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UNIT 8: Managing the Marketing Function

8.0 Intended Learning Outcomes

At the end of the course, students are expected to:

 Explain the marketing concept

 Identify possible measures to make products easily available to customers
 Define advertising and enumerate the different advertising media
 Discuss the different factors in selecting a target market

8.1 Introduction

Engineer managers are engaged in the production of tangible or intangible goods. Some
of these engineer managers are directly responsible for marketing the company’s
products or services. If he is promoted as general manager, both production and
marketing functions become his overall concern.

At whatever management level the engineer manager works, he must be concerned

with convincing others to patronize his outputs. If he is the general manager of a
construction firm, he must convince people with construction needs to avail of the
services of the company. If he is the staff officer of a top executive, he must convince his
boss to continuously rely on him regarding the staff services he provides.

If the foregoing statements are true, the engineer manager has a marketing problem. He
needs to understand certain concepts related to the marketing discipline.

8.2 Topics/Discussion (with Assessment/Activities)

A. What is Marketing Concept?

Marketing is a group of activities designed to facilitate and expedite the

selling of goods and services.

The marketing concept states that the engineer must try to satisfy the needs of
his clients by means of a set of coordinated activities. When clients are satisfied
with what the company offers, they continually provide business.

B. The Engineer and the Four P’s of Marketing

The engineering organization will be able to meet the requirements of its

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clients (or customers) depending on how it uses the four P’s marketing which are
as follows:

1. The product (or service)

2. The price
3. The place, and
4. The promotion.

 The Product
In the marketing sense, the term “product” includes the tangible (or
intangible) item and its capacity to satisfy a specific need. When customer
buys a car, he is actually buying the comfortable ride he anticipates to derive
from the car. This is not to mention the psychological benefits attached to the
ownership of a car.
The services provided by the engineer manager will be evaluated by
the client on the basis of whether or not his or her exact needs are met. When
a competitor comes into the picture and sells the same type of service, the
pressure to improve the quality of services sold will be felt. When
improvement is not possible, “extras” or “bonuses” are given to clients. An
example is the construction company that provides “free estimates” on
whatever inquiries on construction are received.

 The Price
Price refers to “the money or other considerations exchanged for the
purchase or use of the product, idea, or service.” Some companies use price as
a competitive tool or as a means to convince the customer to buy.
When products are similar in quality and other characteristics, price
will be a strong factor on whether or not a sale will be made. This does not
hold true, however, in the selling of services and ideas. This is because of the
uniqueness of every service rendered or every idea generated.

Fig.1 The Engineer Manager and the Four P’s of Marketing

When a type of service becomes standardized, price can be a strong
competitive tool. When a construction firm, for instance, charges a flat 10
percent service fee for all of its construction services, a competitor may charge

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a lower rate. Such action, however, will be subjected to whether or not the
industry will allow such practice.

 The Place
If every factor is equal, customers would prefer to buy from firms
easily accessible to them. If time is of the essence, the nearest firm will be
patronized.
It is very important for companies to locate in places where they can be
easily reached by their customers. Not every place is the right location for any
company.
When a company cannot be near the customers, it uses other means to
eliminate or minimize the effects of the problem. Some of these means are:
1. Hiring sales agents to cover specific areas;
2. Selling to dealers in particular areas;
3. Establishing branches where customers are located;
4. Establishing franchises in selected areas.

Manufacturing companies can choose or adapt all of the above-

mentioned options. Service companies like construction firms adapt the
modified versions. An example is the engineer manager of a construction firm
who gives commissions to whoever could negotiate a construction contract
for the firm.

 The Promotion
When engineer managers have products or services to sell, they will
have to convince buyers to buy from them. Before the buyer makes the
purchasing decision, however, he must first be informed, persuaded, and
influenced. The activity referred to, in this case, is called promotion.
There are promotional tools available and the engineer manager must
be familiar with them if he wants to use them effectively. These tools are as
follows:
1. Advertising
2. Publicity
3. Personal selling
4. Sales promotion

Advertising. Nylen defines advertising as “a paid message that appear

in the mass media for the purpose of informing or persuading people about
particular products, services, beliefs, or action. The mass media referred to

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include television, radio, magazine, and newspaper. If the engineering

manager wants to reach a large number of people, he may any of the mass
media depending on his specific needs and his budget. Each of the public
advertising carriers, i.e., radio, television, magazines, and newspaper, has
their own specific audience and careful analysis must be made if the
engineering manager wants to pick the right one.

Fig. 2 An example of an Advertising Message

Publicity. The promotional tool that publishes news or information

about a product service, or idea on behalf of a sponsor but is not paid for by
the sponsor is called publicity. The mass media is also the means used for
publicity. If the engineer manager knows how to use it, publicity is a very
useful promotional tool. His message may be presented as a new item, helpful
information, or an announcement.

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Fig. 3 An example of a Publicity Release

Personal Selling. A more aggressive means of promoting the sales of a

product or service is called personal selling. It refers to the “oral presentation
in a conversation with one or more prospective purchasers for purpose of
making a sale.”
Personal selling may be useful to the marketing efforts of the engineer
manager. If, for instance, he is the general manager of a firm manufacturing
spare parts, he may assign some employees to personality seek out spare
parts dealers and big trucking companies to carry their product lines.

Sales Promotion. Any paid attempt to communicate with the customers

other than advertising, publicity, and personal selling, may be considered
sales promotion. This includes displays, contests, sweepstakes, coupons,
trading stamp, prizes, samples, demonstration, referral gift, etc.
Contest and sweepstakes are very popular sale promotion tools. An
example is shown in Figure 4.

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Fig. 4 An Example of a Company Using Sweepstakes as a Sales Promotion Tool

C. Strategic Marketing for Engineers

Companies, including these managed by engineer managers, must
serve markets that are best fitted to their capabilities. To achieve this end, a
very important activity called strategic marketing undertaken.
Under this set-up, the following steps are made:
1. Selecting a target market
2. Developing a marketing mix

 Selecting a Target Market

A market consists of individuals or organizations, or both, with the
desire and ability to buy specific product or service. To maximize sales and
profits, a company has the option of serving entirely or just a portion of its
chosen market. Within markets are segments with common needs and which
will respond similarly to a marketing action. Fig. 5 shows an example of
various segments of a given market.

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An analysis of the various segments of the chosen market will help the
company make a decision on whether to serve all or some of the segments.
The segment or segments chosen become the target market.
In selecting a target market, the following steps are necessary:
1. Divide the total market into groups of people who have
relatively similar product or service needs.
2. Determine the profit potentials of each segment.
3. Make a decision on which segment or segments will be served
by the company.

As shown in Fig.5, a company may choose any or all of the residential,

industrial, and government segments. The decision will depend, however, on
the profit potentials of each segment and the capability of the firm.
A smaller company may find it most profitable to supply only the
construction material needs of the residential segment. A bigger company,
however, may find it more profitable to perform actual construction in
addition to selling construction materials.

Fig. 5 The Construction Market and Its Segments

Factors Used in Selecting a Target Market. A target market must have the
ability to satisfy the profit objectives of the company. In selecting target
market, the following factors must be taken into consideration:

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1. The size of the market, and

2. The number of competitors serving the market.

The total demand for the product or service in a given area must be
determined first if the company wants to serve that particular market. If there
are existing business serving the market, the net demand must be considered.
Figure 6 illustrate an example of the relationship between demand and
supply of a particular product. The figures presented indicate that there is still
room for another company in the market for telephone lines in Cabanatuan
City.

Fig.6 Total Demand and Net Demand as a Guide for Determining Target
Market

 Developing a Marketing Mix

After the target market has been identified, a marketing mix must be
created and maintained. The marketing mix consists of four variables: the
product, the price, the promotion, and the place (or distribution).
Given a marketing environment, the engineer manager can manipulate
any or all variables to achieve the company’s goals. As such, the quality of the
product may be enhanced, or the selling price made a little lower, or the
promotion activity made a little more aggressive, or a wider distribution area
may be covered. Any or of the foregoing may be undertaken as conditions
warrant.
As shown in Figure 7, all marketing activities are focused on target
market.

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Fig.7 The Company, The Marketing Mix and the Target Market

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