their judgements of a RETAILERS

products value on the prices that competitors charge for
-firms that sell good to consumer and industrial
similar products.
users for their consumption
Going Rate Pricing
Non-traditional Channels
-the firm bases its price largely on competitors’
-this arrangement helps differentiate a firm’s
prices, with less attention paid to its own costs or
product from the competition.
demand.
-may limit brands coverage, they can give a
Sealed-bid Pricing
producer serving a niche market a way to gain market
-the firm bases its price on how it thinks access without having establish channel intermediaries
competitors will price rather than on its own costs or on
-can also provide another avenue of sales for
demand.
larger firms.
Profit-Oriented/Based Pricing
THE FUNCTIONS OF DISTRIBUTION CHANNEL
-places an emphasis on the finances of the Channels Reduce the Number of Transactions
product and business.
-Channels make distribution simpler by reducing
-the benefit of profit-oriented is obvious: the the number of transactions required to get a product from
company is guaranteed a profit in every sale manufacturer to consumer

-is often a difficult strategy for marketers to Channels Ease the Flow of Goods
succeed with because it limits flexibility.
 Sorting out: Breaking many different items into
separate stocks that are similar
  Accumulating: Bringing similar stocks together
into larger quantity.
 Allocating: Breaking similar the products into
smaller and smaller lots.
- A second way to ease the flow is by locating
buyers for merchandise.
- Channels reduce the number of transaction and
ease the flow of goods
 Distribution(place) includes the efficient
managing of the acquisition of raw materials by
the factory and the movement from producer to
business-to-business users and consumers.
 Distribution channel are the series of marketing
entities through which good and services pass on
their way from producer to end user.
 Distribution System focus on the physical
transfer of goods and services on their legal
ownership at each stage of the distribution
process.
THE NATURE OF SUPPLY CHAIN
- The system as a whole is known as supply chain
Supply chain- is a relative concept, but is commonly
applied to the whole sequence as an activity
- A supplier maintains outbound inventory
- Customer maintains inbound inventory
- A manufacturer also has in-process inventory,
which all the parts currently used in the
fabrication process.
Q4 M4
PROMOTIONAL TOOLS
PROMOTION- keeps the product in the minds of the
customer and helps stimulates demand for the product
DIFFERENT PROMOTIONAL TOOLS
1. ADVERTISING
- “Ad”-towards and “Verto”- I turn means to turn the
people’s attention to specific thing
- Process of delivering a message about ideas
through media, paid by an individual sponsor.
TYPES OF ADVERTISING
1. Print Advertising- is the oldest media
2. Outdoor advertising- Publicized product or service
outdoor
3.Broadcast Advertising- reaches wider audience
4.Surrogate advertising- advertise indirectly and
banned by law
5. Celebrity Advertising- uses public figures
2. SALES PROMOTION - Set of marketing activities to
boosts the sales of the product or services.
- Process of persuading a potential customer to
buy the product.
Push Strategy- Involves taking the product directly to the
customer via whatever means, ensuring the customer is
aware of the brand at the point of purchase.
Pull Strategy- Selling by yourself. It uses advertising to
build up customer demand for a product or services.
3.PERSONAL SELLING
- Is an oral communication with the potential
buyers of a product with the intention of making a
sale
- Is the oldest form of promotion
Philip Kotler- “As a face-to-face interaction with one or
more prospective purchases for the purpose of making
sale”
4. PUBLIC RELATIONS
- Is the practice of managing the flow of
information between an individual or organization
and a public.
- The aim is to persuade the public to maintain a
certain point of view about it
Four PR process according to Marston
Research, Action, Communication and Evaluation.
5.DIRECT MARKETING
- Is the use of consumer direct channels to reach
and deliver and services to consumer without
using marketing middle man
FORMS OF DIRECT MARKETING
1. Direct Mail Marketing- involves sending an offer,
announcement, or other item to a person through mail.
2. Catalog Marketing- generally in printed form but can
distribute in form of CD’s
3.Telemarketing- is the use of telephone and call
centers to attract prospects, sell to existing customers
and provide service by taking orders and answering
questions.
4. Direct Response Marketing
Via television (DRTV) has two forms:
1. Long Form informercials) - half-hour or hour-long
segments that explains a product in detail
2.Short Form- typical 30 or 60 sec. commercials that ask
viewers for an immediate response.
Infomercials- promote products that are complicated or
technologically advance or require a great deal or
explanation.
5. Kiosk Marketing- kiosk is small, stand alone booth
used for marketing strategies
- usually be manned by one or two individuals who help
attract attention to the booth to get a new customer.
Q4 M5 Audit- means by which a company can understand how
it relates to the environment in which it operates.
MARKET ANALYSIS, PLANNING,
IMPLEMENTATION AND CONTROL MARKETING AUDIT
-is a comprehensive examination and analysis of your
THE MARKETING PROCESS marketing activities, goals and objectives.
Marketing is an ongoing business process that consists
of four distinct stages: -a great way to assess your marketing plan and ask
yourself and your department what working and not.
1. Analysis- entails the gathering qualitative and
quantitative data about the company’s products and -useful for getting back in touch with your brand,
possible markets. products and services and re-focusing your marketing
efforts
2. Planning- involves constructing strategies that the
company can put into action to attain results in the target Fundamental Components of a Comprehensive and
market Systematic Marketing Audit are the ff:

3.Implementation- the success or failure depends more Environmental Audit: where you focus on your
or less on the work prepared in the analysis and planning customers and the competition.
stages.
Strategic Audit: where you take a look at your current
4. Control- company needs to be responsive of marketing plan and strategies and how well or poorly
changing market conditions, customers and fine-tune the they are performing.
marketing strategies for that reason
Organizational Audit: internal look at the resources
THE MARKET ANALYSIS available to you are your marketing department.
-A successful firm Is the which monitors and manages
SWOT Analysis – tool used in strategic planning to
efficiently various forces living in its immediate and
identify and ultimately prioritize the organization SWOT
external environment
1. Strength- characteristics of business that offer an
-Managing the marketing functions begins with a
advantage over its competitors
complete analysis a company’s situation.
2. Weakness- Characteristics that limit performance and
MARKET PLANNING
could represent an obstacle in achieving objectives
-Involves deciding on marketing strategies that will help
the company attain its overall strategic objectives. 3. Opportunities- help improve performance or that can
be capitalized upon or exploited
-detailed marketing plan is needed every business
4.Threats- could hinder performance, so ways of
-explains how each strategy responds to the threats,
defending against them can be explored.
opportunities and critical issues spelled out earlier in the
plan. COMPETITOR ANALYSIS
Strategic groups are made up of organization within the
- should lay out an action program for implementing the
same industry that are pursuing equivalent strategies.
marketing strategy along with the details of a supporting
marketing budget. Competitors Future Strategies and Reaction:
MARKET IMPLEMENTATION  Certain Retaliation- react in aggressive manner
-The process that turns marketing plans into marketing to any challenge
actions in order to accomplish strategic marketing  Failure to React- Competitor can be lulled into a
objectives false sense of security.
 Specific Reaction- some competitors may react,
- involves day-to-day and month-to-month activities that
but only to competitive moves in certain areas
effectively put marketing plan work.
 Inconsistent Reaction- simply not predictable
MARKET CONTROL
-The process of measuring and evaluating the results of
marketing strategies and plans and taking corrective
action to ensure that marketing
COMPANY SITUATION ANALYSIS
-process which aims to disclose all opportunities and the
risk inherent in the environment and assess the
competitiveness of company’s resource and existing
market position